Concession computation rule upheld: a delegated rule fixing tax incentive extent does not itself create tax liability.

The Karnataka HC held that rule 20C(1)(c) of the Karnataka Sales Tax Rules is not a charging provision and does not, by itself, create tax liability. It was construed as a computational rule made to determine the extent of the concession available under section 19C of the Karnataka Sales Tax Act. Any grievance about an assessing authority's calculation of the concession was treated as a matter for the statutory appeal process, not as a basis to strike down the rule. The constitutional challenge therefore failed, and the rule was upheld as a valid provision operating within the concession scheme.

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Issues: Whether rule 20C(1)(c) of the Karnataka Sales Tax Rules, 1957 is unconstitutional on the ground that it creates tax liability, and whether it is only a measure for computing the extent of concession under section 19C of the Karnataka Sales Tax Act, 1957.

Analysis: Rule 20C(1)(c) was read as a provision framed to work out the extent of tax incentive available under section 19C and not as a charging provision. The rule did not impose tax liability by itself, and any alleged error in the assessing authority's computation of concession was held to be a matter for statutory appeal. A provision giving effect to a concession scheme cannot be struck down merely because it may have been applied unfavourably in a particular assessment.

Conclusion: The challenge to rule 20C(1)(c) failed. The rule was upheld as a computational provision for concession, not as a source of tax liability, and the writ petition was dismissed.

Final Conclusion: The petitioner was left to pursue the statutory appellate remedy, and the constitutional challenge to the rule did not succeed.

Ratio Decidendi: A delegated rule framed to determine the extent of a statutory tax concession does not, by itself, create tax liability and is not unconstitutional on that ground.

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