State of Karnataka vs Shobha Developers Limited

N. Kumar, J.—These revision petitions are filed by the Revenue against the judgment dated 26-8-2013 passed in STA Nos. 2385 to 2390 of 2011 by the Karnataka Appellate Tribunal, Bangalore, holding that the tax levied at the higher rate instead of 4% on the materials which are taxable at 4% under the provisions of Karnataka Value Added Tax Act, 2003 is not justifiable in the absence of specific provisions and schedules for levy of tax on the Works Contract, for the year 2005-2006, along with penalty and interest levied under Sections 72(2) and 36 of the Karnataka Value Added Tax Act are also not justifiable. Therefore, the matter was remanded to the Assessing Authority with a direction to levy VAT at 4% for the materials which are taxable at 4% instead of 12.5% for the tax period 2005-2006. Therefore, the question for consideration before this Court in these revision petitions is:

"Whether the Revenue was justified in imposing tax in terms of the Sixth Schedule, which was not in the Statute Book when the assessee was assessed for the year 2005-2006?"

This Court had an occasion to consider the said question in the case of Durga Projects Inc., Bangalore v. State of Karnataka and Another 2012 (74) Kar.L.J. 273 (HC) (DB) : (2013) 62 VST 482 (Kar.) (DB), in STA No. 72 of 2010, disposed of on 28-9-2012, wherein it was held that the Sixth Schedule was substituted from 1-4-2006 and it is not retrospective in nature and therefore, the levy of tax for the period anterior to 1-4-2006 on the basis of Sixth Schedule is illegal. Following the said judgment, we do not see any merit in these revision petitions, as the order passed by the Tribunal is in conformity with the said order. No merits. Dismissed.