Compounded tax option must be exercised at the primary assessment stage, not in appeal or revision.

Section 7 of the Madras General Sales Tax Act, 1959 permits compounded tax only when the dealer exercises the option at the earliest assessment stage, before the first assessing authority and at the time of filing the return. The provision is beneficial, but it must be construed strictly in line with the assessment machinery and prescribed rules. On that basis, the option cannot be claimed for the first time in appeal or revision, and the Tribunal erred in allowing the assessee to switch to the compounded rate at that later stage. The decision follows the earlier Division Bench view on the same issue.

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Issues: Whether the option to pay compounded tax under section 7 of the Madras General Sales Tax Act, 1959 could be exercised at the appellate or revisional stage, or only before the assessing authority at the stage of primary assessment.

Analysis: Section 7 conferred an option to pay tax at a compounded rate where the dealer's turnover fell within the prescribed limit. The wording of the provision, read with the assessment scheme and the relevant rules, indicated that the option had to be exercised at the earliest stage, namely before the first assessing authority and at the time the return was submitted. The provision was a beneficent one, but it had to be construed strictly according to its terms. The statutory machinery for provisional fixation, return filing, and assessment showed that the concession was intended to operate at the assessment stage and not to be claimed later in appeal or revision. The Court also followed the earlier Division Bench view on the same question.

Conclusion: The option under section 7 could not be claimed for the first time before the appellate or revisional authority. The Tribunal was wrong in permitting the assessee to opt for the compounded rate at that stage.

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