TaxTMI 
TaxTMI 
2003 (11) TMI 559
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....of the petitioner that a portion of the work shown in the composition does not fall under section 5-B of the Act. 2.. The facts leading to this petition can be briefly stated as hereunder: The petitioner is a Government of Karnataka undertaking and is a registered dealer under the provisions of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as "the Act"). It is also the case of the petitioner that it is an agency of the Government of Karnataka for execution of works entrusted to it by the Government and it also executes works entrusted to it by other Government bodies. The petitioner for the assessment year 1997-98 made an application in form No. 8-AA seeking for composition under section 17(6) of the Act read with rule 8-B of the Karnataka Sales Tax Rules, 1957 (hereinafter referred to as "the Rules"). The assessing officer allowed the said request made by the petitioner. However, in the return filed by the petitioner, the petitioner claimed that certain works executed by it does not relate to works contract under section 5-B of the Act and as such the same has to be excluded from the assessment. The said claim made by the petitioner was rejected by the assessing off....
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....orders impugned pointed out that since undisputedly the petitioner has sought for composition under sub-section (6) of section 17 of the Act he cannot be permitted to go back on that and seek for exclusion of a portion of the work from the assessment either on the ground that the said portion of the work does not fall within the meaning of works contract or some of the works in respect of which he has sought for composition among several works also would not fall within the meaning of works contract. Elaborating this submission, he pointed out that the object of the composition is to provide for a hassle-free and simple method to the assessees and since the application seeking composition is required to be made long before the conclusion of the assessment year, the petitioner cannot be permitted the wriggle out of the composition even if it is found at the end of the year that adopting regular assessment as against composition sought for by him would be convenient to him. It is his submission, that once composition is sought for and granted, it is not permissible for a dealer to request the Assessing Officer to examine in minute details, the nature of the work executed by such a de....
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....hat year in the State in respect of works contract specified in column (2) of the Sixth Schedule at the rate of four per cent. (ii) Any dealer may apply to the assessing authority to be permitted to pay the amount under clause (i) and, on being so permitted, he shall pay tax in advance as provided for under section 12-B and all the provisions of section 12-B mutatis mutandis shall apply to this sub-section; (iii) the amount paid under clause (ii), shall be subject to such adjustment as may be necessary on completion of final assessment. Explanation.-No tax shall be payable under this sub-section on the turnovers relating to amounts paid to sub-contractors as consideration for execution of works contract whether wholly or partly subject to production of proof that such sub-contractor is a registered dealer liable to tax under the Act and that the turnover of such amounts is included in the monthly statements or return of turnover, as the case may be, filed by such sub-contractor". Rule 8-B of the Karnataka Sales Tax Rules, 1957 (hereinafter referred to as "the Rules") prescribes the conditions and the circumstances under which a dealer may seek for composition under subsection (6....
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....he case may be, on sufficient cause being shown and for the reasons to be recorded by him. Rule 8-B of the Rules referred to above requires a dealer to make an application within thirty days from the date of commencement of such year or of the business, if he has commenced during the course of the year. Sub-rule (2) of rule 8-B. Further provides that the assessing authority having jurisdiction, after such verification as may be necessary permit such dealer, subject to the conditions specified in sub-rule (1), to pay in lieu of the amount of tax payable by him during the year, in respect of which such permission is granted, an amount by way of composition as provided in sub-section (6) of section 17. Clause (ii) further provides that the permission once granted shall be valid for the entire year to which it relates. It is not in dispute that the assessing authority has permitted the composition in terms of the request made by the petitioner. It is only at the time of the finalisation of the return filed by the petitioner, the petitioner made a claim that some of the works executed by him did not relate to works contract and as such in respect of the same, the petitioner is not liabl....
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....t for the benefit of an assessee to relieve him of the botheration of book keeping and of going for a regular assessment and filing appeals against the order of assessment, if he is aggrieved. It is necessary to point out that if a dealer opts for composition, he is required to pay tax at the rate of four per cent which is much less than rates for various works enumarated in Schedule VI. In this connection, it is useful to refer to the observation made by the honourable Supreme Court in the case of State of Kerala v. Builders Association of India [1997] 104 STC 134 at pages 139 and 140 reads as follows: "In these circumstances, it is evident that a contractor who had not opted to this alternate method of taxation cannot complain against the said sub-sections, for he is in no way affected by them. Nor can the contractor who has opted to the said alternate method of taxation, complain. Having voluntarily, and with the full knowledge of the features of the alternate method of taxation, opted to be governed by it, a contractor cannot be heard to question the validity of the relevant sub-sections or the rules. Sub-sections (8), (11) and (12) of section 7 are incidental and ancillary t....