Challenge in this Writ Petition is against Ext.P6 notice issued under S.66(3) of the Kerala Value Added Tax Act, 2003 (KVAT Act). Through the said notice, the 1st respondent had intimated the petitioner about proposal to revise Ext.P5 permission already granted under S.8(b) read with R.11(2)(i) of the KVAT Act and Rules. The petitioner is running a Granite crushing industrial unit and he is a registered dealer under the provisions of the KVAT Act. The petitioner opted for compounding under S.8

(b) of the Act and application submitted in this regard in Form-1D evidenced from Ext.P1 was allowed as per Ext.P5 proceedings issued in Form-4DA, fixing compounded tax payable for the year 2009-10 as Rs.25,250/- which includes tax amount of Rs.25,000/- and cess of Rs.250/-. The said amount was permitted to be remitted in quarterly installments of Rs.6,313/- each. In Ext.P6 notice it is mentioned that on a subsequent verification of records and on enquiry conducted by the 1st respondent, it is noticed that there was mistake in fixing compounding rate and the same ought to have been fixed at Rs.1,50,000/-, in view of the provisions contained in the Finance Act, 2009. Being a mistake apparent on the face of record it was ought to be rectified. Through Ext.P6, the petitioner was called upon to submit objections if any against the proposal.

2. For a better appreciation of the dispute involved, it will be beneficial to examine the relevant provisions. S.8(b) of the KVAT Act as it stood till the year 2008-2009 is extracted below.

“(b). Any dealer producing granite metals with the aid of mechanized crushing machine may, at his option instead of paying tax in accordance with the provisions of the said sections, pay tax at the following rates, namely:-

(i) for each crushing machine of size not exceeding 30.48 cm x 22.86 cm= Rs.50,000/-per annum

(ii) for the each crushing machine of size exceeding 30.48 cm x 22.86 cm but not exceeding 40.64 cm and 25.40 cm=1,60,000 per annum

(iii) for the each crushing machine of size exceeding 40.64 cm x 25.40 cm + Rs.3,20,000/- per annum

Provided that in the case of dealers, who opted to pay compounded tax under this clause, no separate assessment shall be made in respect of m-sand produced by them.

Explanation: For the purposes of this clause, primary, crusher shall also be reckoned for the purpose of computation of the quantum of compounded tax, and the rate applicable primary crusher shall be fifty per cent of the rates mentioned in items (i), (ii) and (iii) above.

Through Finance Bill, 2009, copy of which is produced as Ext.P7, the State Government Proposed amendments to S.8(b) reducing the rate of tax for compounding. As per the said proposal, S.8(b) was sought to be amended as follows:-

(b) Any dealer producing granite metals with the aid of mechanized crushing machine may, at his option, instead of paying tax in accordance with the provisions of the said sections, pay tax at the following rates, namely:

(i) for each crushing machine of size not exceeding 30.48 cm x 22.86 cm = Rs.40,000 per annum.

(ii) for each crushing machine of size exceeding 30.48 cm x 22.86 cm but not exceeding

40.64 cm x 25.40 cm = Rs.1,50,000/- per annum.

(iii) for each crushing machine of size exceeding 40.64 cm x 25.40 cm = Rs.3,00,000

per annum.

(iv) for each cone crusher Rs.10,00,000 per annum.

Provided that in the case of dealers, who opted to pay compounded tax under this clause, no separate assessment shall be made in respect of m-sand produced by them:

Provided further that dealers with a single crusher other than cone crusher shall pay rupees twenty five thousand only per annum as tax under this clause.

Explanation:- For the purpose of this clause, primary crushers shall also be reckoned for the purpose of computation of compounded tax, and the rate applicable to primary crushers shall be at fifty per cent of the aggregate of the tax payable on secondary crushers.

It is evident from the second proviso proposed to