STATE OF KARNATAKA Vs. SURESH ENTERPRISES

JUDGEMENT

(1.) This revision is preferred by the State challenging the order passed by the Karnataka Appellate Tribunal (Suresh Enterprises, Bangalore v. State of Karnataka,2011 71 KarLJ 734(Tri.) (DB)), which has held that the godown cannot be treated as a person for the purpose of levying tax under the provisions of the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 (for short hereinafter referred to as the Act). The assessee is a registered dealer under the provisions of the Karnataka Value Added Tax Act, 2003 and the provisions of the Act on the file of LVO-010, Bangalore. It is a partnership firm dealing in electrical goods. The assessee has godowns and warehouses. The Assessing Authority issued notice proposing levy of professional tax on the additional place of business of the assessee treating them as branches. The assessee replied to the said notice. Rejecting their contention the Assessing Authority levied professional tax for the assessment years 1-4-2005 to 31-3-2010 considering each godown as a branch. Being aggrieved by the said order the assessee preferred an appeal before the First Appellate Authority who dismissed the appeal confirming the order passed by the Assessing Authority. Aggrieved by these two orders the assessee preferred an appeal to the Karnataka Appellate Tribunal. The Appellate Tribunal on careful consideration of the relevant provisions and looking into the judgment of the Apex Court held that if the godown of a firm or a company would be treated as a place of business then the professional tax is leviable treating that godown as a branch and a person. But if no business activity is being carried on in the godown then it cannot be treated as a person for the purpose of levying tax under the Act. Therefore the Tribunal set aside the order passed by the authorities who had treated the godown as a branch and levied tax. Aggrieved by the said order, the State is before this Court.

(2.) Learned Counsel for the revenue assailing the impugned order contended that when the godown is to be treated as a branch and in turn treated as a person then levy of tax is permissible in respect of the said godown. He submits that the approach of the Tribunal is erroneous and requires to be set aside.

(3.) Per contra, learned Counsel for the assessee supported the impugned order.