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SHAJI P. CHALY, SHOBA ANNAMMA EAPEN
Sree Gokulam Hotels India (P) Ltd. – Appellant
Versus
State Of Kerala, Represented By Secretary To Government, Taxes Department – Respondent
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),
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.
The main legal point established is that the assessing authority has the discretion to calculate tax at compounded rate under Section 7 based on the turnover of the previous consecutive three years, ....
Section 7 of KGST Act, which reads as payment of tax at compounded rates.
Compounded tax collection allowed for first-time dealers under KVAT provisions.
Once a dealer opts for tax composition, they cannot revert to regular assessments within the same assessment year.
The absence of formal acceptance of a compounding application does not negate an assessee's entitlement to a concessional tax rate when tax is paid under regular provisions.
Point of law: compounding application is only an application filed for payment of tax at compounded rate in accordance with the statute and not at the rate prescribed by the party because the Act doe....
Once compounding fees are accepted, further challenges related to the assessment cannot be entertained, solidifying the principle of finality in such administrative actions.
A contractor must continue paying VAT on a compounded basis under the KVAT Act once chosen until project completion, as stipulated by statutory provisions.
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