SICILLIA HOTEL PVT. LTD. Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The issue that arises for consideration in these writ petitions is whether, assessments completed in respect of an assessee on compounded basis can be re-opened subsequently, pursuant to a revision of the assessment for an earlier year, the tax paid in which year was taken as the basis for determination of the amount payable by the assessee in the compounding proceedings.

(2.) The petitioner in W.P.(C). Nos. 1514/2011, 7200/2011, 3446/2012 and 10776/2013 and the petitioner in W.P.(C). No. 36210/2010, are bar attached hotels that opted for the compounding facility under Section 7 of the Kerala General Sales Tax Act, hereinafter referred to as the 'KGST Act', for the assessment years commencing from 2006-07. As per the scheme for payment of tax at compounded rates during the relevant period, the assessee had an option to discharge his tax liability by paying tax in accordance with a formula, in lieu of the amounts determined pursuant to the normal method of assessment to turnover tax under the KGST Act. Section 7 of the KGST Act, as it stood during the relevant period read as follows:

(3.) The application of the petitioners seeking permission to pay tax at compounded rates was accepted by the assessing authority and accordingly the petitioners computed the amount in clause (b) by reckoning the highest tax paid during the three previous assessment years and computing 115% of the said figure. They then computed 140% of the purchase turnover of the year as stipulated in clause (a). By the end of the assessment year, therefore, they had the two figures contemplated in (a) and (b) above, and they determined the amount that had to be paid by them under the compounding scheme by adopting the higher of the two figures. This amount was accepted by the department towards their tax liability for the year in question.