TMI Blog2002 (4) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... conceded in the return or accounts for the immediate preceding year. Explanation.-For the purpose of this clause 'tax payable as conceded in the return or account for the immediate preceding year' means tax payable on the sales turnover under sub-section (1) of section 5 and the tax payable on the purchase turnover under section 5A: Provided that where during the preceding year, the dealer had not transacted business for any period the tax payable for the whole year shall be calculated proportionately on the basis of the tax payable for the period during which such dealer had transacted business; Provided further that where a dealer has paid tax under this sub-section for the preceding year, the compounded tax to be paid by him for the succeeding year shall be one hundred and twenty per cent of such tax paid or one hundred and twenty per cent of the tax payable as per the return or accounts of the dealer for the preceding year whichever is higher: Provided also that where such dealer has paid compounded tax consecutively for a period of three years the compounded tax payable for the succeeding year shall be one hundred and fifteen per cent, and in the case of a dealer who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the petitioner has no liability either under section 5 or section 5A of the Act, and since the petitioner is paying tax at compounded rate under section 7(1) of the Act, the petitioner has no liability to pay additional sales tax provided under section 5D of the Act, which applies only to tax payable under sections 5 and 5A of the Act. The alternate contention raised by the petitioner is that the demand of additional sales tax by issuing form 14D is not authorised under the Act because the liability is not admitted in the returns filed and if the first respondent ever wanted to levy additional sales tax, the same should have been done after completing the assessment either provisional or regular after observing the procedural formalities provided under the Act. In other words according to him, for liability under section 5D of the Act, the impugned demand notices are unsustainable for want of proper assessment justifying the demand. 2.. I heard learned counsel appearing for the petitioner, Dr. Muhamed Kutty, and Sri Raju Joseph, Special Government Pleader for Taxes, appearing for the State. 3.. Since the dispute is with regard to liability under section 5D, the section is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional tax also. According to him, the tax paid at compounded rate under section 7(1)(a) by the petitioner should take in additional sales tax as well, and therefore the payment of tax at compounded rate is a clear discharge of liability of sales tax and additional sales tax under the Act. The last argument is alternate in nature and is against the issue of form 14D which is only a demand of tax without any assessment before that, either provisional or regular. He also referred to the decision of this Court in O.P. No. 36033 of 2000 wherein this Court has held that the proceedings under section 7(1) are not appealable as there is no dispute in the matter. If a demand of tax under section 7(1)(a) is not appealable, then it is not a proceeding determining tax under section 5 because against the assessment under section 5(1) there is an appeal provided. In that view of the matter he contends that assessment for tax under section 7(1)(a) is not assessment of tax under section 5, and therefore there is no liability on the petitioner to pay additional sales tax under section 5D on tax paid at compounded rate. Reported as Pioneer Industries v. Additional Sales Tax Officer in [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 7(1)(a) or under section 7(1)(b) or section 7(7) or 7(7A) will have to pay additional sales tax under section 5D on such compounded tax. According to the petitioner if this interpretation is followed, additional sales tax will be payable in respect of licence fee under section 5B. Further according to him then lottery tickets under section 5BA will Reported in [2002] 128 STC 301 (Ker) (P.O. Abraham Associates v. Commissioner, Commercial Taxes). also attract additional sales tax which does not appear to be justified. I cannot agree with this proposition. This is because sections 5B and 5BA constitute independent charging sections with regard to items referred to therein, whereas section 7 or any sub-section provided thereunder does not constitute any independent charging provision, but it is only a substitute for the tax payable under the various provisions of section 5 of the Act. Therefore I am of the view that the petitioner and other dealers paying tax at compounded rate under various sub-sections of section 7 are liable to pay additional sales tax under section 5D of the Act. Similar is the view taken in the decision in O.P. No. 3583 of 2002 dated February 18, 2002. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to the tax payable under the Act, no purpose will be served by issuing notice to the petitioner, is his contention. I agree with the view of counsel for the petitioner that the tax not shown as due in the return cannot be demanded by issuing of form 14D under rule 21(10) of the Rules as the assessing officer has necessarily to issue notice and any demand over and above the tax shown as due in the return should be made after making provisional or regular assessment and after issuing notice to the assessee and after hearing his objections. However, in this case I do not think there is any need to direct the officer to make an assessment because the issue is only a matter of application of section 5D to the assessee. As the case was contested on merits before me and I have decided the issue in this O.P. there is no need for remanding the matter to the assessing officer for making an assessment. In the circumstances, it is declared that the assessee is liable to pay additional sales tax under section 5D on the tax paid at compounded rate and demand vide exhibits P2 and P3 are in order and hence are sustained. The original petition is accordingly dismissed. Order on C.M.P. No. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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