Composition option under sales tax law must be exercised before assessment and within the notified procedure.

Composition under the sales tax scheme had to be exercised while the liability remained open and before assessment was completed, because "tax payable" referred to liability arising under the charging provision, not merely the amount finally quantified on assessment. The State Government was competent to prescribe the manner for invoking composition, including requiring an application within a fixed period, since that procedure was part of the notified scheme. A time-limit supported by an express power to extend time was not unreasonable or ultra vires. The composition notification was therefore treated as valid, and the option had to be taken in the manner and within the time prescribed.

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Issues: (i) Whether permission to pay a lump sum by way of composition under section 7-E could be sought after assessment had been completed; (ii) whether the State Government was competent to require an application and prescribe a time-limit for seeking composition; and (iii) whether the notified time-limit and the impugned notification were unreasonable or ultra vires.

Issue (i): Whether permission to pay a lump sum by way of composition under section 7-E could be sought after assessment had been completed.

Analysis: Liability to sales tax arises on the taxable event and from the charging provision itself. Assessment only quantifies the liability and does not create it. The expression "tax payable" in section 7-E refers to the tax liability already incurred under the Act, not merely to tax as finally quantified by assessment. A dealer who seeks composition must therefore exercise the option while the liability is still open and cannot insist on waiting until assessment proceedings are concluded.

Conclusion: The contention was rejected. Permission under section 7-E could not be claimed after completion of assessment.

Issue (ii): Whether the State Government was competent to require an application and prescribe a time-limit for seeking composition.

Analysis: Section 7-E empowered the State Government to notify the manner in which the composition amount was to be determined and paid. That power included prescribing the procedure for exercising the option, including the making of an application within a specified period. Since composition was a beneficial alternative to the normal charging machinery, the dealer had to invoke it in the manner prescribed by the notification.

Conclusion: The requirement of an application and a prescribed period was upheld as within power.

Issue (iii): Whether the notified time-limit and the impugned notification were unreasonable or ultra vires.

Analysis: The notification fixed a definite period for applications and also conferred power to extend time in suitable cases. In the presence of an express power of extension, and in the absence of any attempt by the petitioner to seek enlargement of time, the prescribed period could not be treated as arbitrary or unreasonable. The notification was therefore within the statutory authority conferred by section 7-E and was not invalid on the ground of unreasonableness.

Conclusion: The challenge to the notification failed.

Final Conclusion: The composition scheme was validly framed, the time-limit for invoking it was lawful, and the sales tax authorities acted within jurisdiction in proceeding on the assessee's applications and in recovering the assessed tax.

Ratio Decidendi: The right to seek composition under a taxing statute must be exercised in accordance with the statutory scheme and notified procedure, and a composition option tied to "tax payable" relates to liability arising under the charging provision rather than to tax finally quantified on assessment.

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