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TMI Blog2018 (7) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... were brought to tax by the Assessing Authority U/s 3(2) of Act, while concluding the reassessment proceedings U/s 39(1) of the Act. Being aggrieved, appellant preferred appeals before the Appellate Authority and the same came to be allowed setting aside the tax levied under Section 3(2) of the Act on the URD purchases, as well as the penalty and interest levied U/s 72(2) and Section 36 of the Act. Thus, Commissioner of Commercial Taxes, Zone-I exercising powers under Section 64(1) of the Act revised the said order of the First Appellate Authority, by Order dated 4.7.2012, the order passed by the First Appellate Authority was set- aside restoring the order of the Assessing Officer relating to the tax periods April 2005 to March 2009. Hence, these appeals. 3. Learned counsel appearing for the appellant has challenged the order of the Revisional Authority raising the following questions of law: i) Whether the action of the respondent- Authority u/s 64(1) of the Act is justifiable in law ? ii) whether the Revisional Authority is justified in law in holding that the appellant is liable to purchase tax U/s 3(2) of the Act ? 4. Firstly, it was argued that the provisions of Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the appellant placed reliance on the following Judgments: 1. CONTINENTAL BUILDERS AND DEVELOPERS VS. STATE OF KARNATAKA [[2008] 14 VST 175 [Kar]]; 2. CONTINENTAL BUILDERS AND DEVELOPERS VS. STATE OF KARNATAKA [2009[67] Kar.L.J 359 [Tri.] (FB)] 3. CONCORDE HITECH CITY [P] LIMITED VS. STATE OF KARNATAKA AND ANOTHER [[2011] 39 VST 52 [Kar]] 4. CANARA OVERSEAS LIMITED V/S. THE STATE OF KARNATAKA [STRP.NO.21/2008, D.D. ON 08.07.2008] 5. KWALITY BISCUITS [P] LTD., V/S. STATE OF KARNATAKA [[2012] 53 VST 66 [Kar]] 6. GODREJ AGROVET LIMITED V/S. ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE II, BANGALORE [[2011] 39 VST 20 [Karn]] 7. Learned AGA, Mr.Vikram A.Huilgol, for the respondent supports the impugned order. It was argued that Section 3(2) of the Act contemplates the levy of tax on the registered dealer or a dealer liable to be registered, on the sale of taxable goods to him in the course of his business, if such goods are sold by a person who is not registered under the Act. The appellant being a registered dealer under the provisions of the Act is liable to pay tax U/s 3(2) of the Act, once the goods are purchased from the unreg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on in furtherance of gain or profit and whether or not any gain or profit accrues therefrom; and [b] any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern." 12. This court in the case of Continental Builders and Developers, Bangalore (supra1) has held thus: "5. With reference to the above legal rival contentions, we have to answer questions framed in paragraphs 14 and 15 against the assessee for the following reasons: The Tribunal, with reference to the rival legal contentions and the undisputed facts urged by the learned counsel for the parties, has answered the point framed by it against the assessee by recording reasons at paragraph 8 of the impugned order after referring to the undisputed facts with regard to common facilities such as putting-up compound wall, drainage, constructing club house, stores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004 by dissenting from the judgment of a coordinate Bench of the Tribunal? 15. Whether, in the facts and circumstances o the case, charges received for creation of common amenities that are not sold to any person but only a right to use thereof is provided, would be liable to tax under the provisions of the Karnataka Sales Tax, 1957?" Indeed, this judgment throws light on the aspect of levy of tax on the transfer of common facilities provided in the layout. The relevant questions of law are answered in favour of Revenue, dismissing the revision petition of the assessee. In the circumstances, judgments rendered by the Tribunal would not come to the assistance of the assessee. 13. Subsequently, in the case of Shyamaraju & company (supra), the Co-ordinate Bench of this court in STRP Nos.32 and 103-105/2010 had the occasion to deal with the similar issue, in the context of goods purchased from URDs for the development of their own property in the course of his business. It is held thus: "Sub-section (2) of Section 3 deals with the liability to pay tax on the registered dealer when he purchases taxable goods from a person who is not registered under the Act. As is clear from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s his goods and sells the goods in the same form or uses in the course of the business by absorbing the same as an input and then sells the final product, he is liable to be levied sales tax. The contention that Section 3(2) applies only to a case where the registered dealer who purchases goods from unregistered dealer, uses the said goods in the same condition in the course of his business, is not tenable. 7. In this case, admittedly, the assessee is a private limited company carrying on business of civil works contract and also development of properties. It is not in dispute that the taxable goods were purchased from unregistered dealers for development of their own property. That development of their own property is done in the course of business and therefore, Section 3(2) is attracted. Hence, the order passed by the Tribunal cannot be sustained. Accordingly, we pass the following order: The STRP is allowed. The impugned order passed by the Appellate Tribunal is hereby set- aside. The orders passed by the Assessing Authority as well as the Appellate Commissioner are restored." 14. In the light of these Judgments, it is clear that once the taxable goods purchased from the u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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