Mandatory timing for composition claims bars compounded tax rate when contractor's application is filed after contract receipts.

A civil contractor could claim composition under section 7(7) of the Kerala General Sales Tax Act, 1963 only if the application under Rule 30A(2) in Form No. 21B was filed before receipt of the contract amount or any instalment. The rule's use of "shall" was treated as mandatory, so compliance with the prescribed timing was a condition for payment at the compounded rate. An application filed after receipt of contract amounts did not satisfy the procedural requirement, and the claim for composition was therefore not available.

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Issues: Whether a civil contractor could claim payment of tax at the compounded rate under section 7(7) of the Kerala General Sales Tax Act, 1963 when the application under Rule 30A(2) of the Kerala General Sales Tax Rules, 1963 was filed after receipt of the contract amount.

Analysis: Section 7(7) permits a civil contractor to opt for composition, but Rule 30A(2) prescribes that the application for permission must be filed in Form No. 21B before the receipt of the contract amount or any instalment thereof. The use of the word "shall" in the rule was treated as mandatory, not directory. The arrangement for payment at the compounded rate was treated as dependent on compliance with the prescribed procedure, and an application made after receipt of contract amounts did not satisfy that requirement.

Conclusion: The assessee was not entitled to pay tax at the compounded rate, and the rejection of the claim for composition was upheld.

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