Ajay Rastogi JUDGMENT
Ajay Rastogi, J.
1. The civil appeal arises out of the judgment of the Division Bench of the High Court of Karnataka dismissing the writ petition and upholding the validity of Rule 6(4)(m)(i) of the Karnataka Sales Tax Rules, 1957(hereinafter referred to as "KST Rules") read with Explanation III to Rule 6(4) of the said rules.
2. The question which has been raised in the instant appeal is whether the condition of 'use in the same form in which such goods are purchased' under Rule 6(4)(m)(i) of the KST Rules expands the scope of charging Section i.e. Section 5B under KST Act, 1957.
3. The brief facts of the case relevant for the purpose are that the Appellant is a private limited company engaged in the business of interior decoration and other types of work. The Appellant had purchased various goods from registered dealers under the KST Act, 1957 and used them in the execution of works contracts. The Appellant claimed deduction from the total turnover of such purchases in terms of Rule 6(4)(m)(i) of the KST Rules, 1957 as per which all amounts received or receivable in respect of goods purchased from registered dealers and used in the execution of works contracts in the same form in which goods are purchased, can be claimed as deduction from the total turnover.
4. The assessing Officer issued notices for provisional assessment for the years 1998-99, 1999-2000, 2000-2001, 2001-2002 and 2002-2003 to deny the deduction of the value of timber, purchased from the local registered dealers claimed under Rule 6(4)(m)(i) on the ground that the timber was not used in the same form in which such goods were purchased, while executing the works contract. It was further observed that for carrying out the interior decoration, the Appellant purchased timber in log forms, plaster of paris, plywood, glass sheets and the said purchases have been manufactured to produce the goods which are necessary for interior decoration. The Assessing Officer further observed that as per Rule 6(4)(m)(i), the registered dealer purchases deductible from the works contract receipts is limited to transfer of the purchased goods in the same form. As per Explanation III of the said Rule "in the same form" do not include the registered dealer purchases which are either consumed or manufactured of other goods which are used in the execution of the works contract. Hence, there shall be no deductions as claimed.
5. It has been informed to this Court that five notices were issued by the Assessing Officer on 8th November, 2002 for different assessment years Under Section 28(6)(iii) of the KST Act, 1957 and reply was submitted by the Appellant but the matter has not been proceeded thereafter any further because of pendency of the litigation. Being aggrieved, the Appellant preferred writ petition, assailing the five show cause notices served upon the Appellant/Assessee and also the constitutional validity of Rule 6(4)(m)(i) read with Explanation III to Rule 6(4) of the said