9911796707
TMI Blog2024 (1) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... cability on dealer who opted for composition scheme - Constitutional Validity of Section 15(5)(e) of the KVAT Act - seeking declaration that Section 4(3)(d) of the Finance Act, 2007 as prospective in nature. Whether Section 15(5)(e) of KVAT Act, inserted by the Finance Act, 2007 is ultra vires Constitution? - HELD THAT:- The object sought to be achieved by the Amendment is to encourage purchase from registered dealers. This object will fail and instead encourage purchase from dealers outside the State since goods purchased within the State are only taxable and therefore, the object sought to be achieved will not be fulfilled. It is recorded that State has all the machinery such as, Tax Inspectors, Flying Squads etc. to identify the UR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT P.S. DINESH KUMAR J , These intra-court appeals by the unsuccessful writ petitioners are directed against the common order dated April 13, 2009 in W.P. No. 9757/2007 and connected matters, passed by the Hon ble Single Judge. 2. Writ Appeals No. 2605/2009, 2695/2009, 3190/2009, 333/2010, 543/2010, 558/2010, 1756/2010 and Writ Petition No. 12323/2009 are filed by the assessees and Writ Appeals No. 5184/2009 and 31268/2013 are filed by the State. 3. For the sake of convenience, parties shall be referred as per their status in writ petition. 4. Heard Shri. Keshavmurthy, Shri. M.N. Shankare Gowda, Shri. Atul K. Alur and Shri. Rabinathan, learned Advocates for the assessees and Shri. Jeevan J. Neeralgi, lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not opted for composition are given the benefit of set-off, whereas petitioners are denied the same, which amounts to violation of Article 14 and 19(g) of the Constitution of India; rate of composition tax of 4% has been consciously determined taking into consideration that the assessees who have opted for composition scheme cannot collect tax in the invoices, cannot claim ITC [Input Tax Credit] , nor can they claim any deductions towards purchase value of tax covered goods, which can be claimed by non composition assesses; though composition tax assessment is an option, the State is obligated to provide a level playing field for all traders situated alike; goods brought from outside the State for the purposes of work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove question is in the negative, will it have retrospective effect i.e., from April 1, 2006? (iii) Whether the order passed by the Hon ble Single Judge requires any interference? Re. Point No. (i) : 13. Undisputed facts of the case are, assessees herein have opted for composition scheme for payment of tax under Section 15(1)(b) of the KVAT Act. Provisions of the Section 15(5) was amended by Finance Act, 2007, by inserting a new clause Section 15(5)(e) by which tax has been imposed on purchase of goods from URDs under Section 3(2) of the KVAT Act, with effect from April 1, 2006. 14. Section 15(5)(e) of the Act by Karnataka Act No. 6 of 2007 with effect from 01.04.2007, reads as follows: 15. Composition of tax: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of India. 18. State s justification as contended by the learned AGA for such discrimination is that, imposition of tax on goods purchased from URDs will encourage assessees to purchase from registered dealers and encourage such URDs to get registered as dealers. 19. Thus the State has admitted discrimination for imposition of tax for purchase of goods from outside the State vis- -vis the goods purchased within the State of Karnataka. 20. We find merit in the argument of the assessees, because the object sought to be achieved by the Amendment is to encourage purchase from registered dealers. This object will fail and instead encourage purchase from dealers outside the State since goods purchased within the State are only taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
