Composition scheme under tax law cannot override completed assessment or permit part-period compounding without express authority.

A composition scheme for brick kiln tax was upheld as valid because Section 6 of the U.P. Value Added Tax Act, 2008 permits compounding subject to the statute and State directions, and no constitutional or statutory infirmity was shown. Regular assessment already completed for 1.1.2008 to 31.3.2008 could not be displaced by invoking compounding, as the scheme is an alternative mode of taxation, not a second assessment mechanism. Part-period composition for 1.4.2008 to 30.9.2008 was also unavailable because the scheme covered the entire fixed season and contained no express provision for bifurcation or proportionate relief.

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Issues: (i) Whether the compounding scheme dated 9.6.2009 for the brick kiln season 1.1.2008 to 30.9.2008 was liable to be struck down as unconstitutional or ultra vires; (ii) whether compounding could be granted for the period 1.1.2008 to 31.3.2008 after regular assessment had already been completed; (iii) whether compounding could be allowed for the part-period 1.4.2008 to 30.9.2008 under a scheme framed for the entire fixed season.

Issue (i): Whether the compounding scheme dated 9.6.2009 for the brick kiln season 1.1.2008 to 30.9.2008 was liable to be struck down as unconstitutional or ultra vires.

Analysis: Section 6 of the U.P. Value Added Tax Act, 2008 authorises composition of tax liability as an alternative mode of taxation subject to the statute and the directions of the State Government. The scheme was framed under that provision and did not contravene any constitutional or statutory limitation. The Court also held that a party cannot simultaneously challenge the validity of the scheme and claim its benefit. In fiscal matters, policy choices and classification are accorded wide latitude unless shown to be arbitrary, discriminatory, mala fide, or beyond legislative competence, none of which was established.

Conclusion: The challenge to the compounding scheme failed; the scheme was held valid and not ultra vires.

Issue (ii): Whether compounding could be granted for the period 1.1.2008 to 31.3.2008 after regular assessment had already been completed.

Analysis: Regular assessment orders had already been passed under Section 28 of the U.P. Value Added Tax Act, 2008 for that period. Once a completed assessment exists, the composition scheme under Section 6 could not be invoked to reopen or supplant it. The scheme was an alternate method of assessment, not a second assessment mechanism for an already-assessed period.

Conclusion: Compounding for 1.1.2008 to 31.3.2008 was not permissible after completion of regular assessment.

Issue (iii): Whether compounding could be allowed for the part-period 1.4.2008 to 30.9.2008 under a scheme framed for the entire fixed season.

Analysis: The scheme fixed composition for the entire season 1.1.2008 to 30.9.2008 and did not provide for bifurcation of the period or proportionate composition for a part-season. The assessing authority was bound by the terms of the scheme and had no power to rewrite it or grant part-period composition in the absence of an enabling provision. In tax matters, the Court applied strict construction and declined to read into the scheme a power not expressed therein.

Conclusion: Compounding for the part-period 1.4.2008 to 30.9.2008 could not be granted.

Final Conclusion: The writ petitions were found to be without merit because the composition scheme was valid, compounding was unavailable for the already-assessed period, and part-season composition was not authorised by the scheme.

Ratio Decidendi: A composition scheme in fiscal law operates only within the terms authorised by the statute and the governmental directions issued under it, and it cannot be invoked to override a completed regular assessment or to permit part-period composition unless the scheme expressly so provides.

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