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2018 (3) TMI 158 - HC - VAT and Sales TaxImposition of VAT - sale of Manually Operated Sprayers - Held that - this Court is satisfied that the said question need not be straightaway decided by this Court, as there is no sufficient material on record to embark upon such enquiry as to the nature of commodity dealt with in the present case or decide the question of interpretation about the said commodity falling under the Entry described in the Notification dated 31.3.2010 as Agricultural Sprayers or Manually Operated Agricultural Implements covered by First Schedule of the Act. Such question deserves to be first decided by the Head of the Department, viz., the learned Commissioner under Section 59(4) of the Act - petition disposed off.
Issues:
1. Interpretation of tax rate on "Manually Operated Sprayers" under the KVAT Act, 2003. 2. Conflict between the Notification reducing tax rate and exemption under First Schedule. 3. Authority of the Commissioner to clarify tax rates under Section 59(4) of the Act. 4. Availability of alternative remedies for the petitioner-assessee. Issue 1 - Interpretation of tax rate on "Manually Operated Sprayers": The petitioner challenged the Re-assessment Order imposing 5% VAT on the sale of "Manually Operated Sprayers" under the KVAT Act, 2003. The Assessing Authority relied on a Notification reducing the tax rate on certain agricultural equipment, while the petitioner argued that "Agricultural implements manually operated" were exempt from tax under the First Schedule. The Commissioner's Clarification Order also differentiated between "Agricultural Sprayers" and "Manually Operated Agricultural Implements," but the nature of the commodity in question remained unclear. Issue 2 - Conflict between Notification and First Schedule exemption: The petitioner contended that while Battery Operated Sprayers were taxed at 5%, there was no specific clarification for "manually operated sprayers." The court noted the absence of clarity and the need for the Commissioner to interpret whether the commodity fell under the Notification's description of "Agricultural Sprayers" or the exemption in the First Schedule. Issue 3 - Authority of the Commissioner to clarify tax rates: The court emphasized the Commissioner's authority under Section 59(4) to clarify tax rates for maintaining uniformity in assessments. It highlighted that the purpose of Section 59 was to guide Assessing Authorities and that the Commissioner could provide clarifications even during ongoing assessment or re-assessment proceedings. Issue 4 - Availability of alternative remedies: The court advised the petitioner to utilize the remedies available under the Act, such as First Appeal before the Joint Commissioner or Second Appeal before the Karnataka Appellate Tribunal. It refrained from adjudicating on the mixed questions of fact and law under Article 226, directing the petitioner to first exhaust the regular and alternative remedies provided in law. In conclusion, the court disposed of the Writ Petitions, granting the petitioner the liberty to seek clarification from the Commissioner under Section 59(4) of the Act. It stressed the importance of the Commissioner's role in issuing appropriate clarifications to prevent conflicting orders and varied approaches by Assessing Authorities.
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