TaxTMI 
TaxTMI 
2024 (1) TMI 441
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....<br>HON'BLE MR. JUSTICE P.S. DINESH KUMAR AND HON'BLE MR. JUSTICE C.M. POONACHA For the Appellant (By Shri. T.N. Keshavamurthy, Advocate) For the Respondent : (By Shri. Jeevan J. Neeralgi, AGA), (By Shri. G. Rabinathan, Advocate), (By Shri. A. Satyanarayana, Advocate), (By Smt. A. Rama, Shri. Venkatesh Vikram And Shri. Atul K. Alur, Advocates), (By Smt. H. Vani, Advocate), (By Shri. M.G. Kumar, Law Firm), (By Shri. B.G. Chidanand Urs, Advocate), (By Shri. H.B.V. Patil, Advocate And Smt. Shalini Patil, Advocate For R2 To R4) R-1 Served, (By Shri. T.N. Keshavamurthy, Adovate) (By Shri. Aravind Kamath, Advocate), (By Mr. Raghuram And Chythanya, Advocates) JUDGMENT P.S. DINESH KUMAR J, These intra-court appeals by the unsuccessfu....
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....ng the validity of Section 15(5)(e) of the KVAT Act and declaring Section 4(3)(d) of the Finance Act, 2007 as prospective in nature. 7. Learned Advocates for the assessees, praying to allow the appeal, submitted that: • Entry 54 of List II of the Seventh Schedule of Constitution of India authorizes levy of taxes on sale or purchase of goods, and not sale and purchase of goods; • the learned Single Judge erred in holding that the purchase from an URD [Unregistered Dealers] and its subsequent sale by the petitioner/dealer constitute two different transactions, whereas it is one single integrated transaction; • assessees, who have not opted for composition are given the benefit of set-off, whereas peti....
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....rovide concession or exemption to the assessees opting composition in respect of liability under Section 3(2) of KVAT Act; • the Amendment is clarificatory in nature, and no additional levy has been created from a previous date. 10. With these submissions, he prayed for the dismissal of assessees appeals and prayed to set-aside the learned Single Judge's order with respect to retrospective application of the Amendment. 11. We have carefully considered rival contentions and perused the records. 12. The questions that arise for our consideration in these appeals are: (i) Whether Section 15(5)(e) of KVAT Act, inserted by the Finance Act, 2007 is ultra vires Constitution? (ii) If the answer to the above q....
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....e cases is that they have opted for composition scheme. The Amended Section 15(5)(e) of the KVAT Act is violative of Article 14 of the Constitution of India because, purchase of goods by the assessees from outside Karnataka does not attract any tax whereas, if the same goods are purchased within the State, assessees will be rendered liable to pay tax on such purchase in addition to composition tax. 17. This leads to a situation where two different assessees; one who purchases the goods within the State and one from outside the State will be treated differently. Thus there shall be no parity in taxation. The State Government have clearly discriminated among two similarly situated assessees and it amounts to violation of Article 14 of the ....