BHIRIYA AND SONS Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) The petitioner in this revision petition is a dealer registered under the provisions of the Karnataka Sales Tax Act, 1957 ("the Act" for short). The question involved pertains to the assessment period July 1, 1985 to June 30, 1986. The petitioner questions the levy of sales tax under section 5(1) of the Act on the turnover relating to pens costing less than Rs. 10 per piece (for the sake of convenience these pens are referred hereinafter as the "low priced pens", in contradiction to pens costing Rs. 10 and above per piece).

(2.) Section 5 of the Act levies tax either on the sale or purchase as the case may be, of any goods by a dealer, as stated under the various sub-sections of section 5. As per section 5(1) every dealer shall pay tax on his taxable turnover at the rate of the prescribed percentage of such turnover. This prescribed rate was 7 per cent during the relevant period. The proviso to the said sub-section imposes a lower rate of tax in respect of certain goods with which we are not concerned. As per sub-section (3)(a), notwithstanding anything contained in sub-section (1), the tax shall be levied at a single point and is imposed on the first or the earliest of successive dealers in the State at the rates specified in column (3) of the Second Schedule in respect of the goods mentioned in column (2) of the Second Schedule. Further sub-clauses of section 5(3) provide different rates of taxes, with which also, we are not concerned now. Sub-section (4) of section 5 pertains to the declared goods. As per section 8, sale of goods specified in the Fifth Schedule to the Act is not taxable and are thus exempted. Similarly under section 8-A State Government is given power either to grant exemption or reduce the rate of tax payable under the Act, by issuing appropriate notification.

(3.) Therefore, the tax payable in respect of the sale of goods specified in the Second Schedule, is only at the rate stated in the said Schedule and the tax is levied on the first or the earliest of the successive dealers. The sale or purchase of those goods are not taxed under the Act anywhere else in the Act. The petitioner, inter alia, deals in pens. Entry 164 of the Second Schedule mentioned pens costing Rs. 10 and above and the tax payable per piece was 8 per cent during the relevant period. However, the Second Schedule was silent about the pens costing less than Rs. 10 per piece.