AI Structured Summary
Not yet generated for this judgment
Judgment
An appeal was preferred by the petitioner which is stated to have been withdrawn on 27-2-1999. The controversy in the present matter is regarding interpretation of notification dated 19-12-1996. The petitioner has undertaken the works contract and in terms of the provisions of Section 17(6)(i) of the Karnataka Sales Tax Act moved for composition scheme. The application submitted by the petitioner was accepted and permission was granted. As a result of this composition, the petitioner was not liable to pay the turnover tax in terms of Section 6-B. Subsequently, by a notification dated 19-12-1996, issued under Section 8-A, transfer of property on goods involved in the execution of works contract relating to Information Technology Park Limited, were exempted under Section 8-A for a period of three years from the tax payable under Section 5-B. The petitioner was subjected to tax for the period from 19-12-1996 to 31-3-1997 also. It is this action of the Assessing Authority which has been challenged.
Arguments of both the learned Counsel for the parties heard.
The power to exempt under Section 8-A of the Act which is exercised by the State Government is to take out the assessee from the charging section. The charge that is created comes to an end the moment exemption is granted. A contention is raised by the learned Counsel for the respondent that the composition under Section 17(6) is for the year and therefore, grant of exemption during the year would still make an assessee liable to pay the tax, in terms of Section 17(6) of the Act. This contention cannot be considered to be proper. It is true that the composition is granted on yearly basis, as the unit of assessment is also for an year, the charge is created annually, but if the charging section itself is not in force during part of that year, the liability ceases from the date of exemption is granted. In view of this interpretation, the assessment order dated 22-4-1997 is quashed. The Assessing Authority will proceed to frame the assessment de novo in the light of the observation made above.
Writ petition is allowed accordingly.