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2010 (6) TMI 737 - HC - VAT and Sales TaxConstitutional validity of section 4(1)(c) and Schedule VI, item 23 of the Karnataka Value Added Tax Act, 2003 and the Explanation appended to rule 3(1) of the Karnataka Value Added Tax Rules, 2005 challenged Held that:- Writ petitions are allowed. It is declared that section 4(1)(c) read with serial No. 23 of the Sixth Schedule to the KVAT Act does not enable the respondents to levy tax at the rate of 12.5 per cent in respect of declared goods used in the same form, in the execution of works contracts, which fall under section 14 of the Central Sales Tax Act, 1956. Consequently, proceedings initiated or concluded in respect of the petitioners seeking to levy tax, as questioned above, are hereby quashed to that extent. "Explanation" to rule 3(a) to (g) of the KVAT Rules is contrary to section 4(1)(c) of the KVAT Act and article 366(29A)(b) of the Constitution of India and is hence, unconstitutional and invalid. Consequently, the levy of tax and penalty on advances received by the petitioner in W.P. Nos. 29046 to 29048 of 2009 at annexure A thereof is hereby quashed.
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