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2018 (7) TMI 1765 - HC - VAT and Sales TaxWithdrawal of compounding application - Compounding of tax - KVAT Act, 2003 - Rule 11 of the Kerala Value Added Tax Rules, 2005 - Held that:- Unless the compounding application is accepted by an order of sanction, it does not become a concluded contract. If there is no concluded contract between the parties, the application remains only as an offer which could be withdrawn at any time and the assessee can go for regular assessment. Viewed at a different angle, if after payment of quarterly tax the compounding application is rejected, necessarily, the assessee will have to file returns by producing the books of account. Therefore, payment of tax at compounded rate by itself cannot be a reason for concluding that there is a concluded contract between the parties. The appellant ought to have been given an opportunity to withdraw the compounding application especially when no sanction had been issued during the assessment year - The appeals are only to be allowed and an opportunity should be given to the appellants/petitioners to file regular return for the respective assessment years. However, it is made clear that the appellants shall not be entitled for refund of any amount paid towards compounded tax. Appeal allowed.
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