9911796707
TMI Blog2011 (3) TMI 1542X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of plant and machinery as claimed by him. The assessee is a limited company registered under the Companies Act, 1956. The assessee is registered under the Karnataka Sales Tax Act, 1957 and Central Sales Tax Act, 1956. Section 5C inserted in the Karnataka Tax on Entry of Goods Act, 1979 (for short, hereinafter referred to as "the KTEG Act") came into effect from May 1, 1992. The said section offers an option to pay entry tax at the compounded rates in lieu of tax under section 3 of the KTEG Act, 1979. The said provision provided for two modes for calculation of tax, one for the dealers to cause the entry of goods liable for tax under the Act in India, the local area for use, the consumption or sale therein and another for the manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower authorities and dismissed the appeal. Aggrieved by the same, the assessee is before this court. The learned counsel appearing for the revision petitioners submitted that once the assessee opts for composition scheme under section 5C, as the said claim did not provide for payment of composition tax on plant and machinery, the assessee is not liable to pay any entry tax on plant and machinery. Secondly, he contended that the entry of goods, that is the raw materials into the local area made by the assessee, if it is exempted from payment of entry tax the same has to be deducted out of the value of the manufactured goods before imposition of composition tax. His grievance is that the assessing authorities have not granted the same and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e April 30, 1992 and were not liable to tax under the Act prior to the said date." Therefore the composition of the tax scheme is applicable to those goods which are brought into the local area for sale therein. Therefore, if the goods are brought into the local area for the purpose of it being used and not for sale then section 5C is not attracted. For such goods section 3(1) applies. Therefore, the contention that section 5C is self-contained in itself, it is an alternative to the regular assessment as provided under section 3(1) and therefore once section 5C is not applicable to plant and machinery, it follows that under section 5C he is not liable to pay tax for goods which do not fall under section 5C, cannot be accepted. If particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer of tractor, shall be deducted from the value of the manufactured goods for the purpose of calculating composition tax under section 5C. The reasoning of the Tribunal that there is no provision providing for such deduction is ex facie incorrect and cannot be sustained. Therefore, the said contention of the revision petitioner is upheld. Consequently, the matter is remanded back to the assessing authority to give deduction to the value of the raw materials, component parts and inputs which are used in the manufacture of goods on which goods entry tax is exempted under this Act and deduct a sum from the value of manufactured goods and reassess the tax liability and if any amount has been paid in excess of amounts due under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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