STATE OF TAMIL NADU Vs. BALL BEARING CENTRE

JUDGEMENT

(1.) THIS tax revision petition has been filed against the order of the Sales Tax Appellate Tribunal dated 22nd December, 1973. For the assessment year 1971-73, the assessee reported a total and taxable turnover of rs. 46, 733. 60 and Rs. 45, 199. 14 respectively. The Assistant Commercial Tax officer noticed certain defects, rejected the turnover as per accounts and determined the turnover to the best of his judgment at Rs. 56, 398. 92, under section 7 of the Madras General Sales Tax Act, making an addition of 25 per cent. to the book turnover. The assessee filed an appeal before the Appellate assistant Commissioner who upheld the rejection of the accounts but he sustained only an addition of 12 1/2 per cent. to the book turnover and refixed the taxable turnover at Rs. 50, 759. 03. Against the order of the Appellate assistant Commissioner, the assessee appealed to the Tribunal. The turnover disputed in the appeal was Rs. 5, 639. 89 and the tax due on the disputed turnover was Rs. 922. 58. The assessee had opted for assessment under section 7 of the Act by letters dated 1st August, 1972, and 4th September, 1972. The assessing authority accordingly assessed the assessee under section 7 of the act. On appeal, the Appellate Assistant Commissioner revoked the assessment made under section 7 of the Act and directed the assessment under section 3 (1)of the Act, because rule 15 (4-B) of the Tamil Nadu General Sales Tax Rules had been deleted by an amendment made to the Rules. The assessee questioned this part of the order of the Appellate Assistant Commissioner before the Sales Tax appellate Tribunal. According to the assessee, the deletion of rule 15 (4-B) had not deprived the right to have the option exercised within a reasonable time and the right having vested in the assessee on 1st May, 1971, could not be taken away from the assessee retrospectively. It was this contention which found favour with the Tribunal. The Tribunal held that the assessee, having exercised the option for assessment under section 7 within a reasonable time, was eligible for assessment under that provision. It is this order of the Sales tax Appellate Tribunal which is now sought to be questioned in the present revision filed by the State. The learned Additional Government Pleader submitted that the result of the repeal of rule 15 (4-B) read with the relevant provisions in the statute as interpreted in the decisions would only go to show that the assessee had to exercise the option before the 1st of May in each year, that, in the present case, the option should have been exercised on or before 1st may, 1971, and that the option, not having been exercised by that time, that was no question of section 7 applying to the assessee at all. It is this contention which requires to be examined.

(2.) SECTION 7 provides that, notwithstanding anything contained in sub-section (1) of section 3, every dealer whose total turnover is not less than fifteen thousand rupees but not more than seventy-five thousand rupees, could at his option instead of paying the tax in accordance with the provisions of that sub-section, pay the tax at certain rates specified under section 7 (1 ). SECTION 7 (2) provided that any dealer who estimates his total turnover for a year to be not more than seventy-five thousand rupees may apply to the assessing authority to be permitted to pay the tax under section 7 and, on being so permitted, he shall pay the tax in advance during the year in monthly or prescribed instalments and for that purpose shall submit such returns in such manner as may prescribed. The permission granted to the assessee by the assessing authority would continue in force so long as the assessee is eligible to be assessed under that provision, i. e. , so long as the turnover did not exceed the amount specified in the provision and so long as the assessee had also not withdrawn the option. Sub-section (3) of section 7 provides that the tax paid under sub-section (2) shall be subject to such adjustment as may be prescribed on the completion of final assessment in the manner prescribed. Rule 15 provides for the submission of returns by the assessee. Every dealer liable to submit a return had to, on or before the 1st day of May in every year, submit to the assessing authority of the area in which his principal place of business was situate a return in form A-1 showing the actual total and taxable turnover in the preceding year and the amounts by way of tax or taxes actually collected during that year. The proviso to sub-rule (1) of rule 15 states that a dealer who opts to pay tax at compounded rates under section 7 shall submit a return in form AA-1. Sub-rule (4-A) of rule 15 provides that if a dealer who is eligible to pay tax at the compounded rate laid down in section 7 is desirous of being assessed on a provisional basis from the commencement of any year, at the rates laid down in that section, he shall before the 1st May of each year or if the return referred to in sub-rules (1) to (3) of this rule was submitted earlier along with that return, intimate his desire to the assessing authority to be so assessed. It further provides that the option so exercised shall be valid for the year of assessment and be continued so long as the dealer was found eligible to be assessed under section 7 and had not withdrawn the option and that the change-over to this method of assessment shall not be permitted in the course of a year. Sub-rule (4-B), which was in force, at any rate, during a part of the year, provided that a dealer who was eligible for payment of tax at the rates laid down in section 7 but who had not exercised the option to be assessed under that section as provided in sub-rule (4-A) in respect of any year, shall, if he desired to avail himself of payment of tax at the compounded rates laid down under that section for that year, exercise his option to be as assessed at the time of submitting the annual return prescribed in sub-rules (2) and (3) of rule 15 or at any time before the final assessment for the year and that the option once exercised under this rule shall be final in respect of that year. There is another provision in rule 18 (1) providing for filing of monthly return. That rule specifically states that it would apply only to a case where a dealer had not opted to pay the tax under section 7. We have, therefore, to rule out of consideration rule 18 in the context of the present case.