TMI Blog2010 (2) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... in the rule nor the rule being ultra vires under the provisions of section 30 of the KVAT Act. Thus do not find the order being totally in violation of the principles of natural justice though the authority could have given some more time to the petitioner. Be that as it may, it is not a fit case for interference in writ jurisdiction when the assessee is provided statutory remedies under the Act. It is open to the petitioner to avail of statutory remedies available under the provisions of the Act. Without prejudice, the writ petition is dismissed. - Writ Petition Nos. 2692,2693, & Others - - - Dated:- 15-2-2010 - RAM MOHAN REDDY , J. ORDER :- RAM MOHAN REDDY J. The petitioner, a company incorporated under the Companies Act, 1956 having its registered office at Madurai, engaged in retail sale of motor vehicles/chassis manufactured by M/s. General Motors India Private Limited and Ashok Leyland Ltd., apart from spares, has its outlet in the State of Karnataka at the address shown in the cause title, is a registered dealer under the Karnataka Value Added Tax Act, 2003 (for short, the Act ) and Karnataka Value Added Tax Rules, 2005 (for short, the Rules ). According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007, recorded a finding that discounts granted through credit notes subsequent to raising tax invoice are eligible for deduction and that the rule 3(2)(c) of the Rules, is invalidated. It is the allegation of the petitioner that the second respondentassessing authority, without application of mind, confirmed the proposal by order dated January 16, 2010, annexure H. Hence this petition for the following reliefs: (a) A writ of declaration or any other writ or order or direction in the nature of a writ of declaration, declaring the words and the tax invoice or bill of sale issued in respect of the sales relating to such discount shows the amount allowed as discount contained in rule 3(2)(c) of the Karnataka Value Added Tax Rules, 2003 as ultra vires sections 2(36), 4 and section 30 of the Karnataka Value Added Tax Act, 2003 read with rule 31 of the KVAT Rules and articles 14, 19(1)(g), 265 and entry 54 of List II of the Seventh Schedule to the Constitution of India, as far as the petitioner is concerned; and (b) Writ of certiorarified mandamus to call for the impugned order passed under section 39(1) of the KVAT Act, dated January 16, 2010 by the second respondent, for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner, is arbitrary and illegal; (v) The levy of penalty and interest is without jurisdiction. In order to appreciate the contentions of the petitioner, it is useful to extract the relevant provisions of the Act and Rules, which reads thus: 2. (32) 'tax invoice' means a document specified under section 29 listing goods sold with price, quantity and other information as prescribed. (33) 'tax period' means such periods as may be prescribed. (34) 'taxable turnover' means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed, but shall not include the turnover of purchase or sale in the course of interState trade or commerce or in the course of export of the goods out of the territory of India or in the course of import of the goods into the Territory of India and the value of goods transferred or despatched outside the State otherwise than by way of sale. (35) 'total turnover' means the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e containing the particulars prescribed. (4) Notwithstanding anything contained in sub-section (1) or (3) or sub-section (1) of section 7, a registered dealer executing civil works contracts shall issue a tax invoice or bill of sale at such time and containing such particulars as may be prescribed. 30.. Credit and debit notes. (1) Where a tax invoice has been issued for any sale of goods and within six months from the date of such sale the amount shown as tax charged in that tax invoice is found to exceed the tax payable in respect of the sale effected or is not payable on account of goods sold being returned within the prescribed period, the registered dealer effecting the sale shall issue forthwith to the purchaser a credit note containing particulars as prescribed. (2) Where a tax invoice has been issued for sale of any goods and the tax payable in respect of the sale exceeds the amount shown as tax charged in such tax invoice, the registered dealer making the sale, shall issue to the purchaser a debit note containing particulars as prescribed. (3) Any registered dealer who receives or issues, credit notes or debit notes shall declare them in his return to be furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a registered dealer is required to issue in duplicate, marking the first copy as original, a tax invoice at the time of sale of goods exigible to tax, in compliance with section 29(1) of the Act, containing all material particulars prescribed in rule 30(1) of the Rules which constitutes the basis for accounting a transaction of purchase or sale of goods and evidence of the said transaction. Taxable turnover is determined by allowing deductions from out of the total turnover in the manner prescribed in rule 3(2) of the Rules. In other words, sale price received or receivable alone constitutes sale consideration liable to tax which is part and parcel of total turnover. Rule 3(2)(c) prescribes the following three conditions: (a) that the discount is allowed in accordance with the regular practice of the dealer, or is in accordance with the terms of the contract or agreement between the buyer and the seller; (b) that such discount is reflected in the tax invoice or bill of sale issued by the seller; (c) the buyer has paid the sum originally charged less the discount, specified in the invoice. A transaction of sale of taxable goods when completed, would result in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India, deserves to be rejected, as not supported by necessary pleadings. Even otherwise, the rule does not, in any manner, hinder or restrict the petitioner from carrying on its profession, business or trade. It is elsewhere said that the power of the State to impose tax so long as it, does not impose an unreasonable restriction to the practice, trade or profession, is not ultra vires article 19(1)(g). There can be no dispute over the proposition advanced by the learned counsel, as recorded in the order sheet dated January 29, 2010, supported by the reported opinions in Belgaum Structural Engineering Pvt. Limited v. Additional Commissioner of Commercial Taxes, Belgaum Zone, Belgaum [1998] 111 STC 222 (Karn) and in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Advani Oerlikon (P.) Ltd. [1980] 45 STC 32 (SC); [1980] 1 SCC 360. The Division Bench of this court, in Belgaum Structural Engineering case [1998] 111 STC 222 (Karn), following the observations of the apex court in Advani Oerlikon's case [1980] 45 STC 32; [1980] 1 SCC 360 held that, a cash discount is allowed when the purchaser makes payment promptly or within the period of cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability of the procedure to all assessees. There is no question of discrimination under this rule. As to how the rule may affect different assessees or different dealers is not the criteria for holding that the rule is a discriminatory provision and discriminates from dealer to dealer. 9.. In so far as the ultra vires assessment is concerned I find that the rule only stipulates the disclosure of some information and does not either create a new liability or an additional liability or in any way come in the way of assessees claiming the benefit under section 30 of the Act. That is a procedure for claiming the benefit. Moreover, the benefit envisaged under section 30 of the Act is only to make a correction within six months from the date of the sale transaction on finding the tax charged/collected is more or less, by issuing a credit note or debit note and in case goods are returned within the prescribed period, to issue a credit note forthwith and claim the value to be excluded from the taxable turnover. The value of the sale transaction is as fixed at the time of sale and even in terms of the charging section. There is no scope for fixing the price later. If under the rule, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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