TaxTMI 
TaxTMI 
2008 (10) TMI 606
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....ect of his principal place of business and all branches. Such dealers will be permitted to continue to pay compounded tax under this clause even if they do not opt for paying tax under this clause for the new branch." Section 8(1) stands substituted with effect from April 1, 2008. According to the petitioner, the said Explanation is inapplicable to the petitioner. In order to appreciate the contentions of the petitioner it is necessary to advert to the following facts: The petitioner is a registered dealer in gold and silver ornaments under the KVAT Act (hereinafter referred to as, "the Act"). It has its head office at Alappuzha and has two branches, one at Kollam and another at Thrissur. For the assessment years 2006-07 and 2007-08, ....
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.... the tax due for the other two branches and tax at the rate of 115 per cent has been fixed as due for the year 2008-09. It is on this basis, that the calculation in exhibit P7 is sought to be justified. A counter-affidavit has been filed on behalf of the first respondent. Reference is made in the counter-affidavit to circular No. 42/2006. It is, inter alia, stated therein as follows: "In case of a branch opened by a dealer after March 31, 2005, who has opted to pay tax as in items 1 and 11 above the tax payable for the new branch will be worked out as in sub-clauses (1) and (11) based on the figure used for computing the tax liability by taking the average of the tax paid or payable for the principal place of business and other bra....
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....ard learned counsel for the petitioner Sri Anil D. Nair and learned Government Pleader Sri C.K. Govindan. Sri Anil D. Nair would submit that it is clear that exhibits P7 and P9 cannot be sustained. A perusal of Explanation 5 to section 8(f) of the Act which has already been extracted in this judgment would show that it will be applicable only if a new branch is opened after April 1, 2008, he contends. In this case, he points out that the branch at Thrissur is opened in the year 2005. The branch at Thrissur did not opt for compounding in terms of the law prevalent in the assessment years prior to April 1, 2008. This was permitted and the branch filed returns under section 6. It is only the head office at Alappuzha and the branch at Kol....
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....d. 6.. Branches are treated as independent units for the purpose of compounding. So if need be, dealers are at liberty to opt out of compounding in respect of any branch and compound for the rest. 11.. In respect of the dealers opting for compounding during 2006-07, the tax paid during the year shall be adjusted against the compounded tax liability fixed under section 8(f) of the Kerala Value Added Tax Act. 12.. The last date for filing application for compounding for the year 2006-07 will be November 30, 2006." The circular in my view would appear to be inapplicable in respect of compounding for the assessment year 2008-09. In specific terms paragraph 5 of the circular refers to compounding tax to be paid for the year 2006-07. ....