A.M. Shaffique, J.

Common questions have arisen for consideration in these appeals and hence are heard and decided together. WA No. 871/17 has been filed challenging judgment dated 9/3/2017 in WP(C) No.39547/2016 and WA No. 239/18 has been filed challenging judgment dated 26/7/2017 in WP(C) No.853/2011.

2. The short question that has arisen for consideration in the above appeals is concerning an issue relating to the Kerala Value Added Tax Act, 2003 (hereinafter referred to as KVAT Act). The appellants are assessees under the KVAT Act. During an assessment year, they opted for compounding and the quarterly compounding tax was also paid. However, according to the appellants, during the said assessment year, they were unable to carry on the business and therefore applied for withdrawing the compounding application. The same came to be rejected against which these appeals have been filed.

3. The learned Single Judge while deciding WP(C) No.39547/2016 arrived at a conclusion that in so far as compounding is a contract between the assessee and the department, it cannot be allowed to be withdrawn. The issue that was urged and decided by the learned Single Judge was whether the assessee could be absolved from the liability arising from the contract on the ground of the obligation being impossible of performance in terms of S.56 of the Indian Contract Act, 1872. It was found that the petitioner filed two returns for the month of April and May, 2017 and paid the first instalment of tax based on the compounding provision. He applied for withdrawal from the scheme as per Ext.P23(A) which was declined as per Ext.P24 order.

4. The main ground urged was that the appellant was unable to obtain a permit and D & O license in the particular year for operation of the quarry and consequently, he was unable to carry on the quarrying activity and therefore, it had become impossible for performance. Learned Single Judge found that the factual and legal position would indicate that there is subsequent supervening circumstance, which created an impossibility in performing the obligations under the contract and therefore such a contention does not merit consideration. It was also found that at best the obligation under the scheme which the petitioner voluntary opted is onerous and in Naihati Jute Mills Ltd. v. Khyaliram Jagannath (AIR 1968 SC 522), the Apex Court held that courts cannot absolve parties from the performance of his part of the contract merely for the reason that the performance has become onerous on account of an unforeseen turn of events and the Court cannot modify the terms of the contract.

5. In WP(C) No.853/2011 against which WA No.239/18 has arisen, another learned Single Judge had occasion to consider a similar issue. In that case also, petitioner submitted an application for compounding u/s 8(b) of the KVAT Act and tax was paid upto the quarter ending 30/9/2010 for the financial year 2010-2011. This Court granted a stay of operation of the unit from 6/10/2010 onwards and thereafter there was no commercial production or sale. At that time, he requested for exemption from payment of tax which came to be rejected as per Ext.P5 order. Based on judgment in Raju Jacob v. Sales Tax Officer (2006 (1) KLT 788), it was held that once an assessee had opted for payment of tax by compounding, he cannot withdraw the option subsequently.

6. Heard the learned senior counsel appearing for the appellant in WA No.871/17, learned counsel appearing for the appellant in WA No. 239/18 and the learned Special Government Pleader appearing for the revenue.

7. The learned counsel for the appellants raised two specific contentions. The first contention is based on the wording in S.8(b), as it then was, which reads as under:-

“8(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:-.xxxxxx”

8.