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TMI Blog2009 (5) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... were filed by the assessee, we direct the officer to recall penalty orders provided the assessee clears all the arrears of tax under the compounding scheme with interest in accordance with the judgment, within three months from now. Since counsel for the petitioner submitted that there is error in the calculation of tax, we direct the officer to modify the demand, if there is any mistake based on application for rectification to be filed by the petitioner under section 43 ignoring the time-limit, if application is filed within a month from the date of receipt of a copy of this judgment. X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal by the Tribunal. It is against this order of the Tribunal the petitioner has filed this revision case. We have heard senior counsel Dr. K.B. Mohamed Kutty appearing for the petitioner and Government Pleader appearing for the respondent. The main question raised in the revision is whether the belated order issued by the assessing officer on October 15, 2007 produced as annexure A is beyond his jurisdiction and against the scheme of compounding provided under section 7 of the Act. Senior counsel appearing for the petitioner contended that order on compounding application filed in form 21 along with demand notice in form 22 should be served on the assessee before the due date for filing return for the first month of the year, i.e., May ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding application before due date for filing of monthly return is not fatal to the application. Of course in the above case decided by this court, the assessee after filing compounding application continued to pay tax along with monthly return in accordance with the scheme of compounding, whereas in this case the assessee paid tax on the taxable turnover along with monthly return filed by them. Before proceeding to decide the issue, we notice that the assessee has raised an objection before the lower authorities and before us that along with annexure A issued on October 15, 2007 the assessing officer did not issue notice of demand in form No. 22 which is fatal to the proceeding itself. However, on going through the records produced in court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted passing of orders and issue of demand notice are contemplated in the form provided in form 22 itself. We are in agreement with this proposition for many reasons. In the first place, proviso to rule 30(1) provides for belated filing of application for compounding and the officer is bound to accept it, if the assessee produces good and sufficient reason for the delay in filing the application. There is nothing to indicate that no belated application could be filed beyond 10th of May of the year. If a belated application is entertainable for payment of tax under compounding scheme, then certainly we cannot assume that the Legislature intended an absolute time-frame for the officer to pass the order and along with it raise notice of demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r compounding filed in form 21 after the assessee started filing monthly returns declaring taxable turnover and paying tax thereon. Senior counsel appearing for the petitioner contended that once the assessee fails to get order on compounding application and demand notice in form 22, the assessee is entitled to file monthly returns, declare the turnover, taxable turnover and pay tax thereon. In other words, according to him, the application for compounding in form 21 does not survive at all for orders to be passed by the officer. On facts, the Government Pleader pointed out that the assessee has never withdrawn application for compounding until orders are passed thereon vide annexure A on October 15, 2007 and in fact, even after annexure A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns for succeeding months should be in accordance with demand served in form 22. Necessary consequence in the delay in passing order on compounding application is delay in payment of tax which is attributable to the officer. Therefore, the assessee cannot be called upon to pay any interest under section 23(3) or section 23(3A) of the KGST Act. However, the assessee is bound to clear the arrears of tax demanded under the compounding scheme in form 22 within the time stated therein and so long as the tax payable for the succeeding months of the year is concerned, payment has to be made along with monthly returns in accordance with the compounding scheme in terms of the demand in form 22. We, therefore, uphold the validity of annexure A c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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