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TMI Blog2017 (1) TMI 1716X X X X Extracts X X X X X X X X Extracts X X X X ..... 7(1)(i), which provision has two Clauses - (a) and (b), which operate in alternative. Clause (a) or (b) would apply depending upon which would bring home to the Revenue through the compounded scheme, higher revenue as tax. The assessee applied for payment of tax at compounded rate. That application was not rejected. Obviously therefore, the learned counsel for the assessee is justified in saying that the compounding as was offered, was accepted. But, in the same breath, the assessee would contend through its learned counsel that what has been offered is not merely the option to pay tax at compounded rate, but to pay such compounded rate of tax dependent on Clause (a) and not Clause (b) of S. 7(1)(i) of the Act. This, in our view, is wholly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng option once exercised results in the crystallisation of a bilateral contract as between the assessee and the State, that tied down both of them to be regulated by compounding mechanism, the situation to which they get tied down by that process is that the assessee cannot be compelled by the State to submit itself to regular assessment under S. 5, and this is dependent upon the assessee's offer that he would pay tax at compounded rate in terms of S. 7. The offer and acceptance as between the State and the assessee is to opt out of S. 5 which provides for regular assessment and falls under the canopy of payment of tax at compounded rate, which is governed by S. 7. This, and only this, is the contract between the State and the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the assessee is unfounded and without jurisdiction. We are unable to countenance this. S. 7 option once exercised, it becomes a statutory liability of the assessee to pay tax at compounded rate. It does not depend upon any further assessment order being issued under S. 7. Once the assessing authority comes across the fact that either as a matter of mistake, or otherwise the entire amounts due under proper application of S. 7(1) has not been paid, it would be well within the authority of that agent of the State Revenue to make demand for payment of the balance. The Accountant General is a statutory authority/Accountant General's audit through audit squads is a regular feature in all institutions of governance, which deal with fiscal m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired. We do not find any jurisdictional error in either the assessing authority having required the assessee to pay the differential in terms of S. 7 or the Accountant General's office or the squad of that office having prompted the assessing authority to proceed to make demand for the remaining amount. 3. Learned counsel for the assessee, ultimately, argued that the assessee was essentially falling into a trap of misrepresentation by the assessing authority. This is projected by saying that the assessing authority has accepted the option, and therefore, could not have done so without making a concession against any claim for further amounts. We state this argument only to be rejected because there is no question of any misrepresentat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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