GAJARAJ ENTERPRISES Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) The question of law which arises for consideration in this petition is whether the turnover in respect of plates used in switch gear boxes, sold by the petitioner to M/s. Mysore Electrical Industries Ltd., who are manufacturers of electrical switch gears, has to be taxed at a concessional rate under section 5(3A) of the Karnataka Sales Tax Act.

(2.) Section 5(3A) of the Act provides that notwithstanding anything contained in sub-section (1) or sub-section (3), the tax payable by a dealer in respect of any sale of goods mentioned in the Second Schedule by such dealer to a registered dealer for use by the latter as component part of any other goods mentioned in that schedule, which he intends to manufacture inside the State for sale, shall be at the rate of two per cent. or the rate specified in the Second Schedule in respect of such goods whichever is lower on the turnover relating to such sale. In order to claim the benefit of section 5(3A), the dealer has to show : (1) that the goods in question are mentioned in the Second Schedule; (2) that they are sold to a registered dealer for use by the latter as a component part of some other goods mentioned in column 2 of Second Schedule; and (3) that the purchaser intends to manufacture such other goods inside the State for sale.

(3.) In the instant case, it is not disputed before us that the goods sold by the petitioner are accessories of electrical goods. The Tribunal also finds that the goods come under item 61 of the Second Schedule. Hence, the first ingredient is satisfied.