TaxTMI 
TaxTMI 
2017 (12) TMI 1015
X X X X Extracts X X X X
X X X X Extracts X X X X
....e' contained in Section 15 of the Karnataka Value Added Tax Act, 2003 ('KVAT Act, 2003' for short). 2. The assessees petitioners are either Hoteliers, Works Contractors or Crushing Units who have been denied this benefit on the ground that they purchased certain goods from outside the State or in the course of inter-State Trade or Commerce including the capital goods like Plant and Machinery and in view of the Circulars issued by the Head of the Department, namely Commissioner of Commercial Taxes, Circular No.14/2013-14 on 05/10/2013 and Circular No.20/2013-14 on 18/12/2013, such benefit is sought to be denied to them. Hence, the present writ petitions. 3. These writ petitions have been filed by the different assessees petitioners at different stages of the proceedings undertaken by the Respondent Departmental Authorities, some have approached this Court at the notice stage and some have approached against the Assessment Orders passed against them. 4. The learned counsels for the petitioners have submitted before the Court that the said benefit under Section 15 of the KVAT Act, 2003 of Composition of Tax cannot be denied to them, if they have effected purchases of Capital ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is concerned, the issue is already pending before the Division Bench of this Court in the case of New Taj Mahal Café (P.) Ltd. (supra) and that question cannot be allowed to be re-agitated before this Court again. 9. On the question of purchase of capital goods by the assessees in the present cases also, the learned counsel for the Revenue has submitted that there is no exclusion of the capital goods from the words 'goods' employed in Section 15 of the KVAT Act, 2003 and therefore the dealers who purchase or obtain goods from outside the State or trade outside the Territory of India are excluded from the ambit and scope of Section 15 of the KVAT Act,2003 and they should pay regular rate of tax and get their assessments done in the ordinary course under Section 4 and other relevant provisions of the KVAT Act, 2003. 10. He submitted that the Circulars issued by the learned Commissioner of Commercial Taxes just explain the provisions of the KVAT Act,2003 as they stand and there is no such interpretation of these provisions which would inhibit the discretion of the Assessing Authorities or even the Appellate Authorities to decide the cases in accordance with law. 11. He....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... effected purchases within the State and those who have effected purchases from outside the State. The other requirement is that it should have a nexus to the object of the provision. 45. The object of the particular provision Section 15 of the Act is to provide some facility i.e., simplifying the procedural compliances required on the part of an assessee and the identification of such assesses or dealers having been indicated to be on the basis of the difficulty in adhering to the procedural requirements, particularly, in respect of persons like dealers who have turnover less than Rs. 15 lakhs i.e., small time dealers not big businessmen, dealers who are executing works contract or dealers who are hoteliers, restaurateurs, caterers or dealers running a sweetmeat stall, but in the sense, who are selling edible items or who is a mechanized crushing unit producing granite or any other metals. The general scheme as indicated for identifying these dealers is that their inputs are numerous and in small quantities. Maintenance of the details of such purchases and input taxes may be cumbersome and as a alternative scheme of taxation by composition is extended to them as a rough a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....not have, can be said to be a reasonable classification and having some purpose and nexus to the object of providing facility and retaining the purpose of the Act. Even here, the depth of scrutiny is proportionate to the affectation in the sense, greater the affectation stricter the examination. The complaint is not that there is affectation, complaint is that the facility is denied. The affectation being present in the case of the petitioners is a different matter because that is an affectation which they had invited themselves and that cannot be the test to examine the discriminatory nature of the provision as complained by the petitioners. It is also of relevance to notice that the petitioners by themselves form a class of dealers who are in fact identified for extending the facility and within them a further sub-classification i.e., in the first instance, the petitioners are identified as class of dealers who alone get the facility and not others in general. Such being the nature of the provision, a further sub-classification to fine tune the provisions cannot be one characterized as discriminatory as the object of classification is only in furtherance of the main purpose of ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rities are free to exercise their jurisdiction and can inter alia also refer to such Circulars issued by the Commissioner of Commercial Taxes and other relevant judgments, if cited before them. 20. Therefore, this Court does not find any reason to allow the assessees petitioners to by-pass the regular appellate remedies available to them under the KVAT Act, 2003 before the Appellate Forums and if such petitions are directed only against the Show Cause Notices issued by the Assessing Authorities, the assessees may first show cause before the concerned Authorities themselves. 21. There is no justification to undertake the exercise of interpreting the various provisions of the KVAT Act, 2003 and the KVAT Rules, 2005 prematurely at this stage and terms like 'capital goods' are 'goods or not at this stage academically and it is necessary for the assessees petitioners to get these mixed questions of facts and law first determined through the Appellate Forums provided under the KVAT Act, 2003 itself. 22. It is only finally against the orders passed by the Karnataka Appellate Tribunal the final fact finding body and appellate authority under the KVAT Act, 2003 that if such questio....