TaxTMI 
TaxTMI 
2015 (8) TMI 741
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....accepted. However, when an application came to be filed for payment of tax at compounding rate for the year 2011-12, same was rejected stating that business premises was shifted. The revision petitioner contends, it is not a sufficient reason for rejecting the application for composition under section 8(f) (ii) of the Kerala Value Added Tax Act, 2003 (for short, "the Act"). Aggrieved by the same, the assessee filed an appeal before the Appellate Tribunal, which came to be dismissed, against the same, the present revision is preferred. The revision petitioner raised the following grounds upon which he seeks to set aside the order of the respondent-authority; the order refusing the application is beyond show-cause notice;change of business premises during the year 2010-11, which was approved, cannot be a ground for rejecting the application;prior approval of the District Deputy Commissioner as required under the statute was not obtained; shifting of business premises per se cannot be a ground to reject the application unless it is for valid reasons;there was no reason to reject the compounding application for the year 2011-12 when such compounding was permitted for 2010-11. Questi....
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....ing alleged in the notice in annexure A3 that the revision petitioner has not intimated the opening of the business place at Sankara Iyer Road, whereas in the order in annexure A5, it was found that opening of the business place at Sankara Iyer Road was duly informed, ought not the Tribunal should have found that the reasons stated in the annexure A3 notice for rejection of the application for composition is not what is relied upon in the annexure A5 order?" As against this, learned Government Pleader placed his arguments on the following lines:- The option exercised by the assessee for compounding under section 8(v) of the Act for the year 2010-11 was permitted by an order dated May 31, 2010. The assessee shifted his place of business from City Centre, Thrissur to Sankara Iyer Junction, M. G. Road, Thrissur with effect from July 1, 2010. Therefore, the assessing authority rejected the application for compounding for the year 2011-12 relying on sub-section (ii) of section 8(f) of the Act only after hearing the assessee. The said provision contains several reasons upon which the concerned authority can refuse permission for compounding, which includes shifting of place o....
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....nment Pleader relies upon several decisions in support of his contentions.[1980] Supp SCC 229 in the case of (State of Maharashtra v. V. S. Naik) is relied upon, which pertains to service matter and the controversy that arose was, whether the impugned notice-cum-order of compulsory premature retirement from service passed against the respondent was in strict compliance with rule 8, note (1) of the Revised Pensions Rules, 1950. The said rule required to record the exact reasoning in writing in each case. It was held that reason may be recorded in the concerned file and need not be mentioned in retirement order. The expression "such as" in the said rule indicates, grounds are only illustrative and there can be other grounds also. It is contended that rule 8(f) (ii) indicates certain instances only where registration could be rejected or withdrawn, therefore the reasons mentioned thereunder are only illustrative and not exhaustive. [1997] 104 STC 134 (SC) in the case of (State of Kerala v. Builders Association of India) is relied upon. The question that arose in the said case was whether the provisions of the Kerala General Sales Tax Act, i.e., sections 5(1)(iv), 7(7), (7A), (11) a....
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....ging section and creates a liability against a dealer on his purchase turnover with regard to goods, the sale or purchase of which though generally liable to tax under the Act, have not, due to the circumstances of particular sales, suffered tax under section 3, 4 or 5, and which after the purchase have been dealt with by him in any of the modes indicated in clauses (a), (b) and (c) of section 7A(1). He relies upon the decision in Commissioner, Sales Tax, U. P. v. Kumaon Tractors and Motors[2002] 9 SCC 379, in which it was held that under section 11 of the U. P. Trade Tax Act, 1948, the jurisdiction of a High ' Court was only to interfere with the Tribunal's order and the scope is a limited jurisdiction to interfere on the question of law which has to be precisely stated or formulated. Therefore, the order of the High Court was set aside opining that the High Court re-appreciated the evidence and ignored the material documents and held that the assessee was not a dealer but was entitled to receive commission. He also relies upon[2008] 13 VST 372 (SC);[2010] 18 KTR 420 (SC) in the case of (Commissioner of Trade Tax, U. P. v. J. U. Pesticides and Chemical P. Ltd.) to stres....
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.... in accordance with the provisions of section 6, pay tax at,- (a) one hundred and fifteen per cent, in case their annual turnover for the above goods for the preceding year was rupees ten lakhs or below; (b) one hundred and twenty per cent, in case their annual turnover for the above goods for the preceding year was above rupees ten lakhs and up to rupees forty lakhs; (c) one hundred and thirty five per cent, in case their annual turnover for the above goods for the preceding year was above rupees forty lakhs and up to rupees one crore;and at (d) one hundred and fifty per cent, in case their annual turnover for the above goods for the preceding year exceeded rupees one crore; of the highest tax payable by him as conceded in the return or accounts, or tax paid by him under this Act, whichever is higher, for a year during any of the three consecutive years preceding that to which such option relates. (ii) The assessing authority, for valid and sufficient reasons, such as shifting of place of business, holding of stock exceeding double the quantity held in the previous year, furnishing of false information, suppression of relevant information, failure to furnish such....
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....exure A3 reads as under:- "Take notice that you have filed return in form 10 for the month of April 2011 opting to pay tax at 125 per cent. of the average monthly tax paid during the last financial year (10-11). It may be noted that during the last financial year, after opting for compounding you have shifted your place of business from City Centre, Thrissur to Shankara Iyer Road, Thrissur. But you have not changed the address of your business place, and have not intimated the opening of branch business place at Shankara Iyer Road. It is therefore proposed to reject the claim for compounding at 125 per cent. of the compounded tax paid during 10-11 under section 8(f)(ii) of the Act. Your objection to the proposal, if any, should be filed within seven days of receipt of this notice. You are also given an opportunity of being heard." Annexure A5 reads as under:- "M/s. Al-Ahali Business Trade Links (P) Ltd., is an assess on the rolls of this office doing business in jewellery of gold, silver and platinum group of metals with the branch name Malabar Gold at Door No. 19/441/1-2, Sankara Iyer Junction, MG Road, Thrissur. The dealer had opted and paid tax at Rs. 8,2....
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....19/441/1and2, Sankara Iyer junction, M. G. Road, Thrissur, a more spacious show room at a conspicuous location in the heart of the city, they are not eligible to continue to pay tax under section 8(f)(i)(v)(d) of the Act and hence the following orders are issued. Order No. 32080262152/2011-2012 Dated June 22, 2011 In the circumstances explained above, the application filed by M/s. A1 Ahali Business Trade Links (P) Ltd., opting to pay tax under section 8(f)(v)(d) of the KVAT Act, 2003 for the year 2011-12 at 125 per cent. of the tax paid during the previous year is rejected." As per annexure A3 show-cause notice, the reason proposed to reject the claim was after opting for compounding dealer has shifted his place of business from City Centre, Thrissur to Sankara Iyer Junction, M. G. Road, Thrissur. Further, in spite of such shifting of place of business, the dealer has not changed the address of business place and there was no intimation regarding opening of branch business place at Sankara Iyer Road. The proceedings at annexure A5 clearly indicate altogether a different reason for rejecting the claim of the dealer. Further, proviso to section 8(f)(ii) requires prior ....
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.... held in the previous year, which is in violation of the mandatory provision, refused to grant permission to pay tax at compounding rate. When challenge was made to the provision on the ground of violation of freedom under article 19(1)(g) of the Constitution, their Lordships opined that once an objective criteria is fulfilled, the authority can exercise its power in terms of the statute. Therefore, challenge to section 8(f)(ii) was repelled and the request to read down the provision on the basis of article 14 as without any basis was also repelled. In the above case, a writ petition was filed before the learned single judge challenging the provisions of section 8(f)(ii) as unconstitutional if it were to be interpreted as meaning that the officer is bound to cancel the permission granted irrespective of the circumstances. The learned single judge rejected the said contention wherein he opined that none of the circumstances which would render the statute vulnerable existed in that case. He further opined that the appellant must be treated as aware of the provisions as per which there were stock exceeding double the quantity held in the previous year, the party is not entitled to ....