Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2011 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (6) TMI 716 - HC - VAT and Sales TaxWhether the commodities being dealt with by the petitioner-assessee fall under entry 2(a)(vi) of the Fourth Schedule to the Act, inasmuch as the commodities such as cold rolled strips in coil form are purchased by the assessee from dealers and are subjected to the process of bending and corrugation? Held that - The lower authorities having considered the nature of the raw materials as well as the finished products being dealt with by the assessee, were of the clear view that the same fall under entry 2(a)(v) of the Fourth Schedule to the Act and articles such as lathe channels, bottom and door frame section, cannot fall under entry 2(a)(vi) of the Fourth Schedule to the Act. We are in complete agreement with the findings recorded by the lower authorities. We do not find any error committed by the lower authorities and the impugned order does not call for interference.
Issues:
Assessment of tax under Karnataka Sales Tax Act for two consecutive years based on the classification of goods under the Fourth Schedule. Analysis: For the assessment years 1995-96 and 1996-97, the petitioner declared gross turnovers and was subjected to tax by the assessing authority, which led to appeals before the Joint Commissioner of Commercial Taxes and subsequently the Karnataka Appellate Tribunal. The Tribunal, in its order, classified the goods sold by the assessee under entry 2(a)(v) of the Fourth Schedule to the Karnataka Sales Tax Act, 1957. The petitioner contended that the goods should fall under entry 2(a)(vi) instead, citing the process of bending and corrugation applied to cold rolled strips. The senior counsel for the petitioner relied on the decision of the Supreme Court in Telangana Steel Industries v. State of Andhra Pradesh [1994] 93 STC 187 (SC) to support this argument. The Court examined the definitions under entry 2(a)(v) and 2(a)(vi) of the Fourth Schedule, which respectively cover steel structurals and other iron and steel products. After considering the products and arguments presented, the Court agreed with the lower authorities' classification under entry 2(a)(v) for the petitioner's goods. The Court noted that the nature of raw materials and finished products, such as lathe channels and door frame sections, align more closely with the description under entry 2(a)(v) than 2(a)(vi). The Court found no errors in the lower authorities' decision and upheld the Tribunal's order, dismissing the petitioner's appeals. Consequently, the Court ruled in favor of the Revenue and against the assessee, emphasizing that the goods in question fell under entry 2(a)(v) as per the Fourth Schedule to the Act. The petitions were deemed meritless and were dismissed accordingly.
|