STATE OF KARNATAKA Vs. RATNA INDUSTRIES

JUDGEMENT

(1.) THE Assessee is a dealer under the provisions of the Karnataka Sales Tax Act, 1957. He is dealer of fried gram and based on the Government notification dated March 31, 1984 Bengal gram as well as fried gram were classified as the same and accordingly tax used to be levied. The honourable Supreme Court in Gopuram Gram Mill Co. v. State of Andhra Pradesh (1994) 95 STC 358 held that fried gram is different from Bengal gram and the aforesaid judgment was delivered on August 23, 1994. Even though the judgment was delivered by the honourable Supreme Court on August 23, 1994 there was no corresponding change in the Government notification in regard to levy of tax on Bengal gram as well as fried gram. Order of the assessment for the year 1996 -97 was passed levying tax at the rate of 1.25 per cent based on the judgment of the honourable Supreme Court even though notification was not withdrawn or amended. Subsequently, on a rectification application, the order of the rectification was passed reducing the tax from 1.25 per cent to one per cent. Thereafter the Joint Commissioner of Commercial Taxes, Davanagere reviewed the order of rectification and the order of rectification was set aside and the original order was retained. Against which the Assessee preferred an appeal before the Karnataka Appellate Tribunal, Bangalore in S. T. A. No. 1347 of 2004 which appeal came to be allowed on July 18, 2006. Legality and correctness of this order is called in question by the Revenue.

(2.) IT is the case of the Revenue that the Tribunal has committed a serious error, when the order of the Joint Commissioner of Commercial Taxes was based on the order of the Supreme Court wherein Bengal gram and fried gram are treated as different commodities and attract sales tax at different rates. According to the learned Government Advocate, even though the earlier notification was withdrawn, in view of the law laid down by the honourable Supreme Court tax has to be levied treating fried gram as a different commodity.

(3.) HAVING heard the counsel for the parties, we do not see any questions of law arise in this appeal since the Government Notification dated March 31, 1984 has not been withdrawn by the Government till 1997 even though Supreme Court had declared the Bengal gram and fried gram as different commodities. If the Government has committed a mistake without bringing to the notice of the Assessee, the assessing officer cannot call upon the Assessee to pay tax at a higher rate when he has not collected the amount in view of the Government notification.