MATHEW VARGHESE Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The petitioners are dealers in cycle and cycle parts. Bicycles, tricycles and cycle rickshaws and specified parts are brought under four per cent tax under entry 13 of the Third Schedule to the Kerala Value Added Tax Act, 2003. During inspection of the business premises by the audit team, it was noticed that all items were accounted by the petitioners at four per cent tax. The assessing officer was of the view that cycle parts such as seat cover, dynamo, bell, carrier, cycle stand, handle bar, etc., which are not covered by entry 13 of the Third Schedule, are assessable at 12.5 per cent under Section 6(1)(d) of the Act. Since petitioners have not shown any turnover of those items separately, the assessing officer estimated the turnover of cycle parts which are not covered by entry 13(3) of the Third Schedule and assessed the same at 12.5 per cent. These assessments are challenged on the ground that the provisions of the KVAT Act authorising levy of sales tax on parts of bicycles not covered under entry 13(3) at 12.5 per cent are discriminatory and against the mandate of Article 14 of the Constitution of India.

(2.) I have heard the learned Counsel for the petitioners and Government Pleader for the respondents.

(3.) The petitioners have cited the decisions of the Supreme Court in Arya Vaidya Pharmacy v. State of Tamil Nadu,[1989] 73 STC 346, Kerala Hotel & Restaurant Association v. State of Kerala, and State of U.P. v. Deepak Fertilizers & Petrochemical Corporation Ltd.,[2007] 7 VST 535 in support of their contention that discriminatory legislation is liable to be declared unconstitutional under Article 14 of the Constitution of India. However, Government Pleader referred to the decision of the Supreme Court in State of Karnataka v. Hansa Corporation, wherein Supreme Court held that the Legislature has wide discretion in regard to levy of tax including fixation of rate of tax. Government Pleader also relied on the decisions reported in Elel Hotels and Investments Ltd. v. Union of India, 1989 74 STC 146, Federation of Hotel & Restaurant Association of India v. Union of India,[1989] 74 STC 102 and R.K. Garg v. Union of India, and contented that Legislature enjoys wide discretion in regard to levy of tax including fixation of rate of tax on various commodities.