Writ Appeal No. 2448 of 2007 · Kerala High Court · 2009

WA 2448 OF 2007-:3:-Judge holding that by Explanation I to sec.8(f)(ii) theposition is made clear that where during any such precedingyear the dealer has not transacted business for any periodin that financial year, tax payable for the 12 months shall becalculated proportionately on the basis of the tax payablefor the period during which such dealer had transactedbusiness. Though it was contended by the petitioner thatthis explanation applies only to clause (ii), the learnedSingle Judge did not accept the same and it was held that infact the Explanation applies to sub-sec.(ii) also and suchsituation applies only to dealers who had carried on businessonly for part of the the previous year and who had notcarried on business for two preceding years prior to theprevious year. In other words, sub-sec.(ii) of sec.8(f) readwith Explanation applies to a dealer who commencedbusiness in the previous year relevant to the year for whichtax at compounded rate is to be computed where suchdealer had not carried out business for the full period of thesaid previous year. The writ petition was accordingly WA 2448 OF 2007-:4:-dismissed. Aggrieved thereby, this writ appeal is preferred.3. We have heard the learned counsel for the appellantas also the learned Government Pleader.4. The learned counsel appearing for the appellantreiterated his submission before us and took us to theamended provision where, according to him, the Explanationis much more clear that unless the three years period iscompleted, he will become ineligible to come under sec.8(f)(i). First of all, the subsequent amendment made to thelegislation cannot be taken as a guideline for interpretingthe provision as it stood earlier. Further, even the amendedprovision, according to us, only supports the interpretationplaced by the learned Single Judge.5. As per sec.8(f)(i), as we have noticed, what is moreimportant is that the highest tax payable should bereckoned for a period of twelve months. Therefore, if adealer has not carried on business for a period of twelvemonths, necessarily he will become ineligible to come undersec.8(f)(i). But merely because a person like the petitioner WA 2448 OF 2007-:5:-who was a dealer had only done business for 51 days in theyear 2003-04, but continued his business during thesubsequent years, will not become ineligible for the merereason that he could not do business for the entire periodof 2003-04. Admittedly the assessment year relates to2006-07. We find nothing in the section which compels thecontinuing of the business for the entire period of 36 monthsduring the preceding period of three years to becomeeligible to claim the benefit under sec.8(f)(i) of the Act.Admittedly he had done business during all the three yearspreceding the year in question, but he had done businessonly for a few days in one of the three years. As perExplanation I, if 'during any such preceding year' the dealerhas not transacted business for any period in that financialyear, then the tax payable to the twelve months shall becalculated proportionately on the basis of the tax payablefor the period during which the dealer transacted business,makes the position clear that he need not have donebusiness for the entire period to become 'eligible' to claim WA 2448 OF 2007-:6:-the benefit. The words 'preceding year' occurs only in sec.8(f)(i). Therefore Explanation I squarely applies to sec.8(f)(i) and sec.8(f)(i) read with the Explanation leaves no doubtthat it it is not necessary to complete the three full yearsperiod to become eligible for claiming option under sec.8(f)(i). If it is less than three years, necessarily by virtue ofthe Explanation, twelve months can be calculatedproportionately on the basis of the period during which hehas transacted the business. We agree with the view takenby the learned Single Judge. No grounds made out forinterference. Writ appeal is dismissed.In view of the pendency of the matter, the timegranted by the learned Single Judge for paying the balancetax is extended by two weeks from today.P.R.Raman, Judge.P.S.Gopinathan, Judge. mt/-