In Brief
Craft Interiors, an interior decoration company, purchased goods from registered dealers and claimed tax deductions under Karnataka Sales Tax Rule 6(4)(m)(i) when using them in works contracts. Tax authorities denied deduction for timber, arguing it was not used 'in the same form' as purchased. The Supreme Court upheld the rule's validity, holding that Section 5B (the charging provision) and Rule 6(4)(m)(i) (the deduction provision) operate in different spheres. The rule does not expand the scope of taxation but ensures goods are taxed only once. If goods transform into a different commercial commodity, that new commodity is separately taxable. The appeal was dismissed, allowing reassessment proceedings to continue.
The lawyer headnote and full judgment text are available to registered users.