Special compounding power cannot be invoked outside its statutory class; rejection of the application was quashed and reconsideration ordered.

A special compounding refusal power confined to dealers within the Section 8(f) class could not be used against a dealer governed by Section 8(b). The rejection of the application for tax payment at the compounded rate was therefore unsustainable because the statutory basis invoked did not apply to the dealer's category. As the rejection itself was invalid, the Tribunal's view that the appeal was not maintainable became immaterial. The impugned rejection was quashed and the assessing authority was directed to reconsider the compounding request on merits within the stipulated time.

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Issues: Whether rejection of an application for payment of tax at the compounded rate could be sustained by invoking Section 8(f)(ii) in the case of a dealer covered by Section 8(b); and whether the Tribunal was justified in treating the appeal against the rejection order as not maintainable.

Analysis: The statutory scheme distinguished dealers covered by Section 8(b), namely granite metal crushers, from the special compounding scheme under Section 8(f), which applied to dealers in gold, silver, platinum group metals and diamond. The power under Section 8(f)(ii) to refuse permission or cancel permission to pay tax at the compounded rate was tied to that special category, and the appeal under Section 8(f)(iii) was correspondingly directed only against orders passed under that sub-clause. Since the petitioner was not a dealer governed by Section 8(f), reliance on that provision to reject the petitioner's compounding application was unsustainable. Once the rejection itself was held invalid, the Tribunal's view on the appeal ceased to have practical significance.

Conclusion: The rejection order was unlawful and liable to be set aside. The compounding application was required to be reconsidered on merits, and the petitioner succeeded.

Final Conclusion: The writ petition was allowed to the extent that the impugned rejection was quashed and the assessing authority was directed to reconsider the compounding request within the stipulated time.

Ratio Decidendi: A provision conferring a special compounding refusal power in a limited statutory class cannot be invoked against a dealer governed by a different compounding category, and an appeal provision attached to that special class cannot control the remedy for orders passed outside its scope.

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