Provisional sales tax assessment remains enforceable after year-end and pending final assessment under the U.P. rules.

Under the U.P. Sales Tax Act and the Rules, provisional assessment is a staged determination of turnover and tax liability for the relevant period, with final assessment following after the year ends. The provisional character attaches to the tax assessment for that period, not to the underlying turnover determination. Accordingly, once turnover has been determined and tax demanded for a quarter or month, the liability does not lapse merely because the assessment year has closed or final assessment proceedings have begun under rule 41(5). The provisional assessment and recovery remain valid and enforceable.

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Issues: Whether a provisional assessment made under rule 41(3) of the Rules framed under the U.P. Sales Tax Act ceases to operate on the close of the assessment year or on initiation of regular assessment under rule 41(5), so as to bar recovery of the tax provisionally assessed.

Analysis: Section 3 of the U.P. Sales Tax Act makes the dealer liable to pay tax for each assessment year, while section 7 and rule 41 contemplate filing of periodical returns, provisional assessment of tax on quarterly or monthly turnover where necessary, and final assessment after expiry of the year. The scheme of the Act and Rules shows that determination of turnover and tax liability may proceed in stages and that the provisional character attaches to the assessment of tax for the period, not to the determination of turnover itself. Once the turnover for a quarter or month has been determined and tax has been demanded, the liability does not become ineffective merely because the assessment year has ended or because proceedings for final assessment have been initiated under rule 41(5). The final assessment for the year is to be based on the periodical determinations, and there is no requirement that the turnover must be determined twice.

Conclusion: The provisional assessment and recovery proceedings remained valid and enforceable notwithstanding the expiry of the assessment year or the initiation of proceedings under rule 41(5); the challenge failed.

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