Compounded-tax option under sales tax law must be exercised in time and cannot be claimed at final assessment.

A concessional compounded-tax option under section 7 of the Madras General Sales Tax Act had to be exercised in the manner and at the stage prescribed by the Act and Rules, including timely application, permission, and advance payment. The scheme required returns and provisional tax fixation at the start of the year, showing that the option was not meant to be deferred until final assessment. A dealer who failed to invoke the option at the proper stage could not claim the benefit later, and the ordinary mode of assessment under section 3 continued to apply.

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Issues: Whether a dealer could invoke the option to pay tax under section 7 of the Madras General Sales Tax Act only at the time of final assessment, or whether the option had to be exercised at the commencement of the year in the manner prescribed by the Act and Rules.

Analysis: Section 7 provided a special mode of taxation at compounded rates for eligible dealers, but it contemplated an application to the assessing authority, permission being granted, and payment of tax in advance in the prescribed manner. The scheme of sections 3 and 7 read with the relevant rules showed that returns were to be filed at the beginning of the year and that provisional fixation of tax was made on that basis. The rules also treated the section 7 procedure as one to be adopted before the year ran its course, and not as a choice that could be postponed until the close of the assessment year. The dealer, having failed to exercise the option in the prescribed manner at the proper stage, could not claim the benefit of section 7 at final assessment.

Conclusion: The dealer had no right to claim assessment under section 7 at the stage of final assessment; the Tribunal's direction to that effect was unsustainable and the assessment had to proceed under section 3 only.

Final Conclusion: The special compounded-tax option was held to be time-bound and conditional, and the assessment was restored to the ordinary statutory mode.

Ratio Decidendi: Where a taxing statute makes a concessional or compounded-rate option dependent on timely application, permission, and advance payment, the option must be exercised at the stage and in the manner prescribed by the statute and rules, and cannot be claimed for the first time at final assessment.

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