1958 (1) TMI 34 - HC - VAT and Sales Tax

Summary

Issues:
Provisional assessment under the Mysore Sales Tax Act, 1948 before the amending Act of 1955.

Detailed Analysis:
The petitioner was provisionally assessed with tax for sale transactions of his business ending on 31st March, 1955, without being required to furnish an advance estimate of turnover or periodical returns before the assessment. The amending Act of 1955 introduced provisions for provisional assessment, allowing authorities to determine tax in advance based on turnover estimates or returns. However, the petitioner argued that the assessment was invalid as he was not asked to provide turnover estimates or returns before the assessment.

The validating clause of the amending Act aimed to validate acts done before its commencement under the principal Act as amended. The petitioner contended that the provisional assessment could not be justified under the amending Act as it required turnover estimates or returns before assessment, which were not obtained in this case. The respondent argued that authorities had discretion to base assessments on previous year's transactions without requiring turnover estimates or returns.

The Court held that the authorities cannot require turnover estimates or returns without prescribed rules, rendering the provision ineffective. It was emphasized that the assessing authorities must obtain turnover estimates or returns before determining tax based on the previous year's transactions. Ignoring the requirement for estimates before assessment was deemed incorrect, and the authorities were obligated to follow the prescribed procedure.

Conclusively, the Court ruled that the provisional assessment was made without jurisdiction and set aside the order of assessment. The judgment highlighted the necessity of following the prescribed procedure for provisional assessments under the amending Act. The parties were directed to bear their own costs, and the decision was agreed upon by both judges.