2018 (1) TMI 147 - HC - VAT and Sales Tax

Rate of tax - Pre-painted Galvanized Steel Metal Sheets - whether taxable at the residuary rate of 14.5% under Section 4(1)(b)(iii) of the KVAT Act, 2003 or otherwise? - declared goods or not? - Held that - it is open to the petitioner to seek requisite clarification from the Respondent-Commissioner of Commercial Taxes himself with regard to the effect of clause (vi) of Section 14 of the CST Act, 1956 in the first instance - petition disposed off.

Summary

Issues:
1. Interpretation of tax provisions under the KVAT Act, 2003 and CST Act, 1956 regarding the taxability of "Pre-painted Galvanized Steel Metal Sheets."
2. Consideration of the effect of Section 14(vi) of the CST Act, 1956 by the Commissioner of Commercial Taxes.
3. Validity of the reassessment notice issued to the petitioner under Section 39(1) of the KVAT Act, 2003.

Analysis:

Issue 1: Interpretation of tax provisions
The petitioner was aggrieved by a Notice issued under Section 39(1) of the KVAT Act, 2003 for re-assessment of the year 2014-15. The Commissioner of Commercial Taxes had held that "Pre-painted Galvanized Steel Metal Sheets" are taxable at a rate of 14.5% under Section 4(1)(b)(iii) of the KVAT Act, 2003. However, the petitioner argued that the commodity falls under the category of 'Declared goods' under Section 14(vi) of the CST Act, 1956.

Issue 2: Consideration of CST Act provisions
The court noted that the Commissioner had not considered the effect of Section 14(vi) of the CST Act, 1956 while making the decision. The order did not address whether the commodity in question would fall under clause (vi) of Section 14 or not. The petitioner was advised to seek clarification from the Commissioner regarding the applicability of Section 14(vi) of the CST Act, 1956. The Assessing Authority was to decide on the categorization of the commodity based on the relevant provisions.

Issue 3: Validity of reassessment notice
The court found that the petitioner still had the option to present arguments and seek remedies before the Assessing Authority regarding the classification of the commodity. As such, the court deemed it premature to interfere in the matter at that stage. The writ petition was disposed of as premature, granting the petitioner liberty to approach the authorities with suitable replies and representations without any costs imposed.

In conclusion, the judgment highlighted the importance of considering relevant provisions of the CST Act, 1956 in determining the taxability of goods under the KVAT Act, 2003. It emphasized the need for the Assessing Authority to make a decision on the classification of goods based on the applicable legal framework, allowing the petitioner to pursue appropriate remedies within the statutory framework.