9911796707
TMI Blog2011 (6) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... ct"). We have heard counsel for the appellant and Government Pleader for the State. The appellant, a bar attached hotel not being a star hotel or heritage hotel/was entitled to pay turnover tax at the compounded rate provided under section 7(1)(a) as against the liability for tax under the charging section, namely, section 5(2) of the Act. The appellant applied for payment of tax at compounded rate under section 7(1)(a) which is 140 per cent of the purchase value of liquor and the appellant's request was allowed by the officer. Consequently during the assessment year 2006-07, the appellant remitted tax at compounded rate under section 7(1)(a) and the same was accepted by the officer. However, when the assessment for the year 2006-07 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question to be considered is whether the assessment made in accordance with the statutory provision is to be interfered with based on a letter issued by the Commissioner which is contrary to the statute. Section 7 providing for compounding is as follows:- "Payment of tax at compounded rates:- (1) Notwithstanding anything contained in sub-section (2) of section 5, any bar attached hotel, not being a star hotel of and above three star hotel, heritage hotel or club, may, at its option, instead of paying turnover tax on foreign liquor in accordance with the provisions of the said sub-section pay turnover tax on the turnover of foreign liquor calculated,- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the purchase turnover of liquor for the year for which compounding is sought. In this case the appellant is in the first year of business and, therefore, clause (b) has no application and so much so, the Department has no option to compare the liability under clause (a) with liability under clause (b) to adopt the higher tax. The contention of the appellant that three years' business preceding the assessment year for which compounding is sought, i.e., 2006-07 in this case, is a condition for compounding is unacceptable because the section does not make it a condition. In fact, section 7(1)(a) is not dependent on 7(1)(b) and so much so, a bar hotel in the first year of business is entitled to apply for compounding. We, therefore, hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also to be noted that an assessee who is otherwise liable to maintain all the records pertaining to business including sales turnover, after offering payment of tax at compounded rate based on purchase price and by disabling the Department to verify sales turnover during the relevant year, cannot revert back to the position of a normal dealer liable to pay tax on the sales turnover. We are of the view that once compounding application is filed and tax is paid in terms of the same, the same binds both the assessee and the Department unless assessee recalls application before starring payment of tax in terms of the compounding scheme. In this case the appellant not only applied for compounding, but paid tax in terms of the compounding ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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