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TMI Blog1970 (5) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to deposit the deficiency on demand?" The dealers carry on business in foodgrains. They applied under rule 20-13(a) of the U. P. Sales Tax Rules for exemption from sales tax, the applications being made on different dates. One of them, M/s. Basdeo Ram Manohar Lal, applied for exemption for the assessment year 1958-59, while the rest applied for exemption for the assessment year 1957-58. With the exemption application each dealer deposited an amount towards the exemption fee purporting to be in compliance with rule 20-13(a). The Sales Tax Officer took up the exemption applications after the close of the assessment year and holding that the deposit made by each dealer fell short of the true amount which he should have deposited, he rejected the exemption applications and assessed each dealer to sales tax by virtue of rule 23. The dealers appealed but without success. Thereafter, they applied in revision, and the revision applications were allowed by the Additional Revising Authority who took the view that rule 20-13(a) was merely directory in nature and that the failure to deposit the instalment of the exemption fee contemplated by that provision was not fatal to the exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with a notification issued under section 4, shall submit to the Sales Tax Officer an application for exemption in form V, which, unless otherwise provided, shall be presented within thirty days of the commencement of the year for which it has been made, and shall be accompanied by a treasury chalan showing deposit of one-fourth of the exemption fee calculated on his turnover of the previous year: Provided that the exemption fee for the year ending March 31, 1957, shall, when business has been done during the whole year, be calculated on the basis of the turnover for the period from April 1 to December 31, 1956, increased by one-fourth thereof, and three-fourths of the exemption fee so calculated shall be paid before submitting the application and the remaining one-fourth by April 30, 1957. (b) If a dealer in foodgrains commences business after the issue of the notification under section 4, or has not done business in foodgrains during the whole of the year 1956-57, he shall estimate his turnover for the period from the date of commencement of business up to the end of the assessment year and shall calculate exemption fee thereon. The fee so calculated shall be di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer under sub-rule (i), or if any such amount found due is paid within the period fixed by the Sales Tax Officer, the Sales Tax Officer shall pass an order declaring the exemption certificate issued under sub-rule (e) final." After carefully considering the relevant provisions of the Act, the notification and the Rules it appears to me that the requirement of rule 20-13(a) that the dealer should deposit one-fourth of the exemption fee calculated on his turnover of the previous year within thirty days of the commencement of the year for which he claims exemption is a mandatory provision if exemption is to be granted for the entire assessment year. There are several considerations which persuade me to that view. The claim is to exemption from tax. Before exemption can be claimed the person claiming exemption must strictly fulfil the conditions underlying the grant of exemption and comply with all the requirements necessary before such grant is made. In a number of cases of registration of partnership firms under the Income-tax Act, where upon such registration the benefit of lower rates of tax becomes available, the Supreme Court has held that if a firm desires to have such be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealer must indicate therein the entire exemption fee payable for the assessment year and further state that he has deposited the total first instalment of the exemption fee. Significantly, the information furnished in the application must be verified by the dealer as true and complete to the best of his knowledge and belief. Apart from the application being in order, the fee must also have been correctly calculated. If the fee is found to be correctly calculated, it will be possible to know whether the amount deposited fulfils the requirement in that regard contained in rule 20-B(a). Then follows the form of the provisional exemption certificate, which is form VI-A. It certifies that the dealer has been fully exempted from payment of tax for the period mentioned therein, that he has deposited the first instalment of the exemption fee and states that he is bound to deposit further instalments on or before July 31, October 31 and January 31 following. The requirement of payment of further instalments with reference to these dates is in obedience to rule 20-B(c). The certificate contains the warning that failure to deposit the instalments on due dates will render the exemption liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Indeed when the two schemes are compared it will be discovered that there is close identity in the pattern of the two schemes. Rule 41 also envisages the payment of sales tax provisionally in quarterly instalments on or before specified fixed dates followed by consequential adjustments upon an assessment order made at the end of the assessment year determining the final tax liability. In both the cases, the quarterly deposits are facilitated by making their determination depend on an easily referable basis. In the case of rule 20-B it is ordinarily the turnover of the previous assessment year, and in the case of rule 41 it is the turnover of the relevant quarter of the assessment year. Upon the aforesaid considerations, I am of the opinion that to obtain exemption from tax for the entire assessment year it is incumbent upon the dealer to make the exemption application within thirty days of the commencement of the year and also to deposit within that period one-fourth of the exemption fee calculated on the turnover of the previous year. I am supported in this view by the decisions of this court in Shyam Lal v. Assistant Sales Tax Officer[1962] 13 S.T.C. 1019., M/s. Ram Gopal S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e U.P. Sales Tax Act and the Rules made thereunder. Being a creature of the statute, the assessing authority is armed with such jurisdiction only as has been expressly conferred on him or can be spelled out by necessary intendment. There is nothing in the Act or in the Rules authorising the assessing authority to demand from the dealer the deficiency in the deposit of the first instalment. The first part of the second question is, therefore, answered in the negative. Accordingly, no answer need be returned to the second part of the question. The third question is whether, in a case where the deposit of the first instalment is deficient, the assessing authority can, upon the expiry of the assessment year, make an order determining the exemption fee under rule 20-B(h) and demand the deficiency by reference to rule 20-B(i). In the view taken by me in regard to the essential features of the scheme under rule 20-B, I find it difficult to hold that although only the first instalment has been deposited, and that even not in full measure, the benefit of the exemption can be granted to the dealers by following the procedure contained in clauses (h) and (i) of rule 20-B. I would answer the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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