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In Re: M.P. Kumaraswami Raja - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberCriminal Revn. Case No. 296 of 1954 and Criminal Revn. Petn. No. 278 of 1954
Judge
Reported inAIR1955Mad326; 1955CriLJ968
ActsMadras General Sales Tax Act, 1939 - Sections 19 and 19(5); Madras General Sales Tax (Turnover and Assessment) Rules, 1939 - Rules 6 to 11
AppellantIn Re: M.P. Kumaraswami Raja
Advocates:R.M. Seshadri, Adv.;Adv. General and ;Public Prosecutor
Disposition Petition allowed
Excerpt:
.....- sections 19 and 19 (5) of madras general sales tax act, 1930 and rules 6 to 11 of madras general sales tax (turnover and assessment) rules, 1939 - petitioner prosecuted for non-payment of tax provisionally fixed by assistant commercial tax officer - notice served on petitioner for failure to pay tax for 3 months for which he was prosecuted and convicted - petitioner asked to pay sales tax even before turnover for year determined under rules - demand from petitioner of provisional advance tax was invalid as rules under which such demand made were themselves ultra vires - petitioner not guilty of offence under section 15 (b). - - the petitioner started his sweetmeat shop on 1-8-1953. the assistant commercial tax officer visited the shop and it is stated that the petitioner submitted..........rules themselves are 'ultra vires' of the powers given to the government under the statute. the turnover rules are framed under section 3, cis. 4 and 5, madras general sales tax act. 3. section 3(1) says that 'subject to the provisions of this act, (a) every dealer shall pay for each year a lax on his total turnover for such year.' 4. section 3, clause 4 says that 'for the purpose of this section and the other provisions of this act, turnover shall be determined in accordance with such rules as may be prescribed. provided that no such rule shall come into force unless they are approved by a resolution of the legislative assembly.' 5. this clause, therefore, provides, only for the determination of the turnover.6. under clause (5) 'the taxes under sub-sections (1) and (2) shall be.....
Judgment:
ORDER

Somasundaram, J.

1. This is a revision against the conviction of the petitioner under Section 15(b), Madras General Sales Tax Act. The facts are set out in the judgment of the lower court and it is unnecessary for me to restate them here. Suffice it to say that in this case, the petitioner has been prosecuted for non-payment of tax provisionally fixed by the Assistant Commercial Tax Officer. The petitioner started his sweetmeat shop on 1-8-1953. The Assistant Commercial Tax Officer visited the shop and it is stated that the petitioner submitted a return in form A-l as required by Rule 6 of the Rules of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939 and on that basis A-2 notice was served on him on 25-10-1953 and for failure to pay the tax for three months, August, September and October, he was prosecuted and convicted.

2. This is a case in which the petitioner has been asked to pay the sales tax even before the turnover for the year has been determined under the rules. Mr, Seshadri appearing for the petitioner contends that though under the relevant rules, the petitioner can be asked to pay the lax, the rules themselves are 'ultra vires' of the powers given to the Government under the statute. The Turnover rules are framed under Section 3, Cis. 4 and 5, Madras General Sales Tax Act.

3. Section 3(1) says that 'subject to the provisions of this Act, (a) every dealer shall pay for each year a lax on his total turnover for such year.'

4. Section 3, Clause 4 says that

'for the purpose of this section and the other provisions of this Act, turnover shall be determined in accordance with such rules as may be prescribed.

Provided that no such rule shall come into force unless they are approved by a resolution of the Legislative Assembly.'

5. This clause, therefore, provides, only for the determination of the turnover.

6. Under Clause (5)

'The taxes under Sub-sections (1) and (2) shall be assessed, levied and collected in such manner and in such instalments, if any, as may be prescribed.'

7. Prescribed means prescribed by rules made under this Act. Presumably under this sub-section, the authorities are asking the assessees to pay the tax in advance even before the actual annual turnover is determined in accordance with the rules. In short what the assessees are asked to pay is something in the nature of an advanced tax based on certain surmises either of the assessee himself or of the authorities. The question is whether such a direction asking the assessee to pya the tax is justifiable under the statute. There is provision in the Income-tax Act, Section 18(a), under which the in-come-tax assesseos can be assessed on the basis of the past income and could be asked to pay lor the current year on certain dates in advance. The Central Legislature has thought fit to give such a power to the Government to assess the income-tax assessees in such a manner and collect the tax in advance.' This is based on the assessment of the previous year.

8. Apart from the fact that there is no such provision in the Madras General Sales Tax Act, here the further anomaly is that Without the petitioner being assessed in any previous year, he is being asked to pay the tax merely on a surmise may be that of the assesses himself or that of the authorities. Unless the Legislature gives such a power to the authorities to assess in such A manner to collect the tax, I feel there is considerable force in the arguments of Mr. Seshadri that these rules under which the assessees are asked to pay in advance even when they have not been assessed in any of the previous years are 'ultra vires' of the powers of the Government. The question is one of considerable importance as it affects the revenues of the Stale. I would prefer a Bench of this Court to give an authoritative decision on this point. This case will, therefore, be posted before a Bench of this Court,


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