Compounded assessment under VAT law turns on taxable turnover limits, not earlier inter-State purchases, if statutory conditions are met.

Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006 makes compounded assessment available to a dealer effecting second and subsequent sales within the State where the taxable turnover for the relevant year, and the turnover of the previous year, remain within the statutory limit. The provision does not create any disqualification based on inter-State purchases made in earlier assessment years. The decisive factors are the taxable turnover for the current year and the immediately preceding year, not prior inter-State purchases. Accordingly, a dealer meeting the turnover conditions cannot be denied the compounded rate merely because of such earlier purchases, subject to satisfaction of the remaining statutory requirements.

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Issues: Whether a dealer whose taxable turnover for the relevant year remained below the statutory limit could be denied the benefit of compounded assessment under section 3(4) of the Tamil Nadu Value Added Tax Act, 2006 merely because of inter-State purchases in earlier years.

Analysis: Section 3(4) permits a dealer effecting second and subsequent sales within the State, whose taxable turnover is below the prescribed limit, to opt for payment at the compounded rate. The statutory conditions focus on the turnover for the year and the turnover of the previous year, particularly the consequence that the option is unavailable where the turnover in the previous year has crossed the limit. The provision does not contain any disqualification based on inter-State purchases made in earlier assessment years. The references in the Act to turnover and taxable turnover also show that the decisive factor is the level of taxable turnover for the relevant year and the immediately preceding year, not prior inter-State purchases.

Conclusion: The dealer could not be denied the benefit of section 3(4) merely on the ground of inter-State purchases in earlier years, and the assessment was required to proceed under section 3(4) subject to fulfilment of the remaining statutory requirements.

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