- 1 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF OCTOBER, 2025 PRESENT THE HON'BLE MR. JUSTICE B M SHYAM PRASAD AND THE HON'BLE MR. JUSTICE T.M.NADAF WRIT APPEAL NO. 318 OF 2022 (T-RES) C/W WRIT APPEAL NO. 893 OF 2022 (T-RES) WRIT APPEAL NO. 899 OF 2022 (T-RES) WRIT APPEAL NO. 433 OF 2023 (T-RES) WRIT APPEAL NO. 441 OF 2023 (T-RES) IN WA No. 318/2022 BETWEEN: THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA (AUDIT-2.1) DVO-2, A BLOCK, 5TH FLOOR, VTK-2, KORAMANGALA, BENGALURU-22. …APPELLANT (BY SMT. JYOTI M, HCGP) Digitally Signed by REKHA R Location : High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS AND: M/S. CHAMUNDESHWARI BUILD TECH PVT LTD. 30TH KM, BENGALURU-MYSORE HIGHWAY BIDADI INDUSTRIAL AREA RAMANAGARAM TALUK RAMANAGAR DIST-562 109 REPRESENTED HEREIN BY ITS MANAGING DIRECTOR MR.KIRAN KUMAR MEDA AGED 42 YEARS. …RESPONDENT (BY SRI. T. SURYANARAYANA, SENIOR ADVOCATE FOR MS. TANMAYEE RAJKUMAR., ADVOCATE) THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 04/02/2020 PASSED IN WRIT PETITION NOS. 51482- 51483/2016 AND 51453-51552/2016 BY THE LEARNED SINGLE JUDGE. IN WA NO. 893/2022 BETWEEN: 1. THE STATE OF KARNATAKA THROUGH ITS PRINCIPAL SECRETARY FINANCE DEPARTMENT VIDHANA SOUDHA BENGALURU 560 001 - 3 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS 2. THE COMMISISONER OF COMMERCIAL TAXES IN KARNATAKA VANIJYA THERIGE KARYALAYA , GANDHINAGAR, BANGALORE - 560009 3. THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES ( AUDIT )- 1 SESHADRI BHAVAN, DEWANS ROAD, MYSORE - 570 018 ...APPELLANTS (BY SMT. JYOTI M, HCGP) AND: M/S. WIPRO ENTERPRISES PVT LTD FORMAERLY PART OF M/S. WIPRO LTD CONSUMER CARE AND LIGHTING DIVISION NO 105, HOOTAGALLI INDUSTRIAL AREA, MYSORE - 570018 REPRESENTED BY (ALWYN PEREIRA SR EXEC ACCOUNTS) ...RESPONDENT (BY SRI. RAVI RAGHAVAN, A/W MS. MEGHNA LAL AND SRI. SUDHANVA KUMAR J M, ADVOCATES) THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 04.02.2020 PASSED IN THE WP No-25450/2016 AND 26503- 26513/2016 BY THE LEARNED SINGLE JUDGE. - 4 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS IN WA NO. 899/2022 BETWEEN: 1. THE STATE OF KARNATAKA THROUGH BY ITS PRINCIPAL SECRETARY FINANCE DEPT VIDHANA SOUDHA, BENGALURU-560001. 2. THE COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA VANIJYA THERIGE KARYALAYA, GANDHINAGAR, BANGALORE-560009. 3. THE DEPUTY COMMISSIONER COMMERCIAL TAXES (AUDIT)-1, SESHADRI BHAVAN, DEWANS ROAD, MYSORE. 570 018 ...APPELLANTS (BY SMT. JYOTI M, HCGP) AND: M/S. WIPRO ENTERPRISES PVT LTD FORMERLY PART OF M/S. WIPRO LTD CONSUMBER CARE AND LIGHTING DIVISION NO.105, HOOTAGALLI INDUSTRIAL AREA, MYSORE-570018. REPRESENTED BY (NIKHIL CHANDRA GRUPTA) MANAGER INDIRECT TAXATION. ...RESPONDENT - 5 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS (BY SRI. RAVI RAGHAVAN., ADVOCATE A/W MS. MEGHNA LAL AND SRI. SUDHANVA KUMAR J M, ADVOCATES) THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 04.02.2020 PASSED IN WP No-16458/2017. IN WA NO. 433/2023 BETWEEN: 1. THE STATE OF KARNATAKA THROUGH ITS PRINCIPAL SECRETARY, FINANCE DEPARTMENT, VIDHANA SOUDHA, BENGALURU-560 001. 2. THE COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA VANIJYA THERIGE KARYALAYA, GANDHINAGARA, BANGALORE-560 009. 3. THE DEPUTY COMMISSIONER COMMERCIAL TAXES, (AUDIT)-1, SESHADRI BHAVAN, DEWANS ROAD, MYSORE-570 018. ...APPELLANTS (BY SMT. JYOTI M, HCGP) - 6 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS AND: M/S. WIPRO ENTERPRISES (P) LTD., (FORMERLY PART OF M/S. WIPRO LTD.,) CONSUMER CARE AND LIGHTING DIVISION, NO. 105, HOOTAGALLI INDUSTRIAL AREA, MYSORE-570 018, REPRESENTED BY (NIKHIL CHANDRA GUPTA), MANAGER INDIRECT- TAXATION. ...RESPONDENT (BY SRI. RAVI RAGHAVAN, ADVOCATE A/W MS. MEGHNA LAL AND SRI. SUDHANVA KUMAR J.M, ADVOCATES) THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 04.02.2020 PASSED IN WP No-38863/2016 AND 48608- 48618/2016(T-RES) BY THE LEARNED SINGLE JUDGE. IN WA NO. 441/2023 BETWEEN: 1. THE STATE OF KARNATAKA THROUGH ITS PRINCIPAL SECRETARY, FINANCE DEPARTMENT, VIDHANA SOUDHA, BENGALURU-560 001. 2. THE COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA VANIJYA THERIGE KARYALAYA, - 7 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS GANDHINAGARA, BANGALORE-560 009. 3. THE DEPUTY COMMISSIONER COMMERCIAL TAXES, (AUDIT)-1, SESHADRI BHAVAN, DEWANS ROAD, MYSORE-570 018. ...APPELLANTS (BY SMT. JYOTI M, HCGP) AND: M/S. WIPRO ENTERPRISES (P) LTD., (FORMERLY PART OF M/S. WIPRO LTD.,) CONSUMER CARE AND LIGHTING DIVISION, NO. 105, HOOTAGALLI INDUSTRIAL AREA, MYSORE-570 018, REPRESENTED BY (NIKHIL CHANDRA GUPTA), MANAGER INDIRECT- TAXATION. ...RESPONDENT (BY SRI. RAVI RAGHAVAN, ADVOCATE A/Witness MS. MEGHNA LAL AND SRI. SUDHANVA KUMAR J M, ADVOCATES) THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 04.02.2020 PASSED IN WRIT PETITION No. 52272 OF 2016 AND W. P. Nos. 58523-58533 OF 2016, BY THE LEARNED SINGLE JUDGE. THESE APPEALS, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: - 8 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE B M SHYAM PRASAD) The State is aggrieved by the Writ Court's common order dated 04.02.2020 in W.P.No.52272/2016 and connected matters. The Writ Court, with the corresponding respondents calling in question the proposition notice/s and the assessment/re-assessment order/s under Section 39 of the Karnataka Value Added Tax Act, 2003 [for short, 'the KVAT Act'], has considered the respondent's grievance in the light of these questions: "(i) Whether the branches of the same corporate body acquire independent "legal personality" on being separately registered as dealers for the Act. (ii) Whether the supply of goods from one unit/branch to another unit/branch of - 9 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS the very same company amounts to a sale for the levy of tax under the Act" 2. The Writ Court, referring to Section 3 of the KVAT Act, the definition of the expression "Dealer" in Section 2(12) thereof and the provisions of Section 38(6) and Rule 47 of the Karnataka Value Added Tax Rules, 2005 [for short, 'the KVAT Rules'], has opined that from a reading of these provisions it cannot be concluded that the Legislature intended that registration of branches as units would mean registration as "separate dealers" and that the registration of a branch as a "separate unit" is only for ensuring ease in business and reassessment. The Writ Court's order in these regards reads as under: "xxxxxxx (c) the contention of the Revenue that once the units/branches of a corporate body on being registered as dealers would become juristic persons, cannot be sustained without straining the language of Sec.2(12) which - 10 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS defines the term 'Dealer'; sub-sec (6) of Sec.38 provides for registration of separate units of a dealer who happens to be a body corporate, having plural branches/units of business; the same reads as under: "(6) Notwithstanding anything contained in this Act, where a dealer is a body corporate and has more than one place of business, Commissioner may, subject to such conditions as may be prescribed and with the consent of the dealer, treat each of such places of business as a separate unit for the purposes of levy. assessment and collection of tax and thereupon all the provisions of this Act regarding registration, filing of returns, assessment and collection of tax, shall apply as if each of such places of business is a separate unit". The contention of the learned counsel for the Revenue that the expression "separate unit" makes such units "separate dealers" for the purpose of levy of tax, is not supported by the above text of legal provision; if the - 11 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS Legislature intended that these separate units on being so registered shall become independent dealers, it would have employed the expression 'separate dealers' instead of 'separate units' in the sale provision; (d) Rule 47 of Karnataka Value Added Tax Rules, 2005 which is promulgated to give effect to sub-section (6) of Sec.38 of the Act enables the officer authorised by the Commissioner to permit each of the business branches of a corporate dealer to file a separate return, is true; that enablement per se does not make such branches separate juristic persons; Mr. Shivadass, learned Sr. Advocate appearing for the dealer is justified in pointing out condition (i) prescribed in Rule 47 to the effect that treating of the branches of the business of a corporate dealer as separate units shall not reduce the tax liability in any way: Sec.38 (6) of the Act and Rule 47 are only intended to facilitate ease of business of the branches which the corporate dealer has in the same State; their text and context do not support the contention that they are intended to confer legal personality on such branches, on their registration; the - 12 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS State has such legislative power to attribute legal personality to an entity, under Part-XI of the Constitution of India, is beside the point as long as in exercise of such power, no provision is enacted to that effect in the Statute Book". The Writ Court, on whether there should be a sale when there is a supply/transfer of goods from one branch to another, has also referred to a decision of the Madras High Court in National Textile Corporation Ltd. Vs. Assistant Commissioner, Coimbatore1 observing that the provisions of the KVAT Act and the Tamil Nadu Act are pari materia with each other. 3. Ms. Jyoti M, the learned High Court Government Pleader, arguing to support the State's grievances against the Writ Court's order, submits that the reading of Section 38(6) of the KVAT Act when it begins with the non-obstante clause to 1 2016-VOL-637-MAD - 13 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS conclude that the registration under this provision would only be as a Unit and not as a separate Dealer would do offence to the legislative intendment, and the learned High Court Government Pleader also proposes to draw support from Rule 47 of the KVAT Rules, and argues that a mere raising of an invoice between two branches must in itself satisfy the condition of a sale justifying reassessment. 4. This Court must test the merits of this contention in the light of the scheme under the statute and the Rules. The Section 38(6)2 of the KVAT Act, as observed by the Writ Court, only refers to the expression ‘separate unit’ and not to the expression 2 Notwithstanding anything contained in this Act, where a dealer is a body corporate and has more than one place of business, Commissioner may, subject to such conditions as may be prescribed and with the consent of the dealer, treat each of such places of business as a separate unit for the purposes of levy, assessment and collection of tax and thereupon all the provisions of this Act regarding registration, filing of returns, 2004: KAR. ACT 32] Value Added Tax 239 assessment and collection of tax, shall apply as if each of such places of business is a separate unit. - 14 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS ‘separate dealers’. This would be crucial because if indeed the Legislature intended that registration as contemplated under this provision should result in the registration of the branch as a separate dealer, the Legislature would have used the expression 'dealer' and not a separate unit, especially when the expression ‘a dealer’ is defined and the Section contemplates a dealer being liable to pay tax under the Act. 5. This Court also observes that Rule 47 clarifies that the registration of a branch as a separate unit is not intended to enable registration of such branch as another dealer. The Rule read as under: "47. Separate registration and filing of returns by the branches of corporate bodies:- (1) Where a dealer is a body corporate and has more than one place of business and if it so desires, the Commissioner may on an application from it and on being satisfied that - 15 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS the provisions of sub-rule (1) of Rule 38 are likely to cause hardship by a special order, permit each branch to be assessed separately by the jurisdictional Local VAT officer or VAT sub-officer in which the main place of business of such dealer is situated, as a separate business; and such permission shall be subject to the provisions of the Act and rules relating to registration, filing of returns, assessments, payments and recovery of tax or other amounts due and subject to the conditions that.- (i) the tax payable under any of the provisions of the Act by each of such branch together with other places of business in the State shall not, be less than the tax that would have been payable by him under any of such provisions of the Act, if such branch was not treated as a separate unit under sub-section (6) of Section 38; (ii) every branch shall get registered as required under these rules irrespective of its total turnovers in any year being less than the turnovers specified in Section 22; and (iii) every branch shall be assessed to tax under the Act, irrespective of the amount - 16 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS of turnover of such branch being less than the minimum specified in Section 22, as such rate or rates as applicable. (2) Where, upon completion of the assessments of all the branches, if the dealer proves to the satisfaction of the Commissioner that the aggregate of the total turnover of all such branches in the State did not exceed the turnovers specified in Section 10, the Commissioner may, direct the jurisdictional Local VAT officer of VAT sub-officer to rectify the assessment order and refund the amount of tax paid by the dealer." 6. This Court must observe that where a dealer has more than one place of business, and if such dealer so desires, may apply for registration of its branches when there is a likelihood of hardship and when such hardship is shown, the Commissioner may permit each branch to file a separate return to the jurisdictional local VAT Officer or the VAT Sub- officer in which the main place of business of such dealer is situated as a separate business. The - 17 - HC-KAR NC: 2025:KHC:43689-DB WA No. 318 of 2022 C/W WA No. 893 of 2022 WA No. 899 of 2022 AND 2 OTHERS salutary purpose is brought out in unequivocal terms in spelling out that the registration of a branch to file a separate return is to remove likely hardship, and this is reinforced with the further stipulations on the tax implications for the entire business of the dealer. Therefore, this Court does not find any reason to interfere with the impugned order. The appeals are dismissed. Sd/- (B M SHYAM PRASAD) JUDGE Sd/- (T.M. NADAF) JUDGE RB