THRISSUR BUILDERS (P) LTD Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The petitioner is a registered dealer under the Kerala Value Added Tax Act, 2003 (hereinafter referred to as, "the Act"). The petitioner opted to pay tax at the compounded rate under section 8 of the Act for the assessment years 2005-06, 2006-07 and 2007-08. The complaint of the petitioner is directed against section 30(2) of the Act to the extent it excludes the dealers who pay compounded tax under clause (a) to clause (d) of section 8 of the Act from the facility to collect the tax under the Act from the awarders of the contract or the buyers. Accordingly, a declaration is sought that section 30 of the Act, to the extent it excludes the persons paying compounded tax under clause (a) to clause (d) of section 8 from the benefit of the provision enabling collection of tax amount from the buyers, is discriminatory and hence unconstitutional. Exhibits P1 to P3 are orders of assessments for the years already mentioned and a direction is sought not to recover any amount towards differential tax pursuant to exhibits P1 to P3 assessment orders by placing reliance on the provisions of section 30(2) of the Act. I heard learned senior counsel for the petitioner Sri Arshad Hydayathullah and learned Special Government Pleader Sri Vinod Chandran.

(2.) Sri Arshad Hydayathullah, learned senior counsel appearing for the petitioner, would contend that in view of substitution of section 30(2) the substituted provisions will hold sway from the commencement of the Act. The fact that it is provided that the substitution is with effect from April 1, 2008 would not entitle the respondents to contend that it is to have effect only from April 1, 2008 runs the argument of the petitioner. The date April 1, 2008 is mentioned only to indicate that substitution has come into play but its effect will be from the commencement of the Act itself, he contends. He further contends that if it is found that the substituted provisions will have only effect from April 1, 2008 the court would have to necessarily consider the constitutional validity of section 30(2) and hold the provisions of section 30(2) as unconstitutional being discriminatory. Expatiating the arguments he contended that the petitioner is one among the category of assessees declared eligible under section 8 to opt to pay tax at compounded rate and the dealers in gold as also others allowed to compound constitute a single class. However, the impugned provision enabled the gold dealers alone to collect tax even though they were also allowed to compound. It is pointed out that there is no basis for the discrimination. It is contended that there is no plea or material produced to show how treating of the two similarly circumstanced categories can be justified. He would contend further that it is open to the court at any rate to hold that the petitioner should be given the relief and the provision is to be read down.

(3.) Sri Vinod Chandran, on the other hand, would contend that the substituted provision has only prospective operation and it has come into effect only from April 1, 2008 and it has no retroactive operation. He would contend that the petitioner has not pleaded or established a case of discrimination under article 14. He also would submit that there is no basis at all in the writ petition.