Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2019 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 169 - HC - VAT and Sales TaxInterpretation of statute - Basis for payment of tax for the business carried on in the new branch - initially tax was paid on compounded basis - KVAT Act - payment of tax under Section 8(f) of the KVAT Act, in respect of the category of dealers enumerated therein, or payment of tax in terms of Section 6 of the KVAT Act? Whether or not the petitioner herein is obliged to pay tax on compounded basis, in respect of the newly opened branch, for the whole year or only for that portion of the year when it was functioning as a business entity? HELD THAT:- As per the charging section under the KVAT Act (Section 6), there can be a levy of tax under the Act only when the taxable event of sale or purchase of goods occurs. In other words, there cannot be a levy of tax under the Act, either actual or notional, for the period when the assessee did not occasion a taxable event - In the instant case, although the petitioner had exercised his option to pay tax on compounded basis, in lieu of the regular method of payment of tax under the Act, the assessment and consequential collection of tax from him could only have been for the period during which he carried on a business of sale or purchase of goods, that attracted the levy of tax, in his newly opened branch. The tax liability of the branch that was opened in December 2012 had to be computed on the basis of the tax paid in relation to the principal place of business, but for the period during which the branch functioned as a business entity during the relevant assessment year. The assessment of the petitioner for the year 2012-13 would, therefore, have to be completed by adopting the figure of ₹ 23,07,180/- as the compounded tax payable for the principal place of business and adding to the said sum, an amount of ₹ 7,67,269/- [(2307180/12) x4] as the compounded tax payable for the newly opened branch. Inasmuch as in Ext.P3 assessment order, the assessment has not been completed in the manner indicated above, this Writ Petition is allowed by quashing Ext.P3 and direct the 1st respondent to pass a fresh order of assessment - petition allowed by way of remand.
|