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TMI Blog2019 (1) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... lt of compounding of that tax liability - there existed no circumstance or occasion for the assessing officer to have considered the application under Section 7D of the Act, thereafter. Whether by way of compounding or regular assessment, the liability of tax to be determined always remained one. Once that liability stood determined through regular assessment method, no duplication of such determination was contemplated or permitted. The fact contingency in which such dual method may be adopted is only one :- where value of imported goods (against the work contract in question), is beyond a certain value (5% of the value of the contract). Even then, the assessment is split up in two parts without any duplication. One in respect of the whole contract (excluding value of imported goods exceeding 5% of the value of the contract), to be concluded under compounded method and the other with respect to value of imported goods exceeding 5% of the value of the contract, to be concluded under regular assessment method. This too is possible only because the contract for compounding permits or so stipulates and not otherwise - Such is clearly not the case here in as much as the regular a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by other institutions of the State Government as also the Central Government. 6. Admittedly, on 18.04.2003, the assessee moved an application for grant of benefit of compounding under Section 7D of the Act. The assessee claims that the application was defective. In any case it is admitted to the revenue that no order was passed on that application till conclusion of the regular assessment proceedings of the assessee. 7. In such factual background, the assessing officer issued an assessment notice dated 29.03.2006, to the assessee, under Section 7(3) of the Act, fixing the date 30.03.2006. Thereafter, on 31.03.2006, the assessing officer passed an assessment order under Section 7(3) of the Act wherein after taking note of the application filed by the assessee under Section 7D of the Act, he held - during the assessment year the assessee did not obtain any statutory forms and no information adverse to the assessee's case was found available on the record. Specifically, it was observed, there was no information of sale or purchase of goods made by the assessee. After making such and other observations, the assessing officer concluded the assessment proceedings at nil turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithdrawn and that the compounding fees has been fixed solely on the basis of disclosure made by the assessee and not on any other material. It has also been submitted that in a given case, it is also possible for an assessee to be both, assessed to tax as also be subjected to compounding in terms of the scheme/directions issued by the State Government, under Section 7D of the Act. Therefore, there is no bar to an assessee being both assessed to tax under the regular mode of assessment and being subjected to compounding. 12. Having considered the arguments so advanced by learned counsel for the parties and having gone through the orders passed by the authorities, in the first place, no clause of the compounding scheme/directions issued by the State Government (under Section 7D of the Act), have been shown as may allow for both for compounding as also regular assessment of the same tax liability. In fact there can be only one assessment of liability either by way of regular assessment or in the alternative, by way of compounding, in lieu of assessment, subject to directions issued by the State Government. In Koothattukulam Liquors v. CST reported in (2015) 12 SCC 794 , the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstance or occasion for the assessing officer to have considered the application under Section 7D of the Act, thereafter. 15. Whether by way of compounding or regular assessment, the liability of tax to be determined always remained one. Once that liability stood determined through regular assessment method, no duplication of such determination was contemplated or permitted. Compounding remained an alternative method to determine that liability only. As to the clause (in the compounding scheme) permitting regular assessment of certain liabilities, it may be noted, the same did not involve duplication of determination of tax liability. It only involved determination of the tax liability arising over and above the compounded tax liability, under the directions issued by the State Government under section 7D of the Act. 16. The fact contingency in which such dual method may be adopted is only one :- where value of imported goods (against the work contract in question), is beyond a certain value (5% of the value of the contract). Even then, the assessment is split up in two parts without any duplication. One in respect of the whole contract (excluding value of imported goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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