MAHENDRA PERFUMERY WORKS Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) The petition is by the Assessee, challenging the order passed by the authorities upholding the claim for additional tax under Section 6C of the Karnataka Sales Tax Act (for short, "the KST Act").

(2.) The facts of the case leading to the filing of this petition are that the Petitioner-Assessee who is a dealer registered under the KST Act, is engaged in the activity of manufacture and sales of agarbathies. The assessing authority had passed an order of assessment under Section 12(3) of the Act subjecting to additional tax on turnover, when the tax on turnover was exempted from tax under a notification dated March 31, 2000 as per annexure F. Aggrieved by the said order, the Petitioner preferred an appeal before the Joint Commissioner of Commercial Taxes (Appeals). The appellate authority upheld the demand and dismissed the appeal. Aggrieved by the same, the Petitioner preferred a second appeal before the Karnataka Appellate Tribunal, which also dismissed the appeal upholding the demand. Aggrieved by these orders, the Petitioner is before this Court.

(3.) The learned Counsel for the Petitioner submits that, by a notification dated March 31, 2000, the Government of Karnataka has exempted with effect from April 1, 2000, the tax payable under Section 6 of the Act together with turnover tax payable under Section 6B of the said Act on certain items which includes raw bathi for manufacture of agarbathi for sale in the State or in the course of inter-State trade. Section 6C of the Act deals with the levy of additional tax. The additional tax is payable in addition to the tax payable under Section 6 of the Act. When there is exemption from the payment of the principal tax under Section 6, the levy of additional tax is not warranted. The authorities have committed a serious error in ignoring this fundamental principle and in charging additional tax though they have not charged the principal tax under Section 6 of the Act.