TaxTMI 
TaxTMI 
2015 (10) TMI 2710
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....he purposes of assessment under the KVAT Act, the petitioner opted for payment of tax on compounded basis in terms of S.8 of the KVAT Act, and the revenue authorities accepted his application for the same. The petitioner accordingly filed returns and paid tax as contemplated under S. 8 of the KVAT Act. 2. Pursuant to an inspection conducted at his unit by the revenue authorities, the petitioner was served with Ext.P1 notice by the 1st respondent proposing to impose a penalty on the petitioner for suppressing the actual production of granite metal and M-sand produced in the unit. The basis for the said notice was the allegation that the petitioner had not, in his application for compounding, and while declaring the machinery used for the pu....
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....hat the Commissioner may by order authorize any officer to compound the offence under this section on payment of a reduced amount. (2) On payment of such amount under subsection (1), no further penal or prosecution proceedings shall be taken against such person, in respect of that offence." 4. It is relevant to note that, in the meanwhile, there were several writ petitions filed before this Court challenging the demand of the revenue authorities for payment of tax on Vertical Shaft Impactor (VSI) machines, that were used by dealers engaged in the business of production of granite metal, for production of Msand. The contention of the dealers in the said writ petitions was essentially that, inasmuch as the statutory provision under S. 8 of ....
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....ing departmental composition. The said application was accepted by the 1st respondent and he proceeded to pass Ext.P8 order, fixing the tax and compounding fee payable at Rs. 8,00,000/- each and noticing that the petitioner had already paid these amounts on 23.01.2015. 5. It would appear that, immediately thereafter, this Court by its judgment dated 06.03.2015 rendered in WP (C) No. 2873/2014 and connected cases held that inasmuch as the VSI machine was not a machine that was specified under the S.8 of the statute during the relevant period, the said machine could not be reckoned for the purposes of determining the rate of tax to be paid on compounded basis. The demand of differential tax that was made on the dealers in those cases was als....
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.... 1st respondent and accordingly, the petitioner was entitled to reap the benefits that flowed from a declaration, of the legal position with regard to liability for penalty, in the judgment dated 06.03.2015 rendered in WP (C) No. 2873/2014 and connected cases. In the alternative, he would submit that the offence itself was not compounded in the absence of payment of the balance tax amounts by the petitioner. To substantiate his contentions, he would place reliance on the decisions in Chandrahasan v. State of Kerala [1994 KHC 328], Assistant Commercial Tax Officer (intelligence) v. N.N.Jariwala [1992 (86) VST 229 (Kar)] and State of Karnataka v. Veerchand [1992 (87) VST 138 (Kar-FB)]. It is also contended that, even if it is assumed that the....
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.... to pay the compounding fee demanded in Ext.P8 order by placing reliance on a subsequent declaration of law by this court? and (ii) Whether, in the event of the petitioner having to pay the compounding fee demanded in Ext.P8 order, he can claim a reduction in the fee payable by invoking the provisions of the proviso to S. 74 (1)(a) of the KVAT Act? 9. As regards the first issue, I find that although the petitioner, when confronted with a penalty proposal, had put in an application for compounding the offence in terms of S.74 of the KVAT Act, he had qualified his offer for compounding the offence with certain stipulations namely, (i) that the compounding fee payable should be reduced to 60% of the compounding fee that was payable in respect....
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....ner serves to distinguish the case of the petitioner from the facts in the judgments relied upon by the petitioner. Having obtained the statutory benefits flowing from the composition of the offence, the petitioner cannot now turn around and question the very proposal for imposition of penalty, based on a subsequent judgment of this Court. The conduct of the petitioner wood estop him from attempting such a course of action. The challenge in the writ petition, against Ext.P8 order of the 1st respondent, on the aforesaid ground is therefore rejected. 10. As regards the second issue, regarding the quantum of compounding fee payable, I find that the statutory provisions in this regard are very clear. The proviso to S. 74(1)(a) of the KVAT Act,....