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of <h1>Court rules installation and transportation charges not subject to VAT under Karnataka VAT Act</h1> <h3>Prakash Retail (P.) Ltd. Versus Deputy Commissioner of Commercial Tax (Audit) UDUPI</h3> Prakash Retail (P.) Ltd. Versus Deputy Commissioner of Commercial Tax (Audit) UDUPI - 2013 (32) S.T.R. 388 (Kar.) , [2014] 68 VST 392 (Kar) Issues:Challenge to Section 2(36) of the Karnataka Value Added Tax Act, reassessment orders for multiple assessment years, inclusion of installation and transportation charges in sale price.Analysis:Challenge to Section 2(36) of the KVAT Act:The petitioners sought a writ to declare Section 2(36) of the KVAT Act as ultra vires. The section defines 'Turnover' and includes sums charged for services done by the dealer in relation to goods sold. The court examined the definition and its application to the case.Reassessment Orders for Multiple Years:Respondent issued reassessment orders proposing disallowances and VAT levy on installation and transportation charges for various assessment years. Petitioner contended that these charges were not part of the sale price and had paid service tax separately. The court reviewed the proposition notices and the replies submitted by the parties.Inclusion of Installation and Transportation Charges in Sale Price:The main issue was whether installation and transportation charges formed part of the sale price. Petitioner argued that as per sale agreements and invoices, these charges were separate and not included in the sale price. They contended that post-sale services were charged separately and service tax was paid accordingly. The court analyzed the nature of these charges and their relationship to the sale transaction.Judgment:The court examined the definition of 'Turnover' under Section 2(36) of the KVAT Act, emphasizing that charges for services related to goods sold could be included in the sale price. However, based on the facts presented, where the transfer of title occurred at the seller's location and charges were clearly delineated in invoices, the court ruled in favor of the petitioners. It held that transportation and installation charges were not part of the sale price and service tax had been appropriately paid. Consequently, the court allowed the writ petitions, quashed the reassessment orders for the relevant assessment years, and directed accordingly.This detailed analysis outlines the key legal issues, arguments presented by both parties, and the court's reasoning leading to the judgment in this case.
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