9911796707
TMI Blog1953 (11) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... registered as such manufacturers. For the year 1946-47 the respondent submitted a return showing their net sales for the period ending with 31st March, 1947, and also produced the accounts as directed by the Deputy Commercial Tax Officer. After allowing the necessary deductions and exemptions, the Deputy Commercial Tax Officer duly assessed the respondent company to sales tax for the year 1946-47 in the sum of Rs. 37,151-14-9 and the tax due thereon was paid. For the year 1947-48, the respondent company did not file the monthly returns as required by the rules and, in con- sequence thereof, a provisional assessment notice was issued to the res- pondent-company on the basis of the net turnover for 1946-47. The respondent-company were thereafter called upon by the Deputy Com- mercial Tax Officer to submit a return in Form "A" and the same was submitted on the 30th April, 1948. In that return, the respondent-com- pany showed their turnover to be Rs. 2,68,716-8-10 for oil only. While submitting this return, the respondents claimed deduction of the value of groundnut crushed in the sum of Rs. 2,62,046-11-9 under rule 18(2) of the Madras General Sales Tax (Turnover and Assessment) Rules. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a complete code of remedies by way of appeal and revision to the aggrieved party, that, as the respondents did not submit the monthly returns as required by rule 18(3) of the Madras General Sales Tax (Turnover and Assessment) Rules for any of the months during the assess- ment year 1947-48 and did not also furnish the particulars in Form A9, the respondents were not eligible for any of the reliefs claimed by them, that rule 18(3) of the Madras General Sales Tax (Turnover and Assess- ment) Rules under which monthly statements had to be submitted was mandatory, that, under rule 5(1)(k), any claim for exemption was subject to the conditions specified in rule 18 and that therefore the respondents were not entitled to question the legality of the order of the Deputy Commercial Tax Officer, in his having disallowed the deduction claimed by the respondents. On these pleadings, the learned Second Additional City Civil Judge framed three issues for determination and they are: (1) Whether the Civil Court had jurisdiction to try the suit; (2) Whether the right claimed by the respondents under rule 18(2) for exemption for the value of the groundnut purchased by them was an absolute right w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority in determining the net turnover. In both the rules 5(1) and 5(1)(k) it has been specified that the deductions allowed under sub-rules (a) to (k) shall be subject to the conditions specified therein and in sub-rule (k) it is further provided that such deductions shall be under rule 18 subject to the conditions specified in that rule. Rule 18(1) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, is to the following effect: "Any dealer who manufactures groundnut oil and cake from groundnut and/or kernel purchased by him may, on application to the assessing authority having jurisdiction over the area in which he carries on his business, be registered as a manufacturer of groundnut oil and cake." It is common ground as already stated that the respondents in this case have made the necessary application to the assessing authority and have been registered as manufacturers of groundnut oil and cake. Therefore, they have complied with the condition prescribed in rule 18(1) of the rules. Rule 18(2) is to the effect that every such manufacturer shall be entitled to a deduction under clause (k) of sub-rule (1) of rule 5 equal to the value of the groundnut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsist upon the requirements of rule 18(3) being complied with, but straightaway took into consideration the accounts and the statements submitted by the respondents as correct and allowed the deductions for the purchase of groundnuts. Even for the previous year, no such insist- ence seems to have been made by the Deputy Commercial Tax Officer in the matter of assessing the sales tax due from the respondents. Sub-rule (3-A) of rule 18, however, gives power to the Commercial Tax Officer, in his discretion, to condone the delay or omission, or both, in the matter of the submission of the statement in Form A9 referred to in sub-rule (3) or the furnishing of the particulars required by that Form A9. It is argued by the learned counsel for the respondents that, in so far as the Deputy Commercial Tax Officer did not insist upon the strict compliance by the respondents of the requirements of rule 18(3) in the matter of the submission of the statement in Form A9 and the particulars required by that form, but proceeded straightaway to levy the assessment of sales tax in respect of the net turnover shown by the respondent-company for the year 1947-48, he must be deemed to have condoned not me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Officer to condone only the mere delay in the submission of the returns in Form A9 from month to month or the omission of the particulars to be mentioned in Form A9. On the other hand, I am of the opinion that when power is given to condone the delay and also the omission to furnish the statement or the particulars required in that statement, it would not be doing any violence to the language of the said rule (3A) to infer by implication that the Commercial Tax Officer has also the power to condone any total failure to submit the statement or the particulars required in that statement in Form A9. I am therefore of the view that the action of the Deputy Commercial Tax Officer in not having insisted upon the fulfilment of the requirements of sub-rule (3) of rule 18 in the first instance, when he proceeded to make the provi- sional assessment of sales tax as against the respondent-company, must be deemed to have been a condonation of the total failure on the part of the respondent-company to submit the statement or the particulars in form A9 required as per sub-rule (3A) of rule 18, and that he was well within his power to do so. Sub-rule (3A) of rule 18, as has been urged by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, the assessee will not be entitled to claim any deduction in respect of the value of the groundnuts purchased by him. The language used is "subject to the conditions specified in that rule" and when the language itself described the requirements to be complied with under rule 18 to be conditions, it is not open to the res- pondents to argue that they are merely a matter of procedure or that they are directory in character, the non-compliance of which will not dis- entitle the assessee to the exemptions claimed by him. The learned Government Pleader contends that the exemption that is intended to be allowed in favour of the assessee in the matter of deductions in respect of the value of the groundnuts purchased is not, as a matter of right, to be availed of by the assessee without fulfilling the conditions stipulated in sub-rule (k) of rule 5(1), which, in turn, refers to the conditions men- tioned in rule 18. Rule 18 lays down a series of conditions to be com- plied with by the assessee. In the first place, it requires that the assessee should be registered as a manufacturer of groundnut oil and cake. This is covered by rule 18(1). In the second place, rule 18(2) provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he effect that the exemptions and the concessions that are intended by the specific language of the rules of the enactment could not be availed of by the assessee unless and until the assessee complies with every one of the requirements, it will not be legal or within the rules of proper inter- pretation of the statutory enactment to infer that the assessee should be penalised and should be deprived of the benefits given to him as a substantial right. The question then arises as to whether the right to claim exemption given under rule 18 (2) is absolute and substantive or whether it is con- ditional upon other factors such as those mentioned in the other sub- clauses of rule 18. Though it is vehemently contended by the learned Government Pleader for the State that this right to claim exemption is only conditional upon the assessee fulfilling certain requirements, still I do not think that there is sufficient warrant for this contention. The learned Government Pleader further relies upon the terminology employ- ed in rule 5(1)(k) and the sub-cls. (3) and (3A) of rule 18. In my view, these rules do not seem to support the view put forth by the learned Government Pleader. Rule 5(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he intention of the rule-making authority that the deduction should be allowed only if and when sub-rule (3) of rule 18 was fully com- plied with. Therefore, if these rules are only intended to be directory in their nature and not as conditions precedent to the assessee being allowed the deductions claimed by him in respect of the value of groundnut purchased, there is no reason why the assessee should not be entitled to the deductions, if he has otherwise substantially complied with all the other requirements of rule 18, which is the fact in the present case. In Craies "On Statute Law" (5th Edn.), the learned author, at pages 240 and 241, has drawn the distinction between absolute enactments and directory enactments and has observed that the difference between the two is, as explained in Woodward v. Sarsons(1) that, "an absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled substantially." The learned author proceeds to observe that the act permitted by an absolute enactment is lawful only if done in accordance with the condi- tions annexed to the statutory permission. Under the heading "absolute enactments" the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed." "In Howard v. Bodington(2), Lord Penzance, after citing this dictum of Lord Campbell, added as follows: 'I believe, as far as any rule is concerned, you cannot safely go further than that in each case you must look to the subject matter, consider the importance of the provision and the relation of that provision to the general object intended to be secured by the Act, and upon a review of the case in that aspect decide whether the enactment is what is called imperative or only directory......I have been very carefully through all the principal cases, but upon reading them all the conclusion at which I am constrained to arrive is this, that you cannot glean a great deal that is very decisive from a perusal of these cases. They are on all sorts of subjects. It is very difficult to group them together, and the tendency of my mind, after reading them, is to come to the conclusion which was expressed by Lord Campbell in the case of Liverpool ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - tion twice over would be clearly defeated. Further, the Madras General Sales Tax Act being a fiscal enactment and the rules framed thereunder also partake of the same character, the words of the statute should be strictly adhered to and no construction such as would favour the Government as against the subject should be put thereupon. In the matter of taxation as laid down in Attorney- General v. Selborne (Earl of)(1) and Brunton v. Commissioner of Stamp Duties for New South Wales(2), the interpretation of statutes involving fiscal measures cannot be such as to enure to the benefit of the State and to the disadvantage of the subject. On the other hand, they should be so interpreted as not to cause any undue advantage either to the State or disadvantage to the subject. It will not also be proper to draw inferences unfavourable to the subject from ambiguous terms in the matter of taxing enactments. It has however been pointed out by the learned Government Pleader that if the contention of the respondents in this case is to be accepted, all the rules framed by the Government under the General Sales Tax Act will become ineffective. I do not think that there is force in this con- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
