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2024 (1) TMI 441 - HC - VAT and Sales TaxLevy of purchase tax and its applicability on dealer who opted for composition scheme - Constitutional Validity of Section 15(5)(e) of the KVAT Act - seeking declaration that Section 4(3)(d) of the Finance Act, 2007 as prospective in nature. Whether Section 15(5)(e) of KVAT Act, inserted by the Finance Act, 2007 is ultra vires Constitution? - HELD THAT:- The object sought to be achieved by the Amendment is to encourage purchase from registered dealers. This object will fail and instead encourage purchase from dealers outside the State since goods purchased within the State are only taxable and therefore, the object sought to be achieved will not be fulfilled. It is recorded that State has all the machinery such as, Tax Inspectors, Flying Squads etc. to identify the URDs and to register them as dealers - in view of the admitted discrimination by the State, the Amendment shall not be sustainable - the Amendment is discriminatory in nature and also not in favour of the welfare of the economy of the State as it encourages purchases from outside the State - question answered in the affirmative. If the answer to the above question is in the negative, will it have retrospective effect i.e., from April 1, 2006? - HELD THAT:- Since, first question is answered in the affirmative, this question does not require any consideration. Whether the order passed by the Hon’ble Single Judge requires any interference? - HELD THAT:- This question also answered in the affirmative. Section 15(5)(e) of the KVAT Act is declared ultra vires Constitution of India - Petition allowed.
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