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M/s. Fashion Jewellery represented by its Managing Partner, C.P. Paul v/s Commercial Tax Officer Chalakudy & Others

    WA. No. 557 of 2013 IN WP(C). 4907 of 2013

    Decided On, 22 July 2013

    At, High Court of Kerala


    For the Appellant: Harisankar V. Menon, Mrs. Meera V. Menon, Mahesh V. Menon, Advocates. For the Respondents: Bobby John, Government Pleader.

Judgment Text

Thottathil B. Radhakrishnan, J.

1. The short issue that arises is as to whether a dealer who opts to pay compounded tax under Section 8(f)(i) of the Kerala Value Added Tax Act, 2003 ('KVAT Act', for short) is entitled to say that, since one of his branches was closed down on the last date of the previous financial year (2011-2012) in question, that is, on 31.3.2012, was he entitled to exclude the turn over of that branch for determining the compounded tax payable for the next financial year, that is, 2012-2013 (from 01.04.2012 to 31.03.2013)?

2. The liability of a dealer to pay tax under the KVAT Act is in terms of Section 6, which is the charging provision. The optional system of payment of tax at compounded rates is permitted in terms of Section 8. Section 8(f)(i) relates to dealers in ornaments or wares or articles of gold, silver or platinum group metals etc. Clauses (a) to (d) under that provision clearly show that the compounded tax has to be determined on the basis of the annual turn over of the assessee. Therefore, those provisions do not admit any classification of the establishment of the assessee into branches, for the purpose of determining the total turn over to determine the annual turn over, for the purpose of such determination.

3. Explanation 3 under Section 8(f)(i) is also categoric to the effect that dealers opting for payment of tax under that clause shall pay compounded tax in respect of their branches existing in the year (to which the option relates). While that Explanation excludes any dissection of the establishment for payment of tax, the principle that the compounded tax has to be determined on the basis of annual turn over remains the same. Therefore, there cannot be any splitting up or proportionate reduction of the annual turn over of the previous year to determine the compounded tax that could be paid in terms of that provision.

4. A provision is made for the year 2010-2011 by Explanation 8. That does

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not apply to the subsequent years. We, therefore, do not find any legal infirmity or jurisdictional error in the impugned judgment issued by the learned single Judge. Writ Appeal fails and the same is accordingly dismissed.