FURTADO FOOD PRODUCTS Vs. THE JOINT COMMISSIONER OF COMMERCIAL TAXES (ADMINISTRATION)

JUDGEMENT

(1.) Entitlement certificate dated 19-6-2006 (Annexure-C), revised entitlement certificate dated 24-7-2006 (Annexure-D) and endorsement dated 3-8-2013 (Annexure-G) are assailed by the petitioner in this writ petition. It is the case of the petitioner that it is engaged in the manufacture of bakery products and sweets since the year 1996. Petitioner was registered as a dealer under the provisions of Karnataka Sales Tax Act, 1957 (hereinafter referred to as "the KST Act"). It was categorised as a Tiny Industry located in Zone II, Industrial Area of Udupi District. According to the petitioner, it was entitled to sales tax exemption, under the State Government notification issued by the Department of Industries and Commerce dated 15-11-1996 (Annexure-F) and Government Order dated 15-3-1996. In terms of the above, petitioner was issued certificate dated 21-3-2001 granting exemption from payment of sales tax for a period of seven years commencing from 1-6-2000 and limiting the same to 80% of the investment made on the fixed assets, which worked out to Rs. 20,26,400/-. A copy of that certificate is produced at Annexure-A of the writ petition. It is the further case of the petitioner that it had availed the benefit of sales tax exemption, pursuant to that certificate with effect from 1-6-2000.

(2.) When the matter stood thus, KST Act was repealed and was substituted by Karnataka Value Added Tax Act, 2003 (hereinafter referred to as "the KVAT Act") with effect from 1-4-2005. In terms of the notification dated 18-4-2005, petitioner was required to obtain an entitlement certificate under the provisions of KVAT Act. Accordingly, petitioner made an application for the same. Initially certificate of entitlement dated 19-6-2006 was issued and later revised certificate dated 24-7-2006 was issued. The grievance of the petitioner is that these certificates have stated that the entitlement to tax exemption would be on the turnover exceeding Rs. 42,69,319/- (Annexure-C) and Rs. 46,29,319/- (Annexure-D). It is the case of the petitioner that, the condition that if the turnover of the petitioner exceeds the aforesaid amounts, then it would be entitled to sales tax exemption, otherwise not is contrary to the Government Order and Annexure-A which is the initial certificate issued under the provisions of Karnataka Sales Tax Act, 1957. In this regard, the petitioner had made an application for rectification of the certificate in response to which an endorsement, which is at Annexure-G has been issued. Therefore, the petitioner has filed this writ petition assailing the aforesaid annexures.

(3.) I have heard the learned Counsel for the petitioner and learned Additional Government Advocate for the respondent and perused the material on record.