1985 (8) TMI 344 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Interpretation of the expression "during the year" in Section 15(1) of the Andhra Pradesh General Sales Tax Act.
2. Authority of the assessing officer to make provisional assessments after the end of the assessment year.
3. Applicability of Section 15 to monthly returns in form A-2.

Detailed Analysis:

1. Interpretation of "during the year" in Section 15(1):
The primary issue was whether the phrase "during the year" in Section 15(1) of the Andhra Pradesh General Sales Tax Act should be interpreted as "within the year." The court examined the language of Section 15(1), which states: "The tax payable under this Act for each year may be provisionally assessed in advance during the year in monthly or other prescribed instalments on the basis of estimated or actual turnover of the dealer." The contention was whether this implied that provisional assessments must be completed before the end of the assessment year (31st March).

The court referred to the Division Bench decision in Ramu & Co. v. State of A.P., which held that "during the year" does not mean "within the year" and that the assessing authority is not prohibited from making provisional assessments beyond 31st March. The court noted that if the legislature intended to mandate completion within the year, it would have used the phrase "within the year."

2. Authority to Make Provisional Assessments After the Assessment Year:
The court addressed the argument that provisional assessments made after the assessment year are invalid. It cited Rule 17(1) of the A.P. General Sales Tax Rules, which requires dealers to submit monthly returns by the 25th of the following month. This implies that the return for March would be submitted in April, making it impractical to complete provisional assessments by 31st March.

The court emphasized that Section 15(3) allows for the tax provisionally assessed to be levied and collected "either in advance during the year in monthly or other prescribed instalments or at any time thereafter in one lump sum." This provision indicates that the legislature intended to permit provisional assessments and collections beyond the assessment year.

3. Applicability of Section 15 to Monthly Returns in Form A-2:
The Government Pleader argued that Section 15 applies only to annual turnover returns in form A-1 and not to monthly returns in form A-2. However, the court found that Rule 17(1) clearly requires monthly returns in form A-2 to be submitted, and these returns are subject to provisional assessment as per Section 15. The court concluded that Section 15(1) applies to both annual and monthly returns.

The court also addressed the argument that the word "may" in Section 15 should be read as "shall," making provisional assessments mandatory within the year. It rejected this interpretation, stating that such a construction would defeat the purpose of the provision, which is to prevent tax evasion and secure tax collection in advance.

Conclusion:
The court affirmed the Division Bench's view in Ramu & Co. v. State of A.P. and held that the phrase "during the year" in Section 15(1) does not mandate completion of provisional assessments within the assessment year. The assessing authority is not prohibited from making provisional assessments and collecting taxes beyond the year of assessment. The writ petitions were dismissed with costs.