Statutory option for concessional tax cannot be time-barred by rule unless the parent Act authorises it.

A rule made under a taxing statute cannot impose a limitation period for exercising a statutory option unless the parent Act expressly authorises it. Under section 7 of the Tamil Nadu General Sales Tax Act, eligible dealers could opt for concessional assessment, and in the absence of any statutory time-limit, the option had to be exercised within a reasonable time. The scheme of the Act and rules showed that exercise of the option before final assessment was reasonable. As the dealer exercised the option before assessment, the claim for assessment under section 7 was valid and could not be rejected.

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Issues: Whether a dealer eligible for concessional assessment under section 7 of the Tamil Nadu General Sales Tax Act, 1959 could validly exercise the option before assessment, notwithstanding the omission of the rule prescribing an earlier time-limit.

Analysis: Section 7 conferred an option on eligible dealers to pay tax at the concessional rate, while section 12 dealt with assessment on the basis of returns. The rules framed under the Act had earlier contained a time-limit for exercising the option, but the Court held that such a period of limitation could not be created by rules when the statute itself did not prescribe one. The expression used in the enabling provision was understood as not authorising the rule-making authority to impose a limitation period. In the absence of a statutory time-limit, the option had to be exercised within a reasonable time, and the rule-making scheme itself indicated that exercise of the option before final assessment was reasonable.

Conclusion: The assessee's option, having been exercised before assessment, was valid and the claim for assessment under section 7 could not be rejected.

Ratio Decidendi: A rule made under a taxing statute cannot impose a period of limitation for exercising a statutory option unless the statute expressly authorises such limitation; where no statutory time-limit exists, the option may be exercised within a reasonable time and before assessment.

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