The court reaffirmed that the legislative aim and provisions under Section 8(a) of the KVAT Act remain valid and constitutional, preserving differentiated tax rates based on contractor categories.

J U D G M E N T

[WA Nos.710/2015,1013/2015, 1376/2018,, 824/2015, 875/2015, 882/2015, 1005/2015, 1006/2015]

S.V.BHATTI,J.

Appellants are the petitioners in the in W.P.(C)

No.24838/2013 and batch of cases. The writ appeals are filed against the judgment dated 20.12.2014 raise a simple point on the interpretation of proviso to Section 8 (a) of the Kerala Value Added Tax Act, 2003 (for short 'KVAT Act, 2003') and consider the consequential challenge to proviso to (a) as illegal, ultra virus and unconstitutional. The question of construction paving way for the alleged challenge to proviso to (a) of KVAT Act 2003 appears to be simple, but the simple question posed by the appellants reminds this Court of the following quote from the Interpretation of Statutes - 5th Edition by Vepa P. Sarathi.

The net result is that the legislative object and intent must somehow be gathered by the court. But sometimes, there is obvious ambiguity in the meaning of a statute either because of the poverty of the language of the draftsman or want of imagination in not providing for conceivable situations, or due to an inept use of language. "Lack of legislative simplicity or clarity leads to interpretative complexity and confusion."

“I am the parliamentary draftsman I compose the Country’s laws, And of half the country's litigation I am undoubtedly the Cause.”

A Cynic describes the Draftsman as assigning the above lines to himself and expects the legal profession to be grateful to such Draftsman.

2. The circumstances relevant to the above narrative are stated thus:

Writ Appeal No.710/2015 has been treated as a representative appeal for the purpose of factual narration and legal grounds raised by the appellants. This Court, after perusing the pleadings in the other matters, is of the view that referring to the details, circumstances and grounds of challenge in W.A. No.710/2015 filed against W.P.(C) No.24838/2013 would be sufficient for disposing of the batch of appeals.

2.1 Chapter III of Act 2003 deals with incidence and levy of tax. Section 6 provides for levy of tax on sale or purchase of goods. Section 7 provides for trade discount etc, on deemed to be sale in certain cases. In the batch of appeals, we are concerned with Section 8 of KVAT Act, 2003 which provides for payment of tax at compounded rates by a few specified classes of dealers registered under the KVAT Act, 2003. The State Legislature through Finance Act, 2008 in Section 5 thereof, introduced a few amendments to KVAT Act 2003 and Sub- section (4) deals with the proposed amendment to of Act 2003, which reads thus:

5. Amendment of Act 30 of 2004 - In the Kerala Value Added Tax Act 2003 (30 of 2004),-

xxx xxx xxx “(4) in section 8, -

(a) for clause (a), the following clause shall be substituted, namely:

"(a) (i) any works contractor not being a dealer registered under the provisions of the Central Sales Tax Act, 1956 (Central Act 74 of 1956), and who is not an importer may, at his option, instead of paying tax in accordance with the provisions of the said section, pay tax at three per cent of the whole contract amount;

(ii) any works contractor not falling under clause (i) above may, as his option, instead of paying tax in accordance with the provisions of the said sections, pay tax at eight per cent of the whole contract amount:

Provided that notwithstanding anything contained in sub- clause (ii) above, the compounded tax payable by any works contractor under this clause in respect of works contracts awarded by Government of Kerala, Kerala Water Authority of Local Authorities shall be four per cent of the whole contract amount:

2.2 The State Legislature through the Kerala Finance Act, 2009 in Section 7 subsection (4) introduced the following amendment to Section 8 of KVAT Act, 2003.

“Amendment of Act 30 of 2004.-In the Kerala Value Added Tax Act, 2003 30 of 2004).

…. ….

(4) in section 8.-

(i) in clause (a)-

(a) for sub-clause (ii), the following sub-clause shall be substituted.

namely:-

"(ii) any wo