H.C. SATISH BABU Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) The assessee has preferred these appeals against the order passed by the Additional Commissioner of Commercial Taxes, Zone-II, Bangalore, where levy of compounded rate of tax under a composition scheme was held to be justified and the order of the Assessing Authority was restored. However, the matter was remanded for the limited purpose of re-conclusion of reassessment of tax together with consequential levies under Section 72(2) and Section 36 in compliance of Section 2(33) read with Rule 37(2) of Karnataka Value Added Tax Rules, 2005. We have heard the learned Counsel for the parties.

(2.) As could be seen from the impugned order, during the year 2005-2006, the assessee has received the sub-contract and entered into an agreement with M/s. Pride and Expert Properties Private Limited, Bangalore. He has raised the bill for Rs. 24,64,000/- which was only labour charges. Therefore, he filed Nil return for the whole year. The authorities held that the assessee is required to pay tax at compounded rate on entire gross receipts relating to works contract. As per Section 15 of the Act, whether such receipts relates to only labour or transfer of property in goods or combination of the both. The scheme for payment of tax is on gross works contract receipts. It is the correctness of this finding which is assailed in these appeals.

(3.) During the year 2006-2007, the assessee has declared gross contract receipt to the tune of Rs. 19,25,385/-. Out of which, the assessee has claimed the labour charges for Rs. 18,94,885/- and on the balance of Rs. 30,500/-, the assessee has paid the tax at compounded rate at 4%. The authority held that the assessee is liable to discharge tax at compounded rate on entire receipts relating to works contract. It is the correctness of the said finding which is also the subject-matter of these appeals.