TaxTMI 
TaxTMI 
2014 (4) TMI 328
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....the date of refund. iii. Award cost of this petition to the petitioner. iv. Pass such other and further writ, order or direction in favour of the petitioner, as this Hon'ble Court may deem fit and proper in the circumstances of the case." The petitioner applied for compounding of the liability of trade tax on the production of vegetables oil in pursuance of the compounding scheme under Section 7-D of U.P. Trade Tax Act dated 19.05.2003 hereinafter referred as "Act, 1948". The petitioner is a company duly incorporated under the Indian Companies Act, 1956 and engaged in manufacture and sale of refined oil. The State Government in exercise of its power under Section 7-D of the Act, 1948 issued direction on 19.05.2003 for assessment year 2003-04 for imposition of composition money on refined oil known as "Compounding Scheme". Under the said compounding scheme fees was to be computed and paid at the rate of Rs. 575/- per tonnes on production of refined oil not exceeding 120% per annum of the installed capacity of the refined oil unit and at the rate of Rs. 675/- per tonne on production exceeding such limit. As per the compounding scheme if the units are sick and remained closed f....
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....me in part of the assessment year rather company has accepted compounding scheme for complete assessment year and he rightly deposited the composition money for the entire assessment period and not entitled for any refund of the composition money deposited by him. He has also submitted that the petitioner had deposited money under Section 7-D under compounding scheme, the same was not an assessment order as such the application which had been moved by the petitioner under Section 22 was not maintainable and the same could not be decided under Section 22 of the Act and the same had rightly been rejected by the respondent. Once, the petitioner itself opted compounding scheme for the entire assessment year and deposited the requisite amount, then there was no occasion for making any somersault and start claiming that the amount could be realised only from the date of starting production. He further states that since the petitioner had deposited the composition money pursuant to the compounding scheme, the same cannot be refunded on the false claim made by the petitioner stating therein that he had carried out on business only for part of compounding period. We have heard the rival su....
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....ssioner within 30 days' time. It is admitted situation that the company got permanent registration on 02.04.2003 and commenced the production since 23.10.2003 and on 23.10.2003 it had been shown capacity of 8000 tonnes per annum which had been modified to 9000 tonnes on 30.10.2003. The petitioner has applied for compounding on 30.10.2003 and consequently the petitioner was given benefit of compounding with the liability of interest at Rs. 2,01,996/- to be paid by the petitioner on late deposit of the installments of compounding and on which the demand of Rs. 1,94,975/- towards the compounding and interest was raised vide order dated 30.07.2007. In the present matter, the petitioner was assessed for trade tax and the entry tax vide order dated 09.08.2007 passed by the Deputy Director Commissioner (Assessment)-2, Trade Tax, Kanpur. In the assessment order dated 09.08.2007 it was found that the petitioner had applied for compounding which was extended in its case upto 30.10.2003 and consequently the petitioner was given benefit of compounding. It also reveals that the State Government had clarified vide its order dated 12.01.2007 on the representation for clarification dated 03.03....
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....duction very late. In the present case, the petitioner itself voluntarily applied under the compounding scheme deposited the requisite tax and submitted the form on the proforma, it implies that the petitioner had accepted the terms and conditions voluntarily. As scheme specifically provided that there would not reduction in the composition money. The Hon'ble Full Bench of this Court in the case of M/s Bhadauria Gram Sewa Sansthan, Fatehpur Vs. Assistant Commissioner, Sales Tax, Allahabad and others reported in 2006 UPTC 538 has considered Section 7-D of the U.P. Trade Tax Act, 1948. The relevant portion is quoted below:- "31. Having given our anxious considerations to the various submissions made by the learned Counsel for the parties, we find that Section 7-D which provides for composition of tax liability, starts with a non-obstante clause. A plain reading of Section 7-D of the Act shows that an option has been given to a dealer who is covered by a scheme issued by the State Government from time to time to opt for payment of lump sum amount in lieu of the amount of tax. It excludes the applicability of other provisions of the Act which deals with the assessment and paymen....
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....roviding that instead of payment of entertainment tax on the basis of actual number of cinema goers, the proprietor of a cinema hall may opt to pay a consolidated levy on the basis of gross collection capacity per show, has held that the compound payment of entertainment tax is a more convenient mode of levy of the tax inasmuch as it dispenses with the need of verification or to enquire into the number of person admitted to each show and to verify the correctness or otherwise of the returns submitted by the proprietor containing the number of. persons admitted to each show and the amount of tax collected. The aforesaid decision has been followed by the Apex Court in the case of Builders Association of India (supra) wherein the Apex Court has held that the object of levy of compound payment of tax is not to increase the revenue. The legislature provides the alternate method of taxation with a view to realise the tax with least discomfort to the assessee. It is only a convenient mode of realisation of tax. It also ensures the fixed amount of payment of tax to the Government irrespective of the fact that the business of the assessee earned profit or not. Similar view has been taken by....
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....n brick kiln or it has been started late or for any other reason, the petitioner is bound, by the said clause and he cannot be permitted to challenge the same in view of the law laid down by the Apex Court in the case of Har Shanker and others, Narain Prasad and others and Bharathi Knitting Co. (supra). As we have already come to the conclusion that the liability to pay the composition money is not relatable to actual sales at all, the principle laid down by the Apex Court in the case of Gannon Dunkerley & Co. (Madras) Ltd. (supra) will not be attracted." In the present matter, the petitioner had opted compounding scheme voluntarily issued by the State Government which facilitate to the company for payment of lump sum amount in lieu of the amount of tax. This also excludes the applicability of other provisions of the Act which deals with the assessment and payment of tax. The payment of compounded tax is a convenient, hassle free and simple method of assessment. A company which opts for payment in lump sum amount in lieu of the tax, is not required to fill monthly or quarterly return of its turn over. It has to pay fixed sum of money as tax as agreed upon by the department. It is ....