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TMI Blog2020 (5) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 7 cannot be said to have been absolved of the liability for all the consequences arising from such an assessment made for the previous three years which is the reference point for determining the tax payable in the relevant year under clause (b) of Section 7. It was well within the authority of the 1st respondent to have revised the assessment for the years 2008-09, 2009-10 and 2010-11, based on the revision of the assessment and tax component for the year 2007-08, resulting in a cascading effect on the assessment for the following three years. The fact that compounded tax was paid for those three years did not fetter the right to revise the assessment. Petition dismissed. - HONOURABLE MR. JUSTICE V.G. ARUN J. PETITIONER/S: BY ADVS. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording to the petititioner, is against Section 7(b) of the KGST Act. Therefore, the petitioner filed Exts P6, P6(a) and P6(b) rectification applications under Section 43, placing reliance on the decision of this court in Sicilia Hotel Pvt. Ltd v. Commercial Tax Officer (2014 (4) KLT 831), wherein it was held that when an assessee opts to pay tax at compounded rates and such option is accepted, the Department cannot, at a later point of time, reopen those proceedings, save to the limited extent of rectifying any computational mistakes that have occasioned during the compounding proceedings. The rectification applications were dismissed under Exts. P8, P8(a) and P8(b) orders stating that the final assessment was done in compliance of the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of assessed tax. It is submitted that this position has been succinctly laid down by the Division Bench in Kalika Hotel and Bar, Amballur(M/s) v. State of Kerala (2012 (3) KHC 85) and The Commercial Tax Officer v. M/s Hotel Breezeland Ltd. (2019 (2) KLT 432). 5. As far as the precedents relied on by the learned Counsel for the petitioner is concerned, the decision in Sicilia Hotel Pvt. Ltd V. Commercial Tax Officer (2014 (4) KLT 831) was the subject matter of appeal in The Commercial Tax Officer v. M/s Hotel Breezeland Ltd. (Supra), wherein the finding is against the legal position canvassed by the petitioner. In Kalyan Tourist Home (Supra), the principal contention canvassed was that the assessee, being a bar attached two star hotel, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior years, which becomes the highest in the three years referred under Clause (b). This results in enhancement of the compounded tax permitted to be paid; under an assessment under S.17 which has been upheld by the decisions afore cited. The restriction in withdrawing from the bilateral agreement, is only in the Department or the assessee claiming levy under any other mode other than compounding. 23. An assessment under S.17, which does not levy tax under S.5, all the same is a valid procedure, even when it correctly computes the tax payable under S.7. This could be based on the returns filed in the subject year resulting in re-determination of purchase value under clause (a) or an enhancement of the tax paid in the prior years, under ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a previous year, which forms the basis of the computation under clause (b) could be ascertained only when the assessment under S.17 is completed for that previous year, determining the taxable turnover and the liability under S.5 of the Act. 25. We cannot but observe that if a contrary interpretation is given, it would only advance the cause of a dishonest dealer, who does not maintain proper books of accounts or file returns in accordance with the statute. The regular assessment and re-opening of assessment for bringing in escaped turnover are all provisions to ensure that the tax due from a dealer is correctly levied and collected by the State. There is also a provision for imposing penalty under S.45A of the K.G.S.T. Act on detection of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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