Point of Law: Taxable turnover means turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed.

JUDGMENT :

(Shaji P. Chaly, J.)

1. Petitioner is an assessee under the Kerala Value Added Tax Act, 2003, hereinafter called, 'KVAT Act, 2003', on the files of the Assistant Commissioner, Special Circle I, Commercial Taxes, Ernakulam. The subject matter of challenge is based on Annexure - A order passed by the said authority dated 13.3.2015, declining compounding facility sought for by the petitioner under section 8(c)(i) of the KVAT Act, 2003, which in turn was affirmed by the Deputy Commissioner (Appeals) - II, Ernakulam, as per his order dated 28.1.2017 and re-affirmed by the Tribunal as per its order dated 14.3.2018.

2. Basic facts for the disposal of the revision petition are as follows;

2.1 M/s.Sree Gokulam Hotels India (P) Ltd., Kochi, is an assessee on the rolls of Assistant Commissioner, Special Circle – I, Ernakulam, dealing in liquor, cooked food etc. As per the applications dated 7.5.2014, 7.8.2014 and 7.5.2014 respectively, petitioner sought for a compounding facility for cooked food, sold from the branch hotels at Guruvayoor and Thalassery. Notices were issued on the said applications informing that the compounding applications cannot be allowed in view of section 2(xv), 2(ii) and 2(iii) of the KVAT Act, 2003 and that all branches of a dealer are reckoned for compounding the turnover of a dealer. Therefore, it was intimated that compounding under section 8(c)(i) of the KVAT Act, 2003 is not allowable for part of the turnover so long as the three business places are remaining as branch business places of the dealer.

3. It is an admitted fact that M/s.Sree Gokulam Hotels India (P) Ltd. is a hotel having bar facility and three star classification; and therefore, by virtue of the provisions of section 8(c)(i), the compounding cannot be allowed. It is also an admitted fact that the dealer - M/s.Sree Gokulam Hotels India (P) Ltd., Kaloor, Kochi, having TIN 32070298735 has 2 branches at Guruvayoor and 1 branch at Thalassery. Accordingly, the primary authority, after considering the objections raised by the petitioner to the notices issued on the applications, rejected the compounding. Even though appeals were preferred before the Deputy Commissioner (Appeals) and the Tribunal, both the authorities were of the opinion that the order passed by the primary authority is in accordance with law. It is thus challenging the legality and correctness of the orders passed by the Tribunal, the revision petition is filed.

4. The paramount contention advanced by the petitioner is that three branches of the petitioner are only ordinary hotels having no star classification or bar; that cooked food from these branches is not supplied to any airline service company or institution or shipping company for serving any aircraft, ships or steamer and therefore, the petitioner is entitled to compounding under section 8(c)(i) of the KVAT Act, 2003. It is further submitted that a dealer would have only one registration under the KVAT Act and the Rules, and that the dealer may be doing several business, however, the turnover of the dealer from all the businesses cannot be clubbed together for the purpose of taxation.

5. Therefore, the sum and substance of the contention advanced by the petitioner is that the branch hotels conducted by the petitioner at Guruvayoor and Thalassery are different entities other than M/s.Sree Gokulam Hotels India (P) Ltd., Kochi and therefore, the assessments are to be made in accordance with the nature of business conducted in each of the entities and departing from the business conducted by M/s.Sree Gokulam Hotels India (P) Ltd., which is a star hotel.

6. It is also pointed out that the turnover defined under the KVAT Act, 2003 means the aggregate turnover in all business places in the branch hotels distinct from the business conducted by M/s.Sree Gokulam Hotels India (P) Ltd., which is a star hotel. It is also contended that each category of goods and transactions is having its own appropriate rate as per the KVAT Act and R