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1959 (12) TMI 34 - HC - VAT and Sales Tax
Issues:
Provisional assessment under Mysore Sales Tax Act, 1957 for the year 1959-60. Analysis: The civil petition challenged the provisional assessment made by the Assistant Commercial Tax Officer under the Mysore Sales Tax Act, 1957 for the year 1959-60. The petitioner, an assessee, was asked to provide an advance estimate of turnover for the year, which was stated as Rs. 15,000. The Commercial Tax Officer, after considering this estimate and a declared turnover of Rs. 18,000 for the previous year, provisionally assessed the turnover at Rs. 30,000, subject to tax under section 5(1) of the Act. The tax payable was calculated at 2% of the turnover, amounting to Rs. 600. This assessment was carried out under rule 16(b) of the rules made under the Act, which allows for assessment to the best of the assessing authority's judgment in case of incorrect or incomplete returns submitted by the dealer. The assessing authority, in this case, disregarded both the estimate provided by the dealer and the transactions from the previous year, opting for a best judgment assessment under rule 16(b). However, the Court held that this action was not within the authority of the assessing officer. Section 5(8) of the Act specifically directs the assessing authority to base the tax determination on either the estimate provided by the dealer or the transactions from the previous year. The Court rejected the argument that the assessing authority could independently estimate the turnover, stating that rule 16(b) allowing such estimation is inconsistent with the Act and therefore invalid. The Court emphasized that section 5(8) and section 12(2) of the Act require the tax assessment to be based solely on the estimate furnished by the dealer or the transactions from the previous year. Any other basis for assessment is not permitted under the Act. Consequently, the provisional assessment made by the Assistant Commercial Tax Officer was set aside, and the officer was directed to conduct a fresh assessment in compliance with the law. The Court allowed the petition, with no order as to costs.
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