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TMI Blog1970 (10) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... : "Under sub-rule (3) of rule 41 the Sales Tax Officer is empowered to make an assessment to the best of his judgment when no return is submitted or when a return is submitted but is not accompanied by a treasury chalan in proof of the deposit in the treasury of the amount of tax calculated by the dealer on the turnover shown in such return or by a cheque for that amount. The dealer is required to calculate the tax payable in accordance with the prescribed rate. Neither subrule (2) nor sub-rule (3) provides that a treasury chalan or cheque need accompany the return only when the dealer admits liability for the tax. These sub-rules require the payment of tax (or its deposit in the treasury) on the turnover shown by the dealer in his return and they do not authorise the dealer to withhold payment of tax on the ground that he is not liable therefor. In the present case the return submitted by the petitioner was not accompanied by a treasury chalan or cheque. I am therefore of opinion that the Sales Tax Officer was-assuming rule 41 to be valid-free to determine the turnover of the petitioner to the best of his judgment, and provisionally to assess the tax payable by the petitioner for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the court have been decided by one Full Bench and another Full Bench is inclined to take a contrary view. In such cases the matter must be referred to a larger Bench for reconsideration, but this rule cannot be applied to such expression of opinion which falls in the category of obiter dictum, not binding even on a single Judge of the court. With regard to obiter dictum it has often been observed that it is not binding even on the subordinate courts, though the expression of opinion must be given due respect depending upon the court which made the observations and also depending upon whether the opinion was expressed casually or on consideration of all the aspects arising in the case. The above question, in one way, determines the jurisdiction of this Full Bench, and it shall but be proper that we should clearly express our opinion why we regard the observations made in the above Full Bench case as obiter dicta which cannot be used as a precedent on the interpretation of rule 41 of the U.P. Sales Tax Rules (to be referred hereinafter as the Rules). In section 29 of Salmond on Jurisprudence, Twelfth Edition, rules determining ratio decidendi have been indicated. It can, broadly spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases....................... Nor is it very helpful where a court gives several reasons for its decision. In such cases we could reverse each reason separately and the decision would remain unaltered, since it could still rest on the other grounds...... Quite often, in fact, where a case is argued on several grounds the judge will decide it on one of these and merely indicate his views on the remaining points, so that here his first proposition of law alone will constitute the ratio. Sometimes, however, he will declare that he is deciding the case on more than one ground, and here each proposition on which he bases the decision will qualify as a ratio." Consequently, where the case is decided in favour of the petitioner on grounds more than one, but on certain points a finding is recorded against him, on the application of the reversal test, the decision on the main question, if apparent from the judgment, would be ratio decidendi, otherwise all the grounds in support of the decision would be ratio decidendi; but the point on which a finding is given against the petitioner would not be a ratio decidendi and shall be mere obiter dictum considering that the reversal of the finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Dew v. United British Steamship Co., Ltd.[1928] 139 L.T. 628.: "..........................It is of course perfectly familiar doctrine that obiter dicta, though they may have great weight as such, are not conclusive authority. Obiter dicta in this context means what the words literally signify, namely, statements by the way. If a judge thinks it desirable to give his opinion on some point which is not necessary for the decision of the case, that of course has not the binding weight of the decision of the case and the reasons for the decision." Thereafter the statement of the law in Halsbury, Volume XIX, at page 251, was quoted and it is as below: "It may be laid down as a general rule that that part alone of a decision of a court of law is binding upon courts of co-ordinate jurisdiction and inferior courts which consists of the enunciation of the reason or principle upon which the question before the court has really been determined. This underlying principle which forms the only authoritative element of a precedent is often termed the 'ratio decidendi'. Statements which are not necessary to the decision, which go beyond the occasion and lay down a rule that is unnecessary for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been raised in the case, and is not really present to the judge's mind. Such dicta, though entitled to the respect due to the speaker, may fairly be disregarded by judges before whom the point has been raised and argued in a way to bring it under much fuller consideration. Some dicta, however, are of a different kind; they are, although not necessary for the decision of the case, deliberate expressions of opinion given after consideration upon a point clearly brought and argued before the court. It is open, no doubt, to other judges to give decisions contrary to such dicta, but much greater weight attaches to them than to the former class." The well-recognised principle of interpretation accepted by the courts in England, therefore, is: "Any judgment of any court is authoritative only as to that part of it, called the 'ratio decidendi', which is considered to have been necessary to the decision of the actual issue between the litigants. It is for the court, of whatever degree, which is called upon to consider the precedent, to determine what the true ratio decidendi was........................Judicial opinions upon such matters, whether they be merely casual, or wholly gratuito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Such observations cannot amount to a precedent, that is, ratio decidendi; they would be obiter dicta which can be disregarded by another judge, though the observations made by a higher court or even by a Bench of a larger number of judges must be given due respect and departure therefrom made on good grounds after detailed consideration of the provisions of the law and the rules. Difficulty arises only when observations have been made after detailed consideration on points which were not necessary to the decision of the case. Where there has been no detailed comments on the provisions of the enactment and the rules, formal expression of opinion on points not necessary to the decision of the case, can be placed in the same category as casual observations and they shall be obiter dicta not binding on other courts, all the more, a court constituted with the same number of judges. Even when the points not necessary to the decision of the case are decided after detailed consideration of the provisions of the law, they can be regarded as the considered expression of opinion by the judges but in other respects would fall in the same category as casual observations not necessary to the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the finding on the above question contained in para. 38 of the report of the Full Bench case of Messrs Adarsh Bhandar v. Sales Tax Officer, Aligarh[1957] 8 S.T.C. 666; A.I.R. 1957 All. 475., cannot be placed in the category of a precedent binding on other Benches, all the more, on a Full Bench with a similar strength. It is not a ratio decidendi, but is mere obiter dictum which cannot be used as a precedent in other cases. When this finding cannot be deemed to be a judicial pronouncement having the force of a binding precedent, the matter can be reconsidered by this Full Bench without recourse to a reference to a still larger Bench. This view is in consonance with the observations in Atma Ram and Others v. State of Punjab and OthersA.I.R. 1959 S.C. 519. Their Lordships of the Supreme Court had advised reference to a larger Bench where a Full Bench of three Judges was inclined to take a view contrary to that of another Full Bench of equal strength so that the subordinate courts may not be placed under the embarrassment of preferring one view to another, both equally binding upon them. When the expression of opinion by the earlier Full Bench does not have the force of a binding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Sales Tax thereof. Officer shall, after making such (3) If no return is submitted by enquiries as he considers necessary, the dealer under sub-section (1) determine the turnover to the best within the period prescribed in that of his judgment, provisionally assess behalf or, if the return submitted by the tax payable for the quarter or him appears to the assessing authothe month, as the case may be, and rity to be incorrect or incomplete, serve upon the dealer a notice in the assessing authority shall, after Form XI and the dealer shall pay making such inquiry as he considers the sum demanded within the time necessary, determine the turnover of and in the manner specified in the the dealer to the best of his judgnotice. ment and assess the tax on the basis thereof: (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 the tax thereon. (6) If the tax assessed differs from the total amount deposited or paid by cheque, the difference shall be realized or refunded by the Sales Tax Officer, as the case may be. Before making comments on the questions of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n such period, and in such form as may be prescribed. Sub-section (1-A) makes it necessary to deposit the amount of tax due on the turnover shown in the return either before submitting the return or along with the return. If the assessing authority is satisfied as to the correctness of the return, he can under sub-section (2) assess the tax on its basis; otherwise under sub-section (3), if no return is submitted or if the return submitted appears to be incorrect or incomplete, the assessing authority can, after such enquiry as may be considered necessary, determine the turnover of the dealer to the best of his judgment and can assess the tax on the basis of such turnover. The assessing authority acts under sub-section (3) when no return is submitted or if the return appears to be incorrect or incomplete, and this has no reference to the deposit of the tax prescribed under sub-section (1-A). Whatever action is taken, is for regular assessment, and not for provisional assessment. It is rule 41 which makes a provision for a provisional assessment. Subsection (1) of section 7 corresponds to sub-rule (1) of rule 41. In fact, this sub-rule prescribes the intervals, the form and also the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the best of his judgment. Sub-rules (5) and (6) of rule 41 govern the annual assessment. Subrule (5) shall correspond to sub-sections (2) and (3) of section 7, and consequently if the returns submitted are correct and complete, the assessing authority shall assess the tax on such turnover and on rates which he considers to be applicable; but if the returns are incorrect and incomplete, he can determine the turnover to the best of his judgment and assess the tax on such turnover on such rates as he considers applicable. It is under sub-rule (6) that adjustment of the tax shall be made by realising the amount not already deposited or paid by cheque or by refunding the amount deposited or paid in excess. The amount already deposited or paid, contemplated by sub-rule (6), shall be the amount calculated by the dealer himself and deposited or paid under sub-rule (2). Had rule 41 not been incorporated, all the assessments, whether made at the end of the year, or in respect of any quarter or month, would have been final assessments subject to adjustment, if necessary, at the time of the annual assessment, but rule 41 makes a distinct provision for provisional assessment. The rule also br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act the words used are "shall pay a tax at the rate of", but these words are suffixed by another expression "which shall be determined in such manner as may be prescribed". A tax cannot be said to be due unless the amount of tax has been determined. The tax is determined by the assessing authority as a result of the assessment at the end of the year, or it may be determined by the assessee himself under section 7(1-A) of the Act or under rule 41 of the Rules, as the case may be. In other words, section 3 of the Act, like section 3 of the Rajasthan Sales Tax Act, merely places a liability to pay tax, while the tax actually payable is determined later either by the assessing authority or by the dealer himself. In connection with section 7(2) of the Rajasthan Sales Tax Act, which is similar to section 7(1-A) of the Act and rule 41(2) of the Rules, their Lordships observed as below: "Section 3, the charging section, read with section 5, makes tax payable, i.e., creates a liability to pay the tax. That is the normal function of a charging section in a taxing statute. But till the tax payable is ascertained by the assessing authority under section 10, or by the assessee under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was emphasized in Jaipur Udyog Ltd. and Another v. Commissioner of Income-tax, Delhi and Rajasthan, and Another[1969] 71 I.T.R. 799 (S.C.). and Roshan Lal Kuthiala v. Income-tax Officer, Special Investigation Circle, Ambala [1966] 62 I.T.R. 558., and it was held in the former case: "The section does not permit an enquiry to be made whether the total income returned by the assessee exceeds the amount admitted by him, nor whether the allowances or deductions claimed are admissible. If there be a discrepancy between the return made and the accounts and documents accompanying the return, the Income-tax Officer may ask the assessee to explain the discrepancy, but he must make a provisional assessment on the basis of the return initially made or clarified and the accounts and documents filed. He cannot make a provisional assessment by holding that certain claims made by the assessee are in law unjustified. If it transpires that the assessee has without reasonable cause concealed particulars of his income or has furnished inaccurate particulars of his income, it may be open to the Income-tax Officer to impose penalty upon him after the regular assessment is completed. But it is not ope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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