Compounded tax computation under Section 7(b) must use the highest of return, accounts, or prior paid turnover tax figures.

Section 7(b) of the Kerala General Sales Tax Act was read to require comparison of the highest turnover tax conceded in the return, shown in the accounts, and actually paid for the previous three consecutive years, with the highest figure forming the basis for compounded tax at 115%. Applying the golden rule and noscitur a sociis, the Court held that "payable" and "paid" operate in distinct but coordinated contexts, so all specified figures must be compared in context rather than treated as interchangeable. The Tribunal's interpretation was upheld, and the reference was answered accordingly.

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Issues: Whether, for determining tax at the compounded rate under Section 7(b) of the Kerala General Sales Tax Act, 1963, the comparable parameters are the turnover tax payable as conceded in the return or accounts, or the turnover tax paid for any of the previous consecutive three years.

Analysis: Section 7(b) uses the expressions "return", "accounts" and "turnover tax paid" in the company of the words "highest" and "whichever is higher". The Court applied the golden rule of interpretation and the principle of noscitur a sociis, holding that the words "payable" and "paid" operate in distinct but coordinated contexts within the provision. The provision contemplates comparison of the highest turnover tax as conceded in the return, as shown in the accounts, or as actually paid for the previous consecutive three years, and the highest of those figures is then taken as the basis for applying 115%.

Conclusion: For Section 7(b), the relevant comparable parameters include the turnover tax payable as conceded in the return or accounts and the turnover tax paid for the previous consecutive three years, and the Tribunal's interpretation was upheld.

Final Conclusion: The reference was answered by confirming that clause (b) of Section 7 adopts the highest of the specified figures as the basis for compounded taxation, and the matter was sent back for further proceedings before the Division Bench.

Ratio Decidendi: Where statutory words in a taxing provision are linked by "highest" and "whichever is higher", they must be read literally and in context so that all specified figures are compared and the highest qualifying figure governs the tax computation.

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