Provisional assessment has no independent survival after regular assessment is quashed, requiring refund with interest.

A provisional assessment under the Business Profits Tax Act, 1947 operates only until a regular assessment is made, and it merges into the regular assessment once that process is completed. If the regular assessment is later quashed, tax collected solely under the provisional assessment cannot survive as an independent demand. The statutory scheme also contemplates refund of excess tax paid under provisional assessment with interest where the final liability is lower. The court therefore held that the assessee was entitled to refund of the amount recovered under the provisional assessments together with interest, and the orders refusing refund were unsustainable.

---

---

Issues: Whether tax paid pursuant to provisional assessments under the Business Profits Tax Act, 1947 remained recoverable after the regular assessment was quashed and whether the assessee was entitled to refund with interest.

Analysis: The scheme of section 13(5) to (7) shows that a provisional assessment operates only until a regular assessment is made under section 12. Once the regular assessment is made, the provisional assessment merges into it and ceases to have independent existence. If the regular assessment is later quashed, the liability cannot be sustained on the basis of the provisional assessment. The statutory scheme also contemplates refund of excess tax paid under the provisional assessment with interest where the regular assessment results in a lesser liability, and the provisional assessment is not intended to create a separate enduring demand.

Conclusion: The assessee was entitled to refund of the tax paid under the provisional assessments together with interest, and the impugned orders refusing refund were unsustainable.

Final Conclusion: The writ petition succeeded and the respondents were directed to return the amount recovered under the provisional assessments with interest.

Ratio Decidendi: A provisional assessment under the Business Profits Tax Act, 1947 has no independent survival after a regular assessment is made, and if the regular assessment is quashed, tax collected solely under the provisional assessment must be refunded in accordance with the statutory scheme.

---