Compounded tax under Kerala VAT cannot be reduced for branch closure during the assessment year, absent express statutory provision.

Section 8(f) of the Kerala Value Added Tax Act was treated as a self-contained optional compounding scheme for gold dealers, with tax computed on the dealer's branches existing in the relevant year and with future liability linked to tax paid in the previous year. The provision contained no express mechanism for proportionate reduction of compounded tax merely because one branch closed during the assessment year. Applying the strict construction of taxing statutes, the court noted that equitable considerations or implied words cannot be used to reduce a statutory tax liability. The dealer's claim for reduction on closure of the branch therefore failed.

---

---

Issues: Whether a dealer who had opted for compounding under section 8(f) of the Kerala Value Added Tax Act was entitled to proportionate reduction of compounded tax for the assessment year on closure of one branch during that year.

Analysis: The charging provision under section 6 fixes the normal liability, but section 8(f) creates an optional and self-contained scheme for payment of tax at compounded rates for gold dealers. The scheme requires tax to be paid for the dealer's branches existing in the relevant year and also regulates the liability for succeeding years by reference to the tax paid for the previous year. The provision does not contain any express allowance for reducing compounded tax merely because one branch is closed during the assessment year. In taxing statutes, liability cannot be inferred on equitable considerations or by importing words not found in the enactment, and the language of section 8(f) did not support the claimed reduction.

Conclusion: The dealer was not entitled to reduce the compounded tax on account of closure of the Kollam branch, and the claim for rectification failed.

---