HOTEL SAYOOJ Vs. DEPUTY COMMISSIONER

JUDGEMENT

(1.) In this Writ Appeal, the appellant, who is an assessee under the Kerala General Sales Tax Act (hereinafter referred to as "the KGST Act"), and runs a Three Star Bar Attached Hotel, impugns the judgment dtd. 29/11/2023 of a learned Single Judge in WP(C). No.13264 of 2023. The brief facts necessary for the disposal of the Writ Appeal are as follows:

(2.) The appellant had filed an application for remitting turnover tax (TOT) on compounded basis for the financial year 2021-22. The application was submitted on 29/4/2021 under Sec. 7 of the KGST Act. Although there is no express provision under the KGST Act for accepting an application and granting permission to the dealer for payment of tax on compounded basis, since the compounding provision is permitted to be availed on an annual basis, one would expect that a decision on the application is taken by the authority concerned within the said period of one year. In the instant case, no decision was taken on the application till 4/1/2023, by which time the assessment year for which the appellant had sought permission to pay tax on compounded basis had long since expired.

(3.) It is significant that although the appellant had filed the application seeking permission for paying tax on compounded basis, he did not actually pay tax on compounded basis pending an acceptance of the application by the department. On the contrary, he paid tax as per the regular provisions of the KGST Act (Sec. 5) and not in terms of Sec. 7 of the KGST Act. However, taking note of the fact that while paying the tax under Sec. 5 of the Act, the appellant had used the form of return prescribed for those paying tax under Sec. 7 of the Act, the department, in 2023, passed a formal order accepting the application for compounding that was filed in 2021, and assessing the appellant to a differential tax (difference between the tax that was paid under S.5 and the tax that would have been payable under S.7 of the Act) through an assessment order passed on 15/3/2023.