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TMI Blog2010 (7) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... ndependent charging sections of the Act and a works contractor is liable to tax under both the charging sections. The facts of the case are that the appellant/assessee is a company under the Companies Act, 1956. It is liable to tax under section 5B of the Karnataka Sales Tax Act, 1957 (for short, hereinafter referred to as, "the Act"). Section 6B of the Act was substituted by Act No. 5 of 2002 with effect from April 1, 2002 in terms of which there was to be levied, tax at 1½ per cent. on such portion of the total turnover which is not liable to tax under section 5, 5A, 5B, 5C or 6. Provisos (i) to (xi) of the said provision exempted certain parts of such turnover from the levy. After amendment of section 6B, the appellant approached ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand, the Commissioner passed an order on April 19, 2010 and held that the turnover would be liable to resale tax under section 6B of the Act. Aggrieved by the same, again the assessee is before this court. The learned senior counsel appearing for the assessee contended that the assessee is liable to pay taxes under section 5B of the Act. When once it has paid tax under section 5B, as is clear from the wordings of section 6B, on such portion of his total turnover which has suffered tax under section 5B, no resale tax is leviable under section 6B. Similarly, clause 10 of proviso to section 6B categorically discloses that the total amount paid or payable by the dealer as consideration for the purchase of any of the goods in respect of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Section 6 provides for levy of purchase tax under certain circumstances. Section 6A deals with burden of proof. Section 6B deals with levy of resale tax which was substituted by Act No. 5 of 2002 with effect from April 1, 2002. It reads as under: "6B. Levy of resale tax.-(1) Every registered dealer and every dealer who is liable to get himself registered under subsections (1) and (2) of section 10 whose total turnover in a year is not less than the turnovers specified in the said sub-sections, shall be liable to pay tax at the rate of one and half per cent. of such portion of the total turnover which is not liable to tax under section 5, 5A, 5B, 5C or 6:" A reading of the aforesaid provision makes it clear that every registered dealer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 has categorically stated as under: "177. VAT entails multi-point levy of tax at all points of production and distribution. The second and subsequent dealers in the trade channel who are currently paying a nominal non-passable turnover tax of one per cent. would have to pay tax under VAT which could be higher but collectable. As an intermediate measure and to prepare dealers for a smooth transit to VAT, I propose to introduce a collectable resale tax of 1.5 per cent. Most of the commodities, which are totally exempt from tax on their second and subsequent sales, however, are proposed to be exempt from this new levy. This collectable new levy should induce the entire trade to issue bills on all their sales." Therefore, it is clear that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy of these two taxes are different." The said reasoning runs counter to the express provisions contained in section 6B of the Act and to the assurance given by the Finance Minister at the time of initiating the said amendment on the floor of the State Legislature. It is clear from the above provision that resale tax is only on such portion of the turnover which is not liable to tax under section 5B of the Act in the case of a works contract. In other words, that portion of the turnover which is liable to tax under section 5B of the Act is not liable to resale tax under section 6B of the Act. Clause (x) of the proviso of section 6B of the Act exempts resale tax on consideration paid on purchase of goods, i.e., turnover of goods which are l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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