TaxTMI 
TaxTMI 
2023 (10) TMI 586
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.... (f) (i) any dealer in ornaments or wares or articles of gold, silver or platinum group metals including diamond may at his option, instead of paying tax in respect of such goods 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; xxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxx....
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.... (d) at one hundred and twenty five per cent of such tax paid during the previous year, in case their turnover for the above goods for the preceding year exceeded one crore: Provided that the tax payable under this sub-clause by the dealers covered under Explanation 6 of this clause shall be at the appropriate percentage of tax mentioned in (a), (b), (c) or (d) above, of the tax re-determined under the said Explanation. (ii) 1.25% of the turnover of sales of the goods covered under this clause, for the previous year."; (emphasis supplied) 3. It is apparent that while at the time of exercising its option for payment of tax on compounded basis for the assessment year 2011- 12, the statutory provision required the petitioner to pay tax @ 125% of the tax paid during the previous year (since their turnover of goods for the preceding year exceeded Rs. 1 crore), the amended provisions introduced with retrospective effect required the petitioner to pay tax at the higher of two rates viz (i) 125% of the tax paid during the previous year and (ii) 1.25% of the turnover of sales of the goods for the previous year. 4. The Assessing Authority revised the qu....
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....or the year 2011-12. In view of the above the undersigned is satisfied that the averments of the appellant is genuine. Therefore the compounded tax payable for 2011-12 is refixed as shown below. Total turnover conceded in the annual return Rs. 10461911623.00 Turnover included in the return of the principal For the computation of compounded tax 3050414268.00 Turnover of sale of own goods of the appellant 7411497355.00 Tax due @ 1.25% 92643717.00 Cess payable @ 1% 926437.00 Total 93570154.00 Monthly compounded tax payable: 93570154.00 12 7797512.00 The assessing authority is directed to give an opportunity to the appellant to file a revised return for the year 2010-11 with supporting documents within 2 months from the date of this order. Appeal stands allowed." 7. Annexure V order of the First Appellate Authority was challenged by the State before the Appellate Tribunal. The State contended that the First Appellate Authority was not justified in directing the Assessing Authority to permit a revision of the return for the year 2010-11 since the Assessing Authority had earlier rejected the request of the petitioner fo....
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....n provided for under Rule 10 (1) (h) (I) & (ii) of the Rules from the total turnover of the dealer is for arriving at the taxable turnover of the dealer for assessment under Sec. 6 (1) and not for computation of compounded rates of tax under Sec. 8. As mentioned earlier, both Sec. 6 (1) and Sec. 8 provide for different modes of assessment and the procedure prescribed for determining the tax payable under Sec. 6 (1) cannot be adopted for determining the quantum of tax payable at compounded rates under Sec. 8, unless specifically provided for by the provisions. In Sec. 6 (1) the words used are 'taxable turnover' and in Sec. 8 (f) (v) (ii) 'turnover of sale of the goods'. As per Subclause (ii) of Sec. 8 (f) (v) tax payable is at the rate of 1.25% of the turnover of sales of the goods covered under this clause, for the previous year. Thus tax was to be fixed on the basis of turnover of sales for the previous year. The provision does not differentiate between sales inter se agent and principal or vice versa or by a dealer to outside customers. Whatever may be the nature of sales, 1.25% of total turnover of sale of goods of the previous year was the basis for fix....
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.... 25F and allow the deduction where appropriate tax has been paid on purchases made by the agent and subsequent sales tax was paid by the principal. In the instant case, the petitioner had paid tax while purchasing gold from the State Bank of India as an agent of its sister concerns and converted the same into ornaments. For accounting purposes, the purchases made on behalf of the sister concerns and delivered to them were recorded a sales to the sister concerns in view of the provisions of the Companies Act, 1956. It is trite that there can be no stock transfer as the petitioner was a limited company and of the sister concerns, one is a limited company and the other is a partnership firm. There is also no dispute that sales tax was paid by the two sister concerns on their sale of the same jewellery. Reliance is placed on the decision in Kedarnath Jute Manufacturing Company Limited v. CIT - [(1971) 82 ITR 363 (SC)] in support of the contention that the entitlement of a tax deduction cannot be based merely on a view taken by an assessee or the entries made by it in the books of accounts. The decision in Sundaram Finance v. State of Kerala - [AIR 1966 SC 1178] is relied upon to conten....
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.... case, the purchases effected by the petitioner are from State Bank of India after paying tax under Section 6(1). Therefore the situations envisaged in Rule 10(1)(h)(ii) for deducting the turnover do not apply. This is also for the reason that the purchase bills obtained by the petitioner were not endorsed with the legend "on account of the principal" and further there was no delivery note under cover of which the goods were delivered to the sister concerns. ● The submission of the petitioner that the transaction to the sister concern was recorded as a sale only in view of the provisions of the Companies Act, 1956 was not one that was raised before the authorities below and hence it was not open to the petitioner to raise such a contention in a Revision under Section 63 of the KVAT Act. ● The Appellate Tribunal had correctly allowed the Second Appeal preferred by the State by accepting the contention that the First Appellate Authority had exceeded its jurisdiction in accepting Form 25F since the question of revision of turnover for the year 2010-11 was a concluded matter as the order passed by the Assessing Authority rejecting the request of the petiti....
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....st Appellate Authority found that since the petitioner had obtained the statutorily prescribed Form 25F to claim exemption of the agency sales turnover from its declared turnover for the year in question, the same could be excluded for the purposes of computation of tax in terms of Section 8(f)(v) for the year 2011-12. The Appellate Tribunal, however, set aside the order of the First Appellate Authority on the finding that Form 25F had relevance only in a situation where the assessment to tax was in terms of Section 6 of the KVAT Act and not in situations where the payment of tax was on compounded basis under Section 8(f)(v) of the KVAT Act. 16. We do not for a moment deny that the payment of tax on compounded basis is an optional course of action for an assessee and he who chooses to opt for the same cannot wriggle out of it when he perceives its terms as rigid or unfair. In the instant case, however, we are called upon to decide whether an assessee who has shown certain amounts as turnover in its return filed for a previous year, which turnover was not relevant for payment of tax in that year, can be permitted to demonstrate that the turnover was mistakenly included in its ret....
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....n 6 read with Rule 10 of the KVAT Act and Rules it does not mean that the facts intended to be proved through it cease to exist or be relevant merely because the assessment is on a different basis, and in accordance with a formula which treats that fact as relevant and incorporates it as a component. In other words, we cannot accept the submission of the learned Government Pleader that by producing Form 25 declarations, the petitioner was virtually trying to compute his taxable turnover under the KVAT Act, which is not a relevant concept for the purposes of payment of compounded tax under Section 8(f)(v) of the KVAT Act. We are of the view that the petitioner was only demonstrating through a mechanism provided under the Statute itself that the amounts covered by valid Form 25 declarations did not constitute his turnover for the purposes of the KVAT Act. Rule 10 permits deduction of certain amounts from an assessee's turnover and also excludes certain amounts from entering into the computation of turnover. What admittedly does not constitute turnover that can be assessed in the hands of the petitioner under the KVAT Act, cannot be treated as turnover for any purpose under the sa....