option to fix turnover tax under the compounding scheme at 115% of the highest turnover tax paid or payable based on accounts for any of the three preceding years, if the same is higher than turnover tax payable on 140% of the purchase turnover of liquor for the year for which compounding is sought. In this case appellant is in the first year of business and, therefore, clause (b) has no application and so much so, department has no option to compare the liability under clause (a) with liability under clause (b) to adopt the higher tax. The contention of the appellant that three years' business preceding the assessment year for which compounding is sought i.e. 2006-2007 in this case, is a condition for compounding is unacceptable because the Section does not make it a condition. In fact, Section 7(1)(a) is not dependent on 7(1)(b) and so much so, a Bar hotel in the first year of business is entitled to apply for compounding. We, therefore, hold that the compounding application submitted by the appellant and accepted by the officer and payment of tax made by the appellant are perfectly in terms of the statutory provisions.”
