A.K.JAYASANKARAN NAMBIAR,J. - (1.)The petitioner, who is engaged in the activity of powder coating, an activity in the nature of works contract, is an assessee on the rolls of the 1st respondent. During the first year of business, namely 2012-13, the petitioner opted to pay tax on compounded basis under Section 8 of the Kerala Value Added Tax Act (hereinafter referred to as the Act for short) and accordingly after getting the necessary permission from the department to do so, filed the necessary returns and paid tax at the applicable rates on compounded basis. For the immediately succeeding year 2013-14, inasmuch as there was no change in the nature of the business, the petitioner continued to pay tax on compounded basis, although without formally preferring an application for payment of tax on compounded basis for the said year. The petitioner continued the said practice for the subsequent three years also upto assessment year 2016-17. It is relevant to note that, during the said period from 2013-14 to 2016-17, while opting to pay tax on compounded basis, albeit without filing a formal application for the same, the petitioner also relinquished his claim for input tax credit, since a person paying tax on compounded basis was not entitled, as per the statutory provisions, to avail input tax credit. By Ext.P1 series of notices issued to the petitioner on 10.05.2017, the respondents cited the non filing of applications for compounding by the petitioner as a reason to reopen the assessment for the years 2013-14 to 2016-17 and subject the turn over of the petitioner to assessment under the regular method in Section 6 (1)(f) of the Act. Although the petitioner preferred detailed replies to the said pre- assessment notices, the proposals were confirmed against the petitioner by Ext.P3 series of orders, whereby, demands of differential tax were raised against the petitioner. In the writ petition Ext.P3 series of orders is impugned, inter alia, on the ground that, while it would be inequitable on the part of the respondents to proceed against the petitioner seeking a demand of differential tax, solely on the ground that the petitioner had not preferred any compounding application for the assessment years in question, it is also contended that at any rate, the power to assess escaped turnover under Section 25 cannot be exercised on a mere change of opinion of the assessing officer, more so, when it was within the knowledge of department, that the petitioner was paying tax on compounded basis during the assessment years in question. The petitioner would place reliance on the decisions of this Court in State of Kerala v. Kalyanaraman [2009 (3) KLT S.N.31], Johnson and Johnson Limited v. Assistant Commissioner (Assessment), Special Circle 1, Ernakulam and Others [2009 (23) VST 274] and M/s. Surya Rock Products v. Additional Sales Tax Officer, Angamaly and Another. [2002 (10) KTR 615], in support of his contentions.
(2.)A counter affidavit has been filed on behalf of the respondents, wherein the stand taken is that, inasmuch as the petitioner had not complied with the necessary conditions for payment of tax on compounded basis, namely the filing of an application for such payment, he was not entitled as per the statutory provisions, to avail the benefit of payment of tax on compounded basis. The orders impugned in the writ petition are sought to be justified on the aforesaid contentions, and it is further stated that, the apprehension of the petitioner that he will not get input tax credit is misplaced since the respondents have already allowed input tax credit to the petitioner while confirming the proposals in Ext.P1 series of notices. The decision of the Division Bench of this Court in 2009 (23) VST 274 is stated to have been distinguished by a learned Single Judge in the judgment dated 06.06.2016 in WP(C) No.9770 of 2016, wherein the learned Judge found that, on the facts of the case before him, the decision of the Division Bench could not be applied since, that was a case where the assessee therein had not filed any application for payment of tax on compounded basis. It is contended therefore, that the judgment of the Single Judge would have a direct bearing on the facts of the instant case and the writ petition therefore ought not to be allowed.
(3.)I have heard the learned counsel appearing for the petitioner as also the learned Government Pleader appearing for the respondents.