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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Delhi records high of 32.7 deg C; AQI remains 'moderate'
New Delhi (PTI): The maximum temperature in Delhi settled at 32.7 degrees Celsius on Sunday, 1.3 notches below the seasonal average, according to the India Meteorological Department.
The minimum temperature was recorded at 20.1 degrees Celsius on Sunday, 1.3 notches below the average for the season, while the relative humidity stood at 46 per cent at 5.30 pm, the IMD said.
The weather department has forecast a partly cloudy sky for Monday with the maximum and minimum temperatures expected to hover around 34 and 19 degrees Celsius, respectively.
The air quality remained 'moderate' at 4 pm, with an Air Quality Index (AQI) reading of 134, a slight drop from Saturday’s 137, Central Pollution Control Board (CPCB) data showed.
According to the CPCB, an AQI between zero and 50 is considered 'good', 51 and 100 'satisfactory', 101 and 200 'moderate', 201 and 300 'poor', 301 and 400 'very poor', and 401 and 500 'severe'.
