9911796707
TMI Blog2006 (10) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... on 7(1)(a) of the KGST Act. The appellant who is a dealer in jewellery, applied for payment of tax at compounded rate under section 7(1)(a) of the KGST Act for the year 2001-2002. The tax payable under section 7(1)(a) of the Act during that year was 120 per cent of the compounded rate of tax paid by appellant for the preceding year or 120 per cent of the tax payable based on the return or accounts in that year, whichever is higher. The appellant made application in Form No. 21 under rule 30 of the KGST Rules offering to pay an amount of Rs. 3,51,907 being tax, according to her, payable under section 7(1)(a) of the Act. Even though the officer passed orders allowing facility in terms of the claim made by appellant, it was noticed in the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the decision of the Supreme Court in Maruthi Wire Industries Pvt. Ltd. v. Sales Tax Officer [2001] 122 STC 410; [2001] 2 KLT 100 on the assumption that interest levied was under section 23(3) of the KGST Act. The Commissioner of Commercial Taxes noticed that the revisional authority went wrong in cancelling levy of interest, without reference to the relevant statutory provision, namely, section 23(3A) and, therefore, he initiated proceedings in exercise of the powers conferred on him under section 37(1) of the Act and revised the order restoring interest. It is against this order that the appellant has filed this appeal. We have heard learned senior counsel Dr. K.B. Mohammed Kutty, appearing for the appellant and the learned Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by issuing notice in form 22 in terms of rule 30 of the KGST Rules and so much so, the assessee cannot be held responsible for shortpayment of tax under the compounding scheme. In order to consider this argument, we have to refer to the statutory provision under which interest is levied, which is extracted hereunder: "23(3A). Where any dealer has failed to include any turnover of his business in any return filed or where any turnover has escaped assessment, interest under sub-section (3) shall accrue on the tax due on such turnover with effect from such date on which the tax would have fallen due for payment had the dealer included the same in the return relating to the period to which such turnover relates. " It is clear from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to accept the contention of appellant that the short-payment of tax at compounded rate is not on account of non-inclusion of turnover in the return, but on account of mistake committed by the assessing officer. The assessment for 2000-2001 was not completed when compounding application was filed for 2001-2002. Therefore, the assessing officer had no opportunity to verify the accounts to find out the tax payable based on the same and he has only considered appellant's liability with reference to return filed which did not cover purchase turnover of old gold under section 5A. Therefore, the short levy and payment of tax is only on account of non-payment of tax in terms of section 7(1)(a) which again was determined based on return filed i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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