Issuance of notification no. DCOM(I&C)/AC/CR.22/10-11) under KVAT is constitutionally valid

Meenaxi Building Solutions Pvt. Ltd. Vs Commercial Tax Officer (Karnataka High Court)

Karnataka High Court held that petitioner failed to prove how notification no. DCOM(I&C)/AC/CR.22/10-11) dated 24.05.2010 is in violation of the provisions of the Karnataka Value Added Tax, 2003 or the Constitution of India. Accordingly, notification no. DCOM(I&C)/AC/CR.22/10-11) dated 24.05.2010 issued by authorities to track movement of goods is valid.

Facts- The petitioner is a transporter and dealer of cement at Bangaluru and was transporting cement purchased by one M/s. ACC Limited, Ballari from Andhra Pradesh to Karnataka. As the vehicle carrying the cement did not have the necessary documents as stipulated in notification No.DCOM(I&C)/AC/CR.22/10-11) dated 24.05.2010, notices were issued under Section 15(12) of the Karnataka Value Added Tax, 2003. Aggrieved by the same the present writ petition is filed.

The petitioner is challenging the notification bearing No. DCOM(I&C)/AC/CR.22/10-11) dated 24.05.2010 to the writ petition as violative of the provisions of the Act and the Constitution of India. Consequently the petitioner is praying for setting aside the notices issued against the petitioner.

Conclusion- The petitioner in the course of his arguments, is not in a position to show as to how the said provision of the notification no. DCOM(I&C)/AC/CR.22/10-11) dated 24.05.2010 is in violation of the provisions of the Karnataka Value Added Tax, 2003 or the Constitution of India. The said details are specified by the authorities in order to track the movement of goods in the manner known to law, which is essential to determine the tax liability under the Karnataka Value Added Tax, 2003.

Held that I do not see any reason, as to why the impugned notification is to be struck down. The notices at Annexure – B and C to the writ petition are issued in pursuance of the impugned notification and they do not violate the said notification. Hence, the said notices are also upheld.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

The petitioner is a transporter and dealer of cement at Bangaluru and was transporting cement purchased by one M/s. ACC Limited, Ballari from Andhra Pradesh to Karnataka. As the vehicle (two lorries bearing registration No.KA-05/AB-2368 and KA-05/AB-1676) carrying the cement did not have the necessary documents as stipulated in notification No. DCOM(I&C)/AC/CR.22/10-11) dated 24.05.2010 (Annexure-A to the writ petition), notices were issued under Section 15(12) of the Karnataka Value Added Tax, 2003 (herein after referred to as Act). Aggrieved by the same the present writ petition is filed.

2. The petitioner is challenging the notification bearing  No.DCOM(I&C)/AC/CR.22/10-11)dated 24.05.2010 vide Annexure – A to the writ petition as violative of the provisions of the Act and the Constitution of India. Consequently he is praying for setting aside the notice dated 15.10.2010 bearing No.STCP/BLY/HS.K-71/10-11 vide Annexure – B to the writ petition and notice dated 15.10.2010 bearing No. STCP/BLY/HS.K-72/10-11 vide Annexure – C to the writ petition.

3. Section 53(2-A) of the Act empowers the Commissioner to prescribe the details to be entered in the website of the Department in respect of the goods being carried and a proof for entering the same to be carried by the transporter. In pursuance of the same, the notification at Annexure – A to the writ petition is published, and the relevant portion reads as herein below:

“FOR RECEIPT OF GOODS FROM PLACES OUTSIDE THE STATE5.

5. Every dealer registered under the Act who receives (as a result of purchase or otherwise), the following goods from outside the State:

a. Cement

b. Edible oil

c. Granite blocks, slabs and tiles

d. Iron and steel

e. Marble slabs and tiles

f. Plywood, veneered sheets, boards, panels and laminated sheets shall enter the following details of the goods being received in the format appearing in one of the departmental websites namely:

http://vat.kar.nic.in/, http://164.100.80.20/vat 505, http://vatkar.gov. in/. before the goods vehicle enters the State:

6. The dealers receiving other goods may also upload information in the aforesaid manner so as to facilitate expeditious clearance at the check posts.”

4. The petitioner in the course of his arguments, is not in a position to show as to how the said provision of the notification is in violation of the provisions of the Act or the Constitution of India. The said details are specified by the authorities in order to track the movement of goods in the manner known to law, which is essential to determine the tax liability under the Act. I do not see any reason, as to why the impugned notification is to be struck down. The notices at Annexure – B and C to the writ petition are issued in pursuance of the impugned notification and they do not violate the said notification. Hence, the said notices are also upheld.

5. For the above mentioned reasons, the writ petition is hereby dismissed. However, given the peculiar facts and circumstances of the case, liberty is reserved to the petitioner to show cause before the authorities as demanded in the impugned notices, within 15 days from today, as to why action contemplated under the said notices should not be implemented against the petitioner.

6. The dealers receiving other goods may also upload information in the aforesaid manner so as to facilitate expeditious clearance at the check posts.”

4. The petitioner in the course of his arguments, is not in a position to show as to how the said provision of the notification is in violation of the provisions of the Act or the Constitution of India. The said details are specified by the authorities in order to track the movement of goods in the manner known to law, which is essential to determine the tax liability under the Act. I do not see any reason, as to why the impugned notification is to be struck down. The notices at Annexure – B and C to the writ petition are issued in pursuance of the impugned notification and they do not violate the said notification. Hence, the said notices are also upheld.

5. For the above mentioned reasons, the writ petition is hereby dismissed. However, given the peculiar facts and circumstances of the case, liberty is reserved to the petitioner to show cause before the authorities as demanded in the impugned notices, within 15 days from today, as to why action contemplated under the said notices should not be implemented against the petitioner.