TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 1557
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.... two inter connected actions of the Commercial Taxes Department, which have to be dealt with separately. 2. The petitioner, in W.P.(C) No.806 of 2017 is aggrieved with the assessment order, under the Kerala Value Added Tax Act, 2003 [for brevity "KVAT Act"], for the year 2014-15 as passed by Exhibit P6. The assessment was re-opened on the basis of a compounding effected, on an offence detected. The pre-assessment notice also made proposals for re-opening on other counts also. The petitioner, as of now, is aggrieved with the re-opening made on the compounding made and accepted by the petitioner on the ground that the turnover computed as suppressed by the Intelligence Officer and the Maximum Retail Price (MRP) taken to estimate the sales tu....
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....d the sale price proposed to be assessed for the suppression detected were specified in the penalty notice and the same was also evident from Exhibit P1. It is also submitted that the value of closing stock detected as suppressed came to only Rs. 2,30,000/- while the total suppressed turnover came to more than Rs. 59,00,000/-. Further, it is submitted that Exhibit P1 was passed after notice of proposal for penalty and the order too was handed over to the petitioner; on the basis of which the petitioner had made the deposit of the compounding fees. There was no appeal filed against Exhibit P1. Only at the stage of finalisation of assessment, the petitioner turned around and sought for rectification of the compounding order, which is not perm....
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....ed) 6. It was categorically held that the process of compounding would be complete when the fee offered is accepted by the authority concerned and when payment has been made, then there is no further scope for a challenge against the compounding order. 7. The learned Counsel would urge that apparently there is a conflict with the later Division Bench in Trichur Auto Spares, which held so: "8. It is clear from a reading of Section 74 that an assessee who opts for the benefit of the said provision, accepts the commission of the offence alleged to have been committed by it. Once it does that, the competent authority proceeds to determine the compounding fee payable by the assessee in accordance with clause (a) or (b) of sub-section (1) of ....
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....sition, Section 74, to find that nothing excludes the right to challenge the order passed under Section 74. The assessee having agreed for compounding, could not resile from the admission of the offence as such. However, the scheme of compounding, relatable to Section 74, provides for a discretion on the Officer to decide on the compounding fee subject to a maximum as prescribed. Necessarily when a discretion is involved, it has to be exercised by the officer on the well-accepted principles and norms for such exercise; an arbitrary exercise leading to a possible challenge. Even if there is no appeal, definitely an order of compounding could be challenged under Article 226 of the Constitution, but only to the extent of the fixation of the co....
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..... Only on assessment being proceeded with on the basis of the offence detected, a rectification application was made. Obviously, a rectification application is not maintainable and the assessee, even going by Trichur Auto Spares, had to file an appeal under Section 55. The rectification having been rejected, the assessee was in a revision. The prayer in the writ petition is for keeping the assessment proceedings in abeyance while the revision is considered. The rectification itself being not permissible or maintainable, the revision attempted is futile. 11. The assessee, as is seen from the revision filed, is also not aggrieved by the computation of the compounding fee but of the computation of suppression made of turnover and the sale pri....