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TMI Blog2019 (1) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Trade Tax Tribunal, Jhansi Bench-I, Jhansi in Second Appeal No. 59 of 2007, for the Assessment Year 2003-04. The revision arises under the provisions of the U.P. Trade Tax Act, 1948 (hereinafter referred to as the Act). 4. By means of the present revision, the assessee has pressed the following question of law: "Whether upon completion of the assessment under Section 7(3) of the U.P. Trade Tax Act, 1948, the assessing authority had any surviving jurisdiction to pass an order under Section 7(D) of that Act ?" 5. The facts in brief are, the assessee is an enterprise of the Government of U.P. It is involved in executing civil/construction work for various departments of the Government of U.P. During the assessment year 2003-04 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 7D of the Act and determined the liability of the assessee at Rs. 1,16,217.80/- on compounded basis. 8. The appeals filed by the assessee against that order under 7D of the Act before the First Appellate Authority and the Tribunal came to be rejected. While dismissing the appeal, the Tribunal recorded a finding - it is undisputed that the assessee had filed an application under Section 7D of the Act and therefore it could not be disputed that he had himself offered to be admitted to the benefit of compounding. Since that application had not been made under any coercion, the Tribunal further concluded that there was no error in the order passed by the Appellate Authority. 9. Shri. Aloke Kumar, learned counsel for the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her material. It has also been submitted that in a given case, it is also possible for an assessee to be both, assessed to tax as also be subjected to compounding in terms of the scheme/directions issued by the State Government, under Section 7D of the Act. Therefore, there is no bar to an assessee being both assessed to tax under the regular mode of assessment and being subjected to compounding. 12. Having considered the arguments so advanced by learned counsel for the parties and having gone through the orders passed by the authorities, in the first place, no clause of the compounding scheme/directions issued by the State Government (under Section 7D of the Act), have been shown as may allow for both for compounding as also regular asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thod of assessment arising upon filing of returns and concluding with the assessment order. The compounded liability of tax may arise on contractual basis as an alternative to the regular mode of assessment. Contractual nature of the liability apart, the question of a compounding may arise only if the tax liability for which compounding may be sought had itself not been determined under the regular assessment method/procedure. Once the tax liability had been determined under the regular assessment order, no parallel or other determination of that tax liability is permissible. 14. The option with the assessee to seek the alternative mode of determination of its tax liability-by way of compounding on contractual basis, cannot survive the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessment is split up in two parts without any duplication. One in respect of the whole contract (excluding value of imported goods exceeding 5% of the value of the contract), to be concluded under compounded method and the other with respect to value of imported goods exceeding 5% of the value of the contract, to be concluded under regular assessment method. This too is possible only because the contract for compounding permits or so stipulates and not otherwise. Such is clearly not the case here in as much as the regular assessment procedure was adopted for the entire liability of the assessee and not with respect to goods imported by the assessee in excess of 5% of the contract value. 17. A bare perusal of the two orders passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t application under Section 7D of the Act. 19. The fact that the assessee had filed the application seeking compounding was only an offer made by him seeking a contract with the State with respect to its tax liability. Defective nature of that application/offer apart, even if it may not have remained open to the assessee to withdraw that offer, yet the assessing officer was not bound by it. He still had the option to accept or to reject the offer made by the assessee and no concluded contract arose during pendency of the application for compounding. In case of rejection the assessee may have had a right of appeal. However, that not being the case the assessing officer lost his right to (re)determine the tax liability of the assessee (by co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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