Assessee opting to Pay Tax on Compound Basis in lieu of Regular Basis of Assessment, cannot Turn Around: Kerala HC [Read Order]

The Kerala High Court observed that the assessee opting to pay tax on compound basis in lieu of regular basis of assessment, cannot turn around.

The petitioner is aggrieved by the judgment dated 22.02.2024 of a Single Judge. Briefly stated, the Writ Petition was filed challenging the orders issued by the 1^st respondent under the provisions of Section 7 of the Kerala General Sales Tax Act ( the KGST Act ) for the assessment years 2022-2023 and 2023-2024 finalising the assessment of the petitioner on compounded basis as contemplated under Section 7 of the KGST Act.

The only issue urged by the appellant in the Writ Petition was with regard to the manner in which the tax at compounded rate was computed. It is the case of the appellant that during the previous years when the Covidinduced lockdown was in force, the appellant was permitted to effect over the counter sales despite having been issued a licence only for operating a bar attached hotel.

The Single Judge, which places reliance on the decision of this Court in Kalyan Tourists Home v. State of Kerala to hold that the appellant having opted to pay tax on compounded basis in lieu of the regular basis of assessment cannot turn around and contend that the formula provided for payment of tax on compounded basis does not apply to him.

A Division Bench of Justice Dr AK Jayasankaran Nambiar and Justice Syam Kumar VM observed that “ We are also not persuaded to accept the argument of the learned counsel that the over the counter sale figures could not have been taken into consideration for computing the turnover of the bar attached hotel for the purposes of computing the tax liability under Section 7 of the KGST Act.”

“We believe that the permission to effect over the counter sales of alcoholic liquor was a concession given to bar attached hotel owners to permit them to carry on business and tide over the COVID lockdown period. The appellant cannot now contend that the tax on such transactions should not be levied on him because he did not originally have the permission to effect such sales” the Bench concluded.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates