2012 (8) TMI 867 - HC - VAT and Sales Tax

Assessee entitled to composition for one year only under Karnataka VAT Act

SR. Ravishankar Versus Additional Commissioner of Commercial Taxes, Zone-1, Bangalore and AnOther

The court held that the assessee was entitled to composition for the assessment year 2006-07 but not for the assessment year 2005-06 under section ... - Issues involved: Interpretation of section 15(5)(a) of the Karnataka Value Added Tax Act, 2003 regarding composition of tax for dealers executing works contracts who purchase goods from outside the State or outside India.Summary:Issue 1: Eligibility for composition under section 15(5)(a) of KVAT Act, 2003The judgment dealt with the case of an assessee who had brought goods from outside the State for executing works contracts. The assessing officer initially granted the request for composition of tax, but the Joint Commissioner of Commercial Taxes in suo motu revision found this decision to be incorrect. The matter was remanded for re-assessment. The Additional Commissioner later ruled that the assessee could opt for composition under section 15(5)(a) only if the purchased goods were not used in works contracts resulting in property transfer. The assessee appealed this decision.Issue 2: Entitlement to composition for specific assessment yearsThe court held that as per section 15(5)(a) of the KVAT Act, 2003, the assessee was entitled to composition for the assessment year 2006-07 but not for the assessment year 2005-06. Therefore, the appeal was partly allowed, and the assessing authority was directed to redo the assessment accordingly.In conclusion, the judgment clarified the conditions under which a dealer executing works contracts and purchasing goods from outside the State or outside India could opt for composition of tax under section 15(5)(a) of the KVAT Act, 2003.