ORDER

Dated this the 22nd day of June, 2021 Bechu Kurian Thomas, J.

The assessee is running a metal crusher unit. She challenges the assessment order and the order of penalty, imposed upon her under Section 67(1) of the Kerala Value Added Tax Act, 2003 (for short, 'the Act') for the year 2005-06. Since the same issue arose for consideration for the assessment year 2006-07 also, there were altogether four cases – two against assessment orders for 2005-06 and 2006-07, and two against penalty orders for those years. The four appeals were considered together by the Appellate Tribunal. By a common order, the four appeals were dismissed. As mentioned above, these revisions are preferred against the assessment order and the order of penalty for the year 2005-06.

2. O.T.Rev.No.88 of 2015 arises from TA (VAT) No.1565 of

2011 on the files of the Kerala Value Added Tax Appellate Tribunal, Additional Bench, Ernakulam and impugns the assessment order issued for the year 2005-06. O.T.Rev.No.89 of 2015 challenges the order in TA (VAT) No.1566 of 2011 of the same Tribunal and assails the penalty imposed for the year 2005-06.

3. The basis for these proceedings arises from an audit visit conducted in the establishment of the assessee on 27.02.2007. The said audit visit revealed the existence of a primary metal crusher apart from two secondary metal crushers of the size 16” x 9” and 30” x 9” working in the said unit. Compounded tax is payable based on number and size of machinery available with the assessee. Since the appellant had opted for compounded tax under Section 8(b) of the Act for the year 2005-06, a notice under Section 24(1) of the Act was issued proposing to reject the returns for the said year and to re-fix the compounded tax payable by including the compounded tax for the primary crusher also. A notice under Section 67(1) of the Act was also issued proposing to impose a penalty of Rs.2,70,000/- for the year

2005-06.

4. Consequent to the said notice and the objections filed, the assessing authority passed separate orders on 20.08.2007, finalizing the assessment for the year 2005-06 by adding Rs. 1,35,000/- as compounded tax for the primary crusher and also imposed a penalty of Rs. 2,70,000/- for filing inaccurate returns. Though the appeal before the Appellate Authority was dismissed the Appellate Tribunal allowed the appeals in part by reducing the rate of compounded tax after noticing that the compounded tax for primary crusher was only 50% of that for a secondary crusher at the relevant time. The assessing authority was directed to re-fix the rate of tax and modify the assessment. The penalty imposed was also reduced to Rs.1,80,000/-. These revisions are preferred against the said orders of the Tribunal.

5. We have heard Adv.N.James Koshy, the learned counsel for the revision petitioner, and Adv. V.K.Shamsudheen, the learned Senior Government Pleader.

6. The short point that arises for consideration is whether the assessing officer was justified in relying upon the audit visit on 27.02.2007 for revising the assessment and imposing penalty for the assessment year 2005-2006.

7. Admittedly the assessee was granted permission for payment of compounded tax for the year 2005-06. Admittedly the audit visit to the assessee's site was on 27.02.2007. During the entire period 2005-06, the assessing officer had not disputed or questioned the grant of permission for payment of compounded tax. Even at the time when permission was granted for payment of compounded tax for the subsequent year i.e.2006-07, the assessing officer had not disputed the permission granted for the previous assessment year.

8. Reliance upon an audit visit conducted on 27.02.2007, i.e; at the fag end of the subsequent assessment year to re-assess the compounded tax payable for the previous assessment year which ended on 31.03.2006, without any other material, is not justifiable under any circumstances. No special reasons have been stated by the assessing officer or the Appellate