2006 (7) TMI 678 - HC - VAT and Sales Tax

Court affirms assessment orders under Sec. 12-A of Sales Tax Act, dismissing challenge on exemption, emphasizing right of appeal.

Deccan Sales Corporation Ltd. Versus Deputy Commissioner of Commercial Tax, Belgaum and State of Karnataka

Deccan Sales Corporation Ltd. Versus Deputy Commissioner of Commercial Tax, Belgaum and State of Karnataka - tmi Issues:Challenge to correctness of assessment orders under Sec. 12-A of the Karnataka Sales Tax Act, 1957 based on interpretation of relevant provisions and notifications.Analysis:The appellant, a dealer under the Karnataka Sales Tax Act, challenged the order of the learned Single Judge regarding assessment orders made by the first respondent under Sec. 12-A of the Act. The appellant argued that entry-11 of the Second Schedule Part-C exempted Chemical Fertilizers and chemical Fertilizer mixtures from tax if they had not already suffered tax. The appellant relied on a notification issued by the State Government exempting Chemical Fertilizers under Sec. 6-B of the Act. The appellant contended that the exemption notification applied to Chemical Fertilizer mixtures as well, as they had not already suffered tax, as explicitly mentioned in the notification. The Division Bench in a previous case held that Chemical Fertilizer mixtures are one product and their use is different, justifying invoking powers under Sec. 22-A to set aside orders granting exemption. The appellant argued that this interpretation was contrary to the Act's intent, specifically Entry No. 11 Part-C of the Second Schedule.The Court noted that the right of appeal is a substantive statutory right under the Act, allowing the appellate authority to re-examine facts and material to pass a different order. The Court declined to admit the appeal, stating that the finding by the first respondent was correct, and conflict in Division Bench decisions was not grounds for entertaining a writ petition. The Court emphasized that pure questions of law could be brought before the court in accordance with the Act's scheme. The appellant was advised to approach the Appellate Authority to avail the alternative remedy within the prescribed limitation period of 180 days under Sec. 20(2) of the KST Act.In conclusion, the Court agreed with the Single Judge's decision and granted the appellant liberty to file an appeal before the Appellate Authority within four weeks. The Court highlighted that the Appellate Authority had no power to condone delays in filing time-barred appeals. The Writ Appeal was disposed of with all legal contentions of the parties kept open for consideration by the Appellate Authority.