2007 (11) TMI 683 - HC - VAT and Sales Tax

Summary

Issues involved: Whether the assessee is eligible to pay tax at the compounded rate u/s 7(7) of the Kerala General Sales Tax Act for the assessment year 2001-2002.

Summary:
The petitioner, a civil contractor, sought permission to pay tax at the compounded rate after receiving contract amounts, but the assessing authority rejected the request. The First Appellate Authority allowed the appeal, but the Sales Tax Appellate Tribunal reversed the decision. The assessee filed a Tax Revision Case challenging the Tribunal's decision.

Question of Law:
1. Whether the assessee can be denied the benefit of Section 7(7) of the KGST Act for the period prior to registration in the same financial year.
2. Whether the benefit of Section 7(7) is available only to registered dealers.
3. Whether the Tribunal was justified in canceling the first appellate order.
4. Whether the Assessing Authority was justified in completing the assessment without giving the assessee an opportunity to respond.

Court's Analysis:
The Rules mandate filing an application before receiving contract amounts to pay tax at the compounded rate. The contractor must make a bilateral agreement with the assessing authority for this purpose. In this case, the assessee applied for this benefit after receiving the contract amount, which was rightly rejected by the assessing authority. The court held that the assessee was not entitled to pay tax at the compounded rate due to non-compliance with Rule 30A(2).

Conclusion:
The court affirmed the decisions of the assessing authority and the Tribunal, rejecting the Tax Revision Case. The assessee's application for payment of tax at the compounded rate was dismissed.