N. Kumar :

These Writ Appeals are filed against the Order passed by the learned Single Judge declining to entertain the Writ Petitions, which is filed challenging the order passed by the Assessing Authority on the ground that the Petitioner has an alternate and efficacious remedy by way of statutory appeal.

The appellant - assessee is a Public Limited Company engaged in the business of software development and export and providing software services. The Assessee is a registered dealer under the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as the "KVAT Act") and the Central Sales Tax Act, 1956 (hereinafter referred to as 'the CST Act' for short). The Assessee has been filing its VAT returns in Form VAT 100 in LVO - 045 regularly. The Assessee is also registered under Section 69 of Chapter V of the Finance Act, 1994 (hereinafter referred to as 'the Act') for the purpose of payment of Service Tax and has been paying Service Tax on its service turnover from the date of applicability. The place of business of the Assessee was visited by the Commercial Tax Officer for the purpose of inspection on 8.6.2010. Subsequently, the case was assigned for audit. The Assessee produced all its books. The Commercial Tax Officer audited the Books of Account for the period from 2009-10. Subsequently, a notice was issued under Sections 39(1), 72(2) and 36 of KVAT Act. On 9.8.2010, in the course of verification of the monthly returns, it was observed that the Assessee has provided software development and claimed exemption on exports. In support of his case, he had filed copies of invoices and the purchase orders for verification. In the course of verification, it was found that in addition to export of software the Assessee has also rendered services to one M/s. Alcatel-Lucent Technologies; (2) M/s. Motorola; (3) M/s. Texas Instruments; (4) M/s. Nokia. They also noticed that the Assessee had entered into agreements with the above companies regarding the business activities. After setting out the nature of the activities carried out by the Assessee, he concluded that the Company dealt in high-end work of development in various fields and thus executed Works Contract. This development activity of software attracts tax under works contract as per Section 4(1)(c) of KVAT Act at 4%. As per the provisions of Rule 3(2) of the Karnataka Value Added Tax Rules 2005, the labour charges at 25% is allowed as exemption. Verification of Form VAT 100 filed by the dealer revealed that the exempted Sales Turnover includes export also. For computation of tax liability, the Form VAT 100's are considered.

In the light of the above it was proposed to re-assess under Section 39(1) of KVAT Act for the tax period from April 2009 to March 2010 month wise based on the information available on records by rejecting the Monthly Teturns filed by the Assessee as incorrect and incomplete. It was also proposed to impose interest and penalty. On receipt of the said notice, the Assessee filed his objections. The Assessee submitted that it is in the business of rendering software development service and have been accordingly paying Service Tax under the Act, on its turnover from the date of applicability. The Company pays Service Tax under the head "Information Technology Software services". Section 65(105) of Chapter V of the Act, includes within its ambit the taxable service in the nature of Information Technology Software under sub-clause (zzzze). Given the fact that the Company is providing services and hence liable to Service Tax, the payment or levy of VAT on the same turnover does not arise. They also pointed out that the observations made in respect of the agreements are incorrect and they have set out in the nature of reply, the nature of services rendered to each of their clients and also pointed out the different clauses in the said agreements. Then, they contended that they provide the Information Technology Services and the clients owned all the I