Rajagopala Ayyangar, J.
W. P. Nos. 1230 to 1232 of 1956 - The validity of proceedings taken to collect the arrears of sales tax due from the petitioner is the subject matter of these petitions, for the issue of writs of prohibition.
2. Abdul Matheen the petitioner in these three petitions is a dealer in hides and skins within the State of Madras. For the assessment years 1951-52, 1952-53 and 1953-54 he was assessed to sales tax under the provisions of the Madras General Sales Tax Act in respect of his dealings in hides and skins and the tax liability was determined for the three years at Rs. 11,160-7-0, Rs. 2,471-1-0 and Rs. 5,985-6-9 respectively. The assessee raised some dispute regarding the quantum of the turnover on the basis of. which the tax could be levied but these matters have all been disposed of by the departmental authorities and the Sales Tax Appellate Tribunal and are no longer in controversy. The Government have taken steps to have the arrears of tax due from the petitioner by resort to the machinery of the Revenue Recovery Act and it is the validity of these proceedings that are attacked in these three petitions which relate to the assessments for the three years mentioned earlier.
3. Two grounds have been urged by learned counsel for the petitioner. The first was that the assessment itself was invalid in that the statutory provisions in regard thereto had not been followed and (2) that the collection of the tax by the revenue authorities as if the tax due were an arrear of land revenue was not permitted under the statutes as they stand. I shall proceed to consider these two points in that order.
4. The order of assessment was impugned on the ground that the taxing authorities had not issued the monthly demand notices as required by Rule 15 of the Madras General sales Tax (Turnover and Assessment) rules. Rule 15 before it underwent amendment by notification dated 26th February, 1954, ran thus : (to quote only the material portions) :-
15 (1). Rules 6 to 13 shall not apply to licensed tanners and other licensed dealers in hides or skins in respect of their dealings in hides or skins ; but the provisions of this and the following rule shall apply to them in respect of such dealings.
(2) Every tanner or other dealer in hides or skins whose net turnover for a year has been or is expected to be not less than Rs. 10,000
shall submit to the assessing authority...a return in Form A-4
or, as the case may be, in Form A-5 showing his transactions for the preceding month. Along with the return, he shall also submit a receipt from a Government treasury or a cheque in favour of the assessing authority for the full amount of the tax payable for the month to which the return relates.
(3) On receipt of the return and of the receipt or cheque referred to in Sub-rule (2) the assessing authority shall, after such scrutiny of the accounts and after making such enquiry as he considers necessary, satisfy himself that the return is correct and complete and that the correct amount of tax has been paid.
(4) If no return is submitted in respect of any month before the last day of the succeeding month or if the return is submitted without a receipt or cheque for the full amount of the tax or if the return submitted appears to be incorrect or incomplete, the assessing authority shall, after making such enquiry as he considers necessary, and after giving the tanner or other dealer an opportunity as prescribed in Rule 9 of proving the correctness and completeness of his return,where one has been submitted, determine the turnover to the best of his judgment and assess the tax payable for the month and shall serve upon the tanner or other dealer a notice in Form B-1 and the tanner or other dealer shall pay the sum demanded at the time and in the manner specified in the notice.
(5) If at the time of the receipt of the return referred to in Sub-rule (3) or of the issue of the notice in Form B-1 referred to in Sub-rule (4) or subsequently, it is found that the amount paid by the tanner or other dealer is in excess of the correct tax payable, such excess shall, at the option of the tanner or other dealer, be credited towards the tax if any, payable by him for succeeding months or be refunded to him.
5. In the present case the petitioner submitted his A-4 return for the assessment years now in question. He failed however to remit with each of the monthly returns the tax payable on the turnover for the previous month as required by Sub-rule (2). The departmental authorities did not take immediate action, as they were entitled to under Sub-rule (4), but at the end of the year the total turnover for the year was ascertained and the tax due computed and demanded. The contention urged in these petitions is that dealers in hides and skins could be assessed only in the manner provided in Rule 15 and that their tax liability had to be ascertained and assessed each month and that unless notices in Form B-1 setting out the tax due for the previous month was served on an assessee he could not be in default. In other words, the contention was that the assessing authority had no right to consolidate the total turnover for the several months for which notice in Form B-1 should be issued and demand the entire sum as the tax due by the assessee. It will be seen from the terms of Rule 15 that payment month after month is only a provisional payment which has to be adjusted at the end of each year. In this connection it has to be borne in mind that under the main charging provision, Section 3(1), every dealer pays for each year a tax on his total turnover for such year. In line with this Section 9 enacts :-
9. (1) Every dealer whose turnover is ten thousand rupees or more in a year shall submit such return...in such manner, and
within such periods as may be prescribed.
(2) (a). If the assessing authority is satisfied that any return submitted under Sub-section (1) is correct and complete, he shall assess the dealer on the basis thereof.
(b) If no return is submitted by the dealer under Sub-section (1) before the date prescribed or specified in that behalf or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority shall assess the dealer to the best of his judgment....
6. The basic rule therefore is that sales tax is a tax based on the annual turnover of every dealer. Rule 15 is not to be understood as a departure from this provision-as indeed it cannot be, being only a rule-and the several sub-rules of Rule 15 have therefore to be understood as providing for provisional assessments. The payments of the provisional amounts of the tax have all to be adjusted at the end of the year. The provision for refund contained in Sub-rule (5) makes this provision clear. In the present case, the dealer did send up his Form A-4 returns but sent no cheque as he was required under Rule 15(2). I do not see how he obtains any advantage by this default on his part to conform to the provisions of the statute. In my judgment the contention urged by the Additional Government Pleader that when the year ended, without the remittal of the monthly payments the assessing authority was justified in making a consolidated demand for the 12 months of the year is well founded and I accept it. What the argument of the learned counsel for the petitioner amounts to is that the assessing officer had at the end of the year to serve 12 notices in Form B-1 on the assessee, each representing the tax payable for the individual month and that a consolidated demand incorporating all these figures was beyond the jurisdiction of the assessing authority. I see no logic nor reason behind this contention. I am therefore clearly of the opinion that an assessment for an year after the year is ended is not precluded by Rule 15 of the Madras General Sales Tax (Turnover and Assessment) rules even as it stood prior to the amendment in February 1954.
7. The notification dated 26th February, 1954, amended Sub-rules (2) to (5) of Rule 15. Out of these, the one most relevant to the present contention is the amendment of Sub-rule (5) which was amended to read :
(5) After the close of the year in which the provisional assessment as laid down in Sub-rule (3) or (4) 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 returns, the tax or taxes payable under Sections 3, 5 or 8-B(2) or under any notification issued under Section 6(1) for the preceding year.
8. Further a new Sub-rule (6) was added making provision for the assessing officer demanding any excess that might be due from an assessee beyond what had been paid by him month after month already. The assessment order for 1953-54 with which W.P. No. 1231 of 1956 is concerned was passed on 24th March, 1955, that is, after the rule was amended in the manner indicated above. Learned counsel therefore conceded that his objection based upon the non-issue of monthly demands in Form B-1 could not apply to W.P. No. 1231 of 1956. In my judgment the new rules only clarify what was already implicit in the rules as they stood before the amendment. The orders therefore in relation to the assessment years 1951-52 and 1952-53 which were passed on 25th March, 1953, and I7th February, 1954, were therefore perfectly valid and not subject to any infirmity on the score urged by learned counsel for the petitioner.
9. The next ground on which the petitioner seeks the writs of prohibition is based upon the machinery employed for the collection of the tax. Section 10 of the Madras General Sales Tax Act enacts :
10. Payment and recovery of tax-(1) The tax assessed under this Act shall be paid in such manner and in such instalments, if any, and within such time, as may be specified in the notice of assessment, not being less than 15 days from the date of service of the notice. If default is made in paying according to the notice of assessment, the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax under this Act.
(2) Any tax assessed on, or any other amount due under this Act from, a dealer and any fee due from him under this Act, may without prejudice to any other mode of collection be recovered (a) as if it were an arrear of land revenue, or (b) on application to any Magistrate by such Magistrate as if it were a fine imposed by him.
Provided that no proceeding for such recovery shall be taken or continued as long as he has, in regard to the payment of such tax, other amount or fee, as the case may.be, complied with an order by any of the authorities to whom the dealer has appealed or applied for revision, under Sections 11, 12, 12-A, 12-B or 12-C.
10. There is therefore a clear provision that an arrear of tax may be recovered 'as if it were an arrear of land revenue'. Section 5 of the Madras Revenue Recovery Act (Act II of 1864) enacts:
Whenever revenue may be in arrear, it shall be lawful for the Collector, or other officer empowered by the Collector in that behalf, to proceed to recover the arrear, together with interest and costs of process, by the sale of defaulter's movable and immovable property, or by execution against the person of the defaulter in manner hereinafter provided.
11. Section 5 normally extends only to the collection of an arrear of revenue that is public or land revenue. But Section-52 of Act II of 1864 enables the machinery specified in Section 5 to be utilised for the collection of several species of public dues. That section enacts (to quote only the relevant words):
All arrears of revenue other than land revenue due to the State Government, all advances made by the State Government for cultivation or other purposes connected with the revenue...and all sums due to the State Government...may be recovered in the same manner as arrears of land revenue under the provisions of this Act, unless the recovery thereof shall have been or may hereafter be otherwise specifically provided for.
12. Besides Section 10 of the General Sales Tax Act there is no other special procedure prescribed for the recovery of the arrears of sales tax with the consequence that the exception contained in the last portion of Section 52 of Act II of 1864 which I have extracted has no application. Reading these sections together it would appear to be clear that there being a sum due to the State Government as tax and this being specifically directed to be recovered as an arrear of land revenue and provision being made in the Revenue Recovery Act for the recovery of this sum in the same manner as an arrear of land revenue there was no scope for an argument of there being a lacuna in the machinery for collection. What learned counsel for the petitioner however urged was that the General Sales Tax Act did not in terms specify the particular officer who could require the assistance of the revenue authorities to collect the tax and in the absence of such specification the power conferred by Section 10 and which so to speak attracted the provisions of Section 52 of the Revenue Recovery Act could not avail the State Government. In this connection learned counsel urged that without a provision on the lines of Section 46 (2) of the Income-tax Act under which the Income-tax Officer forwards to the Collector a certificate under his signature specifying the amount of arrear due from an assessee, the provisions of the Revenue Recovery Act could not be availed of to recover an arrear of tax. I am wholly unable to agree with this submission. The general scheme of the Madras General Sales Tax Act as well as the Madras General Sales Tax (Turnover and Assessment) rules are to vest the assessing authority with the right and duty of making the collection of the tax. In these circumstances it appears to me that it is implicit that the assessing authority may apply to the revenue authorities acting under Act II of 1864 to exercise their powers to collect the tax payable under the Madras General Sales Tax Act. The fact that there is no specific provision for enabling the assessing authority to inform the Collector and secure his services for the recovery of the tax does not in my opinion invalidate the action of the Collector in recovering these arrears. Learned counsel urged that in the absence of specific provision therefor there was a possibility of the recovery proceedings going on notwithstanding the payment of the tax. But this seems to be a groundless apprehension because if an assessee intimates to the revenue authorities the fact that he has paid the tax and that he is therefore not in arrear, they would certainly stop further coercive proceedings and similarly when the arrear due is paid by a defaulter to the sales tax department the assessing authority would immediately inform the Collector and stop the further execution. The ground urged therefore in attack of the validity of the proceedings for the recovery is without substance. No other points arise in these petitions which accordingly fail and are dismissed. The rules are discharged. There will however be no order as to costs.
13. W. P. No. 1437 of 1956-The petitioner here is one A. Abdul Shukoor and Co., also a dealer in hides and skins. The assessment to sales tax which is the subject of the petition was for the year 1950-51. The tax payable was determined at Rs.7,675-10-2. The petitioner paid the sum of Rs.1,891-6-6 leaving Rs.5,784-3-10 unpaid. The proceedings which were sought to be injuncted by the writ of prohibition related to the recovery of this balance of Rs.5,784-3-10. Two contentions were raised by the assessee petitioner in this petition which were identical with those raised in W. P. Nos. 1230 to 1232 of 1956 which I have dealt with. For the reasons contained in that judgment W. P. No. 1437 of 1956 is dismissed and the rule discharged. There will be no order as to costs.