IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN MONDAY, THE 14TH JUNE 2010 / 24TH JYAISTHA 1932 ST.Rev..No. 256 of 2009() ------------------------- TA.231/2008 of S.T.A.T.ADDL.BENCH,ERNAKULAM .................... REVISION PETITIONER --------------------------------------- STATE OF KERALA, REP BY JOINT COMMISSIONER (LAW) COMMERCIAL TAXES, ERNAKULAM. BY GOVERNMENT PLEADER SRI. MOHAMMED RAFIQ RESPONDENT(S): --------------- SMT.T.K.LILLY, ROYAL AGENCIES CHALAKUDY, REPRESENTED BY HER POWER OF ATTORNEY HOLDER, RENJITH PAUL. ADV. SRI.V.P.SUKUMAR THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 14/06/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR, & P.S. GOPINATHAN, JJ. -------------------------------------------- S. T. Rev. No. 256 of 2009 -------------------------------------------- Dated this the 14th day of June, 2010 JUDGMENT Ramachandran Nair, J. The question raised is whether the Tribunal was justified in holding that respondent-assessee is entitled to payment of tax at compounded rate under Section 7(1)(a) of the KVAT Act for the year 2004-05. We have heard Government Pleader appearing for the petitioner and Sri. V.P. Sukumar, counsel appearing for the respondent- assessee. 2. Original assessment was completed by the assessing officer completing the assessment under the compounding scheme under Section 7(1)(a) of the Act. The Assessing Officer accepted compounding based on the previous year's tax payment. However, Deputy Commissioner found that assessee had done business for 99 days in the previous year and therefore assessee was not entitled to compounding as business was not done for the whole period of preceding year. Further it was found that turnover declared for the 2 preceding year without grossing for the whole year would be below the taxable limit. On appeal filed before the Tribunal, the Tribunal reversed the order of the Deputy Commissioner holding that respondent is entitled to the benefit of compounding for the year 2004-05. It is against this order of the Tribunal State has filed this Revision. 3. Government Pleader has produced copy of Finance Act 2004 which was notified on 28th July, 2004. It is seen that scheme of compounding was changed for the year 2004-05. However, since Amended Act was notified only by the end of July, 2004, special provision was made for dealers to file fresh application for compounding upto 31.8.2004 and time to the Officer to accept the compounding upto 30th September, 2004. It is clear from the impugned orders that neither the Deputy Commissioner nor the Tribunal has considered the provision relevant for the assessment year 2004-05. In other words, unamended provision was considered for deciding the issue. Government Pleader has relied on the judgment of this Court in THALIATH AND CYRILS JEWELLERS V. STO, (2006) 2 K.L.T. 765 wherein the very same issue is stated to have been 3 decided. In any case we notice that the impugned order as well as the order of the Deputy Commissioner challenged before the Tribunal are patently unsustainable because such orders are issued without reference to the relevant statutory provision introduced by Finance Act, 2004. S.T. Rev. is allowed by vacating the order of the Tribunal and that of the Deputy Commissioner and the original assessment by the assessing officer with direction to the assessing officer to make fresh assessment with reference relevant statutory provision in which respondent's eligibility for compounding will be considered based on the judgment above referred. (C.N.RAMACHANDRAN NAIR) Judge. (P.S. GOPINATHAN) Judge. kk 4