STATE OF KERALA Vs. HYMA JEWELLERS

JUDGEMENT

(1.) Heard Sri. V. K. Shamsudeen, learned Government Pleader and Senior Counsel, Sri. K. B. Muhammed Kutty for the respondent. The common question arises in all the cases is whether the assessee is liable to pay tax under compounded rate under S.7(1) by reckoning liability under S.5A. Learned Government Pleader rightly pointed out the decision of this Court relied on by the Tribunal is not applicable to this case. Notification referred to therein is not on compounding but a separate exemption granted to dealers paying tax at compounded rate for the purpose of purchase turnover. In other words, the scope of exemption under the Notification is such that dealer paying tax at compounded rate need not pay tax separately under S.5A. It is seen that explanation was introduced to S.7(1)(A) by the Finance Act, 1997 with effect from 01/04/97 by which liability for payment of tax at compounded rate under S.7(1)(A) is fixed by including tax payable for the preceding years under S.5A also. Even after noting the amendment, the Tribunal allowed the assessee's claim for exemption of purchase tax liability for the later years, 1999-2000 and 2000-01. We find that this issue was decided in favour of the Revenue by a decision of this Court in Prakash Jewellery and Another v. State of Kerala, 2004 (12) KTR 543 which stand confirmed by judgment in STRV No. 39/06. However, we do not think that there is any need to go into the question raised by the Government Pleader that even prior to the introduction of explanation, tax payable at compounded rate should be fixed by reckoning the tax liability under S.5A also. We therefore dismiss the revision pertaining to the assessment year 1998-99 but allow the tax revision cases filed for the years 1999-00 and 2000-01 by reversing the order of the Tribunal with a direction to the assessing officer to refix liability under S.7(1)(A) by reckoning the liability under S.5A for the preceding years. However, we make it clear that no interest should be charged for the excess demand of tax under compounded scheme for any period until revision of assessment pursuant to the judgment.