COMMERCIAL TAX OFFICER Vs. HOTEL BREEZELAND LTD

JUDGEMENT

(1.) The writ petition is placed before us, along with the appeals, since, when the appeals were pending, by a reference order in the writ petition, a learned Single Judge, found non-consideration of a few Division Bench decisions; in the judgment impugned in the appeals. We will first take up for consideration the appeals, since the learned Single Judge who passed the reference order more or less agreed with the impugned judgment in the appeals; but, however, felt the need for a re-consideration by a Division Bench, since three decisions of different Division Benches took a contrary view.

(2.) We will first refer to the facts in each of the appeals briefly. M/s. Hotel Breezeland Ltd. is the respondent in four appeals [W.A.Nos.121, 163, 220 and 229 of 2015] concerned with the assessment for the years 2006-07 to 2012-13. Admittedly, the assessee had applied for compounding under Section 7 of the Kerala General Sales Tax Act, 1963 [for brevity "KGST Act"], which permission was granted. After the close of the first year, within four years a notice was issued by the Assessing Officer [for brevity "AO"] under Section 7 of the KGST Act, modifying the computation of the tax payable under Section 7. This was on account of a variation of the tax assessed for the prior year, which was the reference point of determination of the compounded tax. The compounded tax payable in the subsequent years also were subject to modification, for reason of the change in the highest paid tax for the prior year, of the first year under consideration here. This had a cascading effect in all the subsequent years and the compounded tax payable for those subsequent years, were also modified by various orders. The modification in the first year was on account of the crime file in the just previous year, i.e., 2005-06, when additions were made in assessment, increasing the tax liability of the assessee for that prior year.

(3.) M/s. Sicillia Hotel (P) Ltd. is the assessee-respondent in W.A.No.413 of 2015. As in the other cases, the assessee-respondent applied for compounding for the years 2006-07 to 2008-09. After the close of the first year, within four years a notice was issued by the AO under Section 7 of the KGST Act. There the computation was modified by the AO on the ground that the opening stock was not added to the purchases made in the year for the purpose of computing the tax payable based on the purchase cost of liquor sold in the year.