Gopalan Nambiyar, J.
1. This writ petition has been referred by the Chief Justice for being heard by a Division Bench, after noticing that a previous unreported judgment of a learned Judge of this court (Isaac, J., in O.P. No. 3538 of 1969) has answered the question raised herein in favour of the petitioner.
2. The petitioner is a dealer in copra and oil-cakes in Tellicherry. For the year 1972-73 he was provisionally assessed to sales tax on a turnover of over Rs. 4,00,000 by exhibit P1 order dated 12th September, 1972, and a demand for tax of Rs. 60,587.00 was raised against him. He filed an appeal against exhibit P1 before the Appellate Assistant Commissioner of Sales Tax. By exhibit P2 order dated 17th November, 1972, the appellate authority confirmed the provisional assessment in respect of turnover of Rs. 2,50,759.13 and deleted the assessment in respect of a turnover of Rs. 92,907.00 (copra) and Rs. 93,300.00 (oil and cake). The petitioner has averred in paragraph 8 of his petition that the revenue recovery certificate dated 19th June, 1973, has been issued against him for recovery of Rs. 3,520.81, based on the provisional assessment. He has accordingly prayed for a writ of prohibition restraining the respondents from enforcing the demand.
3. The short ground on which the petitioner put his case was that under Section 18 of the Kerala General Sales Tax Act, 1963, assessment, levy and collection in respect of provisional assessment have all to be done, during the year concerned and, therefore, the collection of the tax assessed by exhibits P1 and P2 beyond the year, is illegal and unsustainable. Section 18 of the Act in so far as it is material reads:
18. Provisional assessment. -- (1) The tax for each year payable under any of the provisions of this Act may be assessed, levied and collected in advance during the year in monthly or other prescribed instalments, and for that purpose a dealer may be required to furnish within the prescribed period either an advance estimate of his turnover for the year, or such periodical returns of the actual turnover as may be prescribed. The assessing authority may determine the amount of tax payable in respect of any period and on such assessment the dealer shall pay the sum demanded within such time as may be fixed by such authority.
Section 2(xxx) defines 'year' as meaning 'financial year'. Applying the definition to the provisions of Section 18, the provisional assessment, levy and collection, according to the petitioner, should all be done during the year, i. e., on or before 31st March, 1973. The strict language of the section seems to lend support to the petitioner's contention and the decision of Isaac, J., in O.P. No. 3583 of 1969 is undoubtedly in the petitioner's favour. The learned Judge referred to Section 18 of the Act (although in the judgment instead of quoting Section 18, Rule 18 was unfortunately quoted by a typing mistake). Thereafter, the learned Judge observed:
The argument is quite novel; but it is entitled to succeed in the light of the plain language of the section, according to which the assessment can be made only during the year to which the assessment relates. In the result, this writ petition is allowed; and accordingly exhibit P3 series and exhibit P4 series are quashed. There will be no order as to costs.
4. To insist on not only the assessment, but even the levy and the collection of the provisional assessment having to be completed during the year appears to be a practical impossibility, and would reduce the section to a mockery, especially when we bear in mind the fact that against an order of provisional assessment, a right of appeal is provided under Section 34 of the Act, of second appeal under Section 39, and perhaps even a revision under Section 41. The learned Government Pleader contended that even on the language of the section, what is provided for is only that the provisional assessment, levy and collection may be made during the year, which according to him, implied and recognised that it may also be made beyond the year. The argument is plausible; but that again opens out certain difficulties. If we are to countenance the notion that an order of provisional assessment, levy and collection of advance sales tax may be made irrespective of any time-limit, we believe it might work serious hardship, and even clash with the provisions for regular assessment and levy and collection of tax, regularly assessed, under the charging section, Section 5, and Section 17, and other sections of the Act. Once the financial year has run out, and the charging section, Section 5, can be brought into operation, we see some difficulty in countenancing the notion that side by side with the prospect of a regular assessment a provisional assessment can also go on. Besides, where on the language of a taxing statute or a fiscal enactment, two interpretations are possible or plausible, we are inclined to favour that in favour of the subject and against the State. But taking a closer look at the section itself, we think that some at least of the difficulties emerging in the first blush, resolve themselves. The closing part of Sub-section (1) of Section 18 of the Act empowers the assessing authority to determine the amount of tax on a provisional assessment and to call upon the dealer to pay the amount of tax demanded within such time as may be fixed by the authorities. Therefore, this part of the section itself contains some indication that once the matter has passed beyond the region of assessment, the time-limit indicated in the earlier part of the section, does not, and could not, apply. For, to hold that not only assessment but even levy and collection, should all be done 'during the year' within the first part of Section 18(1), would render the closing part unworkable and otiose, if the provisional assessment were to be made, say, one day or a few days prior to the close of the year concerned. We are concerned with the stage of collection in the instant case, in view of the provisional assessment orders evidenced by exhibits P1 and P2. We are, therefore, of the opinion that in respect of the collection of tax provisionally assessed, the limit indicated by the earlier part of the section, namely, that it should be done during the financial year, cannot and does not apply.
5. It follows therefore that this writ petition has to fail. We dismiss it with no order as to costs. We also think it very necessary to direct that the final assessment of the petitioner to sales tax for the year 1972-73 which is still pending, should be made and completed as expeditiously as possible.
6. Before we leave this matter, we would like to draw the attention of the Government and the authorities concerned, to the need for a suitable amendment or redrafting the section to avoid confusion in its application and working. We have already pointed out the possible interpretations which the language of the section is capable of yielding. It may be worthwhile to compare the provisions of the Indian Income-tax Act which provided for payment of advance tax and for the making of a provisional assessment. See the provisions in the Act of 1922 and the subsequent Act of 1961. These provisions do not enjoin that the assessment, levy and collection should be made during the year as Section 18 does. Nor is there any provision for an appeal or a second appeal against the assessment to advance tax or an order of provisional assessment under the provisions of these Acts. It may be worthwhile to compare these provisions and suitably remodel, if necessary, the provisions of Section 18 of the Act.
Issue carbon copies of this judgment to counsel.