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2015 (1) TMI 80 - HC - VAT and Sales TaxRejection of application for registration u/s 6(5) of the Kerala Value Added Tax Act, 2003 as a "presumptive dealer" with liability to pay tax at lesser rate and the assessment finalised u/s 25(1) of the Kerala Value Added Tax Act – Satisfaction of liability u/s 6(1) or not – Held that:- The Commissioner of Commercial Taxes had issued a Circular No. 5 of 2005 dated April 1, 2005, explaining the scope of provision, wherein it was observed that the rate of presumptive tax was "one per cent" of the taxable turnover of the dealer - The amendment was brought about on August 28, 2005, giving retrospective effect from April 1, 2005 - Section 6(5) as amended with retrospective effect from April 1, 2005, the rate of tax payable by an eligible "presumptive tax dealer" has been brought down to "0.5 per cent" of the turnover of the sales of the taxable goods. There was a total stock of ₹ 13.45 lakhs, which however was sought to be explained by the petitioner stating that it was only in respect of "maize", which was purchased for feeding the petitioner's own poultry and not for sale; adding that it was not a taxable commodity - the commodity is the same and the rate of tax is also the same, as it is 12.5 per cent - The benefit of lesser rate of tax available to a presumptive tax dealer under section 6(5) is carved out by way of exemption in respect of such dealers, who satisfy the different parameters as prescribed under the statute - It is for the law making authorities to prescribe various conditions so as to extend the benefit of exemption, by way of reduced rate of tax and incorporation of such provisions with retrospective effect cannot be misunderstood as enhancement of any rate of tax, by virtue of any amendment - The idea and understanding of the petitioner is thoroughly wrong and misconceived. Constitutional validity of section 6(5) with regard to the retrospective amendment made on August 28, 2005 w.e.f. April 1, 2005 – Held that:- There is absolutely no challenge or discrimination with regard to the rate of tax in respect of broiler chicken, which is 12.5 per cent, whether it is imported from outside the State or procured within the State - However, in respect of certain specified class of dealers, who satisfy the conditions stipulated under section 6(5) and having a place lower in the hierarchy with maximum turnover of less than ₹ 50 lakhs, are given the benefit of option of paying tax as a "presumptive tax dealer" on the total sales turnover at the prescribed rate, subject to satisfaction of the requirements - This, in no way, violates the mandate under article 301 or 304(a) of the Constitution of India - That apart, when the petitioner raises a blanket challenge against section 6(5) referring to the discrimination to the imported commodity and if the said provision is to go on this count, the benefit of option also goes and the petitioner cannot be heard to say that he is entitled to have the benefit of section 6(5) as a presumptive tax dealer - The challenge is quite wrong and unfounded. The liability to satisfy tax is not depending upon the right or chance of the dealer to have it passed on to the purchaser - Tax is payable at the instance of sale and only by virtue of the statutory prescription that the dealers have been permitted to pass on the liability to buyers, which in no case can be a "pre-condition" to have mulcted with the tax liability - the tax paid by the petitioner u/s 6(5) was not in full conformity with the statutory prescription and as such, the option exercised and satisfaction of the requirements could be said as incomplete. By virtue of the specific exclusion of "first taxable sellers" from the scheme of payment of presumptive tax under "clause (d)" of section 6(5), the lower authorities including the Tribunal have rightly rejected the claim of the petitioners - section 6(5)(d) was very much there in existence, right from the beginning when the VAT Act was brought into force with effect from April 1, 2005, independent of any amendment subsequently brought about on August 28, 2005 (with retrospective effect from April 1, 2005) – as the petitioner is not entitled to have the benefit of "presumptive tax" under section 6(5) (even by virtue of the unamended provision itself), the petitioner is not entitled to have any relief in this writ petition – decided against petitioner.
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