JOSCO Fashion Jewellers Vs State of Kerala (Kerala High Court)
Kerala High Court held that compounding under KVAT Act for that year cannot be cancelled in case suppression of turnover is detected with respect to dealer who have paid tax at compounding rate. Accordingly, point is answered in favour of petitioner.
Facts- Petitioner is a dealer in gold ornaments and jewellery registered under the Kerala Value Added Tax Act, 2003 and CST. The Petitioner had been opting for payment of tax at compounded rates under Section 8(f) of the KVAT Act since the year 2006. The compounding orders dated 18.02.2011 and 13.12.2011 allowing the Applications of the Petitioner for compounding and determining tax for the Assessment Years 2010-11 and 2011-12. Petitioner is challenging the Notices issued by the Respondent No.3 proposing to cancel compounding orders permissions to pay tax at compounding rate on the ground that the Intelligence Officer (IB), Thiruvananthapuram, has found that the Petitioner did not declare certain purchases in the Returns in Form 10DA filed during the relevant Assessment Years in which the compounding were opted.
Conclusion- Single Bench judgment of this Court dated 02.08.2017 in W.P.(C) No.3593/2017 in which it is held that since the Petitioner’s payment of tax on compounded basis for the assessment year 2012-2013, is based on the turnover reported for the previous three consecutive years, any suppression, even if established against the Petitioner for the year 2012-2013, will not have any bearing on the tax paid by the Petitioner on compounded basis for the said year since, the turnover of the Petitioner for the year 2012-2013 is not relevant for the purposes of determining his tax liability on compounded basis for that year.
