DATTARAM ADVERTISING PRIVATE LTD Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THERE petitions are disposed of by this common order, as all of them raise the same questions of law which are required to be decided by us under section 23 (3) of the Karnataka Sales Tax Act, 1957.

(2.) THOUGH the assessees and the assessment years vary, for purposes of convenience, the facts stated in S. T. R. P. No. 23 of 1985 are narrated in order to answer the questions which are common to all, except that in S. T. R. P. No. 23 of 1985 an additional question regarding limitation also falls for consideration by us.

(3.) HOWEVER , the assessee before the assessing authority contended as is evident from the reply issued to the show cause notice, dated November 12, 1975, through its lawyers that the company was only preparing art work, booking the space in various newspapers, periodicals, getting estimates from various agents and block makers and such acts were done on behalf of the advertiser-customer and absolutely there was no element of sale in the business. However, having regard to the decision of the High Court of Bombay in the case of Commissioner of Sales Tax v. Durga Khote Productions [1975] 36 STC 77 and the decision of the Madras High Court in the case of State of Madras v. Bomas Limited [1965] 16 STC 819, the assessee authority came to the conclusion that the business carried on by the assessee though appeared to be on the face of it a works contract, in reality it involved sales and as such the turnover was liable to tax. In the result, the proceeding commenced under section 12-A (1) of the Karnataka Sales Tax Act were concluded in respect of all the years in question and the escaped turnover brought to tax. Aggrieved by the assessment orders in question, appeals were filed before the Additional Deputy Commissioner of Commercial Taxes (Appeals), Bangalore, in Appeals Nos. AP/621, 622, 623, 624, 625 and 626/75-76. By a common order dated January 10, 1979, the Additional Deputy Commissioner of Commercial Taxes dismissed the appeals upholding the assessments. Thereafter, further appeals were preferred to the Karnataka Appellate Tribunal in Sales Tax Appeals Nos. 152 to 157 of 1979. The Tribunal by its common order dated September 12, 1984, dismissed the appeals. Therefore, the present petitions.