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State of Madras (Now the State of Andhra Pradesh) Vs. Kasam Ayub - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Judge
Reported in[1959]10STC190(AP)
ActsMadras General Sales Tax Act, 1939 - Sections 12B(1); Madras General Sales Tax Rules, 1939 - Rule 9; Madras General Sales Tax (Turnover and Assessment) Rules, 1939 - Rules 7, 8, 9 and 18(3)
AppellantState of Madras (Now the State of Andhra Pradesh)
RespondentKasam Ayub
Advocates:D.V. Sastry, Adv.
DispositionPetition allowed
Excerpt:
sales tax - tax exemption - section 12b (1) of madras general sales tax act, 1939, rule 9 of madras general sales tax rules, 1939 and rules 7, 8, 9 and 18 (3) of madras general sales tax (turnover and assessment) rules, 1939 - assessee claimed exemption on letter - not on format prescribed by department disclosing all required particulars - compliance of section 9 mandatory to enable assessee to claim rebate - held, rebate can be claimed only on prescribed format. - - the assessee's appeal to the commercial tax officer was unsuccessful. before the rebate is granted, the revenue has to be satisfied that the particulars contained therein are correct and that the assessee could properly make a claim in that regard......act. consequently the granting of rebates is subject to fulfilling the conditions prescribed in rule 9. rule 9 is cast in a language which is mandatory, the expression used being 'shall submit to the assessing authority'. that being so, the assessee could not ask for rebate on the basis of section 7 of the act, without conforming to the procedure indicated in the rule. in this connection, we cannot ignore rule 10, which calls upon the assessing authority to satisfy itself that the application was in order and that the rebate was admissible etc. so, the submission of an application in form viii is not a mere technicality. it is designed to serve a particular purpose. before the rebate is granted, the revenue has to be satisfied that the particulars contained therein are correct and.....
Judgment:

Chandra Reddy, C.J.

1. This revision petition is filed against the order of the Sales Tax Appellate Tribunal, Madras, and it raises a question relating to the interpretation of section 7 of the Madras General Sales Tax Act, 1939, read with rule 9 of the Rules framed under the Act. The question arises in the following circumstances.

2. The respondent was a dealer in groundnuts and groundnut oil and was exporting groundnut oil to places outside the State of Madras. In regard to sales of oils, he claimed exemption based on provisions of law which will be referred to presently, in a letter which he annexed to From A3 which discloses the total turnover of the assessee. This letter did not contain all the particulars that were required to enable the Department to fix the amount to be allowed by way of rebate. On receipt of this letter, the Deputy Commercial Tax Officer made an endorsement on that letter to the following effect :

'He should apply separately in the prescribed form under rules. Intimate.'

3. It appears that this order was not actually communicated to the assessee. However, there being no application in the prescribed form, no rebate was allowed to the assessee by the Deputy Commercial Tax Officer. The assessee's appeal to the Commercial Tax Officer was unsuccessful. He then carried the matter in appeal to the Sales Tax Appellate Tribunal which directed the claims for rebate in respect of three consignments to be admitted, having taken on file the invoices produced by the assessee revealing the names and addresses of the purchasers outside the State and also the aggregate amount for which the goods were sold. It is this order of the Tribunal that is sought to be revised. It is urged in support of this petition that the Sales Tax Appellate Tribunal fell into an error in thinking that the absence of a prescribed form claiming the rebate did not materially affect the right of the assessee to get a rebate. In order to appreciate this contention, it is necessary to extract the relevant provisions of the Madras General Sales Tax Act.

4. Section 7 recites :

'In respect of such finished articles of industrial manufacture as may be notified by the State Government and subject to such restrictions and conditions as may be prescribed, a rebate shall be allowed of one half of the tax levied on sales of such articles for delivery outside the State if such articles are actually so delivered.'

5. A notification issued by the State Government on the 26th September, 1939, included oil cakes and vegetable oils. It is these commodities that are the subject-matter of this enquiry. There is no dispute that the assessee sold these articles for delivery outside the State and were in fact so delivered. The only point is whether rebate should have been granted in the events that occurred. That has to be judged in the light of the foregoing rules which were framed by the State Government in regard to the procedure to be followed for claiming rebates under section 7 of the General Sales Tax Act and they occur in Part III of the Madras General Sales Tax Rules, 1939. Rule 9 reads :

'Every person claiming a rebate under section 7 shall submit to the assessing authority an application in From VIII within three months of the delivery of the articles outside the State.'

6. 'Rule 10 says :

'On receipt of the application, the assessing authority shall, after satisfying himself that the application is in order and that the rebate is admissible, send to the applicant a refund order for the amount of the rebate due, if the tax had already been paid, or if the assessment had been provisionally made under rule 7 or 8 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, adjust the amount at the time of final assessment under rule 11 of those rules.' It is thus plain that in order to enable the assessee to claim rebate, he should conform to the procedure indicated in rule 9. That rule makes it obligatory for the assessee to put in an application in Form VIII. Form VIII should contain particulars as to the names and postal addresses of applicants, nature and description of the articles sold, correct amount for which sold and names and addresses of persons to whom sold. It is also essential that the claimant should declare that the information furnished by him is true and complete and that it relates to a particular month. At the outside, it should be remembered that in this case the application was not made in Form VIII at all.

The only question is whether the letter written by the assessee fulfils the requirements of section 7 of the Sales Tax Act read with rule 9 of the Rules. In this context, it cannot be overlooked that the letter did not contain particulars as to the names and addresses of persons to whom the goods were sold and the aggregate amount for which they were sold. The problem for solution is whether despite the omission to submit an application in From VIII - and at any rate to supply all the particulars as required in Form VIII - the assessee is entitled to claim rebate contemplated by section 7. It is important to note that section 7 lays down that the rebate should be allowed 'subject to such restrictions and conditions as may be prescribed'. 'Prescribed' is defined as 'prescribed by the rules made under the Act', and as already pointed out the State Government had framed rules in this regard and it is rules 9 and 10 that bear on the rebate envisaged in section 7 of the Act. Consequently the granting of rebates is subject to fulfilling the conditions prescribed in rule 9. Rule 9 is cast in a language which is mandatory, the expression used being 'shall submit to the assessing authority'. That being so, the assessee could not ask for rebate on the basis of section 7 of the Act, without conforming to the procedure indicated in the rule. In this connection, we cannot ignore rule 10, which calls upon the assessing authority to satisfy itself that the application was in order and that the rebate was admissible etc. So, the submission of an application in Form VIII is not a mere technicality. It is designed to serve a particular purpose. Before the rebate is granted, the Revenue has to be satisfied that the particulars contained therein are correct and that the assessee could properly make a claim in that regard. There is no provision of law either in the Act or in the rules framed thereunder which casts an obligation on the Sales Tax Authorities to call for particulars from the assessee in order to determine whether he should be allowed the rebate, as suggested by the Sales Tax Appellate Tribunal. If a particular assessee does not take advantage of the provisions governing the rebate by making an application in a prescribed manner, the Department is not called upon to undertake an inquiry in that behalf.

7. The scope of rule 18 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, which is analogous to the provisions of law involved in the present revision case, was considered by a Full Bench of this Court in Deputy Commissioner of Commercial Taxes v. Lakshmanaswamy (1956 7 S.T.C. 560). Rule 18(3) of the Turnover and Assessment Rules, 1939, is similar to rule 9 in question. Rule 18(3) reads thus :

'Every such manufacturer shall submit so as to reach the registering authority not later than the 25th day of every month, a statement in Form A-9 in respect of the transactions relating to the previous month.'

8. In the case cited, there was no application for deduction permissible under rule 18 of the concerned rules. The question that was referred to the Full Bench was whether the deduction referred to in sub-rule (2) of rule 18 of the Turnover and Assessment Rules framed under the Madras General Sales Tax Act was conditional upon the assessee complying with the requirement contained in sub-rule (3) of that rule and the Full Bench answered the question in the affirmative. The learned Judges expressed the opinion that the exemption could not be claimed in any manner other than that indicated in sub-rule (3) of rule 18. The doctrine enunciated in that case applies to this case also, since rule 9 also contains provision which is absolute and peremptory. It follows that it is only a strict compliance with the provisions of rule 9 that enables an assessee to claim the rebate, since the submission of the application in Form VIII is a pre-requisite to take advantage of the benefit conferred by section 7 of the General Sales Tax Act. It follows that the order of the Tribunal is wrong and has to be set aside. In the result, the revision is allowed with costs. Advocate's fee is fixed at Rs. 200.


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