2018 (2) TMI 1604 - HC - VAT and Sales Tax

Classification of goods - pre-painted galvanized corrugated roofing iron and steel sheets - whether taxable at 14.5% or otherwise? - Held that - From a bare perusal of the order passed by the Respondent-Commissioner of Commercial Taxes under Section 59(4) of the KVAT Act, 2003, it is clear that the said Commissioner has not considered the effect of Section 14(vi) of the CST Act, 1956 at all and therefore, whether the commodity dealt with by the petitioner would fall under clause (vi) or not, was not an issue before the Respondent-Commissioner of Commercial Taxes. If the said order passed by the Respondent-Commissioner of Commercial Taxes is the cause for issuing reassement notice against the petitioner in the present case, 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 liability on pre-painted galvanized corrugated roofing iron and steel sheets under Karnataka Value Added Tax Act.
2. Challenge to the tax proposal under Annexure-A and E based on Central Sales Tax Act.
3. Prematurity of the writ petition in light of previous judgment in M/s. Karthik Roofings case.

Analysis:
1. The petitioner supplied pre-painted galvanized corrugated roofing iron and steel sheets to customers under different tax rates proposed by the respondents. The 1st respondent issued a clarification under Annexure-A, stating the tax liability at 14.5% under the Karnataka Value Added Tax Act. Subsequently, the 2nd respondent proposed to levy tax at 14.5% and demanded the difference amount from the petitioner. The petitioner sought to quash Annexure-A and E, arguing that the commodity falls under sections 14 and 15 of the Central Sales Tax Act.

2. The learned Addl. Government Advocate cited the judgment in M/s. Karthik Roofings case, where it was held that the writ petition was premature. The court emphasized that the Commissioner of Commercial Taxes did not consider the effect of Section 14(vi) of the CST Act, 1956 in the previous order. The petitioner was advised to seek clarification from the Commissioner or contend before the Assessing Authority regarding the classification of the commodity. Since the petitioner still had available remedies, the court deemed it premature to interfere in the matter and disposed of the petition accordingly, granting liberty to approach the concerned authorities with suitable replies and representations.

3. The court concluded that the present case was squarely covered by the judgment in M/s. Karthik Roofings case and disposed of the petition as premature. The petitioner was directed to approach the relevant authority with appropriate responses and representations. Additionally, the court disposed of I.A.No.1/2018 in light of the petition's disposal.