9911796707
TMI Blog2008 (12) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, 3337 of 2006, 557 of 2006, 181 of 2006, 26223 of 2005, 3370 of 2006, 3554 of 2006, 27312 of 2005, 4572 of 2006 and 4908 of 2006. The learned single judge allowed the writ petitions, quashed the impugned endorsements and the assessment orders and held that the petitioners are entitled to tax exemption under the Karnataka Sales Tax Act, 1957 (hereinafter referred to as, "the KST Act"). The impugned order is challenged urging various grounds and prayed to allow these appeals and to set aside the order of learned single judge. As per memo dated August 14, 2008 filed by the learned Additional Government Advocate, the appeal pertaining to W.P. No. 26233 of 2005 is de-linked from the batch of these writ appeals. By notification dated D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive power not traceable to the provisions of the Act, which was issued only for the limited purpose of extending financial assistance to hotel industry which is treated as tourism industry. Therefore, the conclusions arrived at by the learned single judge in holding that respondents herein are new industrial units and are entitled for exemption from payment of sales tax under section 5(2) of the Act is contrary to the notification issued under the KST Act. The learned Additional Government Advocate relied upon the decision in Mathra Parshad and Sons v. State of Punjab reported in [1962] 13 STC 180 (SC) in support of the contention that merely because exemption notification issued under the KST Act can be applied unless there is express or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 5(2) of the KVAT Act granting exemption in respect of certain new industrial units is permissible in law. Notwithstanding the fact that earlier notification issued under the KST Act in force in the absence of express or implied repeal, the same benefit is not continued under the notification issued under the KVAT Act, unless it is satisfied that the respondents are new industries as defined in the notification. Therefore, the reasons assigned by the learned single judge at paragraphs 8 and 9 holding that notification issued under the KST Act is not repealed and the notification issued under section 5(2) of the KVAT Act is not applicable to the respondents being tourism industry. That is only an executive order which cannot be app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to tax exemption under section 5(2) of the KVAT Act? (iii) Whether the learned single judge is justified in applying the Government order dated November 26, 1998 to hold that tourism is also declared as industry? All the above points are required to be answered in favour of the State/ appellants for the following reasons: In view of the decision in Polaki Motors v. State of Orissa reported in [1993] 88 STC 259 (SC); [1993] 2 SCC 674, the State has got legislative power under entry 54, List II of the Seventh Schedule to the Constitution to enact the KVAT Act despite the fact that the KST Act is in field. The Act is enacted for all goods except the goods mentioned therein. Paragraph 13 of the aforementioned decision is extracted hereun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As held by this court in S. Kodar v. State of Kerala [1974] 34 STC 73; [1975] 1 SCR 121 it is also not necessary that the dealer should be enabled to pass on the incidence of the tax on sale to the purchaser in order that it might be a tax on sales of goods. There being no legal or constitutional bar for a combination of single point levy and a multipoint levy and levying of additional tax, there is no infirmity or constitutional inhibition which would invalidate the impugned Validation Act." In view of the aforementioned decision, the enactment of the KVAT Act by the State Legislature is constitutionally legal and valid. In exercise of power under section 5(2) of the KVAT Act the notification dated April 18, 2005 was issued providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said Act. Therefore, the learned has single judge committed error in applying the exemption notification issued under the KST Act. The same ought not to have been applied for tax exemption benefit since the respondents are not "new industrial units" as defined under the notification issued under the provisions of the KVAT Act. They have not registered as such with the Director of Industries and Commerce Department. Therefore, the appellants were justified in issuing the endorsement to them stating that they are not entitled for the benefit of exemption from payment of tax exemption that was impugned in the writ petitions and the learned single judge has erroneously quashed the same by wrongly applying the Government order which has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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