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TMI Blog1942 (6) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... is notice on you, in form S.T.I., enclosed herewith, a return of the turnover of your business for the said year. Further take notice that in case you fail to submit a return as requir- ed, the annual turnover of your business for the year 1940-41, for purposes of the Punjab General Sales Tax Act, 1941, will be determined without any further opportunity being given to you". The petitioner then submitted a petition to the District Taxation Officer. According to the order passed by that officer on the 21st March, 1942, the main points urged in that petition were: (a) that the Punjab General Sales Tax Act cannot have retrospec- tive effect, (b) that the turnover based on sales effected during a period prior to the enforcement of the Act ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er than an order on an appeal against an actual assessment) is the Financial Commissioner. I must therefore cancel the order of the District Taxation Officer dated the 21st March, 1942. I am further asked by the petitioner to declare the notice invalid and to cancel it and the subsequent proceedings, if any. The validity or at least the propriety of the notice depends on whether the Act authorises its issue, i.e., whether the Act contemplates a call for the annual turnover of 1940-41, or four times the actual turnover of any three consecutive months between the 1st April and the 31st December, 1941, in order to base the assessment of the tax, and its subsequent levy, for 1941-42 on these figures. This is in accordance with rule 5(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to rules which are to be treated as if within the enactment. In that case probably the enactment itself would be treated as the governing consideration and the rule as subordinate to it." I find it impossible to distinguish the case which is now before me from the case which was before the House of Lords so far as the point whether the rules are ultra vires or intra vires of the Act is concerned. I must therefore treat the rules as though they were part of the Act itself. I now turn to the point whether there is a conflict between rule 5 (3), on which the notice is based, and the other provisions of the Act [and in particular Section 8(2) mentioned in the heading of the notice] and, if so, to decide which is the governing considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregate amount for which goods were sold by him during the year 1940-41. Moreover, rule 5(3) contemplates the taxing of a dealer in the year 1941-42 on the aggregate amount for which goods were sold by him during 1940-41 and not taxing him on his hypothetical turnover for 1941-42 based on (and indeed equivalent to) his turnover for 1940-41 or in other words, the aggregate amount for which goods were sold by him during 1940-41 which, as I understand, is the contention by the counsel for the Crown. There is, it is to be noted, no provision in the Act or in the rules for any adjustment if at the end of 1941-42 it were found that his actual turnover for that year differed from that for 1940-41, and therefore the assessment for 1940-41 could n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a subsequent year. I now come to the second alternative given in the notice. Being an interpolation in the printed notice, the wording is not very clear but it can be taken as running "as the annual turnover of your busi- ness based on 4 times that of the 3 consecutive months between 1st April and 31st December, 1941, exceeds Rs. 5,000 (now Rs. 10,000), you are required to submit a return of the turnover for the said year." The said year must be 1940-41 as, on the 18th February, 1942, the petitioner clearly could not know his turnover for 1941-42 and also in the second paragraph of the notice he is warned that if he does not submit the return as required, the annual turnover for 1940-41 will be determined. I must hold this alternative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, and (b) that it is the actual turnover in a year and not the hypothetical turnover in a year which can be taxed. I hold further that in such matter it must be the provisions of the Act itself which should be the governing consideration and that the provisions of the rules must there- fore give way to those of the Act itself. Holding therefore that Sec- tion 8 read with Section 1(3) of the Act does not contemplate the sub- mission of a return for a year prior to the 1st April, 1941, and the assessment and levy of a tax on the basis of it, I hold that the notice was invalid. In taking this view I would add that if the intention of the notice had been to base an advance assessment on the return and to have a subsequent adjustment i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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