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of <h1>High Court quashes tax on transfer of goods for photograph processing. Rectification orders voided.</h1> The High Court allowed the appeals in a case concerning the rectification of assessment orders under the Karnataka Sales Tax Act, 1957. The Court quashed ... - Issues:1. Rectification of assessment orders under the Karnataka Sales Tax Act, 1957.2. Levying of tax on the turnover relating to processing of goods by the assessing authority.3. Challenge to rectification orders and demand notices issued under Section 25-A of the Act.4. Interpretation of the decision of the Supreme Court in ACC Limited vs. The Commissioner of Customs.5. Validity of circular No. 17/2002-03 dated 27-9-2002 issued by the Commissioner of Commercial Taxes.6. Availability of alternative remedy in filing appeals against orders passed under Section 25A.7. Principles of natural justice in rectification orders.8. Consequential relief sought in quashing orders of rectification.Analysis:The judgment pertains to a case involving the rectification of assessment orders under the Karnataka Sales Tax Act, 1957. The petitioner, a registered dealer running a Photo Studio, challenged the levy of tax on the turnover related to processing of goods by the assessing authority for the assessment years 1990-91 to 1998-99. The petitioner sought rectification and refund based on legal precedents such as the decision in Rainbow Colour Lab vs. State of Madhya Pradesh. The assessing authority initially rectified the assessment orders in favor of the petitioner but subsequently issued rectification orders and demand notices based on a Supreme Court decision and a circular dated 27-9-2002.The petitioner filed petitions seeking to quash the circular and the rectification orders, which were initially rejected by the single judge. The petitioner then filed appeals contending that the rectification orders were against natural justice and misinterpreted the Supreme Court decision in ACC Limited. The High Court, considering similar cases, allowed the appeals, setting aside the rejection of the petitions seeking consequential relief. The Court held that despite the availability of alternative remedies, petitions challenging statutory provisions or circulars could be entertained.The Court referred to the decision in GOLDEN COLOR LAB & STUDIO where it was held that tax cannot be levied on the transfer of property in goods involved in processing photographs. Consequently, the circular dated 27-9-2002 was quashed, and it was declared that the decision in KESHORAM SURINDRANATH PHOTOMAG (P) LTD. vs. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES remains binding. The Court directed the Authorities under the Act to proceed on the basis that Entry 25 is not restored to the Sixth Schedule of the Act. As a result, the rectification orders and demand notices were quashed for the assessment years 1990-91 to 1998-99.In conclusion, the Court allowed the appeals and the petitions, directing the parties to bear respective costs. Sri B Anand, the Learned G. A., was permitted to file a memo of appearance within six weeks. The judgment provides a detailed analysis of the legal issues involved, the application of legal precedents, and the reasoning behind the decision to quash the rectification orders and demand notices.
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