The Condition No. (iii) and the Condition No. (vii) in the said Notification are mutually exclusive. Condition No. (iii) does not exclude the dealer from the applicability of the Notification even if his turnover exceeds the prescribed levy of Rs.50,00,000 in the current year, provided his turnover is less than Rs.50,00,000 in the previous year.

Condition No. (vii) states, once an option of composition has been exercised in any particular year, the same can be changed only in the subsequent year. The opinion expressed by the learned Trustee in the February 2008 Review is most correct. I do not want to offer any comments on Shri M. C. Jain’s commentary.

My client is running ‘Resort & Spa’, where he is not having Residential Accommodation at present. At present, the client is having Restaurants & Liquor Bar where he serves meals, snacks, and liquor.

The said business started on 27.03.2006 (as per Partnership Deed). His turnover of Sales and Purchases is as under.

Period	Sales Rupees	Purchases Rupees
27.03.06 to 31.03.07	Nil	13,07,039
01.04.06 to 31.03.07	Nil	1,06,80,016
01.04.07 to 17.06.07	500211	8,16,112

He applied for registration under MVAT Act on 10.07.2007 (for voluntary Registration) accordingly TIN was issued by registration branch.

With this background my queries are :

1. Sub-section(9)of Section 3 comes into operation only after other sub-sections of the said Section are not applicable to the concerned dealer. Therefore, on the facts stated by you in your letter, your liability should be fixed only as per Section 3(4) and you are entitled to the deduction u/s. 3(2) of the MVAT Act, 2002.

2. The principle of unjust enrichment applies to both, the assessee as well as administration The Department will have to refund the fees paid for voluntary registration.

3. You will get the set-off u/r. 52. But, since you are claiming deduction u/s. 3(2), in my view, you will get set-off only on the purchases of capital assets which are not resold till the date of registration.

4. Appeal is the remedy.

1. Registration fees paid Rs.5000 on voluntary basis for TIN but obtained TIN on actual Turnover basis on which the dealer has paid Rs.500 only. Now whether the dealer is entitled to refund of Rs.4500 or adjustment of excess amount in his next return is possible ?

2. Whether Composition Dealer is entitled to reduction of composition money from Sale Price as per rule 57 of MVAT Rules, 2005 ?

1. You can certainly claim the refund. Adjustment may be tried under Rule 55(3)(a).

2. There are different views on this issue. But, I am of the firm opinion that the composition money included in the Sale Price is liable to be deducted from the price irrespective of whether Rule 57 prescribes deduction for the same or not. The rule speaks about deduction of ‘sales tax’, but, in my view, the deduction is required to be granted, otherwise, it would be a tax on tax which is against the scheme of the Act. It is only an arithmetical calculation and no rule is required for granting such deduction.