Tholasi Prints India Limited, Bangalore vs State of Karnataka

V. Gopala Gowda, J.-The correctness of the judgment of the Karnataka Appellate Tribunal at Bangalore dated 18-7-2005 passed in STA Nos. 1568 and 1569 of 2003 is questioned in this appeal by the petitioner who is a registered dealer under the provisions of Karnataka Sales Tax Act, 1957 (hereinafter referred to as the ''KST Act'') upon whom the Deputy Commissioner of Commercial Taxes (Assessments-12), Bangalore levied tax under Section 5-B of the KST Act, urging various legal contentions prayed to set aside the assessment orders passed by the Assessing Authority and the Joint Commissioner of Commercial Taxes (Appeals), City Division-I, Bangalore contending that the exemption granted under Entry 13 of the Fifth Schedule of the KST Act for the books which are printed on the orders placed by the customers are exempted, as they are reading books as enumerated under Entry 13 of the Fifth Schedule of the KST Act. Ignoring the said entry, the Assessing Authority and the Appellate Authority have committed error in law by recording a finding that exemptions claimed by the assessee are not attracted. In the facts of the case, the orders passed by the Karnataka Appellate Tribunal affirming the impugned orders challenged before it are not legal and valid and therefore prayed to set aside the same by allowing this petition.

Learned Counsel for the petitioner places strong reliance on the decision of the Madras High Court in the case of Kannan Art Calendars v State of Tamil Nadu, (2002)128 STC 498 (Mad.), which decision came later the decision in State of Tamil Nadu v Papco Offset Printing Works, (2000)118 STC 160 (Mad.), wherein in the later judgment, the Madras High Court at paragraph 4 referred to earlier Papco Offset Printing Works case and the same has been explained with reference to the exemption granted under the notification by the State Government of Tamil Nadu under the provisions of the Karnataka Sales Tax Act which was referred to in the aforesaid later decision. On this aspect of the matter, the Assessing Authority and the Appellate Authority have committed an error in placing reliance upon the Papco Offset Printing Works case which relates to the assessment year of 1985-86, during which time the constitutional amendment to the provision 2 (sic) Article 366, clause (29-A) had not come into effect. Therefore, the decision in the aforesaid Papco Offset Printing Works case has no relevance to the facts and situation of this case.

We have carefully considered the above said legal contentions urged by the learned Counsel on behalf of the petitioner and also carefully examined, the submission made by the learned Counsel on behalf of the respondent herein with reference to the findings and reasons recorded by the Karnataka Appellate Tribunal in the impugned judgment.

The Karnataka Appellate Tribunal has rightly, with reference to the rival legal contentions urged in the appeal before it, has formulated two contentious issues which have been answered it by recording its reasons at paragraph 10 of the judgment by affirming the finding of fact recorded by the Assessing Authority in levying tax under Section 5-B of the KST Act, 1957 on the amounts received towards execution of works contract classifiable under Entry 31 of the Sixth Schedule to the KST Act. The Karnataka Appellate Tribunal has rightly referred the decision in Papco Offset Printing Works case, which was rendered prior to the constitutional amendment to the provision 2 (sic), Article 366, clause (29-A). In that case, the Papco Offset Printing Works was a registered dealer in printing materials according to the specification of publishers and charging them. With reference to the rival legal contentions in the said case at paragraph 9, with reference to the exemption under the notification granted by the Tamil Nadu State Government, it is notified that sale of reading books which includes text books by any dealer was exempted from payment of sales tax by any dealer much emphasis is placed upon the phrase "dealer" by the learned Counsel for the petitioner. The contention of the petitioner''s Counsel cannot be accepted by us in view of the observation made by the Madras High Court in the aforesaid Papco Offset Printing Works case where it states thus "to put it otherwise, the assessee-dealer never complied any books for reading, nor effected sales of such reading books". In the instant case, the petitioner before us who is a registered dealer under the provisions of the Karnataka Sales Tax Act, is a printer and therefore the Karnataka Appellate Tribunal is right in applying Papco Offset Printing Works case to the case on hand. Reliance is placed on the decision of the Supreme Court*1 in the case of Kannan Art Calenders, in support of the proposition that the Assessing Authority did not challenge the previous assessment orders made in respect of the very same petitioner and the same was in force for the assessment years in question. He has taken the view that it is liable to pay turnover tax. Therefore, the order is erroneous in law not following the decision of the Supreme Court* applies to the facts and circumstances of the case. Therefore, the order is erroneous in not following the decision of the Supreme Court* applies to the facts and circumstances of the case. This contention also cannot be accepted for the simple reason as long as the petitioner is a dealer and he is undertaking business accepting the work order placed by its customers which is a works contract engaged in a business of goods involved and undisputedly it is registered as a dealer under the provisions of the KST Act, 1957 and it is neither a publisher nor a seller. Therefore, exemption claimed under the entry of the Fifth Schedule are not applicable to facts of this case. Therefore, the Assessing Authority has rightly exercised his power while discharging his statutory duty to

*Madras High Court levy turnover tax on the dealer. Therefore, reliance placed upon the decision of the Apex Court* and later decision of Madras High Court referred to supra have no application to the fact situation of this case, wherein the Karnataka Appellate Tribunal and the Assessing Authority recorded a concurrent finding of fact after careful examination of the relevant provisions of the Act and case-law on the relevant point and answered against the assessee. For the above said reasons, we do not find any question of law much less the questions of law that is framed in this petition that would arise for our consideration to invoke our revisional jurisdiction to interfere with the impugned judgment. Hence, the revision petition is devoid of merits.

Accordingly, the petition is dismissed.