1. This tax revision case arises out of anorder of the Sales Tax Appellate Tribunal rejecting an appeal preferredby the petitioner.
2. The petitioner (hereinafter referred to as 'the assessee'), a manufacturer of groundnut oil, registered under Rule 18 of the Madras General Sales Tax (Turnover and Assessment) Rules, was submitting his monthly returns and claiming rebates on sales, as provided under Sub-rule (2) of that rule. For the financial year 1952-53, he submitted his returns to the assessing authority in Forms A-3 and A-9. Subsequently he was adjudged an insolvent and his estate vested in the Official Receiver who took possession of his assets along with his records. Against the order of assessment passed by the Original Authority, the assessee preferred an appeal to the Deputy Commissioner (Appeals), Kurnool. While disposing of the appeal, the Deputy Commissioner called upon the assessee to produce his accounts. The assessee referred the Appellate Authority to the Official Receiver. On the basis of the accounts produced by the Official Receiver, the assessee was allowed rebate by deduction of the purchase value of the groundnut and kernel calculated on the sale value of the groundnut oil for the period from 19th October, 1952, to 31st March, 1953. His claim for rebate from 1st April, 1952, to 18th October, 1952, was negatived. The appellate order was confirmed by the Sales Tax Appellate Tribunal.
3. It is contended by Sri Kondapi, learned counsel for the assessee,that he was filing A-9 returns on the basis of which he was claimingdeductions under Rule 18, and that the fact that the accounts for theperiod from 1st April, 1952, to 18th October, 1952, had not been produced by him, should not be a ground for disallowing the rebate.
4. It would appear that the assessee's authorised representative made an endorsement on the memorandum of appeal filed by the assesseehathe was not able to reconcile the figures with reference to the two katchabooks that were available for the aforesaid period. That the accountbooks for the period in question were not produced is common ground ;but what is stated is that once the A-9 returns were accepted by theassessing authority, the non-production of the accounts should not entailrejection of the claim for rebate provided by Rule 18.
5. In order to appreciate this contention it will be convenient to refer to the scheme of the Act. The general scheme of taxation adopted under the Act and the Rules made thereunder is multipoint taxation.Tax is levied at specified rates on the total turnover of a dealer if it exceeds a specified limit. In respect of the same transaction of sale the buyer or seller but not both, as determined by the rules, shall be taxed. Generally the amount for which the goods are sold by a dealerconstitutes his gross turnover. But in the case of certain specified goods, such as groundnuts, tax is levied on the purchase turnover.
6. Any dealer who manufactures groundnut oil and cake from ground-nut or groundnut kernel purchased by him may register himself as amanufacturer of groundnut oil and cake. Such manufacturer is entitledto a deduction from his gross turnover of an amount equal to the valueof the groundnut and (or) kernel purchased and converted by him intooil and cake, provided that the amount for which the oil is sold is in-cluded in his turnover and subject to the conditions specified in Rule 18.Normally the manufacturer of groundnut oil and cake who sells themhas to pay tax on the sales turnover. But if the gross turnover of oilis subject to tax, the manufacturer would be paying tax both on thegroundnut and kernel purchased by him and also on the sale of oilmanufactured therefrom. In order to obviate this hardship, a specialprivilege or exemption is conferred on a dealer in groundnut who registers himself as a manufacturer of groundnut oil and cake. The right to claim this exemption is, however, subject to certain conditions specified in Rules 5(1)(k) and 18. Under Rule 5(1)(k), all amounts which a registered manufacturer of groundnut oil and cake may be entitled to deduct from his gross turnover under Rule 18 shall be subject to the conditions specified in that rule. Rule 18(1) requires any dealer who anufactures groundnut oil and cake to be registered as a manufacturer. Rule 18(2) imposes two further conditions, viz., that the oil should have been manufactured and sold by the dealer who has registered himself as a manufacturer and that the amount for which the oil is sold should be included in his turnover. If these two conditions are fulfilled, then deduction equal to the vaule of the groundnut and kernel purchased by him and converted into oil and cake is permissible. There is a further obligation under Rule 18(3), viz., that 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. This is to enable the assessing authority to allow deduction or to fix the amount thereof under Rule 18(2).
7. The assessee for reasons of convenience adopted, as he was entitled to under the Madras General Sales Tax Act, a system of payment of tax on provisional assessment based on returns submitted by him in Form A-3 showing the gross and net turnover for the preceding month and the amount or amounts actually collected by him by way of tax or taxesduring that month. The return so filed is provisionally accepted by the assessing authority. After the close of the year in which the provisionalassessment as laid down in Sub-rule (3) has been made, the assessing authority shall, after such scrutiny of the accounts and after such enquiry as he considers necessary, satisfy himself that the returns filed are correct and complete, and finally assess under a single order on the basis of the returns, the tax or taxes payable by the assessee. This is provided by Sub-rule (5) of Rule 13. The assessment referred to in this sub-rule is the final assessment on the basis of which the assessing authority shall serve upon the dealer a notice in Form B. The final assessment is made at the end of the year by the assessing authority after a scrutiny of the accounts and after that authority is satisfied that the monthly returns filed in Form A-3 are correct and complete. After the assessing authority is so satisfied, a single assessment order is finally made. As a result of the final assessment, the assessee is called upon to pay the difference between the amount provisionally assessed and that finally assessed, or he will be entitled to a refund of the excess tax paid by him.
8. Sri Kondapi has argued that once the monthly returns are accepted by the assessing authority, there is no power left in that authority to call for the accounts and scrutinise them. We are unable to agree with this contention. If the scheme of assessment contemplated by Rule 13 is correctly understood, there is no difference between the mode of making an assessment in the case of dealers who submit their returns once in a year and dealers who submit their returns every month. In both cases, the final assessment has to be made by the assessing authority after a scrutiny of the accounts and after the authority is satisfied that they are correct and complete. If the argument of the learned counsel is to be accepted, it would mean that in the case of a dealer submitting monthly returns, the assessing authority will not be entitled to scrutinise his accounts, whereas in the case of a dealer submitting annual returns, he would be under a duty to satisfy the authority with regard to the correctness of his accounts. We do not think that the filing of the A-3 returns would absolve the assessee from producing his accounts.
9. The provisional assessment on the basis of the monthly returns isdesigned for the benefit of the dealer and there is no obligation on hispart to opt out to this system. But in case he so opts out he wouldhave the advantage of paying the tax not in one lump sum but inmonthly instalments subject, however, to the final assessment beingmade.
10. As supporting his contention, Sri Kondapi relied on the decisionof a Division Bench of this Court in State of Andhra Pradesh v. Sri Sitharamanjaneya Rice, Groundnut and Flour Mill  13 S.T.C. 31. On a scrutiny of the facts of that case, we find that the assessing authority denied the concession provided by Rule 18 to the assessee on the ground that his accounts were incorrect and that there was also a suppression of a part of the turnover. It was held that an assessee would be entitled to the rebate once he had fulfilled the conditions specified in Rule 18, notwithstanding the: fact that. he was later found not to have maintained correct accounts or suppressed the turnover.The real ratio of that decision is that the assessee's failure to maintain correct accounts should not be a ground for disallowing therebate to which he is otherwise entitled. This decision is clearlydistinguishable and does not apply to the facts of the present case.
11. It may also be noted that the assessee has been adjudged an insolvent and his estate has vested in the Official Receiver. Whether in such a case, it is open to the assessee to prosecute the appeal against the assessment order, is itself open to serious doubt. Having regard to our conclusion that this revision case must fail on the merits, we do not think it is necessary to go into this question.
12. This revision case is, therefore, dismissed with costs. Advocate's fee Rs. 100. The respondent will be entitled to recover his costs fromthe estate of the assessee in the hands of the Official Receiver.