K.K. BUILDERS Vs. COMMECIAL TAX OFFICER

JUDGEMENT

(1.) The petitioner is a registered partnership firm engaged in various businesses, including a business in granite metal through the operation of two granite crushing units. The units in question namely, Kottiyoor Metals and K.K. Granite Industry, are said to be located 30 Kms. apart. The former unit employs one primary crusher and two secondary crushers whereas the latter unit employs only one secondary crusher. The issue in the present writ petition involves the construction to be placed on Section 8(b) of the Kerala Value Added Tax Act that deals with payment of tax at compounded rates by dealers producing granite metals with the aid of mechanized crushing machines. The said provision reads as under:

(2.) It is the case of the petitioner that insofar as the 2nd unit namely K.K.Granite Industry employs only one secondary crusher, the tax to be paid by him in respect of the said unit must only be with reference to the amounts prescribed under the Section for secondary crusher and without referring to the secondary crushers that are employed in the other unit namely Kottiyoor Metals. Further, when it comes to the payment of tax in respect of the primary crusher that is employed by the petitioner in Kottiyoor Metals, the computation of tax under Section 8(b) for the primary crusher must be in an amount that represents 50% of the amounts due on the two secondary crushers that are employed in that unit and not with reference to the three secondary crushers that are employed by the petitioner in both the units collectively. It is pointed out by the petitioner that this contention had been accepted by the respondents for the earlier assessment year 2008- 2009 and Exts.P2 and P3 orders have been produced in support of the said contention. It is the specific case of the petitioner that when it came to the application of the compounding provision for the assessment year 2009-2010, the respondents took the stand that while computing the liability in respect of the primary crusher in the first unit, the secondary crusher in the second unit would also be reckoned. Exts.P8 and P9 orders of the 1st respondent are passed on the above basis. The petitioner impugns the said orders in the present writ petition. It is further urged that, responding to the stand of the respondents in Exts.P8 and P9 orders, and with a view to avoiding the rigour of Section 8(b) of the Kerala Value Added Tax Act, the petitioner had approached the 3rd respondent with a request to treat the various places of business of the petitioner as separate units for the purposes of levy, assessment and collection of tax, in terms of Section 20(3) of the Kerala Value Added Tax Act. Ext.P11 is the order passed by the 3rd respondent on the application of the petitioner. The 3rd respondent treated the various places of business of the petitioner as separate units for the purposes of the Act with the exception of the two granite crushing units which he treated as a single unit for the purposes of the Act. The contention of the petitioner while impugning Ext.P11 order of the 3rd respondent is that it was not open to the 3rd respondent to accede to the request of the petitioner for treating these different places of business as separate units in a partial manner and he had either to treat all the places of business as separate units or to reject the request of the petitioner under Section 20(3). It is the further case of the petitioner that if the two Granite crushing units of the petitioner are also treated as separate units for the purposes of Section 20(3) of the Kerala Value Added Tax Act, then the compounding provisions under Section 8(b) of the Act would have to be independently applied to each of the units and on doing so the position that prevailed for the assessment year 2008-2009 would apply for the assessment year 2009-10 also.

(3.) A counter affidavit has been filed on behalf of the 1st respondent wherein it is pointed out that as per the scheme of payment of tax on compounded rates applicable to Metal Crushing Units, the compounding provisions have to be applied in respect of a dealer and not in respect of a unit. Thus viewed, the separation of units belonging to a single dealer may not be of any consequence when the provisions of Section 8(b) are relied on for the purposes of determining the compounded tax that is to be paid by a dealer. With regard to Ext.P11 order passed by the 3rd respondent, it is pointed out that the 3rd respondent had only exercised a discretion that was vested in him under Section 20(3) and in view of the fact that the petitioner was carrying on the same granite metal business activity in both the units, there was nothing wrong in treating both these units as a single unit for the purposes of the Act.