JOSE Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) The challenge made in this batch of Writ Petitions/Writ Appeal is against the " amendment brought outtoS.6(1)(f) of the Kerala Value Added Tax Act,2003 as amended by the Kerala Finance Act, 2006 (Act 22/2006). Though the amended Act was passed and assent of the Governor was obtained on24.10.2006, it was given retrospective effect from 1.7.2006. As per S.6(1)(f) of the Act thus amended, the rate of tax in the case of transfer of goods involved in the execution of works contract, where the transfer is not in the form of goods, but in some other form, tax payable is increased to 12.5 % as against the 4% as it stood prior to the amendment. Prior to the amendment, where the goods incorporated in the works contract are separately ascertainable, the tax was levied at the rates applicable to the goods and where the goods incorporated in the works contract are not separately ascertainable, at the rate of 12.5 % at all points of sale. Though the grounds urged in these Writ Petitions are similar except one or two, additional grounds are raised in some Writ Petitions. Since the grounds urged are all against the provision as amended, all these matters were taken together and heard.

(2.) W.A. No.566/2007 arises out of the judgment of the learned Single Judge in W.P.(C) No.4568/2007, where also the petitioner challenged mainly the retrospectivity given to the provision. The learned Single Judge dismissed the Writ Petition on the basis of the submission made by the learned Government Pleader that the bills proposing to amend the various fiscal statutes were presented in the form of Finance Bill on 1.7.2006, wherein it was provided that the tax proposals contained therein will have effect from 1.7.2006 and though the Act was enforced only on 24.10.2006 everyone knew that the revised proposals will have effect from 1.7.2006 in view of the specific clause contained in the Finance Bill. It was observed that it is well settled that the Finance Act, though passed later, can be given effect from the date of presentation of the Finance Bill, containing the proposals for taxation. We find the dismissal of the Writ Petition on the aforesaid-grounds is based on a mistake of fact and it is fairly submitted by the Special Government Pleader (Taxes) appearing on behalf of the State that the facts so stated on the basis of which the Writ Petition was dismissed was a mistake. It is conceded that there was no proposal as stated earlier and it is only after the Finance Bill was referred to the Special Committee and after discussion, some recommendations were made and finally, the Act was passed incorporating the provision under challenge with retrospective effect. So however, he justified the amendment with retrospective effect, to which we will refer to later. Since the basis on which the Writ Petition was disposed of having arisen out of a mistaken fact, necessarily we will have to consider the contentions raised in the said Writ Petition on its merits.

(3.) The main prayer in the Writ Petition is to declare S.6(1)(f) of the K.V.A.T. Act as unconstitutional in so far as it imposes levy of tax at 12.5 % in the execution of works contract and transfer is not in the form of goods though goods are not separately assessable and for further consequential reliefs.