Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2022 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 671 - HC - VAT and Sales TaxIssuance of Garnishee Notices - non-service of pre-assessment notices as well as assessment orders - composition scheme - dispute over turnover - execution of civil work relating to construction of roads - HELD THAT:- Any VAT dealer who executes a contract and opts to pay tax by way of composition, must register himself as a VAT dealer and he shall pay tax at the rate of 5% of the total consideration received or receivable. In a case where the VAT dealer opts for composition he shall before commencing execution of the work notify the prescribed authority in Form VAT 250 details of the contract on which composition option has been exercised. On receipt of the payment by the VAT dealer, he shall calculate the tax at 5% of the amount received and shall enter such details in Form VAT 200 whereafter the tax due shall be paid along with the return in Form VAT 200. In Koothattukulam Liquors v. Deputy Commissioner of Sales Taxes [2014 (3) TMI 782 - SUPREME COURT] Supreme Court examined the concept of payment of tax under composition scheme. That was a case under the Kerala General Sales Tax Act, 1963 whereunder the appellant had opted for composition of tax in terms of Section 17 thereof. After the appellant had closed his business, he had approached the assessing authority to cancel the permission granted for payment of tax under the composition scheme. It was in that context that the question for consideration before the Supreme Court was whether the appellant could request for a regular assessment in the same year after opting for composition of tax under Section 17 of the Kerala General Sales Tax Act, 1963 - Supreme Court held that composition of tax is nothing but an alternative route to assessment regulated by the terms of the contract between the assessee and the assessing authority to arrive at the same destination. Therefore, the dealer who had voluntarily and with full knowledge of the alternate method of taxation had opted to be governed by it, he cannot in the lean season claim that his assessment for the very same assessment year be made under regular assessment. Once the contract is affected by way of payment of composition tax and acceptance thereof, both the parties are bound by the contract. In the instant case there is no dispute that for the assessment periods under consideration petitioner had already paid tax under the composition scheme. Respondents have also not disputed the turnover figures of the petitioner. If that be the position and having regard to the law laid by the Supreme Court in Koothattukulam Liquors v. Deputy Commissioner of Sales Taxes [2014 (3) TMI 782 - SUPREME COURT] it was not open to the respondents to have resorted to regular assessments of the petitioner for the very same assessment periods and thereafter levy tax at a much higher rate - receipt or non-receipt of pre-assessment notices or assessment orders would have no significance or bearing as those are besides the point. When an action is without jurisdiction, the fact that the same has been put to challenge after two years would not be of material consequence. Petition allowed.
|