2005 (1) TMI 737 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to assessment order under Karnataka Sales Tax Act, 1957 regarding tax liability for works contract under Section 17(6).

Analysis:
The petitioner challenged the assessment order determining a tax liability of Rs. 27,17,115, being 4% of the total turnover of Rs. 6,79,27,868 related to works contracts undertaken from a Public Sector undertaking of the Government of Karnataka under Section 17(6) of the Act. The petitioner contended that the turnover included contracts not falling under Section 5(B) of the Act and should have been excluded from the assessment.

The petitioner argued that the Assessing Officer should have given notice and an opportunity of hearing before finalizing the assessment if intending to modify the tax liability indicated in the return. The petitioner claimed that the assessment was based on determination under Section 12(3) of the Act, requiring the Assessee to be given an opportunity before finalization. The petitioner approached the court directly without availing the appeal remedy under the Act.

On the other hand, the Government pleader submitted that the order was appealable, and all aspects could be examined by the Appellate Authority. As the issues raised involved disputed questions of facts regarding the nature of the contract and its classification under the VI Schedule, the pleader suggested that the petitioner should utilize the appellate remedy provided by the statute.

The court dismissed the writ petition, advising the petitioner to avail the remedy of appeal to address all points before the Appellate Authority. The court allowed the Appellate Authority to consider the pendency of the writ petition while determining the question of limitation in the appeal. The Government Pleader was granted six weeks to file the har memo of appearance.