1955 (7) TMI 19 - HC - VAT and Sales Tax

Summary

Issues:
Validity of assessment without monthly provisional assessments

Analysis:
The case involved a firm of wholesale dealers challenging the validity of an assessment made by the Deputy Commercial Tax Officer for the assessment year 1951-52. The petitioners contended that the assessment for the whole year was invalid as no provisional assessment was made monthly. The relevant provisions of the Madras General Sales Tax Act and the Rules were analyzed to determine the legality of the assessment.

The court examined Section 3 of the Act, which states that every dealer shall pay tax on the total turnover for the year. Section 9 outlines the procedure for submitting returns and assessment by the authority. The Rules provided for both yearly assessment on an estimate and an alternative method of assessment under Rule 13 for dealers with a net turnover exceeding Rs. 20,000.

Under Rule 13, dealers were required to submit monthly returns in Form A-3, which were provisionally accepted under sub-rule (3). If no return was submitted or found incorrect, the assessing authority could determine the turnover to the best of his judgment under sub-rule (4). Sub-rule (5) allowed for a final assessment based on the monthly returns after the close of the year.

The court interpreted the rules to establish that the scheme of assessment was logical and self-contained, aiming to ease the burden on the assessee while facilitating tax collection. The absence of a specific time limit for monthly assessments did not invalidate the yearly assessment based on monthly returns. A Division Bench of the Madras High Court had previously upheld this interpretation in a similar case.

The court rejected the argument that sub-rule (5) required monthly returns as a condition precedent for the final assessment. It emphasized that the liability to duty was clear, and the assessing authority had the power to assess to the best of his judgment even in the absence of monthly returns. The court concluded that the assessment in the present case, based on monthly returns and in compliance with the rules, was valid. The revision was dismissed with costs, and the petition was rejected.