(1) To a considerable extent, our task in these petitions is lightened, because of the recent judgment of the Supreme Court, which covers two of the substantial points argued in them.
(2) In T. C. 8 of 1964, which relates to the assessment year 1961-62, the assessee, who is the petitioner, disputed the tax on five items of turnover, before the Tribunal. The assessing authority determined the net turnover to be Rs. 1,57,105.71 of which Rs. 1,47,979.71 was held liable to tax at one per cent and the balance of Rs. 9,126 at seven per cent. The assessing authority determined the net turnover to be Rs. 1,57,105.71 of which Rs. 1,47,979.71 was held liable to tax at one per cent and the balance of Rs. 9,126 at seven per cent. The turnover charged to the higher rate related to two sales both dated 29-12-1959, one for Rs. 4,690 and the other for Rs. 4,536 made by the assessee to a purchaser in the State of Kerala. In respect of the aggregate turnover of the two sales, a single declaration in Form C was filed before the assessing authority along with the connected monthly return. But when the assessing authority indicated to the assessee that the declaration was not in compliance with the proviso to Rs. 10(1) of the Central Sales Tax (Madras) Rules, 1957, he obtained fresh but separate declarations in C Form for each of the two sales and tendered them to the officer, before he completed assessment. He declined to accept the fresh declaration apparently on the ground that they were not filed along with the monthly returns as required by Rs. 5(1) of the said Rules and that no discretion in him vested to condone the delay in the late filing. The sum of Rs. 1,47,979.71 included three items of turnover totalling Rs. 48,681.08 in respect of which declarations in C Form were filed and accepted by the assessing authority. In an appeal filed by the assessee, the Appellate Assistant Commissioner of Commercial Taxes found the position of the assessee to be worse, and enhanced the turnover chargeable to the higher rate. Apart from the sum of Rs. 9,126 which he held to be chargeable at 7 per cent, he added to the chargeable turnover at that rate Rs. 8,296.18, as referable to excise duty not eligible for reduction and another sum of Rs. 48,601.08, which, as already mentioned, pertained to three items of turnover. In his view, the assessing authority was right in charging the sum of Rs. 9,126 at the higher rate. This Court in Khader and Co. v. State of Madras (1966) 17 STC 396, held that there was no provision in the Central Sales Tax Act or the rules made thereunder for deduction of excise duty from chargeable turnover. It appears, in fact, that so far as the amount of the excise duty was concerned, the assessee admitted liability before the Appellate Assistant Commissioner. Though a ground has been taken on this matter before the Tribunal and also in this Court, it has not actually been pressed, counsel for the assessee realising that, in view of the admission of the assessee and also (1966) 17 STC 396, it will not avail him to urge it any longer. The assessee failed to get relief before the Tribunal in respect of the other two sums of turnover, Rs. 9,126 and Rs. 48,682.08. In dismissing the appeal, the Tribunal purported to follow Dy. Commissioner of Commercial Taxes v. Parakutti Hajee Sons, : AIR1963Mad125 and Dy. Commissioner of Commercial Taxes v. Manohar Bros., : AIR1962Mad410 , both to the effect that non-compliance with the requirements of S. 8(4) read wits Rs. 5(1) would disentitle a dealer to the benefit of S. 8(1).
(3) The C Forms which covered the three items of turnover totalling Rs. 48,681.08 were, according to the Appellant Assistant Commissioner, with whom the Tribunal agreed, defective in that in all of them the registration number and the date of registration of the out-of State purchases dealer were not given, and in one case the value of the goods sold as noted in the C form differed from the relative invoice. The assessee, in all the three cases, filed before the Appellate Assistant Commissioner original letters obtained from the out-of State buyers showing the dates of registration, and also explained to him that the discrepancy in the figures in one of these case occurred between that mentioned in the C form and the invoice. But, as we have mentioned, the Appellate Assistant Commissioner was not minded to receive the additional evidence making up the deficiency found by him, as in his opinion, he had no power or jurisdiction to condone the delay in filing accurate C forms within the time prescribed.
(4) From the facts we have narrated, two points arise (1) the propriety in rejecting the C form declarations relating to the two sales for a total consideration of Rs. 9126 and (2) the propriety of the Appellate Assistant Commissioner declining to receive additional documents filed to rectify the defects found for the first time by the Appellate Assistant Commissioner in the relative C forms.
(5) We will consider the second point first, Sec. 8(1) of the Central Act charges inter State sales to a registered dealer other than the Government goods of the description referred to in sub-sec.(3) at one per cent, as the section stood at the relevant time. It is not stated before us that the goods sold by the assessee were not of the kind within the scope of sub-sec. (3). But the rate of one per cent will be applicable only if the conditions prescribed therefor by sub sec. (4) of Sec. 8 are complied with. The subsection requires in order that sub-sec. (1) may apply, that the dealer selling goods furnishes to be prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority. Non-compliance with this requirement will attract the higher rate of tax, namely 7 per cent, provided by sub-sec. (2) of Sec. 8 Sec. 13(4)(e) authorises the State Government to make rules relating to the authority from whom, the conditions subject to which and the fees subject to payment of which, any form of declaration prescribed under sub-sec. (4) of Sec. 8 may be obtained, the manner in which the form shall be kept in custody and record relating thereto be kept in custody and record relating thereto maintained, the manner in which any such form may be used and any such declaration may be furnished. Evidently, in exercise of the authority conferred by Sec. 8(4) and Sec. 13(4)(e), the State Government framed the Central Sales tax (Madras) Rules 1957. Rule 5(1) is as follows:--
'Every dealer (other than those specified in the proviso to Rule 11 of the Central Sales-tax (Registration and Turnover) Rules 1957) registered under Sec. 7 of the Act shall submit a return of his transactions in the course of inter State trade or commerce or in the course of export of the goods out of the territory of India in form I together with the connected declaration form (or duplicate of such form where the original has been lost) (and the certificates in Forms D, E. 1 and E. 11), so as to reach the assessing authority on or before the 25th of each month showing the turnover for the preceding month and the amount or amounts collected by way of tax together with a chalan or a crossed cheque in favour of the assessing authority for the payment of tax due thereon under the Act: Provided that in respect of the sales during the half year ending 31st March 1959, the certificates in form E. 1 an E. 11 may be furnished at any time before the final assessment'.
In substance, this sub-rule requires that along with the monthly return which should be filed on or before the 25th of each month, declarations in the prescribed form which in the present case is form C, as prescribed by Rule 12(1) of the Central Sales-tax (Registration and Turnover) Rules 1957, should also be filed. An exception to the requirement is to be found in Rule 19(2) under which if a dealer maintains a register in form 9 in the prescribed manner, he could then file the declarations along with the final return.
(6) Construing the foregoing statutory provisions, a Division Bench of this Court in : AIR1963Mad125 , was of opinion that failure to furnish declarations in C form along with the monthly return where Rule 5(1) applied, or along with the final return where Rule 10(2) was applicable, would involve forfeiture of the benefit of the lower rate of tax and would render the transaction liable to the higher rate. The Court observed :--
'The Rule 5(1) accordingly prescribes that along with the return of the turnover relating to any month, the connected declaration should be submitted so as to reach the assessing authority on or before the 25th of the succeeding month. Here is a rule setting out the manner in which the declaration should be furnished to the prescribed authority by the dealer selling the goods.'
(7) It was considered that the time limit for filing the declarations should be complied with, as a condition to the eligibility to the lower rate of tax. This view was followed by the same Division Bench subsequently in : AIR1962Mad410 . The Kerala High Court in Abraham v. Sales-Tax Officer Ponkunnam, : AIR1964Ker131 (FB), however, took a different view. In that case, tax was imposed at the higher rate of seven per cent on a certain turnover, on the ground that the connected declarations in Form C were not filed before the time prescribed by the rules, Rule 6(1) of the Central Sales-tax (Kerala) Rules 1957, required that the monthly return should be filed on or before the 20th of each month and along with it the connected declaration forms. Three provisos were added to the sub-rule from time to time, and the last of them said that all declaration forms pending submission by dealers on 2nd May 1960 should be submitted not later than 16-2-1961. Actually, the assessee in that case filed the forms only on 8th March 1961, before assessment was made. The delay in filing was explained as due to late receipt of the forms from the purchaser in Madras. But the explanation was not accepted and the higher rate of tax was applied. The assessee failed in his appeal and revision. Thereafter, he moved the High Court of Kerala under Art. 226 of the Constitution and the petition was eventually beard and disposed of by a Full Bench of three learned Judges of that Court. They held that neither Sec. 8(4) nor Section 13(4)(a) conferred authority on the State Government to prescribe time limit for filing declarations in Form C. They referred to decisions of this Court, which we have noticed already, but were unable to accept the assumption made in them that the prescription of time for filing declarations was within the rule making competence of the State Government. We may, at this stage, with respect, observe that before the Division Bench which decided the two cases, : AIR1963Mad125 and : AIR1962Mad410 , no argument was addressed to the Court as to the validity of the rules prescribing the time limit. The view of the Kerala High Court was based on the interpretation of the expression 'in the prescribed manner' in Sec. 8(4) of the Act. The expression is also found in Sec. 13(4)(e). In the view of the Kerala High Court, the word 'manner' did not comprehend any element of time. Stroud's Jidicial Dictionary and Acraman v. Herniman, (1851) 16 QB 998, were relied on in support of the interpretation. (CA 404 of 1966) = AIR 1967 SC 1823, Sales-tax Officer, Ponkunnam v. K.T. Abraham. To quote Stroud (at page 1729 Vol.8):--
'The words in 'manner and form refer only to the mode in which the thing is to be done, and do not introduce anything from the Act referred to as to the thing which is to be done or the time for doing it'.
(8) To the same effect was the judgment of Lord Campbell C. J., in the Queen's Bench. The judgment of the Kerala High Court was affirmed by the Supreme Court in CA 404 of 1936 = AIR 1967 SC 1823. Their Lordships held:
'............... the phrase 'in the prescribed manner' in Sec. 8(4) does not take in the time element. In other words, the section does not authorise the rule-making authority to prescribe a time limit within which the declaration is to be filed by the registered dealer'.
(9) On that view, the third proviso to R. 6(1) of the Kerala Rules was declared to be ultra vires Sec. 8(4) read with Sec. 13(3) and (4) of the Central Act. Rule 6(1) of the Kerala Rules is materially ad idem with Rule 5(1) of the Madras Rules. It is true that the Supreme Court was concerned with the third proviso to Rs. 6(1) of the Kerala Rules. But the principle that the State Government has on authority under the rule-making power available to it to prescribe time limit for filing declarations in form C is applicable to the construction of the Madras Rule 5(1) with equal force. Applying the judgment of the Supreme Court, we hold that Madras R. 5(1), in so far as it prescribed time limit, is invalid as being in excess of the rule-making power of the State Government. The Supreme Court, at the same time, pointed out:
'In the absence of any such time limit it was the duty of the assessee to furnish the declarations in form C within a reasonable time.......' In that case, of course, the assessee, as we already mentioned, filed the declaration before the order of assessment was made, and so it was held that the asessee would be entitled to the benefit of the lower rate of tax.
(10) In the instant case, before us, declarations in form C in all these cases were filed before the assessing authority before assessment. The assessing authority, in three cases, accepted the declarations as being in order, but in one he was of the view that the declaration was not in conformity with the proviso to Rule 10(1) and that the date of registration of the purchasing dealer was not also mentioned. But even in respect of that declaration, the assessee subsequently procured fresh declaration forms complying with the proviso to Rule 10(1), were filed before the assessment order was made, there was no question of any delay, and they should be held to have been filed within a reasonable time. The contrary view taken by the Revenue as well as the Tribunal cannot be supported. As regards the three other declarations accepted by the assessing authority, for the first time, the Appellate Assistant Commissioner had the credit of probing into and finding out that the C forms were defective inasmuch as they omitted to mention the dates of registration of the out-of State purchasing dealers. While he gave the assessee an opportunity to show cause why the higher rate should not be applied to the turnover covered by those declarations, when fresh particulars giving the dates of registration were furnished, he declined to accept them, as coming out of time. The question is whether in such circumstances, it cannot be held that they were filed within a reasonable time. It is true, as the Supreme Court held, that normally the and in the prescribed manner should be filed within a reasonable time. But what will be 'reasonable time' in a given case will depend on particular circumstances, and if the defects in the C form are known before assessment is made, but still the assessee failed to furnish the correct particulars in spite of reasonable time being given to him before assessment is completed, it may be a case for application of the higher rate of tax. But even here, we would not like to lay it down as a rule of law, for, circumstances may exist which may justify extension of the scope of 'reasonable time'. In the instant case, the defects having been discovered for the first time at the appellate stage, before enhancing the rate applicable, the appellate authority in the appeal filed by the assessee was bound to give an opportunity--indeed such an opportunity was given in this case--for the assessee to furnish the correct particulars to conform with the rules. Curiously, the Appellate Assistant Commissioner, having given the opportunity to the assessee, declined to accept the rectified C forms produced by the assessee. In our view an appeal, after all, is, in a sense, an extension of the original jurisdiction, especially when the Appellate Assistant Commissioner reopened the order which was in favour of the assessee and when the appeal was one filed by the latter. Apart from that, even the principles of natural justice would require that, when something is discovered at the appellate stage which exposed the assessee to the higher rate of tax, the dealer should be given an opportunity to rectify the defects with a stipulated time granted for the purpose. In our view, therefore, the fresh particulars furnished before the Appellate Assistant Commissioner, which rectified the defects in the C forms filed before the assessing authority, should have been received and if they were found to be in order, the Appellate Assistant Commissioner should have confirmed the original order applying the lower rate of tax in respect of the three items of sales covering a total turnover of Rs. 48,681-08.
(11) On the first point, apart from the fact that the relative declarations covering a turnover of Rs. 9126 were filed before the assessment order was made, even the declaration forms, as were filed in the first instance before the assessing authority, should be held to be in order. The Supreme Court, in CA 404 of 1966, has held that the proviso to Rule 10(1) in the context can apply only to a purchasing dealer within the State of Madras and not to a dealer in Kerala State. If would appear that the Supreme Court was of the further view that, if the effect of the proviso was to compel the Kerala dealer to give a declaration in Form C as required by the proviso, it would not be within the competence of the rule-making power. On this ground also, the turnover of Rs. 9126 would be liable to tax only at the rate of one per cent.
(12) The Tribunal has not recorded any finding whether the declarations in form C as rectified were in order. The Tribunal only proceeded on the ground of time limit. The petition is allowed and the appeal is remanded to the Tribunal for fresh disposal in accordance with this judgment. The petitioner is entitled to his costs. Counsel's fee Rs. 100 T. C. 9 of 1964 is practically covered by our judgment in T. C. 8 of 1964. In respect of the turnover of Rs. 12,539-17, the higher rate of seven per cent was applied, on the view that the connected declarations in form C were defective inasmuch as they did not give the dates of registration of the out-of State buyers. The assessee, who is the petitioner, sought to rectify the defect at the stage of the appeal before the Appellate Assistant Commissioner. But he disallowed the assessee on the ground that the letters produced were belated and he had no power to condone the delay. The further appeal of the assessee failed on the same ground, the Tribunal relying on : AIR1963Mad125 and : AIR1962Mad410 . On the view we have expressed in T. C. 8 of 1964, the Tribunal acted wrongly in dismissing the assessee's appeal on the only ground that the particulars to make up the defects in C forms were field belatedly.
(13) The petition is allowed an the appeal is remanded to the Tribunal for fresh disposal in accordance with law. We make no order as to costs.
(14) Order accordingly.