General Principles applicable to composition schemes :
In State of Kerala v. Builders Association of India 104 STC 134 = AIR 1997 SC 3640 = (1997) 2 SCC 183 = 1997 AIR SCW 977, it was held that Government can evolve a convenient, hassle-free and simple method, which is ‘rough and ready method’, at the option of assessee (termed as ‘taxable person’ under GST). It was held that legislature can evolve such alternate, simplified and hassle-free methods of assessment, making it optional to assessee (termed as ‘taxable person’ under GST). – . – In the field of taxation, legislation must be allowed greater ‘play in joints’. Allowance must be made for ‘trial and error’ by the legislature. – – – Contractor who has opted to the alternate method of taxation cannot complain. Having voluntarily, and with the full knowledge of the alternate method of taxation, opted to be governed by it, a contractor cannot be heard to question the validity of relevant sub-sections or the rules – followed in Mycon Construction Ltd. v. State of Karnataka 2002 AIR SCW 2156 = 127 STC 105 (SC) * Karnataka State Construction Corporation v. State of Karnataka (2004) 138 STC 75 (Kar HC DB) – same view in Punjab Bearings Industries v. UOI 2006 (203) ELT 187 (P&H HC DB) * T Shivkumar v. CCT (2010) 31 VST 261 (Karn HC DB).
Once a dealer (termed as ‘taxable person’ under GST) opts for composition of tax, he is not entitled to claim any other exemption – T H Venkate Gowda v. CCT (2007) 5 VST 553 (Karn HC DB) * Bhadauria Gram Sewa Sansthan v. ACST (2006) 148 STC 356 (All HC FB) * DCCT v. B V Subba Reddy (2010) 31 VST 530 (Karn HC DB).
Once a dealer (termed as ‘taxable person’ under GST) opts for the scheme, he cannot withdraw from the scheme later – Raju Jacob v. STO (2007) 6 VST 415 (Ker HC DB) * Indian Oil Corp v. Prasanna Welding Industries (2007) 7 VST 101 (Gau HC).
In Bhawani Shanker Castings v. CCE (2004) 169 ELT 73 (CEGAT), it was held that if assessee (termed as ‘taxable person’ under GST) is manufacturing both notified and non-notified goods in same plant, he is required to discharge duty liability u/s 4 and not under compounded levy scheme – followed in Shree Venkatesh Steel v. CCE 2006 (199) ELT 721 (CESTAT).
Unjust enrichment doctrine applicable even if duty paid under compounded levy scheme – In Srinivasa Steel Rolling Mills v. CCE 2006 (193) ELT 419 (CESTAT SMB), it was held that doctrine of unjust enrichment applies to duty paid under compounded levy scheme also – relying on K B Rolling Mills v. CCE 2004 (166) ELT 345 (CESTAT) – view confirmed in Shivagrico Implements v. CCE 2006 (199) ELT 44 (CESTAT 3 member bench).