2007 (9) TMI 574

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.... with Explanation 1 to the said section and not under section 8(f)(i) read with Explanation 1 as computed by the officer. The petitioner admittedly commenced business in February, 2004 and had carried on business only for 51 days during the financial year 2003-04. The petitioner had business for the whole period for the financial year 2004-05 and 2005-06. The question is under which provision, tax liability has to be computed at the compounded rate for the assessment year 2006-07. In order to appreciate the contentions, the relevant provisions have to be referred to and for easy reference the section is extracted hereunder: "Section 8: Payment of tax at compounded rates.-Notwithstanding anything contained in section 6,- (a) (i) any wo....

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....r's liability for tax at compounded rate is under sub-section (ii) of section 8(f) and not under sub-section (i) of the said section. The Government Pleader, on the other hand, supported the order of the officer and contended that Explanation applies to both sub-sections (i) and (ii) and since the petitioner has not carried on business for 12 months in the first year namely, 2003-04, the officer was bound to gross up the turnover and tax for that year to determine the highest tax payable by the petitioner for any of the three consecutive preceding years prior to the relevant year 2006-07. I am of the view that Explanation I applies to both sub-sections (i) and (ii) of section 8(f) of the Act. Sub-section (i) of section 8(f) applies to a....