INVENTA SOFTWARE INDIA PRIVATE LIMITED Vs. ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES ZONE-I BANGALORE

JUDGEMENT

(1.) THESE two Appeals are filed against the order passed by the Additional Commissioner of Commercial Taxes, Zone -I, Bangalore, in 1989 -90 and 1990 -1991, dated 15.7.1996. By the impugned order, the Revisional Authority has set aside the orders passed by the Joint Commissioner of Commercial Taxes (Appeals) in Appeal Nos. 364 and 365 of 1994 -95, dated 25.2.1995 and further has modified the orders passed by the Assessing Authority under Section 12A of the Karnataka Sales Tax Act, 1957, dated 12.1.1995 and 21.12.1994 for the Assessment Orders 1990 -91 and 1989 -1990 respectively to the extent of computing the turnover after allowing 10% of the total Contract Receipts as deductions under rule 6 of the Karnataka Sales Tax Rules, 1957.

(2.) THE facts in brief are : The Assessee is a dealer registered both under the provisions of Karnataka Sales Tax Act, 1957 ('KST Act' for short) and the Central Sales Tax Act, 1956 ('CST Act' for short) and is engaged in the business of supply and development of Computer Software. For the Assessment Years 1989 -1990 and 1990 -1991, the Assessee had filed its Annual Returns and in that had claimed exemption on inter -State sales, export turnover, software consultancy services, sales returns, etc.. The Assessing Authority while concluding the Assessments for the years in question, had allowed the exemption on the turnover relating to the receipt of Service Charges and Consultancy Charges on the sole ground, that, the Consultancy Charges do not involve any purchase or sale. The Order of Assessment so passed came to be modified by the Assessing Authority subsequently by passing Re -assessment Orders under Section 12A of the Act, holding that the Service and Consultancy Charges received by the Assessee relate to sale of Software Development and the same is liable to be taxed under Entry 22 of the Sixth Schedule to the KST Act.

(3.) THE Revisional Authority has taken exception to the aforesaid order on the ground that the order passed by the First Appellate Authority is erroneous and also prejudicial to the interest of the Revenue and accordingly, has cancelled the order passed by the First Appellate Authority and further, has restored the Re -assessment Orders passed by the Assessing Authority. It is the correctness or otherwise of the said order is called in question in this Appeal by the Assessee, being aggrieved by the same.