TMI Blog2015 (10) TMI 2710X X X X Extracts X X X X X X X X Extracts X X X X ..... that enhanced the compounding fee payable under S.74 (1)(a), in 2009 and 2011, on both those occasions the amending body did not deem it necessary to amend the proviso to the said provision - Thus, the proviso has to be read as it stands in the statute book, and when so read, Ext.P8 order of the 1st respondent, to the extent it fixes the compounding fee payable by the petitioner @ ₹ 8 Lakhs cannot be legally sustained. Petition allowed in part. - W.P.(C).No.18120 of 2015 - - - Dated:- 6-10-2015 - A.K.Jayasankaran Nambiar, J. JUDGMENT The petitioner is a registered dealer under the KVAT Act, engaged in the business of production of granite metal and Msand. In connection with the said business, the petitioner had installed at his unit primary as well as secondary crushers. Over and above the said machinery, the petitioner had also installed an Auto Sand Machine for the purposes of producing M-sand. For the purposes of assessment under the KVAT Act, the petitioner opted for payment of tax on compounded basis in terms of S.8 of the KVAT Act, and the revenue authorities accepted his application for the same. The petitioner accordingly filed returns and paid tax as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e this Court challenging the demand of the revenue authorities for payment of tax on Vertical Shaft Impactor (VSI) machines, that were used by dealers engaged in the business of production of granite metal, for production of Msand. The contention of the dealers in the said writ petitions was essentially that, inasmuch as the statutory provision under S. 8 of the KVAT Act envisaged the payment of compounded rate based on machines of specified description used in the respective premises, and the VSI machine was not a machine that was specified under the statute, the said machine could not be reckoned for the purposes of determining the rate of tax to be paid on compounded basis. Taking note of the pendency of the said writ petitions, and anticipating a favourable verdict in the matter from this Court, the petitioner, while preferring Ext.P5 application for compounding the offence, qualified the same with a request to reduce the compounding fee payable to 60% of the compounding fee that was payable in respect of cone crushers, inasmuch as the said rate was stipulated under the statute, as amended by the Finance Act, 2014, and with a further stipulation that, in the event of this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the proviso to S. 74(1)(a), the maximum compounding fee that could have been imposed was only ₹ 2 Lakhs as against the ₹ 8 Lakhs that was imposed. 6. I have heard the learned Senior Counsel Sri. K. Srikumar for the petitioner and the learned Government Pleader for the respondents. Learned Senior Counsel would vehemently canvass for the proposition that, in the instant case, the compounding proposal put forth on behalf of the petitioner, subject to certain stipulations, had been accepted by the 1st respondent and accordingly, the petitioner was entitled to reap the benefits that flowed from a declaration, of the legal position with regard to liability for penalty, in the judgment dated 06.03.2015 rendered in WP (C) No. 2873/2014 and connected cases. In the alternative, he would submit that the offence itself was not compounded in the absence of payment of the balance tax amounts by the petitioner. To substantiate his contentions, he would place reliance on the decisions in Chandrahasan v. State of Kerala [1994 KHC 328], Assistant Commercial Tax Officer (intelligence) v. N.N.Jariwala [1992 (86) VST 229 (Kar)] and State of Karnataka v. Veerchand [1992 (8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stipulated under the statute, as amended by the Finance Act, 2014, and (ii) that, in the event of this Court finding in favour of assessees, in the writ petitions that were pending on the issue of liability to penalty, the compounding fee would be refunded with interest. The said application of the petitioner was considered by the 1st respondent who revised his earlier proposal, partly acceding to the request of the petitioner, and proposed a computation of compounding fee at 60% of the maximum compounding fee payable for the cone crusher, for the Auto sand machine, and another 60% for the VSI machine, for the year 2013-14. He did not, however, accede to the second condition proposed by the petitioner. The modified proposal was then put to the petitioner, who in turn put in a compounding application, admitting the offence and seeking departmental composition based on the modified proposal. The said application was accepted by the 1st respondent and he proceeded to pass Ext.P8 order, fixing the tax and compounding fee payable at ₹ 8,00,000/- each and noticing that the petitioner had already paid these amounts on 23.01.2015. As the petitioner had paid the amount demanded as c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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