G.R. Jagadisan, J.
1. This Revision Petition has been filed by the state taking objection to the order of the Sales Tax Appellate Tribunal granting permission to the assessee under the Madras General Sales Tax Act 1959 to pay compounded tax under Section 7 of the Act instead of the ordinary levy. The assessee is the respondent before us.
2. The assessee is a dealer in firewood at Madras. For the assessment year 1959-60 he returned a taxable turnover of Rs. 17,065-13. The assessing officer checked his accounts and found grave infirmities and defects. The account books were rejected and the turnover was determined on the best judgment basis at Rs. 22,390. The assessee preferred an appeal to the Appellate Assistant Commissioner but failed. He preferred a further appeal to the Salex Tax Appellate Tribunal. His contention that the Department was not right in rejecting the account books did not find favour with the Tribunal. It held that the account books were properly rejected and observed that the Department acted rightly in resorting to estimation of the turnover for the year in question.
3. The assessee also pressed another contention before the Tribunal and that was based upon Section 7 of the Act. He wanted the benefit of composition of tax under that provision. The Tribunal was of the opinion that the assessee was not precluded from getting the benefit of the compounded rate of tax at any stage of the proceedings, original or appellate, as there is no time-limit imposed by the statute It is this decision of the Tribunal which is now called in question before us.
4. Section 7 reads as follows:
(1) Notwithstanding anything contained in Sub-section (1) of Section 3, every dealer whose total turnover is not less than ten thousand rupees, but not more than fifty thousand rupees, may at his option instead of paying the tax in accordance with the provisions of that subsection pay tax at the following rates, namely:
* * * * * * *(2) Any dealer who estimates his total turnover for a year to be not more than fifty thousand rupees may apply to the assessing authority to be permitted to pay the tax under this section and on being permitted he shall pay the tax due in advance during the year in monthly or prescribed instalments and for that purpose shall submit such returns in such manner as may be prescribed.
5. It is manifest from this provision that the assessee has an option of paying the tax; in accordance with the rate prescribed therein where his turnover does not exceed fifty thousand rupees. The language of this provision indicates fairly clearly that the option must be exercised at the earliest instance, which means, that he should do-so before the first assessing authority. The Tribunal observes that:
Equity, natural justice... demand that the concession should not be denied at any stage including appeal stages contemplated under the Act unless some restrictions are placed for exercise of such option in the Act or the Rules framed thereunder.
A taxing statute cannot be interpreted by importing notions of equity or natural justice. Where the terms of the statute are clear, they would have to be given effect to whether harsh or unjust. We must also remember that Section 7 is a beneficent provision enabling the assessee to exercise an option in his favour. Such provisions have to be construed strictly and literally. He who seeks a benefit under a statute by reason of a special provision therein to which he would not otherwise be entitled to must conform to the provision diligently and to the letter of the statute. Equity has its place within or outside the sphere of law, but it wields no influence over the interpretation of statutes which are omnipotent and which speak and operate only through its language, expressed or necessarily implied. Any departure from the terms of the statute into regions of 'equity' which is not a concept of definite or precise import might lead the Court unwarily into the field of legislation. That surely is not the province of Courts.
6. It seems to us that the words of Section 7 necessarily imply that the option has to be exercised before the assessing authority ; if he fails to avail himself of that opportunity he would find himself too late either before the Appellate Assistant Commissioner of before the Appellate Tribunal or before any revising authority. We do not agree with the Tribunal that the option would be permitted to be exercised at any time so long as the assessment proceedings have not become final or complete. An examination of the relevant rules prescribed under the Act would show that the exercise of the option cannot be postponed till after the assessment is made by the first assessing authority. Every dealer liable to pay tax under the Act should submit to the concerned assessing authority a return in Form A-1 showing the total taxable turnover of his business. The assessing authority may call for and scrutinise the accounts of the dealer and enquire into the correctness of the return made by the assessee. If the authority is satisfied that the return submitted. is correct and complete it shall fix provisionally on the basis of the return the annual tax payable at the rate or rates specified in Sections 3, 4, 5 or 7 of the Act. Section 7 is the provision which provides for payment of tax at a compounded rate. If no-return is submitted by the dealer or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the authority may make an enquiry in the matter and determine the turnover of the dealer to the best of his judgment and fix provisionally the annual tax or taxes payable at the rate specified in Sections 3, 4, 5 or 7 of the Act. As soon as the tax has been provisionally fixed as stated above, the assessing authority shall issue to the dealer a notice in Form B and the dealer shall pay for each month of the year of assessment one-twelfth of the tax provisionally fixed at the time and in the manner specified in the notice. Rule 15 provides that every dealer liable to submit a return shall, on or before the 1st day of May in every year submit to the assessing authority a return in Form A-1 showing the actual total and taxable turnover in the preceding year and the amount by way of tax actually collected during that year. The dealer liable to submit a return in Form A-1 should submit along with the return a receipt from the Government Treasury, crossed cheque, crossed demand draft or crossed postal order in favour of the assessing authority for the full amount of the tax due for the year on the basis of the return after deducting therefrom the provisional tax paid already for the year. If the return submitted is accepted to be correct and complete by the assessing authority, the tax shall be levied under Sections 3, 4, 5 or 7 of the Act. If however no return is submitted, or if the return submitted appears to be incorrect or incomplete to the assessing authority, he may after following the procedure prescribed under Rule 11 and Rule 12 of the Act finally assess the tax or taxes-payable under Sections 3, 4, 5 or 7 according to the best of his judgment. The whole scheme and machinery of assessment indicate that the compounded rate of tax has to be levied by the assessing authority at the time when the assessment is made, of course on the exercise of the option by the assessee.
7. Now, Section 7(2) of the Act obliges the assessee to apply to the assessing authority to be permitted to pay the tax at the compounded rate when the assessee assumes his total turnover for a year to be not more than fifty thousand rupees. It is only on permission being granted he would become entitled to pay the tax at the compounded rate in advance during the year in monthly or prescribed installments. If that is the position with regard to payment of tax provisionally in the first instance, we do not see why the assessee should be at liberty not to claim the benefit of a compounded rate at the final assessment but to claim it only at some subsequent stage either before the Appellate Assistant Commissioner or before the Appellate Tribunal. The intention of the Legislature pan be gathered from the words of the Act and the Rules framed thereunder, and, if such intention is not repugnant to the clear terms of the statute the Court should give effect to it. In our opinion in the present case there is abundant internal indication in the statute itself to show that the assessee should if at all have exercised his option for the benefit of a compounded rate only at the stage of the primary assessment.
8. A Division Bench of this Court in The Deputy Commissioner of Commercial Taxes, Coimbatore Division, Coimbatore v. A. Mahadevan Chettiar T.C. No. 110 of 1962, to which one of us was a. party has dealt with the identical question and has reached the same conclusion. Srinivasan, J., observes thus:
Reading all of these rules together, it seems to us to be clear that the option that is given to the dealer under Section 7(1) of the Act has to be exercised at the commencement of the year at the time the dealer submits the return. It is made dependent upon the permission being granted by the assessing authority and on the further condition that he pays the tax in advance. The conclusion therefore seems to be inescapable that it is not open to the dealer to wait till the end of the year and to ask at the time of his final assessment that his tax liability should be computed on the basis of Section 7.
We respectfully agree.
9. In the result the Revision Petition is allowed, and the order of the Sales Tax Appellate Tribunal is set aside in so far as it directed the Department to levy tax under Section 7 of the Act. There will, however, be no order as to costs.