2006 (1) TMI 574

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....ppeal Nos. 1690 and 1708 of 2003 were filed against the common judgment and those appeals were dismissed by this Court on November 25, 2005. Counsel for the appellant, however, submitted that the facts of this case stand on a different footing and addressed elaborate arguments. The assessee in this case having opted for payment of tax at the compounded rate as provided under section 7(1)(a) of the Kerala General Sales Tax Act, 1963 wanted to withdraw the option under section 5 of the Act. Assessee is a dealer in gold ornaments. Gold and silver ornaments are taxable at the point of first sale in the State by virtue of section 5(10) read with relevant entry in the First Schedule to the Act. They are also liable to pay purchase tax under se....

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.... year 2001-02, have to pay tax for 2002-03 at 200 per cent of the compounded tax paid in the previous year. The assessee, on the strength of the abovementioned statutory provision, submitted an application for payment of tax under section 7(1) in the statutory form No. 21A. The assessee declared that the details furnished by him are true and correct and therefore he is not liable to pay tax at the rate. Rule 30 of the Kerala General Sales Tax Rules, 1963 stipulates that every dealer who is eligible to pay tax at compounded rate under section 7 of the Act and who desires to exercise the options provided for under the said section may apply to the assessing authority concerned for permission to pay tax at the rates specified therein in ....

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.... Tax Officer. Counsel appearing for the assessee, Sri T. M. Sreedharan, submitted that before rejecting the compounding application and fixing the amount at 200 per cent, application filed by the assessee for re-option should have been considered by the assessing authority. Instead, assessing officer unilaterally increased the tax to 200 per cent of the compounded tax paid for the preceding year and demanded Rs. 17,60,880 for the period from April 1, 2002 to March 31, 2003, which according to the counsel, is illegal and against the compounding scheme of the Act. We are of the view, only in a case where assessing authority has rejected the application for option, the question of giving opportunity of being heard arises under sub-rule (....