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TMI Blog1965 (7) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner did not deposit the admitted amount of the tax. Ultimately on 31st October, 1964, without any prior notice to the petitioner, the Sales Tax Officer passed a provisional assessment order purporting to be under rule 41(3) of the rules framed under the U. P. Sales Tax Act for the quarter ending 30th June, 1964. In this assessment order it was stated that as the petitioner has failed to deposit the admitted amount of tax, the return filed by him is not in order and as such is rejected. The Sales Tax Officer then proceeded to assess the petitioner to the best of his judgment on a turnover of Rs. 10,60,000. On this turnover the tax liability came to Rs. 42,200. The petitioner was asked to deposit the same within 30 days of the receipt of the order. This order is sought to be quashed in Writ Petition No. 119 of 1965. Similarly the petitioner filed a return for the third quarter ending 30th September, 1964, showing a taxable turnover of Rs. 5,54,101.73p. on 28th October, 1964. The petitioner did not deposit the admitted tax which came to Rs. 22,067.78p. He applied for extension of time which was refused. Ultimately the Sales Tax Officer passed a provisional assessment order on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax at such reduced rates as it may fix. Under section 5 the State Government has been authorised to allow rebates up to full amount of tax in respect of any goods at any specified point in the series of sales of such goods. The tax is thus payable in respect of such turnover as taxable, that is to say, the turnover of the dealer after deducting therefrom the turnover in respect of goods and transactions referred to in sections 3-A, 3-AA, 4, 4-A and 5 of the Act. Section 7 of the Act provides for the determination of the turnover and the assessment of tax. It is the machinery section. It reads as follows: "7. (1) Every dealer who is liable to pay tax under this Act shall submit such return or returns of his turnover at such intervals, within such period, in such from and verified in such manner, as may be prescribed, but the assessing authority may in its discretion, for reasons to be recorded, extend the date for the submission of the return by any person or class of persons. (1-A) Before submitting the return under sub-section (1) or along with such return the dealer shall deposit in such manner as may be prescribed, the amount of tax due on the turnover shows in such r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whom sub-section (2) of section 18 applies shall submit such return within 30 days of the expiry of each month during the year in which the business is commenced. (2) Before submitting the return under sub-section (1), the dealer shall deposit in the treasury the amount of tax calculated by him on the turnover shown in such return and shall submit the treasury chalan with the return, or submit with the return a cheque for the amount so calculated. (3) If no return is submitted in respect of any quarter or months, as the case may be, within the period, or if the return is submitted without the treasury chalan or cheque, the Sales Tax Officer shall, after making such enquiry as he considers necessary, determine the turnover to the best of his judgment, provisionally assess the tax payable for the quarter or month as the case may be and serve upon the dealer a notice in Form XI; and the dealer shall pay the sum demanded within the time and in the manner specified in the notice. (4) Deleted. (5) Upon the expiry of the assessment year, the Sales Tax Officer shall, after such enquiry as he may deem necessary, determine the turnover of the assessment year and shall assess tax thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and must be interpreted so as to advance the object and scheme of the charging section. Section 7 cannot, therefore, be read so as to authorise the passing of any but one assessment order for each assessment year. Similarly the power conferred by section 7(3) to pass a best judgment assessment also is referable to the unit of assessment mentioned in section 3, namely, the assessment year. No best judgment assessment can be passed, under this subsection, for portions of the year. The requirements of section 7 that a dealer shall submit returns periodically in the course of the assessment year and that he shall deposit the admitted amount of tax deals with the method of calculation and payment, and does not change the nature of the tax which remains an yearly tax. The learned standing counsel submitted that the power to make a provisional assessment flows from the provisions of section 7-A also. This section provides that the State Government may require a dealer to submit a return of a portion of the assessment year and the assessing authority may make a provisional assessment in respect of such portion of the assessment year. Section 7-A does not provide for the assessment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Government can validly frame a rule with respect to the filing of returns contemplated by section 7-A. Similarly the phrase "any dealer" in the section does not prohibit the order or rule operating on several dealers or class of dealers at the same time. Rule 41 when it speaks of every dealer liable to pay tax under the Act, refers to each dealer, and is well within the provisions of section 7-A. Section 7-A requires a dealer to submit "a return" of his turnover of a "portion of the assessment year". Under the General Clauses Act singular includes plural. Therefore, the State Government can require the submission of more than one return for more than one portion of the assessment year. This is what rule 41 contemplates. It asks a dealer to submit a return for each quarter of the assessment year. With respect to the phrase "in so far as they may be made applicable", the section does not specify the authority which is to make the provisions of the Act applicable. This phrase is, therefore, susceptible to the interpretation that some external authority has to make an order applying particular provision of the Act to the proceedings under section 7-A. A reasonable interpretat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lid on this ground. The next submission of the learned counsel was that rule 41(3) was contrary to section 7(3) inasmuch as it did not provide for a reasonable opportunity mentioned in section 7(3) and was as such in conflict with it and void. As held above, rule 41(3) is not referable to section 7(3). Section 7(3) comes into play when the assessing authority proposes to pass the final order for the assessment year. As such it does not apply to assessment orders passed for portions of the year. Rule 41(3), therefore, cannot be tested on the anvil of section 7(3). But I am not satisfied that on its own terms rule 41(3) excludes a reasonable opportunity of being heard before a best judgment assessment is passed by the Sales Tax Officer. In a case where a return is not filed or where the return is filed without depositing the admitted tax, rule 41(3) requires that "the Sales Tax Officer shall after making such enquiry as he considers necessary determine the turnover to the best of his judgment................." An enquiry is contemplated. Assessment proceedings are quasi-judicial in nature. The principles of natural justice are attracted to it. It is incumbent upon the Sales Tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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