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TMI Blog2016 (1) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, 23062/2007 and 26474/2007 deal with the assessment orders for the assessment year 2006-07 under the Kerala Value Added Tax Act, hereinafter referred to as the 'KVAT Act'. The issue involved in these writ petitions concerns the option for payment of tax at compounded rates, that was extended to dealers who were engaged in works contracts. As per the provisions of Section 8(a)(i) of the KVAT Act, as it stood on 1.4.2005, any works contractor who was not an importer or a dealer effecting first taxable sale in the State could, at his option, instead of paying tax in accordance with the provisions of the said section, pay tax at 2% of the whole contract amount. For those who opted for payment of tax at compounded rates, but did not sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment year 2005-06, their applications were filed on various dates, prior to the amendment dated 28.8.2005 coming into force. They had, immediately after filing their applications for payment of tax on compounded basis, also filed the necessary returns and paid tax thereon, on the basis of the applications filed by them for payment of tax, at the concessional rate of 2%, on compounded basis. In some cases, the petitioners also surrendered their CST registrations during the assessment year 2005- 06, and before the date of the amendment of S. 8 (a) (i). In the case of some others, the petitioners surrendered their CST registrations only subsequent to the date of the amendment, namely, 28.8.2005. The Assessing Officers, taking note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit petitions as also Sri.Liju V. Stephen, the learned Government Pleader appearing for the respondents in all these writ petitions. 6. On a consideration of the facts and circumstances of the case as also the submissions made across the bar, I find that the contention of the petitioners is essentially that, for the assessment year 2005-06, they had opted for payment of tax on compounded basis at the lower rate of 2% in accordance with Section 8(a)(i) of the KVAT Act, as it stood prior to its amendment, on 28.8.2005, and had commenced payment of tax at the said rate by filing necessary returns with the respondent authorities. It was while so that the amendment dated 28.8.2005 came into force with effect from 1.4.2005 and the petitioners fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to get a cancellation of the certificate of registration issued to them under the CST Act in 2005-06 itself, it would be unfair on the part of the respondents to insist on the higher rate of compounded tax under Section 8(a)(ii) of the KVAT Act being paid by the petitioners on the works contracts executed by them. The orders of penalty imposed on the petitioners on this ground also cannot be legally sustained. I therefore quash the orders impugned in W.P.(C).Nos.17800/2007, 18768/2007 and 21219/2007, to the extent they demand differential tax under Section 8(a)(ii) of the KVAT Act and impose a penalty on the petitioners for erroneously opting to pay tax under Section 8(a)(i) of the Act during the said assessment year. The said writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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