9911796707
TMI Blog2002 (12) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... evious year and there has been progressive increase in payment of tax at compound rate for every year as provided by the relevant Finance Act. The tax payable by dealers in gold jewellery at compounded rate for the financial year 2001 -02 was 150% of the tax payable by a dealer as conceded in the return and the accounts for the immediately preceding year. While this provision applied for dealers who start payment of tax at compounded rate for the first time in 2001 -02, the second proviso to Section 7(1 )(a) provided that those dealers who were paying tax in the preceding year that is 2000-01 need to pay tax for 2001 -02 at the rate of 120 of the preceding year's tax. Petitioners had paid tax at the compounded rate for 2000-01 and by virtue of second proviso to Section 7(1 )(a) the petitioners paid tax at compounded rate for 2001 -02 at 120 of the previous year's tax. No dispute is raised so far as the payment of tax by the petitioners upto 2001 -02. However, amendment was made to Section 7(1 )(a) of the Act by Kerala Finance Act 2002 applicable for the year 2002-03 by enhancing the compounding fee payable under the main Section 7(1 )(a) from 150% to 200% of the tax paid fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by him as conceded in the return or accounts for the immediate preceding year. Explanation:- For the purpose of this clause tax payable as conceded in the return or account for the immediate preceding year means tax payable on the sales turnover under sub-section (1) of Section 5 and the tax payable on the purchase turnover under Section 5A: Provided that where during the preceding year, the dealer has not transacted business for any period the tax payable for the whole year shall be calculated proportionately on the basis of the tax payable for the period during which such dealer had transacted business: Provided further that where a dealer has paid tax under this clause for the preceding year the compounded tax to be paid by him for the succeeding year shall be one hundred and twenty per cent of such tax paid or payable as per the return or accounts of the dealer for the preceding year calculated in accordance with the foregoing proviso: Provided also that where such dealer has paid compounded tax consecutively for a period of three years the compounded tax payable for the succeeding year shall be one hundred and fifteen per cent, and in the case of a deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is correct or not and if so, whether the amendment through Erratum to the Bill also is effective from 1 -4-2002. It is conceded that a declaration was issued under the provisions of the Kerala Provisional Collection of Revenues Act, 1985 along with the Finance Bill, 2002 and by virtue of the said declaration, the provisions of the Finance Bill will take effect from the beginning of the financial year, no matter the Act was passed only later. In fact the Provisional Collection of Revenues Act is enacted to authorise the Government to notify that any or all the provisions of the Finance Bill will take effect from the beginning of the financial year, because invariably the Finance Bill gets passed much after the commencement of the financial year. The petitioners do not dispute that the Government had issued notification under the Provisional Collection of Revenues Act, along with the Finance Bill 2002 and by virtue of the said declaration the provisions of the Finance Bill have come into force on 01 -4-2002. Therefore the increase of tax from 150 per cent of the previous year's tax to 200 per cent introduced under Section 7(1 )(a) has come into force from 1 -4-2002. The next qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e if there is short levy contrary to the provisions of Section 7(1 )(a) in the proceedings issued in Form No. 21A and demand notice issued in Form No. 22, it is absolutely within the jurisdiction of the Officer to correct the mistake in exercise of his power under Section 43 of the Act. Eventhough Section 43 is not referred to in the notice or the proceedings issued, it has to be assumed that when the authority who issued the proceedings has the power to do so under the specific provision, the proceeding is deemed to have been issued in exercise of the said power, no matter whether the section is specifically mentioned therein or not. Apart from this, when there was declaration under the Provisional Collection of Revenues Act, brining into force the Finance Bill 2002 with effect from 1 -4-2002, the acceptance of tax for 2002-03 is subject to the Finance Act when passed. The Officer is bound to implement the Act when passed with effect from the beginning of the financial year. This is because,eventhough the declaration is made along with Finance Bill 2002 under the Provisional Collection of Revenue Act, the provisions of the Finance Bill will be effective from the first day of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 37040 of 2002, petitioners, who have made applications for compounding and such compounding was granted and demands raised, are liable to pay tax in accordance with the amendment by Finance Act 2002 and are liable to pay differential tax to make up the same to 200% of the previous year's tax. 6. Another common issue raised by the petitioners is that there is exemption available from the tax payable at compounded rate on the purchase tax component of tax paid for the previous year. I find no basis for this contention because what is payable under Section (1 )(a) is the tax at compounded rate in lieu of the tax otherwise payable by a dealer on the sales turnover under Section 5(1) and the purchase tax payable under Section 5A of the Act. The tax payable at compounded rate under Section 7(1 )(a) so far as the compounding for the first year is concerned, is the tax conceded in the return or paid in the immediately preceding year which includes tax under Section 5A also. After the first year of compounding, the tax paid in the next year and later years is at the applicable percentage of the previous year's tax paid at the compounded rate, which includes the component of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
