MANMOHAK CREATIONS Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) WRIT petition is by a dealer registered under the provisions of the Karnataka Sales Tax Act, 1957. Petitioner was aggrieved on receiving a show cause notice dated May 22, 2000, copy at annexure A to the petition, issued under the provisions of Section 12(3), Section 12B(4) and Rule 16 of the Karnataka Sales Tax Act, 1957 and Karnataka Sales Tax Rules, 1957 apprising the petitioner that the returns that he had filed for the period April 1, 1998 to March 31, 1999 was not correct or a proper return, particularly, as the petitioner had not quantified his tax liability in terms of Section 6D with regard to the liability for payment of cess in terms of this provision.

(2.) IT was at this stage the petitioner approached this court challenging the legality of this notice along with a challenge to the constitutional validity of the very provision, viz., Section 6D of the Act, on the premise that the levy in terms of Section 6D is invalid and if so, the very levy, i.e., the very charging section is bad, the question of the authorities proceeding further pursuant to the show cause notice which is also bad in law does not arise and therefore has prayed for a declaration to the effect that the provisions of Section 6D, as it stood at that relevant point of time, is unconstitutional and has prayed for consequential quashing of the show cause notice.

(3.) SUBMISSION of Sri Sarangan, learned Senior Counsel for the petitioner is that the very nature of levy sought to be imposed for the relevant period under Section 6D is one to meet the need of the State Government for the purpose of raising funds to invest it in what is described as equity capital of two Government companies, one of which company was initially described as the Karnataka Infrastructure Development Corporation and now known as the Infrastructure Development Corporation (Karnataka) and another company known as Bangalore Mass Rapid Transit Limited and the levy even in terms of the charging section is to raise the funds so that the Government can invest such amount in the equity funds of companies themselves who have the object of creating infrastructure and development of transport facility available not only in Bangalore Metropolitan area but even in other parts of the State. Learned Senior Counsel submits that, that is the limiting factor even in terms of the charging section and the investment even put at the zenith by the Government in such companies can be as much as the capital base of the companies themselves and not beyond and the learned Counsel further points out that the equity capital of the Infrastructure Development Company is 50 crores whereas the equity capital of the Bangalore Mass Rapid Transit Limited Company is 20 crores and put together it is only 70 crores and the moment the Revenue realises this amount of Rs. 70 crores, through imposition of cess under Section 6D of the Act, thereafter, the question of further realisation under this provision does not arise ; that the charges of the section as indicated in the charging section having been specific, there is no more authorisation under this section for further levies. It is on this premise that the validity is challenged contending that the amount of cess collected under such provision has far exceeded the amount of Rs. 70 crores and therefore, it should be declared that further levy is unauthorised in law on the premise that in terms of Article 265 of the Constitution of India it is no more authorised in law thereafter and under this provision it should be declared as unconstitutional.