BHIMA JEWELLERY Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) THE petitioner is a dealer in gold jewellery who has applied for and was granted the benefit of payment of tax at compounded rate under section 7 (1) of the Kerala General Sales Tax Act, 1963. Exhibit P1 is the order levying compounding fee under section 7 (1) of the Act. However, the grievance of the petitioner is that the assessing officer-first respondent has reckoned surcharge paid for the previous year also for the purpose of levying tax at compounded rate. According to counsel for the petitioner, surcharge is a separate levy governed by Kerala Surcharge on Taxes Act, 1957. Learned counsel for the petitioner contended that what is paid towards tax at compounded rate is the tax payable under section 5 of the Kerala General Sales Tax Act and since surcharge is a separate levy under a separate statute, the same should not be reckoned for the purpose of demanding tax at compounded rate for the relevant year, i. e. , 2000-2001.

(2.) I heard the Government Pleader also who contends that surcharge is part of the tax payable under the Act and so much so, the compounding fee payable for this year should include the surcharge paid in the earlier year. For the sake of easy reference the relevant section namely, section 7 (1) (a) with explanation and provisos is extracted below. " 7. Payment of tax at compounded rates.- (1) Notwithstanding anything contained in sub-section (1) of section 5, (a) any dealer in gold or silver ornaments or wares may, at his option, instead of paying tax in accordance with the provisions of that sub-section, pay tax at one hundred and twenty per cent of the tax payable by him as conceded in the return or accounts for the immediate preceding year and where any such dealer opens new branches the compounded tax payable by him in respect of each new branch for the first year shall be twenty-five per cent of the compounded tax for the principal place of business : Explanation.- For the purpose of this clause 'tax payable as conceded in the return or account for the immediate preceding year' means tax payable on the sales turnover under sub-section (1) of section 5 and the tax payable on the purchase turnover under section 5a : Provided that where during the preceding year, the dealer had not transacted business for any period the tax payable for the whole year shall be calculated proportionately on the basis of the tax payable for the period during which such dealer had transacted business : Provided further that where a dealer has paid under this sub-section for the preceding year, the compounded tax to be paid by him for the succeeding year shall be one hundred and twenty per cent of such tax paid or one hundred and twenty per cent of the tax payable as per the return or accounts of the dealer for the preceding year whichever is higher : Provided also that where such dealer has paid compounded tax consecutively for a period of three years the compounded tax payable for the succeeding year shall be one hundred and fifteen per cent, and in the case of a dealer who has paid compounded tax consecutively for a period of five years the compounded tax payable for the succeeding year shall be one hundred and ten per cent, of such compounded tax paid or payable by him for the immediate preceding year. Provided also that where such a dealer acquires any running business or a branch of a business with respect to gold, silver ornaments or wares during the year, the amount of compounding tax payable in respect of such business shall be calculated in accordance with the provisions of this clause as if it were an independent business, taking into account of the turnover conceded in the return or accounts thereof for the previous year with respect to that business or on the basis of the quantum of compounded tax fixed for the previous year in accordance with the second and third provisos, as the case may be. "