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Judgment
S. Rajendra Babu, J.-These two petitions pertain to the assessment periods 1986-87 and 1987-88. The petitioner made an application for composition in terms of the orders made by this Court on 19th July, 1990. However, that application came to be rejected by an endorsement issued to the petitioner inasmuch as it was treated as an application made under Section 25-A of the Karnataka Sales Tax Act, 1957 (for short, the ''Act'') for rectification and inasmuch as the High Court had already upheld the validity of the provisions of Section 5-B of the Act and dismissed the writ petitions, petitioner cannot claim any benefit thereof. This view was upheld by the two Appellate Authorities thereafter.
The question raised in these petitions is one relating to levy of tax in respect of such goods which have been transferred pursuant to works contract. This Court in Builders'' Association of India v State of Karnataka and Others, (1990)79 STC 442 (Kar.), in view of the memo filed with regard to composition for the assessment period 1986-87 to 1989-90, passed a separate order on 19-7-1990 and held that in respect of the dealers who had agreed for the composition in terms of the memo will be permitted to do so by the authorities and in respect of other dealers who did not agree with the memo were governed by the judgment. Further, they made it clear that the judgment would be effective from 1st April, 1990 onwards. In the circumstances, it becomes necessary as to whether it was open to the respondents to refuse to consider the application filed by the petitioner for composition or not. If he had filed such application within the period prescribed therein and extended from time to time, the same should have been considered by the authorities and proper tax computed thereof. The Tribunal has taken the view that since the judgment of the High Court would be effective from 1-4-1990 onwards the question of composition may not arise in a case of this nature.
In our view, there is a total misreading of the directions given by this Court. In para 16 of the order in Builders'' Association''s case, supra, it has been made clear that in respect of the petitioners a memo had been filed with regard to composition and a separate order has been passed and the dealers also had agreed for the composition. Therefore, in respect of those persons who were covered by that memo, the matter will have to be considered in the light of the order made by this Court on 19-7-1990 and in regard to other petitioners the provisions of the Act in the ordinary course may be made applicable from 1-4-1990. Thus, we do not think the Tribunal was justified in making those observations.
In the circumstances, these petitions are allowed and the matter is remitted to the respondents to consider the application for composition in respect of the assessment period in question and dispose of the same as expeditiously as possible. Any assessment orders and the Appellate orders thereto in that regard shall stand set aside. Petitions are allowed accordingly.