TaxTMI 
TaxTMI 
2002 (4) TMI 919
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.... tax at one hundred and fifty per cent of the tax payable by him as conceded in the return or accounts for the immediate preceding year. Explanation.-For the purpose of this clause 'tax payable as conceded in the return or account for the immediate preceding year' means tax payable on the sales turnover under sub-section (1) of section 5 and the tax payable on the purchase turnover under section 5A: Provided that where during the preceding year, the dealer had not transacted business for any period the tax payable for the whole year shall be calculated proportionately on the basis of the tax payable for the period during which such dealer had transacted business; Provided further that where a dealer has paid tax under this sub-section for the preceding year, the compounded tax to be paid by him for the succeeding year shall be one hundred and twenty per cent of such tax paid or one hundred and twenty per cent of the tax payable as per the return or accounts of the dealer for the preceding year whichever is higher: Provided also that where such dealer has paid compounded tax consecutively for a period of three years the compounded tax payable for the succeeding year shall be one....
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....P3 respectively. The contention of the petitioner is that since the petitioner has no liability either under section 5 or section 5A of the Act, and since the petitioner is paying tax at compounded rate under section 7(1) of the Act, the petitioner has no liability to pay additional sales tax provided under section 5D of the Act, which applies only to tax payable under sections 5 and 5A of the Act. The alternate contention raised by the petitioner is that the demand of additional sales tax by issuing form 14D is not authorised under the Act because the liability is not admitted in the returns filed and if the first respondent ever wanted to levy additional sales tax, the same should have been done after completing the assessment either provisional or regular after observing the procedural formalities provided under the Act. In other words according to him, for liability under section 5D of the Act, the impugned demand notices are unsustainable for want of proper assessment justifying the demand. 2.. I heard learned counsel appearing for the petitioner, Dr. Muhamed Kutty, and Sri Raju Joseph, Special Government Pleader for Taxes, appearing for the State. 3.. Since the dispute is w....
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....nt of compounded tax under section 7(1) includes additional tax also. According to him, the tax paid at compounded rate under section 7(1)(a) by the petitioner should take in additional sales tax as well, and therefore the payment of tax at compounded rate is a clear discharge of liability of sales tax and additional sales tax under the Act. The last argument is alternate in nature and is against the issue of form 14D which is only a demand of tax without any assessment before that, either provisional or regular. He also referred to the decision of this Court in O.P. No. 36033 of 2000 wherein this Court has held that the proceedings under section 7(1) are not appealable as there is no dispute in the matter. If a demand of tax under section 7(1)(a) is not appealable, then it is not a proceeding determining tax under section 5 because against the assessment under section 5(1) there is an appeal provided. In that view of the matter he contends that assessment for tax under section 7(1)(a) is not assessment of tax under section 5, and therefore there is no liability on the petitioner to pay additional sales tax under section 5D on tax paid at compounded rate. Reported as Pioneer Ind....
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....ax at the compounded rate whether under section 7(1)(a) or under section 7(1)(b) or section 7(7) or 7(7A) will have to pay additional sales tax under section 5D on such compounded tax. According to the petitioner if this interpretation is followed, additional sales tax will be payable in respect of licence fee under section 5B. Further according to him then lottery tickets under section 5BA will Reported in [2002] 128 STC 301 (Ker) (P.O. Abraham Associates v. Commissioner, Commercial Taxes). also attract additional sales tax which does not appear to be justified. I cannot agree with this proposition. This is because sections 5B and 5BA constitute independent charging sections with regard to items referred to therein, whereas section 7 or any sub-section provided thereunder does not constitute any independent charging provision, but it is only a substitute for the tax payable under the various provisions of section 5 of the Act. Therefore I am of the view that the petitioner and other dealers paying tax at compounded rate under various sub-sections of section 7 are liable to pay additional sales tax under section 5D of the Act. Similar is the view taken in the decision in O.P. No. ....