Karnataka HC sets aside 2007 amendment of KVAT
Bengaluru, Jan 22: The High Court of Karnataka has set aside an amendment to the Karnataka Value Added Tax Act by a discriminatory taxation which encouraged businesses to make purchases from outside the state.
Setting aside the 2007 amendment by which the clause 15(5)(e) was inserted in the KVAT Act, a division bench of Justices PS Dinesh Kumar and CM Poonacha recently said, "We are of the opinion that the Amendment is discriminatory in nature and also not in favour of the welfare of the economy of the State as it encourages purchases from outside the State."
The 2007 amendment had a retrospective effect from April 1, 2006.
A single judge bench had upheld the validity of Section 15(5)(e) but ruled it was prospective in nature.
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The businesses which had challenged the amendment filed the appeals before the High Court.
"The effect of Amendment of Section 15(5)(e) is that, if a dealer who has opted for the composition scheme, purchases goods from an unregistered dealer, he has to pay tax payable on such purchase in addition to the composition tax," the court noted.
The businesses contended that when they made purchases from unregistered dealers in Karnataka, they were made to pay the additional tax.
However, if the purchases were made from outside Karnataka, no such additional taxes were imposed.
The state contended that the clause was inserted so that unregistered dealers in Karnataka register under the KVAT.
The HC, however, said that the State should use its officers to enforce the KVAT rather than target registered users.
It said in the judgement, "We find merit in the argument of the assessees, because the object sought to be achieved by the Amendment is to encourage purchase from registered dealers. This object will fail and instead encourage purchase from dealers outside the State since goods purchased within the State are only taxable and therefore, the object sought to be achieved will not be fulfilled.
We may record that the State has all the machinery such as Tax Inspectors, Flying Squads etc. to identify the URDs and to register them as dealers."
Allowing a batch of appeals, the HC said, "Section 15(5)(e) of the KVAT Act is declared ultra vires Constitution of India."
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CM Siddaramaiah alleges ‘criminal conspiracy’ in Sringeri recount, vows legal action
Bengaluru (PTI): Alleging a “criminal conspiracy” by BJP candidate D N Jeevaraj in the Sringeri Assembly poll recounting, Karnataka CM Siddaramaiah on Tuesday said the outcome was manipulated after valid postal ballot votes in favour of Congress leader T D Raje Gowda were tampered with during the recounting process.
Following a Karnataka High Court order on an election petition filed by Jeevaraj, challenging Raje Gowda’s election, the reverification and recounting were conducted on Saturday.
After the reverification and recount of postal ballots for the Sringeri Assembly constituency, votes polled in favour of Raje Gowda were reduced by 255, the returning officer said.
A report on the matter has been submitted to the Election Commission of India for further action, the officer added.
Congress leader Raje Gowda had won the 2023 Assembly polls from Sringeri by 201 votes, defeating his nearest rival Jeevaraj.
Addressing a press conference in Bengaluru, Siddaramaiah said the High Court had directed the recounting of postal ballots and that irregularities were noticed during the exercise conducted on May 2.
“This is a clear case of criminal conspiracy,” Siddaramaiah said, alleging that valid votes cast in favour of Raje Gowda were altered after being accepted by counting agents of all parties, including Congress, BJP, and JD(S).
He claimed that during the recounting of postal ballots, 255 votes were initially accepted as valid by all agents but were later tampered with by subordinate officials.
“There is a second mark on the votes polled in favour of Raje Gowda. They had accepted these as valid votes. Subsequently, another mark was made by officials. This is a clear case of criminal conspiracy,” he said.
When asked who was behind the alleged conspiracy, the CM replied, “It was hatched by Jeevaraj and others. It is planned.”
Siddaramaiah further alleged that the returning officer acted improperly by declaring the result despite the presence of an Election Commission observer during the recounting.
“Immediately after the counting, the returning officer announced the result. He should not have done so; this is against the law,” he said.
He pointed out that Raje Gowda had originally won by 201 votes, but after the recounting, the BJP candidate was declared the winner by 52 votes.
“The BJP has committed a criminal act of conspiracy. This is not vote chori but vote dacoity,” he alleged.
The CM said a police complaint had already been filed by Raje Gowda’s election agent, Sudhir Kumar, and emphasised the need for electoral integrity.
“We want transparency and free and fair elections. That is what our Constitution mandates,” he added.
Stating that the government would pursue legal remedies, Siddaramaiah said, “We are preparing an appeal challenging the returning officer’s announcement in a court of law.”
Responding to a separate query on elections in other states, the CM said there appeared to be an anti-incumbency factor in West Bengal, while results in Tamil Nadu were “surprising,” adding that Vijay’s party was emerging as the largest there.
Following the victory of party candidates in Bagalkote and Davanagere South, Siddaramaiah expressed confidence about future electoral prospects in Karnataka.
“Even in 2028, we will win the Assembly elections. We will come back,” the CM said.
Siddaramaiah added that he would order a forensic examination into the alleged tampering of postal ballots.
