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Vrajlal Parekh Vs. Assistant Commercial Tax Officer, Park Town Division - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case Number Writ Petition No. 343 of 1970
Judge
Reported in[1975]35STC223(Mad)
AppellantVrajlal Parekh
RespondentAssistant Commercial Tax Officer, Park Town Division
Appellant Advocate K.N. Balasubramaniam, Adv. for ; S.C. Shah, Adv.
Respondent Advocate K. Veukataswami, the First Assistant Government Pleader
DispositionPetition dismissed
Cases ReferredM. S. S. Sivamurugan v. Assistant Commercial Tax Officer
Excerpt:
- .....68, and reiterated in writ petition no. 3122 of 1969 and urges that he is bound to suffer the local sales tax at the appointed rate under section 7 and at the same time, suffer the tax payable under section 5 of the act in respect of his inter-state purchases and subsequent sale of such purchased goods. the point, however, made out is that equity should step in, in such an extraordinary circumstance, and assist the unguided petitioner. at the time when he exercised the option the law was not certain and before he could get the benefit of the option exercised by him, the law became clear and it is this clarification of the existing law that has prejudiced, instead of benefiting the petitioner by reason of the option. it may be that the petitioner has correctly gauged the situation.....
Judgment:
ORDER

Ramaprasada Rao, J.

1. The petitioner is a dealer in toys. For the assessment year 1966-67, he submitted a return in form A but contemporaneously opted for payment of the local sales tax under Section 7 of the Tamil Nadu General Sales Tax Act. The revenue accepted the request and caused a provisional assessment to be made under that section. Ultimately, the petitioner returned a total taxable turnover of Rs. 25,646.36 in form A-l for 1966-67 and he reiterated, the original stand taken by him regarding his option for the payment of the general sales tax under the local law under Section 7. After a check of the accounts, which the authorities are entitled to under Section 7(3) of the Act, it was discovered that the petitioner effected local purchases to the tune of Rs. 382.34 and the rest of the purchases were from outside the State, covered by the usual C form. Consequent upon this discovery on the scrutiny of the accounts, the revenue charged the petitioner under Section 7 of the Tamil Nadu General Sales Tax Act as also under Section 5 therein in respect of their inter-State purchases as provided therein. For such ultimate charge on the assessable turnover made by the revenue, the petitioner discovered that he ought not to have exercised an option under Section 7 as the tax liability by the adoption of such an alternative course would be more than if he were taxed under the general provision, viz., Section 3(1) of the Act. He, therefore, on receipt of the provisional notice of reassessment dated 16th October, 1967, purported to back out from his original option exercised under Section 7 and requested the revenue to assess them under the normal provisions of the statute. As this withdrawal of the option was not in accordance with the rules prescribed, the revenue could not give the petitioner the benefit of the later stand taken by him. Ultimately, the petitioner had to suffer the tax 'as demanded under the revised notice. His further appeal to the Appellate Assistant Commissioner was unsuccessful. Without furthering his remedy before the Sales Tax Appellate Tribunal, the petitioner has filed this writ petition to quash the proceedings of the original as well as the appellate authorities.

2. The learned counsel for the petitioner raises two contentions : Firstly it is said that the option exercisable by an assessee under Section 7 being intended to benefit him, he could, if he discovers that by such exercise of an option he would be prejudiced, withdraw the same at any time before the payment of tax on the assessable turnover. Secondly, it is said that as the tax payable under Section 7 and under Section 5 has now been held by our court to be independent and not telescopable, as contended, equities should prevail and the petitioner's additional but unwanted tax liability be shorn off.

3. As regards the second contention, the learned counsel for the petitioner rightly points out the law as stated by this court in O.M.S.S. Siva-murugan v. Assistant Commercial Tax Officer VIII, Madurai-13 [1970] 26 S.T.C. 68, and reiterated in Writ Petition No. 3122 of 1969 and urges that he is bound to suffer the local sales tax at the appointed rate under Section 7 and at the same time, suffer the tax payable under Section 5 of the Act in respect of his inter-State purchases and subsequent sale of such purchased goods. The point, however, made out is that equity should step in, in such an extraordinary circumstance, and assist the unguided petitioner. At the time when he exercised the option the law was not certain and before he could get the benefit of the option exercised by him, the law became clear and it is this clarification of the existing law that has prejudiced, instead of benefiting the petitioner by reason of the option. It may be that the petitioner has correctly gauged the situation earlier, but he is bound to suffer the consequences by reason of the supervening declaration of law. That would not be a ground to .avoid a tax and taxing statute because it is often said that there is no equity in a tax. The petitioner may be justified in urging that he is prejudiced and, in equity, he should be protected. Such a contention might prevail in normal courts of our country, but, in a tax court, such a contention is not available because the position cannot be helped under the taxing law. If, therefore, the taxes under Section 7 and under Section 5 as pointed out by Ramanujam, J., who spoke for the Bench in 0. M. S. S. Sivamurugan v. Assistant Commercial Tax Officer VIII, Madurai-13 [1970] 26 S.T.C. 68, are separate and independent charges, then, no amount of equitable consideration can prevail to avoid such a sufferance.

4. The other contention of the learned counsel is that the option once exercised by him should be capable of variation till the petitioner actually pays the tax under the provisions of the local Sales Tax Act. This is an extreme contention. Under Section 7, effectively, a concession is granted to the assessee in the matter of quantum of tax. This is given in consideration of the option exercised by the assessee at the appropriate time. The lawmakers have also given the option to the assessee to revoke his option before a particular stage. That is reflected in Rule 16(4-C) of the Madras General Sales Tax Rules of 1959. This rule says that :

If a dealer who was provisionally assessed for any year at the rates laid down in Section 7 is desirous of being assessed under Sub-section (1) of Section 3 of the Act, he may at the time of filing the return referred to in Sub-rules (1) to (3), revoke the option given at the time of provisional assessment and request the assessing .authority to assess him under Sub-section (1) of Section 3 of the Act, provided that the dealer is able to furnish to the satisfaction of the assessing authority all the particulars for so assessing him.

5. The concession sought under Section 7, therefore, need not be availed of if the assessce so desires. But such a decision to wriggle out of the request to adopt the concessional tax under Section 7 should be made as prescribed and within the time allowed. The outer limit of time fixed under the Rules to revoke the option given at the time of the provisional assessment being fixed, then any attempt to get out of the situation at a time later than the prescribed period, would be of no avail. The petitioner, in the instant case, did not revoke the option before he filed his returns. He did it long after he filed his returns, and, as a matter of fact, reiterated the option when he filed such returns. In these circumstances, as the benefit which could be availed of under Section 7 is conditioned upon that being available to the petitioner unless it is revoked prior to or at the time of filing of the returns, as contemplated in the rule above, he cannot be heard to say that he could revoke it at any time he desires and particularly, before the payment of the tax which he should surfer normally under Section 7 of the Act.

6. In these circumstances, both the contentions fail and I do not think that the petitioner can invoke any of the provisions of the Constitution so as to attack the sustainability or vires of the relevant provision which I have considered above. In this view, the petitioner's writ petition should fail. On the ground that he failed to avail himself of the alternative remedy of preferring an appeal before the Sales Tax Appellate Tribunal, he cannot seek a rule under Article 226. But, as I have considered the case on other merits also, I am not satisfied that the rule nisi should be sustained. It is discharged and the writ petition is dismissed with costs. Counsel's fee Rs. 100.


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