TMI Blog2009 (2) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... or the differential amount for the period noted above and issue a revised order to the assessee. Fresh order should be passed after issuing a proposal to the respondent-assessee, calling for their objection and only after hearing the objections. If any issue survives with regard to determination of tax for 1998-99 for the purpose of payment of tax at compounded rate for 2000-01, the assessee is free to file appeal. - S.T. Rev. No. 79 of 2008 - - - Dated:- 13-2-2009 - RAMACHANDRAN NAIR C.N. AND SURENDRA MOHAN K. , JJ. The judgment of the court was delivered by C.N. RAMACHANDRAN NAIR J. This is a revision filed by the State against the order of the Tribunal rejecting an application for review filed by the Revenue under section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he pre-assessment notice issued contending that he does not want an assessment at the compounded rate under section 7(1)(a) and the assessment should be completed on the taxable turnover returned or to be determined by the officer. The assessing officer, however, completed the assessment in terms of the compounding application under section 7(1)(a) and issued assessment and demand notice demanding differential tax at compounded rate with interest thereon. The first appeal filed against the assessment was dismissed by the Deputy Commissioner (Appeal) and in second appeal, the Tribunal allowed the claim. However, the State filed a review petition stating that the Tribunal has not considered relevant facts, particularly the follow-up action ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In fact, neither in the original order nor in the order in the review application, the Tribunal has considered the effect of pendency of an application for compounding filed by the respondentassessee under section 7(1)(a) read with rule 30(1) of the KGST Rules and the consequence of the assessee acting upon the compounding application that was pending by remitting tax along with monthly returns strictly in terms of the pending application so filed and whether the officer is entitled to pass orders accepting compounding along with the assessment. These issues should have been considered by the Tribunal because neither the Act nor the Rules prescribe the time-limit for the officer to pass order on compounding application filed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders on compounding application filed in form 21, the right procedure for the assessing officer was to pass an order and inform the assessee of his orders before the due date for filing the first monthly return due for the year. In other words, before May 10, of the relevant year, the assessee is entitled to an order on the compounding application filed in form 21. However, so long as the application is not rejected, nothing bars the assessee from proceeding to file monthly returns and remit tax at the rate shown in the compounding application filed by him. It is seen from the order of the Tribunal in the review application that even though the assessee's liability for payment of tax based on the taxable turnover returned every month wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme of payment of tax at compounded tax can be subject to inspection at any time during the year and in cases where tax is accepted based on application filed for compounding, the Department has no right to inspect or harass the assessees. After availing of immunity in these forms, the assessee cannot after the closure of the year go back from the offer he made for payment of tax at compounded rate. Therefore, we are of the view that the Tribunal thoroughly went wrong in holding that the assessee is entitled to back out from his offer to pay tax at compounded rate, which stands accepted by the officer while passing the assessment order. Even though the normal procedure for accepting offer of the assessee to pay tax at compounded rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve considered the matter on merits and decided all the issues arising from the order in appeal as well which were also raised in the revision case filed by the State. Further, when the review application was considered by the Tribunal on merits, though rejected, there is merger of the appellate order in the order in review and so much so, we allow the revision by vacating the orders of the Tribunal both in the appeal as well as in the review application by holding that the assessment at compounded rate is perfectly justified. However, we direct the assessing officer to reconsider the tax for the year 1998-99 which is one of the basis for determination of tax payable at compounded rate for 2000-01 and then rework interest by excluding liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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