The Hindu : Karnataka / Bangalore News : Relief for dealers in computers, peripherals

Online edition of India's National Newspaper
Friday, Sep 02, 2005

Karnataka

Karnataka - Bangalore

Relief for dealers in computers, peripherals

Staff Reporter

BANGALORE: The Karnataka High Court on Thursday set aside a single judge order and declared that dealers were not liable to pay resale and turn over tax on parts of computers and computer peripherals.

A Division Bench comprising Justice P. Vishwanath Shetty and Justice H.G. Ramesh allowed appeals by Balaji Computers and others challenging a single judge order of February 10 in permitting the Commercial Tax authorities in resale and turn over tax on dealers in computer parts and computer peripherals.

The appellants had challenged the reassessment proposition notices of January 6, January 18 and January 25, 2005 by the Commissioner of Commercial Tax asking them to pay resale tax for 2001-02 and 2002-03.

They said the Commercial Tax Department initially exempted computer parts and peripherals from turn over tax and resale tax.

But it was re-imposed in 2004 after the Accountant-General opined that the traders had to pay them and were not exempted from it.

They said they had paid all other taxes and they would have to close down if they paid the two additional taxes.

Besides, in 2001, the State Government under a notification had exempted levy of tax on parts of computer and computer peripherals.

They urged the court to set aside the single judge order, which had seen no reason to interfere with the notices.

The Bench observed that the intention of the State in granting exemption under the notification was to promote the IT industry by attracting investors and providing job opportunities.

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