9911796707
TMI Blog2013 (5) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... aid order is not correct or sustainable. - Decided in favor of assessee. - W.P(C) No. 11783 of 2012 - - - Dated:- 2-7-2012 - P.R. RAMACHANDRA MENON J. PETITIONER: BY ADV. SRI.C.K.THANU PILLAI RESPONDENT: BY ADV.SMT.SOBHA ANNAMMA EAPEN, GOVERNMENT PLEADER JUDGMENT Two legal questions are involved in this writ petition; first one is, whether the application submitted by the petitioner for payment of tax at the compounded rate under Section 8 (b) of the KVAT Act could have been rejected by referring to the course stipulated under the 'proviso' to Section 8 (f) (ii) and the second one is, whether the verdict passed by the Tribunal dismissing Ext. P12 appeal, observing that the challenge against Ext. P11 order passed by the second respondent will not lie before the Tribunal and that the same has to be preferred before the Deputy Commissioner is correct or sustainable. 2. The sequence of events as narrated in the writ petition shows that, the petitioner, who is conducting the business of metal crusher unit and a registered dealer on the rolls of the second respondent, was mulcted with penalty of ₹ 9,87,682/- in respect of the assessment year 2007 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only provision to prefer appeal on being aggrieved of the order rejecting application for compounding, is stipulated under Section 8 (f) (ii), which is to be uniformly applied to all the dealers, who are seeking the benefit of compounding. 4. The respondents 2 and 3 have filed a statement before this Court contending that Section 8 (f) (ii) is applicable only to gold dealers and since the petitioner is a dealer in granite metals, he cannot have the benefit of Section 8 (f) (ii). The respondents have also projected the circumstances under which the above provision was incorporated in the Statute Book, based on the Budget Speech 2008 - '09 (with reference to paragraphs 165 to 167). Accordingly, it is stated that the first respondent Tribunal is perfectly justified in having rejected Ext. P12 appeal and the remedy to the petitioner, if at all aggrieved of Ext. P11, is only before the Deputy Commissioner. The petitioner has filed a reply affidavit seeking to reiterate the contentions raised in the writ petition. 5. Heard the learned counsel for the petitioner as well as the learned Government Pleader at length. 6. For the purpose better appreciation of the statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for the above goods for the preceding year exceeded rupees on crore; of the highest tax payable by him as conceded in the return or accounts, or tax paid by him under this Act, whichever is higher, for a year during any of the three consecutive years preceding that to which such option relates] Explanation 1 - Where a dealer had not transacted any business for the last three years consecutively, the highest tax paid or payable for the year during the year or years he transacted business shall be considered for the above purpose. Explanation 2: Where during any such preceding year, the dealer had not transacted business for any period in that financial year, the tax payable for the twelve months shall be calculated proportionately on the basis of the tax payable or the turnover conceded, as the case may be, for the period during which such dealer had transacted business. Explanation 3: Dealers opting for payment of tax under this clause shall pay compounded tax in respect of all their branches existing in the year (to which the option relates) Explanation 4: Where a dealer has not opted to pay compounded tax with respect to a new branch opened in 2008-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the District Deputy Commissioner. There is no dispute with regard to the nature of the business being performed by the petitioner, who comes squarely within the purview of Section 8 (b). The situation covered by Section 8 (f) is in respect of the dealers in ornaments or wares or articles of gold, silver or platinum group metals including diamond. It is under this provision, that various 'explanations' have been given, different rates of payment of tax are provided in respect of the slabs mentioned therein and it also contains other clauses like ii, iii, iv and v which are relevant to the case in hand. Section 8 (f) (ii) gives power to the assessing authority to refuse permission to pay tax under the compounded rate and also to cancel the permission, if at all granted, if the authority is satisfied that there is valid and sufficient reason because of the circumstances available, as narrated therein. Under the 'proviso' to Section 8 (f) (ii), it is stipulated that, no orders under this sub-clause shall be issued without giving the dealer an opportunity of hearing and without 'prior approval' of the District Deputy Commissioner. As per Section 8 (f) (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like the petitioner, who are doing metal crusher business, the respondents conveniently forget the fact that the sole reason for rejecting the application for compounding preferred by the petitioner is by placing reliance on Section 8 (f) (ii) as mentioned in Ext. P11. There is no case for the respondents that there is any enabling provision under Section 8 (b) which is applicable to the petitioner, who is a dealer in metal crusher unit, to reject the compounding application. When the respondents contend that Section 8 (f) (ii) exclusively deals with dealers in gold, silver, they also rely on the same clause to reject the compounding application, which cannot be a paradox. If Section 8 (f) (ii) does not pertain or is applicable to the persons like the petitioner who are doing the business in metal crusher, how the said clause can be used to reject an application for compounding, is a matter mystery. In other words, the respondents are blowing hot and cold simultaneously, which is liable to be deprecated. This Court finds that the respondents are not justified in having rejected the application for compounding, placing reliance on Section 8 (f) (ii), which even according to them is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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