Court upholds assessment of turn over tax for Bar Hotel, citing statutory provisions overruling instructions.

The court dismissed the writ petition challenging the assessment of turn over tax for a Bar Hotel under section 7 of the KGST Act. It held that the assessing authority was justified in using the method provided in section 7 for calculating the turn over tax, despite objections based on instructions from the Commissioner of Commercial Taxes. The court clarified that the instructions did not override statutory provisions, and while it declined interference under Article 226, it allowed the petitioner to pursue statutory remedies against the assessment order. The court granted a temporary suspension of coercive recovery measures to facilitate this process.

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Issues:
Assessment of turn over tax for the year 2006-07 under section 7 of the KGST Act - Validity of instructions issued by the Commissioner of Commercial Taxes affecting assessment procedure - Rejection of objections by assessing authority - Interpretation of section 7(a) and 7(b) for calculating turn over - Petitioner's contention regarding the impact of Ext.P2 on assessment procedure - Availability of statutory remedy against the assessment order (Ext.P5) - Request for restraining recovery steps for seeking statutory remedy.

Analysis:
The petitioner, a firm running a Bar Hotel, faced an issue regarding the assessment of turn over tax for the year 2006-07 under section 7 of the KGST Act. The petitioner had opted for compounding as per the provisions of section 7, where the turn over was proposed to be fixed at 140% of the purchase value of liquor. The petitioner objected to this proposal based on an instruction (Ext.P2) from the Commissioner of Commercial Taxes, stating that three years of business conduct is a prerequisite for compounding for Bar Hotels. Despite the objections raised through Ext.P4, the assessing authority finalized the assessment under section 7, considering turn over at 140% of the purchase value of liquor, as per Ext.P5.

The petitioner argued that the assessing authority should not have followed the procedure under section 7 due to the binding nature of Ext.P2 instructions from the Commissioner. The petitioner contended that the application for compounding became redundant based on this instruction. However, the court noted that section 7 allows Bar attached Hotels to pay turn over tax at a compounded rate, with specific conditions for calculation. The court highlighted that the methods of calculation provided under section 7(a) and 7(b) are alternative, and the authority can choose the appropriate method based on feasibility.

Regarding the impact of Ext.P2 on assessment, the court held that the instruction does not restrict the operation of statutory provisions, and Ext.P2 cannot be considered a clarification under the KGST Act. The court found no grounds to interfere under Article 226, but reserved the petitioner's liberty to pursue statutory remedies against Ext.P5. The writ petition was dismissed with the option to challenge Ext.P5 through appropriate statutory proceedings.

In response to the petitioner's request for restraining recovery steps, the court declined interference on merits but granted an equitable relief by directing the assessing authority to suspend coercive recovery measures for a month to facilitate seeking statutory remedies against Ext.P5.

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