1967 (7) TMI 104 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the turnover was chargeable at a concessional rate of one per cent under section 3(3) of the Madras General Sales Tax Act.
2. Whether the failure to attach declarations in Form XVII to monthly returns affects the applicability of section 3(3).
3. Whether the rules framed under the Act can prescribe a time-limit for filing declarations.

Detailed Analysis:
1. The case involved the assessment of turnover for the year 1961-62 amounting to Rs. 71,225.21, where the petitioner claimed a concessional tax rate of one per cent under section 3(3) of the Madras General Sales Tax Act for sales of component parts. The revenue and the Tribunal disagreed, charging the turnover at six per cent. The key issue was whether the turnover was chargeable at the claimed rate. Section 3(3) allows a concessional rate for specified sales, subject to the dealer furnishing a declaration in the prescribed manner. The proviso mandates the dealer to furnish a declaration containing prescribed particulars. The State Government framed Rule 22, specifying Form XVII for such declarations.

2. The revenue and the Tribunal contended that since the declarations were not attached to the monthly returns as required by Rule 22, the concessional rate could not apply. However, the Court held that the failure to attach declarations to monthly returns did not preclude the dealer from availing the benefit of section 3(3) if the declarations were produced before the final assessment. The Court relied on previous judgments regarding similar provisions in the Central Sales Tax Act, emphasizing that the Act did not stipulate a time-limit for filing declarations.

3. The Court addressed the argument that rules could prescribe a time-limit for filing declarations under section 53 of the Act. It was held that the rule-making power did not extend to imposing a time-limit, as the Act's purpose, as determined from the proviso to section 3(3), did not mandate such a requirement. The Court rejected the contention that rules presented to the Legislative Assembly for approval carried the force of a statute, clarifying that legislative approval served as a check on delegated legislation without transforming the rules into legislative enactments.

In conclusion, the Court allowed the petition, emphasizing that the failure to attach declarations to monthly returns did not bar the petitioner from claiming the concessional rate under section 3(3) as long as the declarations were furnished before the final assessment. The judgment clarified the limitations of rule-making power and affirmed the importance of adhering to statutory provisions without imposing additional requirements not mandated by the Act.