Judgment :- The assessee is questioning the correctness and the legality of the order passed by the Commissioner of Commercial Taxes dated 14-3-2007 whereunder the Revisional Powers under Section 22-A(2) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as ‘the Act’ for short) came to be exercised which is at Annexure-A. 2. The facts in nut shell are as follows: (i) The appellant is an individual P.W.D. Contractor and is a proprietary concern trading in the name and style of M/s Shiva Kumar, Holenarasipur, executing Civil Works which include and involve both transfer of property as well as Civil work which is labour oriented. The appellant is also carrying on the business in HSD, Petrol diesel lubricants etc., as a subsequent seller. For the assessment year 1997-98 appellant had opted for the benefit of composition in respect of contract work undertaken and the jurisdictional Assessing Officer, namely Deputy Commissioner of Commercial Taxes (Assessment) Hassan levied 4% tax on earthen work under Section 17(6) of the Act by order dated 26-4-1999 which is at Annexure ‘B’. The Assessing Officer levied tax at 4% on earthen work which involved labour work of Rs. 1,65,70,899/- which amounted to Rs. 15,56,671/- rejecting the claim, for exemption of receipts relating to labour. (ii) Aggrieved by the order of assessment dated 29-4-1999, the assessee preferred an appeal before the Joint Commissioner of Commercial Taxes in appeal No. KST.AP.94/1999-2000 who by order dated 22-6-2000 allowed the appeal and set aside the order of the Assessing Officer on the ground that the works contract receipt of Rs. 1,65,70,899/- was purely labour oriented and did not involve any transfer of property. While allowing the appeal, the first Appellate Authority directed the works contract receipt concerning the execution of the earthen work to the tune of Rs. 1,65,70,899/- be reduced from the gross works contract receipts and the rest of the turnover be subjected to tax under Section 17(6) of the Act thereby reducing the tax liability to Rs. 8,93,835/- as per the order dated 22-6-2000 which is at Annexure-‘C’. The Additional Commissioner of Commercial Taxes, Zone II, Bangalore in exercise of its powers under Section 22-A(I) of the Act, initiated revision proceedings by issue of a notice dated 2-9-2002 on the ground that the order of the Joint Commissioner of Commercial Taxes (Appeals) dated 22-6-2000 was prejudicial to the interest of the revenue which is at Annexure-‘D’. The Additional Commissioner of Commercial Taxes, Zone II, Bangalore in exercise of its powers under Section 22-A(I) of the Act, initiated revision proceedings by issue of a notice dated 2-9-2002 on the ground that the order of the Joint Commissioner of Commercial Taxes (Appeals) dated 22-6-2000 was prejudicial to the interest of the revenue which is at Annexure-‘D’. The appellant herein filed objections to the said notice contending inter alia that Assessing Officer ought to have assessed under Section 5-B of the Act by relying upon the judgment of this Court in Mycon Construction Limited Vs. State of Karnataka and another reported in (1998) 111 STC 322 (KAR) and sought for withdrawal from composition method by its reply dated 24-5-2003. (iii) The revisional authority on considering the objections filed by the appellant herein to the notice, set aside the order of the Joint Commissioner of Commercial Taxes (Appeals) dated 22-6-2000 and at the same time allowed the appellant to opt out of payment of tax by way of composition method and ordering assessment to be completed under section 5-B of the Act thereby reducing the tax liability of the appellant to Rs. 3,99,646/- by order dated 6-6-2003 which is at Annexure-‘F’. (iv) The Commissioner of Commercial Tax in exercise of Power under Section 22-A(2) of the Act issued a notice dated 22-12-2006 observing thereunder the orders passed by the Joint Commissioner of Commercial Taxes (Appeals) (dated 22-6-2000) and the order passed by the Additional Commissioner of Commercial Taxes Zone II, Bangalore (dated 6-6-2003) are prejudicial to the interest of the revenue and accordingly called for reply from the appellant assessee. In response to the said notice the appellant herein filed its objections to the proposed revisionary proceedings by reply dated 6-2-2007 (Annexure-H) which came to be considered by the Commissioner of Commercial Taxes and by his order dated 14-3-2007 rejected the claim of the assessee-appellant and restored the order passed by the Deputy Commissioner of Commercial Taxes and by his order dated 14-3-2007 rejected the claim of the assessee-appellant and restored the order passed by the Deputy Commissioner of Commercial Taxes Assessment, Hassan dated 29-4-1999. It was held therein that once the assessee has opted for composition he cannot opt out and accordingly confirmed the order of Assessing Officer. It was held therein that once the assessee has opted for composition he cannot opt out and accordingly confirmed the order of Assessing Officer. (v) The appellant-assessee being aggrieved by the said order dated 14-3-2007 passed by the Commissioner of Commercial Taxes, is assailing the same in this appeal. 3. We have heard Sri. Chaitanya, learned counsel appearing for the appellant-assessee and Smt. Geetha Menon, learned counsel appearing for the respondent revenue. 4. At the time of admission of the appeal, the following two questions have been formulated by this Court on 11-7-2008 for being answered: (i) Whether the Commissioner of Commercial Tax was justified in coming to the conclusion that when once the contractor has submitted himself for composition cannot withdraw the same subsequently? and (ii) Whether the amendment made to Rule 8-B(1) of the K.S.T. Rules in prospective and whether the same was in force on the date of withdrawal of the application by the appellant? 5. Sri. Chaitanya for the appellant-assessee would contend as follows: (i) The power under Section 22-A(1) of the Act vested with the Additional Commissioner which is in pari materia with the power available under Section 263(1) of the Income Tax Act and thus the Additional Commissioner was justified in his order dated 6-6-2003 permitting the appellant to opt out of composition provision and allowing the appellant-assessee to opt for assessment under Section 5-B. (ii) The judgment in Karnataka State Construction Corporation Limited was passed subsequent to the revisional order of the Additional Commissioner of Commercial Taxes, Zone II dated 6-6-2003 and as on the said date i.e., 6-6-2003 Mycon Construction case was holding the field and hence the order of the Commissioner in holding that orders of Joint Commissioner (Appeals) (dated 22-6-2000) and order of Additional Commissioner (dated 6-6-2003) cannot be held to be erroneous on the basis of the subsequent judgment. (iii) When two views are possible the view taken by the Additional Commercial cannot be said to be erroneous. (iv) The decision of Karnataka State Construction Corporation Limited Vs. State of Karnataka (2004) 138 STC 75 did not deal with the specific issue of composition option. In the decision in Wipro Infotech Ltd Vs. (iii) When two views are possible the view taken by the Additional Commercial cannot be said to be erroneous. (iv) The decision of Karnataka State Construction Corporation Limited Vs. State of Karnataka (2004) 138 STC 75 did not deal with the specific issue of composition option. In the decision in Wipro Infotech Ltd Vs. DCCT reported in (2000) 120 STC 159 it has been held pure labour charges are not exigible to sales tax and as such the levy of sales tax on services when there is no transfer of property in goods is bad in law. (v) It was contended that the Commissioner of Commercial taxes in exercise of his power under Section 22-A(2) of the Act, is not empowered to review both the orders i.e., the order of the Joint Commissioner dated 22-6-2000 as well as the order of the Additional Commissioner of Commercial Taxes, Zone II dated 6-6-2003 since the said provision permits him to disturb any one order at a time. 6. Per contra Smt. Geetha Menon, learned counsel for the revenue, would contend that once the assessee has opted for composition under Section 17(6) of the Act, they cannot be permitted to opt out particularly in the revisional jurisdiction. It is also contended that the Mycon Construction case was rendered in the background of considering the challenge to the vires of amendment brought to Rule 8-B to Karnataka Sales Tax (Amendment) Rules 2001 whereunder the vires was challenged and in the said case it was a concession given by the State and as such the petitioners therein and similarly placed persons were allowed to opt out of composition and submits that order passed on concession cannot be a binding precedent. She further elaborates her submission that in B.V. Subba Reddy Vs. DCCTs case reported in 125 STC 287 the benefit to opt out was extended by relying upon Mycon’s case and both the judgments were rendered by the learned Single Judge of this Court and she brought to our notice that the said Subba Reddy’s case came to be set aside by a Division Bench of this Court by its order dated 10-12-2004 passed in W.A. No. 1740/2001 and as such contends that neither Mycon’s nor Subba Reddy’s case the position of law has been laid down. She further submits that in Karnataka State Construction Corporation case, the Division Bench of this Court has held that once the assessee exercising option for composition of Tax would be estopped from going back on the ground that some work or portion of work is not works contract. She also contends that in the case of T.H. Venkategowda Vs. Commissioner of Commercial Taxes reported in 2006(61) Kar. L.J. 289, the issue relating to levy of tax in respect of Labour Contracts, it has been held by this Court that once the assessee opts for composition cannot be permitted to opt out and on these grounds she requests this Court to answer the questions of law in favour of the revenue and against the assessee. 7. In support of the submissions made by Sri. Chaitanya he relies upon the following decisions: 1. Malabar Industrial Co Ltd. Vs. CIT (2003) 243 ITR 83 (SC) 2. CIT VS. G.M. Mittal Stainless Steel (P) Ltd. (2003) 263 ITR 255 (SC) 3. CIT vs. Max India Ltd. (2007) 295 ITR 282 (SC) 4. Kamath Restaurant vs. ACCT (2007) 8 VST 172 (Kar.) 5. CIT vs. Abdulkarim Stone Contractor (1997) 225 ITR 1032 (Raj.) 6. C. Parikh & Co. vs. CIT (1980) ITR 610 (Guj.) 7. Smt. Amiya Bala Paul vs. CIT (2003) 262 ITR 407 (SC) 8. Mycon Construction Ltd. vs. State of Karnataka and Another (1998) 111 STC 322 (Kar.) 9. B.V. Subba Reddy vs. DCCT (2002) 125 STC 287 (Kar.) 10. Iqbal Ahamed vs. DCCT 2001 (51) KLJ 390 (Kar.) 8. Per contract Smt. Geetha Menon, learned Additional Government Advocate appearing for the respondent revenue would rely upon the following decisions: (i) Karnataka State Construction Corporation Limited, Bangalore Vs. State of Karnataka (2004) 138 STC 75. (ii) W.A. No. 1740/2001 disposed of on 10-12-2004 in the matter of Deputy Commissioner of Commercial Taxes and others Vs. B.V. Subba Reddy. 9. In order to appreciate the contentions raised by the respective advocates, it would be necessary to extract the relevant provisions of KST Act as also Rule-8 of Karnataka Sales Tax Rules. Section. (ii) W.A. No. 1740/2001 disposed of on 10-12-2004 in the matter of Deputy Commissioner of Commercial Taxes and others Vs. B.V. Subba Reddy. 9. In order to appreciate the contentions raised by the respective advocates, it would be necessary to extract the relevant provisions of KST Act as also Rule-8 of Karnataka Sales Tax Rules. Section. 22-A of KST Act [22-A. Revisional powers of [Additional commissioner] and Commissioner-[1] The [Additional Commissioner] may on his own motion call for and examine the record of [any order passed or proceeding recorded] under [Section 20 or Section 21 of] this Act and if he considers that any order passed therein by any officer who is not above the range of a [Joint Commissioner], is erroneous in so far as it is prejudicial to the interest of the revenue, he may, if necessary, stay the operation of such order for such period as he deems fit and after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or canceling the assessment or directing a fresh assessment. (2) The Commissioner may on his own motion call for an examine the record of any proceeding under this Act, and if he considers that any order passed therein by any officer subordinate to him [or the Authority for Clarification and Advance Ruling constituted under Section 4] is erroneous in so far as it is prejudicial to the interest of the revenue, he may, if necessary, stay the operation of such order for such period as he deems fit and after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or canceling the assessment or directing a fresh assessment. (3) The [Additional Commissioner] or the Commissioner shall not [exercise any power] under sub-section (1) or sub-section (2), as the case may be, if- (a) the time for appeal against the order has not expired: Act 4 of 1992 (1-4-92 to 31-3-99) (b) the matter has been subject to an appeal under Section 22 or a revision in the High Court; or] (c) more than four years have expired after the passing of the order sought to be revised. (4) Notwithstanding anything contained in sub-section (3), the [Additional Commissioner] or the Commissioner, may pass an order under sub-section (1) or (2), as the case may be, on any point which has not been raised and decided in an appeal or revision referred to in clause (b) of sub-section (3), before the expiry of a period of one year from the date of the order in such appeal or revision or before the expiry of a period of four years referred to in clause (c) of that sub-section whichever is later.] [(5) Every order passed in revision under sub-section (1) shall, subject to the provisions of sub-section (2) of this section. Sections 23, 24 and 25-A, be final. (6) Every order passed in revision under sub-section (2) shall, subject to the provisions of Sections 23, 24 and 25-A, be final.] [Explanation-I- If the order passed or proceedings recorded by the appropriate authority referred to in sub-section (1) or (2), involves an issue on which the High Court has given its decision adverse to the revenue in some other proceedings and an appeal to the Supreme Court against such decision of the High Court is pending, the period spent between the date of the decision of the High Court and the date of the decision of the Supreme Court shall be excluded in computing the period referred to in clause (c) of sub-section (3). Explanation-II- In computing the period of limitation for the purpose of sub-section (3), any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded.] Explanation III-For the purposes of this section, ‘record’ shall include all records relating to any proceedings under this Act available at the time of examination by the Additional Commissioner or the Commissioner.] Rule 8-B reads as hereunder: 8-B Composition of tax in the case of dealers executing works contracts- (1) the dealer who elects to compound the tax for any year under sub-section (6) of Section 17, shall submit an application in Form 8-AA to the Assessing Authority each year, within [one hundred and twenty days] from the date of commencement of such year, or of the business if he has commenced the business during the course of the year [and such application once filed by the dealer electing to compound the tax shall not be permitted to be withdrawn by him]: [x x x x x x] (2)(1) The assessing authority having jurisdiction, after such verification as may be necessary permit such dealer, subject to the conditions specified in sub-rule (1), to pay in lieu of the amount of tax payable by him during the year, in respect of which such permission is granted, an amount by way of composition as provided in sub-section (6) of Section 17. (ii) Sub permission for composition shall be granted within thirty days from the date of receipt for the application during the year for which the composition is applied for. The permission shall be in Form 8-AB and shall be valid for the entire year to which it relates. (iii) The [Assistant Commissioner of Commercial Taxes] or [Commercial Tax Officer] may cancel such permission, if the dealer,- (a) fails to pay tax in any month within the time specified; or (b) contravenes any provision of the Act or the Rule made thereunder. Amendment to Rule 8-B In rule 8-B of the said rules, in sub-rule (1):- i. For the words “thirty days”, the words “one hundred and twenty days” shall be substituted; ii. After the words “course of the year”, the following words shall be inserted, namely “and such application once filed by the dealer electing to compound the tax shall not be permitted to be withdrawn by him” iii. The proviso shall be omitted. 10. After the words “course of the year”, the following words shall be inserted, namely “and such application once filed by the dealer electing to compound the tax shall not be permitted to be withdrawn by him” iii. The proviso shall be omitted. 10. The undisputed facts leading to the revised order being passed by the Commissioner of Commercial Taxes are: Assessee is an individual P.W.D. contractor involved in the works Contract and had opted for assessment by composition method under Section 17(6) of the Act. The Assessing Officer in respect of works carried out by the Contractor to the tune of Rs. 1,65,70,899/- levied tax at the rate of 4% which amounted to Rs. 15,56,671/- rejecting the claim for exemption of receipts relating to Labour. The assessee being aggrieved by the same filed an appeal before the Joint Commissioner of Commercial Taxes (Appeals) and the Appellate Authority by order dated 22-6-2000 held that works contract receipt concerning the execution of earthen work to the tune of Rs. 1,65,70,899/- be reduced from the gross works contract receipts and only the rest of the turn over be subjected to tax under Section 17(6) of the Act, thereby reducing the tax liability to Rs. 8,93,835/- from Rs. 15,56,671/-. One curious aspect which requires to be noticed at this juncture is that the assessee being satisfied of the same did not challenge the same which is obvious since the same being beneficial to it. 11. Be that as it may, the Additional Commissioner of Commercial Taxes, Zone II, Bangalore in exercise of his Powers under Section 22-A(1) of the Act suo motu issued a notice dated 2-9-2002 calling upon the appellant assessee to show cause as to why the relief given by the First Appellate Authority bifurcating a portion of the contract work should not be brought to tax as it is an ‘error’ warranting revisional action by placing reliance on the case of S.S. Muddanna Vs. State of Karnataka reported in 89 STC (HC) (DB). It is in reply to this notice it was contended by the appellant that though the assessee had filed form No.8 and had sought for the benefit of composition, there was statutory duty cast on the Assessing Officer to assess the appellant under Section 5-B in respect of declaration made under Section 17(6) of the Act. It is in reply to this notice it was contended by the appellant that though the assessee had filed form No.8 and had sought for the benefit of composition, there was statutory duty cast on the Assessing Officer to assess the appellant under Section 5-B in respect of declaration made under Section 17(6) of the Act. It was further contended that the assessee had maintained books of accounts duly audited by Chartered Accountant and majority of its receipts are labour oriented and only 5% of the works Contract receipts involved in transfer of property and hence sought for the turn over being not leviable to tax under Section 5-B of the Act and in conclusion it sought for withdrawal of composition benefit and hence prayed for being assessed under Section 5-B of the Act by relying upon Mycon Construction Limited by its reply dated 24-5-2003. The Additional Commissioner of Commercial Taxes Zone II, Gandhinagar. On considering the said reply set aside the order of the First Appellate Authority and allowed the appellant to opt out of payment of tax by way of composition and ordered for being assessed under Section 5-B of the Act which in effect reduced the tax liability of the appellant-assessee to Rs. 3,99,646/- from that of the First Appellate Authorities order fixing the liability to Rs. 8,93,835/-. 12. The respondent Commissioner in exercise of his power under Sub-Section 2 of Section 22-A of the Act revised both the above said orders namely, the order of the Joint Commissioner dated 22-6-2000 and the order of the Additional Commissioner dated 6-6-2003 by his order dated 14-3-2007 holding that the assessee had not made any request before the Assessing Officer to withdraw permission granted to him to opt out of composition either during the assessment year 1997-98 or at the time of assessment by Assessing Authority and also at the Appellate stage. It was noticed by the Commissioner of Commercial Tax that Additional Commissioner of Commercial Tax, Zone-II, Gandhinagar relied upon the judgment in Mycon Construction Limited referred to supra and permitted the assessee to revoke the composition option. By perusal of the judgment in Mycon Construction Limited’s case it is noticed by us that assessee therein were permitted to opt out on the basis of the concession made by the State. By perusal of the judgment in Mycon Construction Limited’s case it is noticed by us that assessee therein were permitted to opt out on the basis of the concession made by the State. In the said decision, the constitutional validity of Sub-section (6) of Section 17 was under consideration and it is in this background, the learned Judge of this Court in paragraph 13 of Mycon’s case held as follows: “However, in view of the categorical statement made by the state statement of objections stating that this Court can permit the petitioner opt for regular assessment under Section 5-B; and I have taken that fact as one of the factors to come to the conclusion that the impugned provision is a way results in arbitrariness or violation of the right guaranteed to the petitioner either under article 14 or under article 19(1)(g) of the Constitution; it is record to reserve liberty to the petitioners to opt for regular assessment under section 5-B of the Act notwithstanding the fact that they had opted for composition under Section 17(6) of the Act, if the petitioners, within 12 weeks from today, make an application to the concerned assessing authority that they may be assessed as provided under Section 5-B of the Act, and further direct the assessing authorities to proceed to assess the petitioners and all others, who are not before the Court, as provided under Section 5-B of the Act. This direction is binding on the State and its assessing, revising or appellate authorities wherever an application is made seeking assessment under Section 5-B of the Act and they are directed to pass appropriate orders suitably modifying the assessments.” Subsequently, in B.V. Subba Reddy’s case similar issue namely whether revocation of composition is permissible by an assess came for consideration and on scrutiny the learned Judge of this Court following the dicta in Mycon’s case held the issue in favour of the assessee and the relevant paragraph No.7 in Subba Reddy’s case reads as follows: “7. The assessee in this case had prayed for composition benefits under section 17(6) of the Act. Thereafter, realising that the composition application filed by him may not be beneficial to him, had thought fit to approach the assessing authority to complete the assessments in his case for the assessment year 1997-98 under the provisions of section 5-B of the Act. The assessee in this case had prayed for composition benefits under section 17(6) of the Act. Thereafter, realising that the composition application filed by him may not be beneficial to him, had thought fit to approach the assessing authority to complete the assessments in his case for the assessment year 1997-98 under the provisions of section 5-B of the Act. In my opinion, the assessing authority in view of the observations made by the learned Judge of this Court in Mycon Construction Limited’s case [1998] 111 STC 322, should have passed an order completing the assessment under section 5-B of the Act without issuing the impugned endorsement. In view of the above, the endorsement issued by the assessing authority is contrary to the observations made by this Court in Mycon Construction Limited’s case [1998] 111 STC 322. In that view of the matter, it is difficult to sustain the impugned endorsement. Therefore, the same requires to be set aside by this Court.” [emphasis supplied by us] Thereafterwards the above said Subba Reddy’s case was taken up in appeal by the State in W.A.No.1740/2001 whereunder the coordinate Bench of this Court by its order dated 10-12-2004 reversed the judgment passed in B.V. Subba Reddy’s case in W.P.No.27459/2000 dated 20-10-2000 and allowed the appeal filed by the State. It is held by Coordinate Bench of this Court in Subba Reddy’s case (paragraph No.8 in W.A.No.1740/2001) to the following effect: “Therefore, in our view, the order passed by the learned Single Judge is liable to be set aside on the short ground that the conclusion reached by him runs counter to the two Division Bench decisions of this Court, referred to above. Further, as rightly pointed-out by learned Additional Government Advocate, in the case of Mycon (supra), this Court has not laid down the law taking the view that if once an assessee seeks for assessment by way of composition under Section 17(6) of the Act, it would still be open for him to opt out of it and seek for assessment under Section 5-B of the Act. In that case, the assessees were permitted to seek for assessment under Section 5-B of the Act though they had initially sought for assessment under Section 17(6) of the Act in the light of the statement made by the State Government enabling the assessees in those cases to seek for assessment under Section 5-B of the Act. The said observations were made when constitutional validity of Section 17(6) of the Act came-up for consideration before this Court. While refuting the submission made that Section 17(6) of the Act was unconstitutional in law, this Court, in the light of the concession shown by the State that the assessee could be permitted to seek for assessment under Section 5-B of the Act, the assessees in those cases were permitted to seek for assessment under Section 5-B of the Act. It is clear from the observations made by this Court at paragraph 13 of the judgment, which reads as hereunder: (Emphasis supplied by us]. “13. However, in view of the categorical statement made by the state in the statement of objections stating that this Court can permit the petitioners to opt for regular assessment under Section 5-B; and I have taken that factor as one of the factors to come to the conclusion that the impugned provision in no way results in arbitrariness or violation of the right guaranteed to the petitioners either under article 14 or under article 19(1)(g) of the Constitution; it is necessary to reserve liberty to the petitioners to opt for regular assessment under section 5-B of the Act notwithstanding the fact that they had opted for composition under Section 17(6) of the Act……..” 13. In view of the above binding judgment of this Court we are of the considered opinion that the argument advanced by the learned counsel for the petitioner-appellant does not hold water and is liable to be rejected and accordingly it is rejected. Hence, question No.1 formulated herein above is answered in the negative in favour of the revenue and against the assessee. 14. Section 17 of the KST Act provides for composition of tax. The relevant provision which arises for consideration in the present appeal is sub Section 6 of Section 17. The same reads as follows. “Sec.17(6)(i) Karnataka Sales Tax Act, 1957. 14. Section 17 of the KST Act provides for composition of tax. The relevant provision which arises for consideration in the present appeal is sub Section 6 of Section 17. The same reads as follows. “Sec.17(6)(i) Karnataka Sales Tax Act, 1957. Section 17(6) (i) Notwithstanding anything contained in Section 5-B, but subject to such conditions and in such circumstances as may be prescribed, the Assessing Authority of the area may, if a dealer liable to tax under Section 5-B so elects, accept in lieu of the amount of tax payable by him during the year under this Act, by way of composition an amount on the total consideration for the works contracts executed by him in that year in the State in respect of works contract specified in Column (2) of the Sixth Schedule 1 [at the rate of four per cent.]] ii) Any dealer may apply to the assessing authority to be permitted to pay the amount under clause (i) and, on being so permitted, he shall pay tax in advance as provided for under Section 12-B and all the provisions of Section 12-B mutatis mutandis shall apply to this sub section]: iii) The amount paid under clause (ii), shall be subject to such adjustment as may be necessary on completion of final assessment.] [Explanation.- No tax shall be payable under this sub-section on the turnovers to amounts paid to sub-contractors as consideration for execution of works contract whether wholly or partly subject to production of proof that such sub-contractor is a registered dealer liable to tax under the Act and that the turnover of such amounts is included in the monthly statements or return of turnover, as the case may be, filed by such sub-contractor.” 15.If a dealer is liable to tax under Section 5-B were to elect for composition, in lieu of amount of tax payable by the assessee during the year, on the total consideration for the works contract executed by him in that year in the State, in respect of works contract specified in column No.2 of VI Schedule. The rate of tax would be 4%. Conditions and circumstances prescribed under the said Section is to be found in Rule 8-B of the Karnataka Sales Tax rules, 1956. The rate of tax would be 4%. Conditions and circumstances prescribed under the said Section is to be found in Rule 8-B of the Karnataka Sales Tax rules, 1956. Rule 8-B reads as follows: 8-B Composition of tax in the case of dealers executing works contracts- (1) The dealer who elects to compound the tax for any year under sub-section (6) of Section 17, shall submit an application in Form 8-AA to the Assessing Authority each year, within [one hundred and twenty days] from the date of commencement of such year, or of the business if he has commenced the business during the course of the year [and such application once filed by the dealer electing to compound the tax shall not be permitted to be withdrawn by him]: [x x x x x x] (2)(I) The assessing authority having jurisdiction, after such verification as may be necessary permit such dealer, subject to the conditions specified in sub-rule (1), to pay in lieu of the amount of tax payable by him during the year, in respect of which such permission is granted, an amount by way of composition as provided in sub-section (6) of Section 17. ii) Such permission for composition shall be granted within thirty days from the date of receipt of the application during the year for which the composition is applied for. The permission shall be in Form 8-AB and shall be valid for the entire year to which it relates. (iii) The [Assistant Commissioner of Commercial Taxes] or [Commercial Tax Officer] may cancel such permission, if the dealer,- (a) fails to pay tax in any month within the time specified; or (b) contravenes any provision of the Act or the rule made thereunder] Amendment to Rule 8-B In rule 8-B of the said rules, in sub-rule (1):- i. For the words “thirty days”, the words “one hundred and twenty days” shall be substituted. ii. After the words “course of the year”, the following words shall be inserted, namely “and such application once filed by the dealer electing to compound the tax shall not be permitted to be withdrawn by him” iii. The proviso shall be omitted. 15. ii. After the words “course of the year”, the following words shall be inserted, namely “and such application once filed by the dealer electing to compound the tax shall not be permitted to be withdrawn by him” iii. The proviso shall be omitted. 15. The words “and such application once filed by the dealer electing to compound the tax shall not be permitted to be withdrawn by him” came to be inserted by the Karnataka Sales Tax (Amendment) Rules, 2001, with effect from 8-6-2001. It is contended by Sri. Chaitanya the learned Counsel for the appellant-assessee, that above said words came to be added to Sub-Rule (1) of rule 8-B with effect from 8-6-2001 and as such an assessee was prevented from withdrawing the composition earlier opted with effect only from the said date, particularly the period of assessment being 1-4-1997 to 31-3-1998. The said words added to sub Rule (1) of Rule 8-B not being in existence during the assessment period in question i.e., 1-4-1987 to 31-3-1998 cannot be applied to the facts and circumstances of the case and accordingly submits that the reasoning given by of the Commissioner of Commercial Tax in his Revisional order dated 14-3-2007, passed in exercise of power under Section 22-A(2) of the KST Act is erroneous and liable to be set aside. The undisputed facts on this issue in the instant case are; the assessee had opted by way of election to get the composition done under Section 17(6) of the Act and had obtained an assessment order on 29-4-1999 (Annexure B) which resulted in filing an appeal before the Joint Commissioner of Commercial Tax (Appeals) which came to be allowed by order dated; 22-6-2000 and the assessee having accepted the same in effect would result in an inevitable conclusion that assessee did not have any grievance in, so far as, composition method adopted particularly having not perused the said order of Joint Commissioner of Appeals. Thus, the dealer has accepted the order passed under Section 20 of the Act, dated; 22-6-2000. It is only when the Additional Commissioner proposed to initiate revision proceedings under Section 22-A(1) of the Act suo motu by issue of notice dated; 2-9-2002, the assessee in its reply dated; 24-5-2005 sought for withdrawal from composition method and sought for being assessed under Section 5-B of Act. It is only when the Additional Commissioner proposed to initiate revision proceedings under Section 22-A(1) of the Act suo motu by issue of notice dated; 2-9-2002, the assessee in its reply dated; 24-5-2005 sought for withdrawal from composition method and sought for being assessed under Section 5-B of Act. There is no separate or independent application made by the assessee for withdrawing from composition method. It is seen from clause (ii) of Sub Section 6 of Section 17, the dealer will have to apply to the Assessing Authority for permitting to pay the amount under clause (1) and on being so permitted, the assessee is required to pay the tax in advance as provided under Section 12-B of the act and all he provisions of Section 12-B of the Act have been made applicable to Sub Section (6) of Section 17 Mutatis Mutandis and the said advance tax paid would necessarily be paid subject to such adjustment as it may arise on completion of final assessment. The provision of Section 12-B reads as follows: 12-B Payment of tax in advance-[(1) Subject to such rules as may be prescribed, every dealer shall send every month [x x x x] a statement containing such particulars as may be prescribed including the taxable turnover during the preceding month and shall pay in advance the full amount of [tax payable by him [under this Act within twenty days after the close of the preceding month to which such tax relates on the basis of the turnover particulars shown in the statement]] and the amount so payable shall for the purposes of [x x x x x] Section 13 be deemed to be an amount due under this Act from such dealer.][r/w rule 17(1)] [Provided that- (i) in the case of a dealer where payment by way of composition under sub-section (1) of Section 17 is accepted, the provisions of sub section (1) shall not apply; and (ii) in the case of dealer being a small scale industry registered with the Director of Industries and Commerce, Government of Karnataka, such dealer shall send such a statement in accordance with sub-section (1) but shall pay in advance the full amount of tax payable for every quarter within twenty days after the close of that quarter;] (iii) in the case of a dealer whose total turnover in any year is not more than seven lakh fifty thousand rupees shall submit statements for each month in accordance with subsection (1) once in a quarter and pay in advance the full amount of tax payable for every quarter within twenty days after the close of that quarter to which such tax relates.] Provided further that the full amount of tax payable by the dealer in advance for the year as reduced by the amount of tax already paid under this Section shall be paid within thirty days after the close of the year to which such tax relates;] [Provided also that where the tax payable for any quarter by a small scale industrial undertaking is not paid within thirty days after the close of the quarter to which such tax relates, such undertaking shall be liable to pay tax thereafter as provided under this sub-section excluding the first proviso.] Act 5 of 2000 (From 1.4.2000) [(2) If default is committed in the payment of tax for any month or quarter as the case may be, beyond ten days, whether or not a statement as required under sub-section (1) is filed; or if the amount of tax paid is less than the amount of tax payable for any month or quarter as the case may be, the dealer defaulting payment of tax or making short payment of tax shall, in addition to the tax, pay interest calculated at the rate of two per cent per month from the date of such default or short payment to the date of payment of such tax [or up to the date specified for payment of tax assessed under Section 12, as the case may be]] [[(3)] If no such statement is submitted by a dealer under sub-section (1) before the date prescribed or if the statement submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority may assess the dealer provisionally for that month to the best of his judgment, recording the reasons for such assessment, and proceed to demand and collect the tax on the basis of such assessment; [[r/w rule 17 (2)] Provided that before taking action under this sub-section the dealer shall be given a reasonable opportunity of being heard] [Explanation-For the purpose of this Section “Quarter” means the period of three months ending on 31st day of May, 31st day of August, 30th day of November and 28th day (or 29th day) of February.] [3-A] When making assessment under sub-section (3), the Assessing Authority may also direct the dealer to pay in addition to tax assessed, a penalty- (a) not exceeding one and a half times but not less than one half of the amount of tax due on turnover that was not disclosed by the dealer in his statement; or (b) not exceeding one and half times the tax assessed in the case of failure to submit a statement] [(4) If at the end of the year it is found that the amount of tax paid in advance by any dealer for any month or quarter or for the whole year in the aggregate was less than the tax payable for that month or quarter or the tax for the whole year as finally assessed, as the case may be, by more than fifteen per cent, the assessing authority may direct such dealer to pay, in addition to the tax, a penalty [which shall not be less than one half of the tax so paid in short, but not exceeding [x x x x x] the amount by which the tax so paid fall short] of the tax payable for the month or quarter or for the whole year as the case may be] Provided that no penalty under this sub-section shall be imposed unless the dealer affected has had a reasonable opportunity of showing cause against such imposition;] [Provided further that no penalty shall be levied under this sub-section after a period of eight years from the close of the year to which any tax paid in short relates.]” 17. Under Section 12-B there is a mandatory duty cast on every dealer to declare the taxable turnover during the preceding month and the dealer is required to pay in advance the full amount of tax payable by him, under this Act within 21 days after the close of the preceding month to which such tax relates to. The said tax is paid on the basis of the turnover particulars shown in the statement filed by the assessee. The relevant Rule applicable in, so far as payment of tax in advance is concerned is Rule 17. The said Rule reads as follows: “[17. The said tax is paid on the basis of the turnover particulars shown in the statement filed by the assessee. The relevant Rule applicable in, so far as payment of tax in advance is concerned is Rule 17. The said Rule reads as follows: “[17. [Payment of tax, in advance, reimbursement of excess tax paid on industrial inputs, etc-][(1) The statement under sub-section (1) of Section 12-B shall be [in form 3 and in the case of an industrial unit in Form 3 along with a statement in the form of Annexure to Form 3] and the return under (sub-section 3) of Section 25-B] shall be in Form 3-B and shall be sent in duplicate to the Assessing Authority [or the Registering Authority, as the case may be, so as to reach it within [twenty days] after the close of the month to which such statement or return relates, such statement or return shall be accompanied by a receipt from a Government Treasury, a crossed postal order, a crossed cheque or a crossed demand draft in favour of the Assessing Authority [or the Registering Authority, as the case may be,] and encashable at a post office/bank situated in the place of location of the office of the Assessing Authority [or the Registering Authority [or the Registering Authority, as the case may be,] and encashable at a post office/bank situated in the place of local of the office of the Accessing Authority [or the Registering Authority, as the case may,] [x x x x [x] for the full amount of tax payable by him on the basis of his actual taxable turnover during the month to which the statement or return relates.] [Provided that the statement to be submitted for the month of April 2001 shall be in Form 3 as substituted by the Karnataka Sales Tax (Amendment) Rules, 2001.] [Provided further that the statement in Form 3 and the return in form 3-B may also be submitted in the State Bank of India or its associate Bank or any other Bank approved by the Reserve Bank of India and specified by the Government, accompanied by a challan in Form 33-B and payment of the tax payable, on or before the twentieth day after the closer of the month to which such statement or return relates: Provided also that the statement in Form 3 and the return in Form 3-B accompanied by payment of the tax payable, may also be sent to the Assessing Authority or a Bank as may be specified by the Government or to any intermediary appointed by the Government or Commissioner, electronically subject to such procedure and conditions as may be specified by the Government or Commissioner]” Coming back to sub Section (6) of the Section 17 we find that composition method is one method offered by the revenue for being elected by the assessee, in lieu of assessment being done under Section 5-B of the Act. The assessee in the instant case having claimed in its reply notice/objection dated 24-5-2003 (Annexure-E) which was filed to suo motu revision notice, dated; 2-9-2002 (Annexure D,) has categorically contended that it has maintained the books of accounts, audited by the Chartered Accountant and majority of the works contract receipts are labour oriented. The said relevant paragraph reads as under: “(5) For revocation of the benefit of composition sought by us earlier and to assess us U/s. 5-B of the Act, we solely rely on the judgment of Mycon Construction Co. Ltd., wherein it is clearly held as @... And further direct the Assessing authorities to proceed to assess the petitioners and all others who are not before the court as provided U/s. 5B of the Act. This direction is binding on the State and its assessing, revising or Appellate Authorities wherever an application is made seeking assessment U/s. 5-B of the Act and they are to pass appropriate order suitable modifying the assessments..@. We therefore, request your good authority to cancel the composition benefit sought by us and to assess u/s. 5-B of the Act and thus render justice to us. We have filed herewith purchase statements. Expenditure incurred details, RA bills to prove the works contract undertaken in which no transfer or property is involved etc., for enabling you to finalise the assessment. 18. Thus, the assessee in question was fully aware as to the nature of transaction and being conscious of the same had elected to be governed by alternate method of taxation namely composition. There was no compulsion on the assessee to opt for method of taxation as provided under Sub Section (6) of Section 17. It was voluntary choice and it was chosen by the assessee on its own volition. Thus, the assessee being aware of the fact that it had less than 5% of works contract involving transfer of property would not have chosen for composition under Sub Section (6) of Section 17 of the Act. The assessee was fully aware of all the features of alternate method of taxation. In fact, a similar proposition now propounded by the learned Counsel for the petitioner by raising substantial question of law No.2 formulated herein above was the subject matter of consideration by a coordinate Bench of this Court in T.H. Venkategowda Vs. The assessee was fully aware of all the features of alternate method of taxation. In fact, a similar proposition now propounded by the learned Counsel for the petitioner by raising substantial question of law No.2 formulated herein above was the subject matter of consideration by a coordinate Bench of this Court in T.H. Venkategowda Vs. Commissioner of Commercial Taxes reported in 2006(61) Kar.L.J.289, wherein the said contention of the assessee came to repelled and held against the assessee by following the dicta of Hon’ble Supreme Court in State of Kerala another Vs. Builders Association of India reported in AIR 1997 SC 3640 and it came to the conclusion as follows. “The said judgment would show that the said option saves the contractor from the botheration of book-keeping, assessment, appeals etc. It provides a ready solution to the contractor. Having opted for Section 17(6), it is now not open to the assessee to bifurcate the contract and the tax thereon for the purpose of payment of tax as sought to be judgment of the Supreme Court has rightly chosen to hold in our view against the assessee. The Appellate Tribunal has rightly in our view held that the assessee having voluntarily, and with the full knowledge of the features of the alternate method of taxation, opted to be governed by it, cannot be heard to question subsequently the levy of tax by the Authorities. The Revisional Authority after noticing the option under Section 17(6) and after noticing the legal error committed by the Assessing Authority, has rightly chosen to review the assessment order on the ground of prejudicial to the revenue of the State. The order of the Revisional Authority is fully backed by Section 17(6) of the Act and also by the ruling of the Supreme Court. The Appellate Tribunal, on the facts of this case is perfectly justified in confirming the revisional order”. 19. Our another aspect which requires to be noticed by us is with regard to applicability of the amendment/added words with effect from 8-6-2001. The Rule making power is a delegated Legislation. It cannot over ride the statutory provision namely Section 17(6) of the Act. 19. Our another aspect which requires to be noticed by us is with regard to applicability of the amendment/added words with effect from 8-6-2001. The Rule making power is a delegated Legislation. It cannot over ride the statutory provision namely Section 17(6) of the Act. Sub Clause (2) of Sub Section (6) of Section 17 postulates that assessee after electing to opt for composition method would be permitted by the Assessing Authority to pay the amount under clause (1) and it is only on being granted the permission the assessee or dealer would pay the tax in advance as provided under Section 12-B of the Act. In effect it would mean that once permitted under the Act of election by the assessee, the assessee cannot retrace the steps and admit to do undo what has been done. The same is impermissible under the Act itself, which is the only conclusion, which can be drawn by reading the words in sub clause (2) of Section (6) of Section 17 of the Act and no other view can be arrived at. Thus, when Section itself is clear the Rule would only act as a procedural factor. The Rule making authority having noticed that it may lead to an ambiguous interpretation have thought fit to clarify the same by way of adding the words “and such application once filed by the dealer electing to compound the tax shall not be permitted to be withdrawn by him” which can be held as either amplification or clarificatory in nature. Though, the said amendment has come into effect with effect from 2001, it would not brittle down the effect provided under sub Section (6) of Section 17 of the Act. Even other wise on facts we find that the assessee having taken the benefit of the 1st appellate authority’s order dated 22-6-2000 for the first time on 24-5-2003 (Annexure E) sought for opting out from the scheme of composition which it had already elected and reaped the benefits accruing thereunder. As on the date of claim made by the assessee, the Rule had already come into effect namely the amended/added portion of Rule 8-B(1) of the Rules. Though Sri. As on the date of claim made by the assessee, the Rule had already come into effect namely the amended/added portion of Rule 8-B(1) of the Rules. Though Sri. Chaitanya Hegde the learned Counsel for the Petitioner would contend that Rule having come into effect on 8-6-2001, is to be interpreted as prospective in nature by pressing into service the decision of the Hon’ble Apex court in Hitendra Vishnu Thakur Vs. State of Maharashtra reported in AIR 199 SC 2623 to contend that law relating to right of action being substantive in nature can only be prospective and cannot be retrospective and accordingly submits that the said amended/added words in Sub Rule (1) of 8-B is to be considered to be substantive and not procedural. We are unable to agree with the same since the Act itself clarify the correct proposition namely permission being granted by the Assessing Officer when so elected by the assessee it cannot be said that the assessee had an option to withdraw from such election. The Act does not provide an option to the assessee to withdraw from composition scheme. The amended rule only clarifies the sub-clause (i) & (ii) of sub-section (6) of section 17 which has to be held procedural in nature and thus it would be applicable to the period anterior to amendment also. 20. It is well settled that a distinction has to be made by the Courts while interpreting provisions of taxing statue, between charging provisions which impose the charge to tax and machinery provisions, which provide machinery for the quantification of the tax and the levying and collection of tax so imposed. While charging provisions are construed strictly machinery provisions are not generally subject to a rigorous construction. The Hon’ble Supreme Court in the case of Associated Cement Company Limited Vs. While charging provisions are construed strictly machinery provisions are not generally subject to a rigorous construction. The Hon’ble Supreme Court in the case of Associated Cement Company Limited Vs. Commercial Tax Officer, Kota and others AIR 1981 SC 1887 has held as follows: “The argument pressed before us on behalf of the assessee is that since Section 7 of the Act does not expressly say that a registered dealer who has not filed any return or a person who has claimed that his turnover or any part thereof is not taxable and has not paid tax due in respect of such disputed turnover should also pay interest on the tax which is legitimately due to the Government but withheld by him, no interest can be claimed under Sec. 11-B of the Act in such cases. Section 7 of the Act which deals with the submission of returns is not a changing section but a machinery section. It is settled law that a distinction has to be made by Court while interpreting the provisions of a taxing statue between charging provisions which impose the charge to tax and machinery provisions which provide the machinery for the quantification of the tax and the levying and collection of the tax so imposed. While charging provisions are construed strictly, machinery sections are not generally subject to a rigorous construction. The courts are expected to construe the machinery sections in such a manner that a charge to tax is not defeated. The above rule of construction of a taxing statute has been adopted by this Court in India United Mills Ltd. V. Commissioner of Excess Profits Tax, Bombay, (1955) 1 SCR 810 ( AIR 1955 SC 79 ) in which Section 15 of the Excess Profits Tax Act came up for consideration. The Court observed in that case thus (at P.82): “That section is, it should be emphasized, not a charging section, but a machinery section. And a machinery section should be so construed as to effectuate the charging section.” 21. The Court observed in that case thus (at P.82): “That section is, it should be emphasized, not a charging section, but a machinery section. And a machinery section should be so construed as to effectuate the charging section.” 21. It is no doubt true that sub Rule (1) of Rule 8-B of the Rules came to be amended where under the words “and such application once filed by the dealer electing to compound the tax shall not be permitted to be withdrawn by him” came to be inserted with effect from 8-6-2001 though not was in existence as on the date of the assessment order passed on 29-4-1999, it was very much present as on the date of application made by assessee seeking to withdraw from composition method and for being assessed under Section 5-B of the Act by its application dated 24-5-2003 and also as on the date of issuing of notice under Section 22-A(1) dated 2-9-2002 by the Additional Commissioner of Commercial Tax. Even otherwise it is well recognised rule of interpretation that an amendment which is by way of a clarification would be useful aid in construing the existing earlier provision even though such amendment is not given retrospective effect. A Subsequent legislation on the same subject can be looked into by the Court in order to see what is proper construction to be put up on an earlier Act where either it is silent or ambiguous. If there is any ambiguity in the earlier legislation then the subsequent legislation would guide the proper interpretation which is to be put upon the earlier. 22. In view of the above proposition of law laid down by this Court following the principles enunciated by the Hon’ble Supreme Court as discussed hereinabove, we are of the considered opinion that Rule 8-(B)(1) of the Rules which has come into effect from 8-6-2001 is also applicable to the period anterior to the same, since the said addition is clarificatory in nature. Accordingly, Question No.2 is answered against the assessee and in favour of the revenue. 23. Accordingly the following order is passed: ORDER (i) The appeal filed by the assessee is hereby dismissed. (ii) The substantial questions of law formulated herein above are answered against the assessee and in favour of the revenue. (iii) No order as to costs.