Composition scheme option accepted where record showed valid election; regular assessment based on contrary premise was quashed.

Where the record showed that the dealer had filed Form 8-AA, returned turnover on a composition basis, and later reiterated that option, the Karnataka HC held that the assessee had opted for composition under section 17(6) of the Karnataka Sales Tax Act, 1957. The assessing authority's refusal to accept that position on the mistaken premise that Form 8-AA was not on record was contrary to the record and unsustainable. The regular assessment at 10 per cent under section 5-B was therefore quashed, along with the appellate order, and the matter was directed to be concluded on the basis of composition treatment.

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Issues: Whether the assessee had opted for taxation under the composition scheme under section 17(6) of the Karnataka Sales Tax Act, 1957, and whether the assessment made on a regular basis at 10 per cent could be sustained.

Analysis: The record contained material showing that the assessee had filed Form 8-AA and had also returned the turnover on the basis of composition at 4 per cent long before the assessment order was passed. The return in Form 4 and the later communication reiterating the composition option supported the assessee's case. The assessing authority rejected the composition claim only on the premise that Form 8-AA was not on record, despite material indicating otherwise, and proceeded to assess the entire turnover under section 5-B of the Act without the deductions required in law. Such a finding was found to be contrary to the record and unsustainable.

Conclusion: The assessee's option for composition was accepted, and the regular assessment at 10 per cent was held unsustainable. The assessment order and the appellate order were quashed, and the matter was directed to be concluded on the basis of composition under section 17(6).

Final Conclusion: The writ petition succeeded, the impugned tax orders were set aside, and the assessment had to be redone on the footing that the assessee was entitled to composition treatment.

Ratio Decidendi: Where the record establishes that a dealer opted for composition and the authority disregards that material by proceeding on a plainly contrary factual premise, the assessment is vitiated as perverse and liable to be quashed in writ jurisdiction.

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