Statutory development authority qualifies for concessional sales tax treatment when state control and public development functions are established.

A statutory development authority created by the State for planned urban development was treated as a government-linked authority rather than a private entity for sales tax notification purposes. Because its constitution, administration and supervision were controlled by the State Government, supplies made to it qualified for the concessional rate extended to governmental or statutory bodies. The revisional authority's denial of that benefit was therefore found unsustainable, and the assessee retained concessional tax treatment on the sales in question.

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Issues: Whether the Bagalkot Town Development Authority was to be treated as a department or authority of the State of Karnataka for the purpose of availing the concessional rate under the sales tax notification, and whether the revisional authority was justified in denying that benefit.

Analysis: The authority was created by statute for planned development of towns and urban areas, with its administration and constitution controlled by the State Government through appointments and supervision. On that basis, it was treated as a statutory/local authority created by the State rather than an outside private entity. The sales tax notification extended concessional treatment to sales in favour of such governmental or statutory bodies, and the benefit was therefore held applicable to supplies made to the authority.

Conclusion: The question of law was answered in favour of the assessee. The revisional order denying concessional treatment was not sustainable.

Final Conclusion: The appeals succeeded and the assessee retained the benefit of concessional tax treatment on sales made to the statutory development authority.

Ratio Decidendi: A statutory body created and controlled by the State for public development purposes may fall within the class of government-linked authorities entitled to concessional tax treatment under a relevant notification.

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