UDAYA TRADERS Vs. SALES TAX OFFICER

JUDGEMENT

(1.) Petitioner is an arrack shop contractor (licencee). During 1993-94 admittedly he had opted for the benefit under S.7(14) of the Kerala General Sales Tax Act, 1963. The sub-section gives option to the assessee to pay tax in accordance with clause (v) of S.5 or at 40% of the rental amount payable by him under the Abkari Act for the licence, less tax paid for the purchase of arrack on the first sale point. Challenge against sub-s.(14) is no longer available in view of the Bench decision of this court in Jyothish Kumar & others v. State of Kerala & others (95 STC 527).

(2.) Having full well realised the aforesaid position petitioner's counsel argued that though the petitioner had opted for payment of tax under S.7(14), he retracted from it as per Ext. P2 letter and therefore he can no longer be held liable for the tax as envisaged under S.7(14). Counsel submitted that the petitioner did not opt initially to invoke the benefit under S.7(14) and it was only on 31-10-1993 when he was called to the office of the first respondent and was told orally to agree to the compounding of tax as provided under S.7(14), he chose to do so. It is the admitted case that on 4-11-1993 the first respondent had accepted the application filed by the petitioner for compounding of tax and accordingly Ext. P1 order was issued. It was on 4-12-1993 that the petitioner submitted Ext. P2 letter to exempt him from compounding of tax. Petitioner's contention is that without giving any reply to Ext. P2 the second respondent at the initiative of the first respondent issued Exts.P3 to P6 for realisation of the tax under revenue recovery proceedings. According to the petitioner initiation of revenue recovery proceedings cannot be sustained as he had retracted from the compounding scheme as per Ext. P1 for valid reasons. In Ext. P2 petitioner has admitted that he had applied for compounding for remittance of Sales Tax at 40%. It is stated that he could not remit the tax for the following reasons:

(3.) It has to be considered whether an assessee who has agreed to pay tax under S.7(14) can back out and insist upon assessment of tax in the regular manner. There is no provision under the Act to enable an assessee who has agreed to pay tax as provided under S.7(14) to back out later and claim to be assessed as if he had not agreed to the former course. In the absence of any such provision an assessee cannot retract from what he had agreed on the ground that he could not foresee the difficulties he may have to encounter later.