Composition scheme election under Karnataka sales tax law is binding; dealer cannot later switch to regular assessment.

An assessee that consciously opts for composition under section 17(6) of the Karnataka Sales Tax Act cannot later withdraw that election and seek regular assessment under section 5B once the option has been accepted. The Karnataka High Court relied on earlier Division Bench rulings holding that a dealer is bound by the composition choice and is estopped by conduct from resiling from it at a later stage. It also clarified that Mycon Construction Limited did not lay down a general right to shift to section 5B, because the liberty granted there arose from the State's concession in the context of a constitutional challenge to section 17(6). The earlier single judge order was therefore liable to be set aside.

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Issues: Whether an assessee who had opted for composition of tax under section 17(6) of the Karnataka Sales Tax Act, 1957 could later withdraw that option and seek assessment under section 5B of the Act, and whether the earlier single judge order permitting such course could stand in the face of later Division Bench decisions.

Analysis: The Court held that the statutory scheme of section 17(6) provides an optional composition mechanism for simplified assessment, but once the dealer has consciously opted for composition and the option is accepted, he cannot thereafter resile from that choice and demand regular assessment under section 5B. The Court relied on its earlier Division Bench rulings which had already concluded that a dealer is bound by the composition option and is estopped by conduct from withdrawing from it at a later stage. The Court further held that the earlier decision in Mycon Construction Limited did not lay down a general rule permitting withdrawal from composition, because the liberty to opt for section 5B assessment in that case was traced to the State's concession in the context of constitutional challenge to section 17(6).

Conclusion: The assessee could not be permitted to opt out of composition and claim assessment under section 5B, and the single judge order was liable to be set aside.

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