THOTTATHIL B. RADHAKRISHNAN, J.

1. These revisions are by an assessee who is eligible to pay tax at compounded rate under Section 7 of the Kerala General Sales Tax Act, 1963, ‘Act’, for short. It is also not in dispute that the assessee is one who has a bar attached hotel of and below two star. This means that if he opts under Section 7 for payment of tax at compounded rate, he would be governed by Section 7(1) (i), which provision has two Clauses - (a) and (b), which operate in alternative. Clause (a) or (b) would apply depending upon which would bring home to the Revenue through the compounded scheme, higher revenue as tax.

2. The assessee applied for payment of tax at compounded rate. That application was not rejected. Obviously therefore, the learned counsel for the assessee is justified in saying that the compounding as was offered, was accepted. But, in the same breath, the assessee would contend through its learned counsel that what has been offered is not merely the option to pay tax at compounded rate, but to pay such compounded rate of tax dependent on Clause (a) and not Clause (b) of Section 7(1)(i) of the Act. This, in our view, is wholly misplaced. It is trite law as has been laid down through different decisions that the concept of option under Section 7 is to opt out of regular assessment, which is governed by Section 5 of the Act. Once the option is exercised and the assessee opts to pay tax at compounded rate, the payment of tax at compounded rate would be governed by the provisions of Section 7. There is no provision or opportunity to opt among the different limbs of Section 7. Therefore, if one were to pay tax at compounded rate under Section 7, everything depends upon the turnover or the total amount that would be generated as revenue through the taxes from the assessee for the relevant period to decide as to whether it is Clause (a) or (b) of Section 7(1)(i) that would apply. Decisions of the Honourable Supreme Court of India in Bhima Jewellery (M/s.) v. Asstt. Commissioner (Assessment), Kerala and Another [2014 KHC 5346], Raju Jacob v. Sales Tax Officer [2006 KHC 246], Koothattukulam Liquors v. Deputy Commissioner of Sales Tax [(2015) 12 SCC 794] and Annie George, Proprietrix v. The State of Kerala [2006 KHC 1701] do not go away from the principle that we have stated herein to that effect. While Koothattukulam Liquors (supra) dealt with a case of payment of tax at compounded rate on the basis of excise duty component, other decisions, particularly Bhima Jewellery (supra), deal with the quality of the contract of compounding and specifically state that compounding option once exercised results in the crystallisation of a bilateral contract as between the assessee and the State, that tied down both of them to be regulated by compounding mechanism, the situation to which they get tied down by that process is that the assessee cannot be compelled by the State to submit itself to regular assessment under Section 5, and this is dependent upon the assessee’s offer that he would pay tax at compounded rate in terms of Section 7. The offer and acceptance as between the State and the assessee is to opt out of Section 5 which provides for regular assessment and falls under the canopy of payment of tax at compounded rate, which is governed by Section 7. This, and only this, is the contract between the State and the assessee on the basis of the compounding system. Once that event happens, the liability to pay tax at compounded rate will stand governed by the different provisions contained in Section 7 of the Act. In this view of the matter, no argument can be countenanced to say that rate of tax and the question whether the assessee would be able to opt as between Clauses (a) and (b) of Section 7(1)(i), is also within the bargain on which the compounding is accepted. So much so, the stand of the Revenue that the assessee/revision petitioner had to pay the particular amounts demanded by the assessing authority u