2019 (7) TMI 976

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....s and photo negatives. The rectification orders impugned herein are passed by the Deputy Commissioner of Commercial Taxes (Audit). DVO-1, Bengaluru, subjecting the turnover relating to the transfer of goods involved in the works contract executed, to tax under Entry 25 of the Sixth Schedule to the Act read with Section 5B of the Act. 4. These rectification orders are passed in the backdrop of the orders passed by the Hon'ble Apex Court in the case of State of Karnataka Vs. Pro Lab and others (D.D.30.1.2015). 5. Marshalling of facts is necessary for the better understanding of the case. Entry 25 of the Sixth Schedule to the Act reads as under: Sl.No. Description of works contract Period Rate of tax u/s 5-B 25 Processing and supplying of photographs, photo prints and photo negatives 1-7-1987 to 31-3-1996 1-4-1996 to 31-3-1998 From 1-4-1998 6% 8% 10% 6. The validity of this provision was challenged in the case of Keshoram Surindranath, Photo-Mag (P) Limited and others Vs. Asst. Commissioner of Commercial Taxes (LR), City Division, Bangalore and others. This Court held that entry 25 of the sixth schedule to the Act is beyond the scope of Ar....

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....gislative competence continues to be binding on the respondents. As a consequence, the Authorities under the Act cannot proceed on the basis that Entry 25 is restored to the Sixth Schedule of the Act. 7. Pursuant to the said Judgment, State Legislature reintroduced Entry 25 of the Sixth Schedule to the Act with retrospective effect from July 1st 1989 by Karnataka Taxation Laws (Amendment) Act 2004 which came into force with effect from 29.01.2004. Section 2(3) of the said amendment reintroduced Entry 25 in identical terms, as it appeared earlier, with retrospective effect i.e., with effect from 01.07.1989. Assessment orders were passed and demand notices were issued relating to the assessees engaged in the photographic activity based on the said amendment. Being aggrieved, the assseses filed writ petitions challenging the Amendment Act. The Division Bench of this Court in the case of Pro Lab & others Vs. State of Karnataka (supra), held that the provisions of Section 2(3) i.e., re-introduction of Entry 25 of Sixth Schedule is unconstitutional. In the light of the said decision, all consequential proceedings including assessment order and demands were set aside. On the challenge ....

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....sessing Authority passed assessment orders by granting exemption from tax in terms of the judgment of this Court. The said assessment orders have been rectified vide order under Section 25-A of the Act in view of the law laid down by the Hon'ble Apex Court in Pro Lab's (supra). The details of the same are as under: WP NO: ASST.YR DATE of Assessment order 25A NOTICE 25A ORDER TAX 23153/18 -12[2] 1998-99 16.01.2004 21.10.2007 09.04.2018 4,89,018 23559/18 -12[7] 1999-00 04.06.2003 -DO- -DO- 83,319 23560/18 -12[2] 2000-01 20.12.2003 -DO- -DO- 11,61,018 23561/18 -12[2] 2001-02 06.05.2006 -DO- -DO- 5,42,129 23562/18 -12[2] 2002-03 27.05.2006 -DO- -DO- 10,17,242           32,92,726       ALL TOTAL:   64,33,369 10. The orders passed under Section 25-A of the Act pursuant to the judgment of the Hon'ble Apex Court in Pro Lab's (supra), are impugned herein mainly on two grounds. Firstly, the order under Section 25-A of the Act are passed beyond the period of limitation. Secondly, the Assessing Au....

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....er of the Hon'ble Apex Court in the Pro Lab's case. Hence, the same are legally valid and justifiable. Reliance was placed on the judgment of the Hon'ble Apex Court in the case of [1] M/s. K.B.Foams [P] Ltd., V/s DCCT, Bangalore City Division, Bangalore and Another [62 STC 233]; and [2] State of Tamil Nadu V/s. Mahalakshmi Textile Mills Ltd., [1999] 113 STC 1 [SC]. 13. I have carefully considered the rival submissions of the learned counsel for the parties and perused the material on record. 14. The main controversy relates to the period of limitation in passing the orders under Section 25-A of Sixth Schedule to the Act pursuant to the judgment of the Hon'ble Apex Court in Pro Lab's case. Section 25-A of the Act reads thus: "25-A. Rectification of mistakes. - [1] With a view to rectifying any mistake apparent from the record, the assessing authority, appellate authority or revising authority, may, at any time, within five years from the date of an order passed by it, amend such order:" 15. This provision makes it clear that the 'Assessing Authority' [for the purpose of the present cases], is empowered to rectify any mistake apparent from the record, at....