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2009 (3) TMI 939 - KARNATAKA HIGH COURTScheme of payment of tax by way of composition as envisaged under section 15 of the Act questioned - effect of levy of penalty under section 72(2) of the Act in the context of cancellation of facility of composition under section 15(1) of the Act - Held that:- The provisions of section 15 of the Act having been so arranged that the State has endeavoured to not only maintain the overall revenue to the State from the imposition of levy under the Act but also to the extent possible it is maintained at the same level whether a dealer has opted for payment of tax by way of normal method or by way of composition, the provision cannot be said to be one imposing an additional burden on dealers who opt for composition. In fact, the obstruction, for attracting article 301 of the Constitution of India is said to be the denial of facility to dealers having out-of-State purchase of goods and not anything else. If the very premise is not available, namely, that there is no discrimination by making such distinction and also that there is no additional burden on dealers who are denied the facility of payment of tax by way of composition, the argument that the provision is violative of article 301 of the Constitution of India and therefore unconstitutional, fails and is accordingly rejected. We deem it fit to permit the petitioner's to avail of the statutory remedies only in so far as levy of penalty under section 72(2) of the Act is concerned as this court will not be in a position to examine the rival contentions in these petitions while examining the constitutional validity of section 72(2) of the Act which was an independent question and which was examined and answered against the petitioners. As the penalty is levied even without providing a proper opportunity to the petitioners and without proper proposition in this regard, it is only necessary that the petitioners are enabled to file written explanation and thereafter the assessing authority may examine the same. Appeal allowed in part.
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