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2018 (4) TMI 374 - HC - VAT and Sales TaxReassessment of tax - Composition Scheme - Liquor - Composition facility (COT) which was granted by the department was cancelled by the Assistant Commissioner of Commercial Taxes on the ground that the petitioner is dealing in liquor either at the principal place of business or branches. Therefore the petitioner is not entitled to avail or opt for Composition Scheme in terms of Section 15(1)(c) of the KVAT Act. Whether the respondent-authorities can re-assess the assessee under VAT Scheme for the tax periods 2014-15, the composition scheme being cancelled with effect from 22.07.2015, directing the assessee to submit returns in VAT 100 with effect from 01.08.2015? Held that: - it is clear that unless the certificate issued under Rule 137 [Composition Certificate] has not been cancelled, the Dealer-Petitioner herein would be entitled to continue with the benefit under Section 15 of the KVAT Act on composition scheme. Indisputably, as narrated above, order of cancellation of composition scheme facility has been passed on 22.07.2015 with immediate effect. It is also made clear that VAT option is enabled to file VAT-100 returns with effect from 1.8.2015. Even in the notice, for cancellation of composition scheme, it was proposed to cancel the COT facility with immediate effect. No reassessment can be made under Section 39[1] of the VAT Act subjecting the petitioner to tax under VAT Scheme. It is not in dispute that the petitioner is filing VAT 100 returns and paying the tax under the VAT Scheme subsequent to cancellation of the composition certificate with effect from 22.07.2015 - the reassessment order impugned herein deserves to be quashed without adverting to the other arguments canvassed. Re-assessment order as well as demand notice quashed - Petition allowed.
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