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2019 (12) TMI 56 - HC - VAT and Sales TaxLevy of tax and penalty on advances received by petitioner - Karnataka VAT Act - tax periods 2013-14 - HELD THAT:- The liability fastened on the petitioner–Assessee for the advance payment received during the tax periods 2013-14 cannot be held to be justifiable, for the reason that Explanation to Rule 3 of the Rules contemplates that any amount paid as advance to a dealer as a part of consideration for transfer of property in goods [whether as goods or in some other form] involved in the execution of a works contract shall be included in his total turnover in the month in which execution of such works contract commences. The Cognate Bench of this Court in the case of NAGARJUNA CONSTRUCTION COMPANY LIMITED AND ANOTHER VERSUS STATE OF KARNATAKA AND OTHERS [2010 (6) TMI 737 - KARNATAKA HIGH COURT], has observed that the Explanation to Rule 3[a] to [g] of the KVAT Rules is contrary to Section 4[1][c] of the Act and Article 366[29A][b] of the Constitution of India and is hence unconstitutional - Accordingly levy of tax and penalty on advances received by the petitioner therein, was quashed. The matter is remitted to the respondent No.2 – Authority to re-consider the same and conclude the re-assessment in an expedite manner after providing an opportunity of hearing to the petitioner - petition allowed by way of remand.
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