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TMI Blog1998 (11) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... ed without prior permission of the Commercial Tax Officer (CTO), the concerned assessing authority, who however was later intimated about the change and the registration certificate was amended on February 5, 1988 incorporating the change. With the permission of the Registrar of Companies a consolidated profit and loss account was made for the two periods, viz., from July 1, 1986 to June 30, 1987 and the broken year from July 1, 1987 to October 31, 1987. The CTO made assessments for 1986-87 ending on June 30, 1987, for the broken year for the period from July 1, 1987 to October 31, 1987 and for the next assessment year ending on October 31, 1988. For the assessment of the broken year ending on October 31, 1987 (covering the 4 months from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 months. The applicant has also prayed for other consequential reliefs. 3.. The respondents stand as set-forth in their affidavit-in-opposition is that the assessing authority rightly assessed the turnover tax at the rate of 1.5 per cent for the broken period because the assessment period relates to the broken part of the period of 16 months ending on October 31, 1987 and there is no substance in the company s claim that the new accounting year from November to October commenced on July 1, 1987 and that since during the accounting year from July, 1987 to June, 1988 the gross turnover exceeded Rs. 1 crore the turnover tax at the rate of 1.5 per cent was proper one. On the said ground the respondents defend the order of the respondent No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggregate of the gross turnover under the 1941 Act and the 1954 Act exceeds Rs. 1 crore, and (b) such aggregate gross turnover means the aggregate turnover in course of a year- (i) in course of which, or (ii) part of which, the turnover tax is levied. 5.. Therefore, it is the aggregate of the gross turnovers under the 1941 Act and the 1954 Act that will determine the rate of turnover tax. Again for fixing the rate of turnover tax for assessment in respect of a whole accounting year the aggregate gross turnover referred to above, of the said whole year is to be considered. On the other hand, if the assessment is in respect of a part of an accounting year, even then the rate of tax will be determined on the basis of aforesaid gross tur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of clause (aa) of sub-section (3) of section 6B. Based on this argument he contends that since during the said 4 months the gross turnover, as specified in sub-section (2) of section 6B, of the company did not exceed Rs. 1 crore the turnover tax cannot but be at the rate of 1 per cent. But we find no reason to hold that the CTO accepted July 1, 1987 as the date for switching over to an accounting year corresponding to November-October. Nor can it be said that CTO could really accept such date according to law. Firstly, the provision of section 2(j), which defines the term year , lays down that with the previous permission of the competent authority a dealer can change his year. Again, since the CTO passed his order only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dar year or the year adopted by a dealer for maintaining his books of accounts and declared by him accordingly. Unless this be the position the expression previous permission as appearing in section 2(j) would be rendered meaningless. (underscorings done to lay emphasis). 7.. Secondly , according to the resolution of the Board of Directors the company (vide annexure to the application at page 25) intended a consolidated annual accounts for the 16 months ending on October 31, 1987. Section 210 of the Companies Act, 1956 provides for preparation of such consolidated accounts to effect such change-over of the accounting year. If such consolidated period is also resorted to for the purpose of calculating the rate of turnover tax under the 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober. Undisputedly, the company s taxable aggregate turnover exceeds Rs. 1 crore during the year from July, 1987 to June, 1988. In view of the specific legal position spelt out in clause (aa) such hypothetical calculation of taxable aggregate turnover for the whole year for the purpose of fixing the rate of turnover tax is mandatory. The change-over of the accounting year corresponding to November-October actually effective from November 1, 1987 will not protect the company from its liability to pay turnover tax at the rate of 1.5 per cent. 8.. Accordingly, we hold that the assessing authority had not committed any mistake in fixing the turnover tax at 1.5 per cent for the concerned broken Here italicised. period and the assessment f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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