Judgment :- Petitioner is challenging Ext.P2 order whereunder the Deputy Commissioner of Commercial Taxes in exercise of powers under section 35 of the KGST Act has set aside the petitioner’s sales tax assessment for the year 1996-97 at compounded rate of tax on the ground that petitioner was not entitled to the benefit of compounding under section 7(1)(a) of the KGST Act. Even though statutory appeal is provided against the impugned order under the Act, petitioner filed this O.P. because the matter involves interpretation of scope of section 7(1)(a). In any case after keeping the O.P. pending for over five years, there is no justification for this court to sent back the petitioner for pursuing statutory remedy. In the circumstances, I proceed to decided the case on merits. I heard counsel appearing for the petitioner, and Government Pleader appearing for the respondents. 2. Since the issue involved is scope of section 7(1)(a) of the Act prior to its amendment the said section applicable for the relevant year is extracted hereunder with the proviso introduced with effect from 1.4.1998: 7. Payment of tax at compounded rates: - (1) Notwithstanding anything contained in sub-section (1) of section 5, every dealer whose total turnover in a year is not less than one lakh rupees but is not more than one lakh and ten thousand rupees may at his option instead of paying the tax in accordance with the provisions of that sub-section, pay tax at the rate of two and a half per cent on his taxable turnover. (a) Any dealer in gold or silver ornaments, may, at his option instead of paying tax in accordance with the provisions of that sub-section, pay tax at one hundred and fifty per cent of the maximum amount of tax payable by him for a period of twelve months in a financial year, as conceded in the return or accounts, in any of the three financial years immediately preceding the assessment. Provided that where during any such proceeding year, the dealer has not transaction business for any period in a financial year, the tax payable for the twelve months shall be calculated proportionately on the basis of the tax payable for the period during which such dealer had transacted business; Provided further that where a dealer has paid tax under this clause for the preceding year, the compounded rate of tax to be paid by him for the succeeding year shall be at one hundred and twenty five per cent of such tax paid or the tax calculated under this Clause whichever is higher; and, Provided also that a dealer shall be permitted to exercise such option only where he has transacted business consecutively for three years immediately preceding the year to which the option relates. (This proviso introduced w.e.f. 1.4.1998). 3. Petitioner admittedly commenced business on 27.11.1995 that is during the fag end of the financial year 1995-96. However, petitioner applied for payment of tax at compounded rate for 1996-97 at 150% per cent of the tax payable during the previous year, i.e., 1995-96 as provided under section 7(1)(a) of the Act. It is seen from Ext.P1 assessment order that the assessing officer accepted the petitioner’s claim and completed assessment for 1996-97 by taking average daily tax liability for the 125 days’ business carried on for the year 1995-96 and then by multiplying it by 365. The Deputy Commissioner however vide Ext.P2 order held that the petitioner having not carried on business for a full year in any of the proceeding three years, prior to the relevant year, i.e., 1996-97, petitioner was not entitled to the benefit of compounding under Section 7(1)(a) of the Act. Counsel for the petitioner contended that Section 7(1)(a) does not require that a dealer should carry on business for the whole year in any of the three years preceding the year in which compounding was claimed. He has specifically referred to the proviso introduced to section 7(1)(a) by Act 14 of 1998 with effect from 1.4.1998 and contended that requirement of minimum three years’ business for payment of tax at compounded rate is application only from 1998-99 onwards and the Deputy Commissioner went wrong in applying the amended provision for the year 1996-97. He has specifically referred to the proviso introduced to section 7(1)(a) by Act 14 of 1998 with effect from 1.4.1998 and contended that requirement of minimum three years’ business for payment of tax at compounded rate is application only from 1998-99 onwards and the Deputy Commissioner went wrong in applying the amended provision for the year 1996-97. Government Pleader on the other hand contended that section 7(1)(a) prior to the introduction of the proviso makes it clear that the assessee should have carried on business for three years preceding the year in which compounding was claimed, and according to him, the amendment is only clarificatory. 4. The question to be considered is whether the amendment is only clarificatory or whether it is substantive without reference to which the impugned order cannot be sustained. 5. On going through section 7(1)(a) of the prior to the introduction of the last proviso, I find that the tax payable by a dealer at compounded rate for the year for which he applied for the benefit is 150% of the maximum amount of tax payable by him for the period of 12 months in a financial year as stated in the return or accounts in any of the three financial years immediately preceding the assessment year. In other words, the tax payable by the petitioner under compounding system for a year is 150% of the tax payable by him in any of the three financial years immediately preceding the relevant assessment year. This pre-supposes that the dealer should have carried on business during three financial years immediately preceding the year for which the benefit of compounding is claimed. The first proviso to the section only says that if a dealer has not carried on business for any period in a financial year, the tax payable for 12 months shall be calculated proportionately on the basis of tax payable for the period during such dealer has transacted business. This only means that the dealer should have carried on business in all the three years immediately preceding the year in which he claims the benefit of compounding, but benefit could not be denied merely because he has not carried on business during any period in any of the said three financial years. This only means that the dealer should have carried on business in all the three years immediately preceding the year in which he claims the benefit of compounding, but benefit could not be denied merely because he has not carried on business during any period in any of the said three financial years. In other words, even if there is some break in business for any period in any of the proceeding three years, the dealer is still entitled to the benefit and the tax for that year should be determined by grossing up of the turnover for the whole year in proportion to the turnover for the period of the years for which the dealer has carried on business. Therefore the requirement of the section even before the amendment is that in order to claim benefit of compounding for any year the dealer should have carried on business at least for some period for all the three financial years immediately preceding the year for which claim is made. The amendment is therefore clarificatory and is introduced only to avoid confusion. Since petitioner has not done business for any period in the two out of the three financial years preceding the year in which the benefit is claimed and has done business only for part of one year, petitioner is rightly found to be not entitled to the benefit of compounding for 1996-97 by the Deputy Commissioner vide Ext. P2 order. The O.P. is devoid of any merit and is therefore dismissed.