ASSISTANT COMMISSIONER (KVAT) COMMERCIAL TAXES, KOTTAYAM Vs. M/S KUNNATHUKALATHIL JEWELLERS, CHANGANASSERY KOTTAYAM

JUDGEMENT

(1.) The appeal by the State arises from the judgment of the learned Single Judge reducing the tax liability under Section 8(f) for the assessments years 2011-12 and 2012-13, on the finding that the Explanation added in the year 2014 is clarificatory in nature.

(2.) The brief facts to be noticed are that the assessee engaged in the business of jewelry had its Head Office at Changanacherry and three branches at Kottayam, Thiruvalla and Chengannoor. From the year 2006-2007 onward the assessee was paying tax under Section 8(f) of the Kerala Value Added Tax Act, 2003 (hereinafter "KVAT Act").The assessee on 31.03.2010 closed down the branch at Thiruvalla and from the next assessment year the business is carried on from the Head Office and two branches.

(3.) The assessee for the year 2010-11 applied for compounding and the issue is said to be pending before the Tribunal in appeal. The Department maintains that the compounded tax to be paid by the assessee is at the percentage prescribed of the tax paid in the previous year, ie, 2009-10 which included the Head Office and three branches. In the year 2011-12 and 2012-13 the assessee again applied for compounding and the same was permitted. The assessee had made an application excluding that portion of the tax paid, attributable to the Thiruvalla Branch for the year 2009-10; in the year 2010-11. The assessee was permitted to pay tax under the compounded provision by Exts.P1 and P1(a) orders dated 13.12.2011 and 04.08.2012. Later notice was issued under Section 25(1) of the KVAT Act and Exts. P4 and P4(a) orders were passed for the two consecutive years including that portion which was excluded in the previous year, for the purpose of determining the tax payable under the compounding scheme for the years under option. The assessment orders were dated 12.10.2015 and 18.02.2017.