TMI Blog2010 (2) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 5-2-2010 - ABDUL REHIM C.K. , J. C.K. ABDUL REHIM J. The challenge in this writ petition is against exhibit P6 notice issued under section 66(3) of the Kerala Value Added Tax Act, 2003 (the KVAT Act). Through the said notice, the first respondent had intimated the petitioner about proposal to revise exhibit P5 permission already granted under section 8(b) read with rule 11(2)(i) of the KVAT Act and Rules. The petitioner is running a granite crushing industrial unit and he is a registered dealer under the provisions of the KVAT Act. The petitioner opted for compounding under section 8(b) of the Act and application submitted in this regard in form 1D evidenced from exhibit P1 was allowed as per exhibit P5 proceedings issued in form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusher Rs. 7,50,000 per annum: Provided that in the case of dealers, who opted to pay compounded tax under this clause, no separate assessment shall be made in respect of m-sand produced by them. Explanation. For the purposes of this clause, primary crusher shall also be reckoned for the purpose of computation of the quantum of compounded tax and the rate applicable for primary crusher shall be fifty per cent of the rates mentioned in items (i), (ii) and (iii) above. Through the Finance Bill, 2009, copy of which is produced as exhibit P7, the State Government proposed amendments to section 8(b) reducing the rate of tax for compounding. As per the said proposal, section 8(b) was sought to be amended as follows: (b) Any dealer pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Taxes (second respondent) had issued exhibit P4 a circular which contained operational instructions for implementation of the provisions of the Finance Bill 2009-10. In exhibit P4 circular it is mentioned that compounded rate for single crusher irrespective of jaw size (other than cone crusher) will be Rs. 25,000 per annum. Exhibit P4 circular was issued on March 23, 2009. There is no dispute with respect to the fact that the size of machinery which is being used by the petitioner is falling within the category mentioned as item (ii) of section 8(b), i. e, machine having size exceeding 30.48 cm. x 22.86 cm., but not exceeding 40.46 cm. x 25.40 cm. It is also an admitted case that during the previous year the rate of compounding with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis is not liable to be rectified, for any reason that such benefit was not available under the Finance Act. It is contended that the Finance Act was enforced during midway of the year and therefore imposition of a different tariff in the middle of the year is not permissible. The learned counsel for the petitioner Sri P.N.D Namboothiri had placed reliance on the dictum laid down by the honourable Supreme Court in Varkisons Engineers v. State of Kerala [2009] 25 VST 1. In that case, the view taken by the Kerala High Court, holding that even though the amendment made to clause (b) of sub-section (i) of section 7 of the Kerala General Sales Tax Act, 1963 came into effect only on July 23rd, it is applicable for the whole year of 2001-02, was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which stood as on the date of commencement of the financial year 2009-10, i.e., as on April 1, 2009, the rate of compounding stipulated was Rs. 1,60,000. Therefore it cannot be said that in variance of the prevailing rate of tax any enhancement was brought during mid way of the financial year by enforcement of the Finance Act, 2009. On the other hand it is clear and evident that what is sought to be rectified through exhibit P6 is only a mistake crept in fixing the compounding rate, which happened to be refixed based on the proposals contained in the Finance Bill and based on clarifications issued through the circular. But the proposal contained in the Finance Bill was never incorporated into the statute. Hence the provisions contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the respective statutes, is binding on all assessing authorities concerned. But in the case at hand exhibit P4 cannot be termed as a circular issued under the provisions of the statute interpreting or clarifying any of the provisions contained in the statute. On the other hand exhibit P4 contained only operational instructions for implementation of proposals contained in the Kerala Finance Bill, 2009. If such proposals have not been transmitted into statute books at any point of time, it cannot be said that those proposals were having any statutory force. Hence exhibit P4 cannot be termed as a circular issued in interpretation or in clarification of any of the provisions contained in the relevant statute. In the case at hand it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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