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TMI Blog2013 (2) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... n 8(f)(iii) provides for appellate remedy against orders issued under Section 8(f)(ii). Similarly, the assessment order passed against the petitioner, which is only consequential, is also appealable as provided under Section 55 of the Act. Therefore, while uphold the constitutional validity of Section 8(f)(ii), decline to examine the validity of the impugned orders on the other factual grounds urged by the petitioner and leave it open to the petitioner to pursue the matter before the appropriate statutory appellate authority. - W.P. (C). No. 1669 of 2013 - - - Dated:- 4-2-2013 - ANTONY DOMINIC, J. For the Appellant : Raju Ramachandran, Senior Advocate, V.G. Arun and T.R. Harikumar For the Respondents : Smt. Shoba Annamma Eapen, Senior Government Pleader, JUDGMENT :- 1.This writ petition is filed by a private limited company, engaged in he business of gold and silver ornaments. It is a dealer registered under the KVAT Act on the rolls of the first respondent. 2.Section 8(f) of the Kerala Value Added Tax Act (hereinafter referred to as the 'Act', for short) permits dealers like the petitioner to opt for payment of tax at compounded rates specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued Ext.P9 notice under Section 25(1) of the Act alleging that they had a taxable turn over of ₹ 32,45,06,031.25 and that they are liable to pay tax at 4%. The petitioner did not submit any reply to Ext.P9. In such circumstances, the first respondent passed Ext.P10 assessment order, in terms of which, the total tax due from the petitioner, for the assessment year 2010-11 was ₹ 1,29,80,241/- and that after giving credit to ₹ 14,96,562/- remitted by the petitioner, the balance tax due was ₹ 1,14,83,679/-. In addition, it is also ordered that ₹ 1,14,836/- is due towards interest. 8.Accordingly, Ext.P11 demand notice was issued, demanding ₹ 1,42,83,136/-. It was thereupon, this writ petition was filed seeking to quash Exts.P8 and P10 orders and to declare that Section 8(f)(ii) of the Act is ultra vires Articles 14 and 19(1)(g) of the Constitution of India. The petitioner also seeks a declaration that once permission is granted for compounding, mandating collection of tax at a specified rate, respondent cannot cancel the permission and compel the petitioner to pay tax at higher rate than what is specified in the order. 9.I heard learned senio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver for the above goods for the preceding year was rupees ten lakhs or below; (b) one hundred and twenty per cent, in case their annual turnover for the above goods for the preceding year was above rupees ten lakhs land up to rupees forty lakhs; (c) one hundred and thirty five per cent, in case their annual turnover for the above goods for the preceding year was above rupees forty lakhs and up to rupees one crore; and at (d) one hundred and fifty per cent, in case their annual turnover for the above goods for the preceding year exceeded rupees one 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 5.- Where a dealer opens a new branch in the current year, the additional compounded tax payable under this clause in respect of such branch shall be the average of the tax payable by him in respect of his principal place of business and all branches. . . . . . . . . . . . . . . . . . . . . . . . . . . . provided that de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evious year The existence of this ground rendered the assessee ineligible for the benefit of Section 8(f) and the Assessing Authority is entitled to either refuse permission and if permission is already granted, to cancel the same. 14.In so far as this case is concerned, the closing stock of the petitioner for the year 2009-10 was 215.115 gms of gold whereas the closing stock for 2010-11 was 61449.097 gms. This shows that there was increase in the stock of gold by 285 times. Consequently, the ground specified in Section 8(f)(ii), viz., holding of stock exceeding double the quantity held in the previous year, is attracted and it was on that basis, Ext.P6 notice calling upon the assessee to show cause why the permission granted shall not be cancelled was issued. 15.The above being the scope of Section 8(f), I must confess my inability to accept the plea of the counsel for the petitioner that Section 8(f)(ii) should be read down to avoid unconstitutionality. The courts have the power to read down the provision of a statute, but that power is invoked to save the statutory provision from the vice of unconstitutionality. This position has been clarified by the Apex Court in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of the permission for payment of tax at compounded rate on the ground that the stock exceeded double the quantity held in the previous year, does not attract anyone of the aforesaid limitations, section is a valid piece of legislation and if it is a valid piece of legislation, the question of reading down the provision does not arise at all. As already seen, Section 8(f) of the Act is subject to conditions and it is for an assessee to opt for the benefit of this Section. Once the benefit is opted for and that option is accepted, the assessee is bound by the conditions that are incorporated in the scheme of compounding. One of the conditions is that the assessee will lose the benefit of compounding if the stock held by it exceed double the total quantity held in the previous year. In my view, the assessee having voluntarily opted for the compounding, fully knowing the conditions that are attached to the scheme, cannot thereafter contend that the conditions are illegal and he is estopped from doing so. Further, petitioner could not satisfy me that the condition that is incorporated by the Legislature suffer from anyone of the limitations, including those of Articles 14 or 19(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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