Executive tax waiver and compounding limits fail where statutory exemption and timely application conditions are not met.

An executive instruction waiving collection of additional sales tax does not, by itself, create a statutory exemption from the levy under the sales tax law; it operates only where the prescribed collection condition is satisfied, and where the dealer has already recovered the tax element from customers the waiver cannot be claimed. A separate right to compound tax in respect of stock held on the relevant date was also conditional on filing an application within the period fixed by the Ordinance; without a timely application, the statutory prerequisite was not met and compounding was unavailable.

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Issues: (i) Whether an executive instruction waiving collection of additional sales tax could be treated as an exemption from the statutory levy under section 3(2) of the General Sales Tax Act. (ii) Whether the assessees were entitled to compound the tax in respect of stock held on the relevant date despite not making an application within the period prescribed by Clause 3 of Ordinance IV of 1957.

Issue (i): Whether an executive instruction waiving collection of additional sales tax could be treated as an exemption from the statutory levy under section 3(2) of the General Sales Tax Act.

Analysis: The statutory scheme distinguished between the levy of tax under the charging provision and its collection. The Government communication, even if assumed to be authoritative, only indicated that collection would not be enforced where the dealer had not recovered the amount from customers. It did not amount to a notification granting exemption from liability under section 6 of the General Sales Tax Act. The assessees had in fact collected amounts corresponding to the tax, so the condition for the waiver was not satisfied.

Conclusion: The executive instruction did not exempt the assessees from the levy, and the benefit of waiver was unavailable.

Issue (ii): Whether the assessees were entitled to compound the tax in respect of stock held on the relevant date despite not making an application within the period prescribed by Clause 3 of Ordinance IV of 1957.

Analysis: Clause 3 permitted compounding only on application made within two weeks from the commencement of the Ordinance. The right to compound was conditional upon compliance with that time limit. Since no such application was made, the statutory condition precedent was not met.

Conclusion: The request to compound was rightly rejected.

Final Conclusion: The liability to additional sales tax remained unaffected, and no relief could be granted on either the waiver or compounding grounds.

Ratio Decidendi: An executive direction relating only to collection does not operate as a statutory exemption from levy unless it is issued in the manner authorised by the taxing statute, and a conditional compounding right must be exercised within the prescribed time.

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