Compounded tax under KGST may be recomputed using a revised prior-year assessment, with rectification unavailable to block it.

Under the KGST compounding scheme, compounded tax for a relevant year may be revised when the assessed tax of the immediately preceding year is later revised and that enhanced figure becomes the basis for computing tax across the three-year period. The binding Division Bench view noted that Section 7(b) is not confined to tax admitted in the return or accounts and does not bar reliance on the assessed tax of a prior year. Acceptance of compounded tax does not prevent departmental recomputation on that basis, and Section 43 rectification cannot be used to undo such revision absent only a patent computational error.

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Issues: Whether, under the compounding scheme in Section 7(b) of the KGST Act, the assessing authority could revise the compounded tax liability for later years on the basis of the revised assessment and tax component for the immediately preceding year, and whether rectification under Section 43 could be invoked to undo that revision.

Analysis: The liability under the compounding scheme was held to be capable of revision when the assessment for a prior year is subsequently revised and the enhanced tax component becomes the reference point for computing the compounded tax for the relevant three consecutive years. The Court followed the binding Division Bench view that Section 7(b) does not confine revision to the tax admitted in the return or accounts and does not prohibit reliance on the assessed tax of a previous year. It was further held that the acceptance of compounded tax does not prevent the department from revising the computation on the basis of a later revision in the preceding year's assessment. The rectification jurisdiction under Section 43 was not available to defeat that reassessment process on the facts of the case.

Conclusion: The revision of the compounded tax liability for the assessment years in question was valid and the petitioner's challenge failed.

Final Conclusion: The assessment revisions based on the earlier year's revised tax liability were upheld, and the writ petition was dismissed.

Ratio Decidendi: Under Section 7(b) of the KGST Act, the compounded tax payable for a relevant year may be revised on the basis of a later revision in the assessed tax of an immediately preceding year, and Section 43 cannot be used to displace such revision absent a mere apparent computational error.

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