Revisional power over advance rulings may remit fact-dependent works contract tax questions to the assessing authority.

Section 64(2) of the Karnataka Value Added Tax Act, 2003 confers wide revisional power on the Commissioner where an order is erroneous and prejudicial to revenue, including the power to enhance, modify, cancel, or direct fresh assessment. Applied to an advance ruling on works contract taxation stated in overly general terms, the provision permits the Commissioner to set aside the ruling and leave fact-dependent matters, such as the nature and transfer of materials in execution of the contract, to the assessing authority. The legal effect is that the revisional order can validly preserve the governing legal position while remitting factual tax determination for assessment.

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Issues: Whether the Commissioner, exercising revisional power under section 64(2) of the Karnataka Value Added Tax Act, 2003, could set aside an advance ruling on works contract taxation and leave the issue to be determined by the assessing authority.

Analysis: Section 64(2) empowers the Commissioner, where an order is erroneous and prejudicial to the revenue, to pass such order as the circumstances justify, including enhancing or modifying the assessment, cancelling the assessment, or directing a fresh assessment. The provision is wide enough to permit an order that does not itself finally determine every factual aspect, especially where the advance ruling is expressed in overly general terms and the underlying liability depends on factual questions such as the nature of materials used and the manner in which they are transferred in execution of the works contract. The revisional authority was therefore justified in treating the ruling as capable of causing prejudice to the revenue and in leaving the factual determination to the assessing officer while keeping the legal position in view.

Conclusion: The Commissioner's order setting aside the advance ruling and remitting the matter for determination by the assessing authority was within jurisdiction and valid.

Final Conclusion: The appeal failed, and the revisional order was upheld.

Ratio Decidendi: Under section 64(2) of the Karnataka Value Added Tax Act, 2003, the Commissioner may set aside an erroneous and revenue-prejudicial advance ruling and leave fact-dependent tax determination to the assessing authority where the ruling is stated in overly general terms.

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