TMI Blog2017 (1) TMI 1716X X X X Extracts X X X X X X X X Extracts X X X X ..... re no jurisdictional error in either the assessing authority having required the assessee to pay the differential in terms of S. 7 or the Accountant General's office or the squad of that office having prompted the assessing authority to proceed to make demand for the remaining amount. Assessee, ultimately, argued that the assessee was essentially falling into a trap of misrepresentation by the assessing authority - HELD THAT:- This argument only to be rejected because there is no question of any misrepresentation of any nature, since the payment of tax consequent on an option exercised by the assessee does not depend upon any representation of the assessing authority or any other statutory authority under the Act. What we say now is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been offered is not merely the option to pay tax at compounded rate, but to pay such compounded rate of tax dependent on Clause (a) and not Clause (b) of S. 7(1)(i) of the Act. This, in our view, is wholly misplaced. It is trite law as has been laid down through different decisions that the concept of option under S. 7 is to opt out of regular assessment, which is governed by S. 5 of the Act. Once the option is exercised and the assessee opts to pay tax at compounded rate, the payment of tax at compounded rate would be governed by the provisions of S. 7. There is no provision or opportunity to opt among the different limbs of S. 7. Therefore, if one were to pay tax at compounded rate under S. 7, everything depends upon the turnover or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of S. 5 which provides for regular assessment and falls under the canopy of payment of tax at compounded rate, which is governed by S. 7. This, and only this, is the contract between the State and the assessee on the basis of the compounding system. Once that event happens, the liability to pay tax at compounded rate will stand governed by the different provisions contained in S. 7 of the Act. In this view of the matter, no argument can be countenanced to say that rate of tax and the question whether the assessee would be able to opt as between Clauses (a) and (b) of S. 7(1)(i), is also within the bargain on which the compounding is accepted. So much so, the stand of the Revenue that the assessee/revision petitioner had to pay the particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand for payment of the balance. The Accountant General is a statutory authority/Accountant General's audit through audit squads is a regular feature in all institutions of governance, which deal with fiscal management of the State. In the course of such exercise, it is well within its fiscal management of the State Government and also through the controlling and regulatory power of the Accountant General's office to point out the statutory officers concerned, the deficit in payment of taxes. What has been done in the case in hand is that when the Accountant General's audit squad had pointed out the deficiency and deficit in the payment of taxes payable under S. 7(1) by the assessee, a notice was issued by the assessing authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted the option, and therefore, could not have done so without making a concession against any claim for further amounts. We state this argument only to be rejected because there is no question of any misrepresentation of any nature, since the payment of tax consequent on an option exercised by the assessee does not depend upon any representation of the assessing authority or any other statutory authority under the Act. What we say now is in tandem with what we have already said as to the automatic flow of the consequences of option. Further, there is no question of the assessee opting either for a particular rate of tax or for opting as between Clauses (a) and (b) of S. 7(1)(i) of the Act adverse to the interest of the Revenue. For the af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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