TaxTMI 
TaxTMI 
2017 (5) TMI 996
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.... well as works contracts. The petitioner has been filing returns of turnover regularly declaring the turnover as exempt since there is no transfer of property in goods by the petitioner. As the turnover is exempted, petitioner is not liable to tax under the KVAT Act and therefore question of petitioner claiming deductions under the provisions of Rule 3(2) of the Karnataka Value Added Tax Rules, 2005, hereinafter referred to as `the Rules' for short does not arise. 3. The petitioner was awarded a contract by Engineers Indian Limited, for installation and commissioning of one Single Point Mooring (SPM) System off the coast of Mangalore; and laying of 12 19 mm (48") diameter offshore crude oil pipeline for offloading of crude and feeding to the refinery, approximately 17.4 k.m. long from SPM/PLEM to land fall point (LFP) at Mangalore, in the State of Karnataka vide detailed letter of acceptance dated 11.7.2011. The Mangalore Refinery & Petrochemicals Limited (MRPL, for short) undertook expansion of its refinery capacity under MRPL-Phase-III for which there was a requirement of crude of 18 MMTPA. Therefore, MRPL proposed to install one SPM system and associated pipeline for offloadin....
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....mpt turnover. The contract executed by the petitioner was a service contract not amenable to the provisions of the KVAT Act since the contract is indivisible and that the State Legislature has no jurisdiction to levy VAT on the value of service contracts. The entire value of the contract is amen able to service tax under the provisions of Finance Act, 1994 read with Entry 92C of List I. The petitioner has discharged service tax on the entire receipts in terms of Finance Act, 1994. It is stated by the petitioner that value of goods deemed to have been transferred in the course of execution of the service contract is negligible and most of the goods purchased by petitioner and used in the execution of service contract are consumable s or goods for temporary usage and machinery/tools which cannot be brought to tax. The labour and like charges incurred by petitioner are duly accounted in the books of accounts which are audited and therefore the said expenditure should be allowed after due verification of the books of the accounts. The purchase turnover of the goods cannot be determined based on the mere declarations for e-sugam transactions. The value of goods incorporated in the works....
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....re is allowable as a deduction while determining the value of transfer of property in goods for the purposes of levy of sales tax or VAT by the Apex Court in Gannon Dunkerly & Co vs., State of Rajasthan, reported in 88 STC 204 SC. 8. It is stated by the petitioner that the issue involved only pertains to levy of VAT on the gross amounts received for the taxable service rendered by the petitioner. The question to be considered by this Court is, whether the petitioner is liable to pay VAT on the payments, which do not fall within the ambit of `works contract' as defined under the Act. It is stated, the dispute between the parties involves interpretation of constitutional provisions, applicability of doctrine of pith and substance, the theory of exclusiveness as found in article 246(1) of the Constitution of India and, therefore, it is submitted that notwithstanding the alternate remedy available under the statute, this is a fit case where this Court should entertain this writ petition and interpret these statutory and constitutional provisions. 9. The respondents have filed objection statement contending that the writ petitions are not maintain able and are liable to be rejected o....
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....how such goods movement or procurement of such goods by purchase or by stock transfer receipts. The said issues are discussed in length in the re-assessment order. In spite of granting sufficient opportunity, the petitioner company failed to reconcile the transactions and failed to arrive at the actual transactions. Further the petitioner has explained the details of material transferred in response to the pre-assessment notice. The petitioner has not claimed the entire turnover as exempted in their reply to the notice of the Assessing Authority. They themselves accepted the fact of transfer of property in goods and conceded that the turnover to the extent there is transfer of property in goods, as explained above, may be subjected to levy of VAT under the KVAT Act. 11. The contention of the petitioner that the entire contract is a service contract is contrary to the Companies own record as submitted by itself as per the accounts. Even in the application under Section 69 of the Act, the petitioner requested for exemptions under Rule 3(2) of the Rules. The petitioner requested for such deductions without substantiating the evidence prescribed under the Act. The claims made by the ....
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....,'s case referred to supra, should have been classified. Th e assessing authority should have considered 8 categories of exemptions enumerated by the Apex Court relating to labour and like charges etc., to be extended to the turnover. Whether the goods listed either under clause 4(1) or 4(2) it is for the petitioner to satisfy by placing materials. The assessing authority failed to verify the records and failed to afford sufficient opportunity to the petitioner. The relief sought for by the petitioner is in the form of declaration and further requires interpretation by this Court. It is to be declared that the petitioner is not amenable to the respondent for payment of tax under the Act. The action on the part of the assessing authority is in violation of the principles of natural justice. This court is required to declare liability of the petitioner to pay VAT apart from paying service tax and hence the writ petition is maintain able even in place of an alternative remedy of appeal is provided in the statute. 15. On the other hand, the learned HCGP submits that there is an alternative remedy of appeal before the Joint Commissioner of Commercial Taxes (Appeals) and when there is a....
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....t petitions. 19. The contention of the petitioner is mainly on two points namely, there shall be declaration by this Court that petitioner is not amenable to VAT when i t is carrying on service contract and service tax has been paid and secondly what it has purchased or procured are all consumables in the nature of work the petitioner is carrying on and the transfer of property in such goods is negligible. On such consumable goods, no VAT can be levied and therefore the petitioner is not liable to pay any VAT as demanded by the respondent Assessing Authority. The reliance is placed on a decision of the Apex Court in GANNON DUNKERLEY & CO. vs., STATE OF RAJASTHAN & OTHERS, reported in (1993) 1 SCC 23 364. It is claimed on behalf of the petitioner that if there is transfer of property in goods, the Assessing Officer shall apply the 8 categories of exemptions mentioned therein. 20. In the instant case, there is a reassessment order after notice to the petitioner. The petitioner appeared before the Assessing Authority produced registers maintained by it and raised similar contentions that all goods, which were procured or purchased were consumable goods, consumed in the service contr....
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....mental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathma's case, Titaghur Paper Mills case and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved persons or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation." 23. It is to be mentioned here that when an alternative remedy is available and petition is entertained by this Court, the petitioner later cannot approach the appellate authority by way of appeal or revision as the case may and thus petitioner would be to its disadvantage. For this reason also, entertaining this writ petition without allowing the petitioner to avail the alternative remedy, is not in the best interest of....