TaxTMI 
TaxTMI 
1961 (12) TMI 63
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....s also a registered dealer under section 7 of the East Punjab General Sales Tax Act, 1948, and till the end of March, 1954, was paying sales tax on manufactured tobacco also. Indeed, the firm paid sales tax on manu- factured tobacco, also for the next quarter ending on June 30, 1954, but did not pay in the succeeding quarter in view of certain events, to which a detailed reference will be made presently. On September 27, 1954, the State Government issued a Notification (No. 4556-E & T (Ch)-54/957) by which the schedule of exemptions under section 6 of the Sales Tax Act was amended by the inclusion of item 51, which reads as follows: Item 51 "Manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954." This Notification was preceded by a Notification of May 7, 1954, (No. 427-E & T (Ch)-54/369), by which the State Government had given notice, as required by law, of its intention to add the said item in the schedule of exemptions. In June, 1954, the State Government issued a Press Note by which it was intended to convey to the dealers that though the Tobacco Vend Fees Act had come into force from April 1, 1954, it was not intended to levy both the sales tax as....
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....ess Note of August 2, 1954, and had been assured that the Notification as printed in the newspapers was accurate, and that Government intended implementing the Press Note. On January 23, 1956, the appellants received a notice from the Excise and Taxation Officer, Rohtak, calling upon them to produce their account books. The appellants as well as other dealers of manufactured tobacco similarly affected, made representations on the basis of the Press Note of August 2, 1954, but without success. The appellants then filed on February 8, 1956, a petition under Article 226 of the Constitution for substantially three reliefs. They were: (a) a declaration that the levy of sales tax on manufactured tobacco up to September 26, 1954, was illegal; (b), refund of the sales tax paid by it for the quarter ending June 30, 1954: and (c) an order in the nature of a writ of prohibition against the proposed levy of sales tax till September 26, 1954. It remains to mention that the Sales Tax Authorities were acting in conformity with a Press Note issued in August, 1955, by which the State Government went back upon the policy declared in August, 1954, and reaffirmed the policy stated i....
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....s also without force. There can be no estoppel against a statute. If the law requires that a certain tax be collected, it cannot be given up, and any assurance that it would not be collected, would not bind the State Government, whenever it chose to collect it. The question which is now raised, and of which there is but a trace in the High Court is the real one to decide, and it may be formulated thus: Did the exemption in the Notification issued on September 27, 1954, have effect from that date, or from the beginning of the financial year. We are not concerned with the question whether, in the absence of rules and forms, the Punjab Tobacco Vend Fees Act, 1954, could operate from April 1, 1954. Whether it did or did not, can make no difference to the sales tax, because the Punjab Tobacco Vend Fees Act. 1954, did not abrogate the Sales Tax Act. If sales tax was not pay- able, it would be because of the exemption, and the only question thus is when the exemption began to operate. The Notification does not say from what date the exemption operates. Taking the Notification by itself, it cannot be said that it comes into force from an earlier date. Both sides have thus called in a....
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....ncial year. Sections 4 and 5 read together are the charging sections, the first dealing with the incidence of the tax, and the second, with its rate. Section 6(1) provides for exemptions on the sale of goods which are specified in the schedule to the Act. Under section 6(2), the State Government has been given the power to add to or delete from that schedule. Section 10 deals with the making of returns and payment of the tax. Section 27 empowers the State Government to make rules for carrying out the purposes of the Act. This is the general scheme of the Act, in so far as we are concerned; but a somewhat detailed examination of these sections is necessary to understand the rival contentions. Section 4 consists of five sub-sections. Sub-section (1), which is subject to the provisions of sections 5 and 6, says that every dealer, except one dealing exclusively in goods declared tax-free under section 6, whose gross turnover during the year immediately preceding the commencement of the Act exceeded the taxable quantum, shall be liable to pay tax under the Act on all sales effected after the coming into force of this Act. A proviso is added, which is not relevant. Sub-section (2) says t....
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....rovide. Section 6(1) is brief, and may be quoted in extenso. It reads: Section 6(1)-"No tax shall be payable under this Act on the sale of goods specified in the first column of the Schedule, subject to the condi- tions and exceptions, if any, set out in the corresponding entry in the second column thereof and no dealer shall charge sales tax on the sale of goods which are declared tax-free from time to time under this section." The respondents emphasise the words "from time to time" in the first sub-section, and say that they also show that exemptions may be given, withdrawn, or given again and again several times during the year in respect of the same goods, and the exemptions, therefore, begin to operate when they are given and ceases when they are withdrawn. But the appellants contend that these words merely indicate that the power may be exercised as often as needed, and do not indicate the time from which the operation of the exemption commences and the period during which it lasts. Section 10(1) provides that the tax payable under the Act shall be paid in the manner provided at such intervals, as may he prescribed. Two rules framed under section 27 provide for such int....
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....which showed that the State Government itself was not sure of the true legal position, thus causing great confusion and distrust in the minds of the taxpayers. There is no doubt that the tax is a yearly tax. It was payable, in the first instance, by a dealer whose gross turnover during the financial year immediately preceding May 1, 1949, was above the taxable quantum. The * Here Italicised. tax is to be levied on the taxable turnover of a dealer every year. The difference between gross turnover and taxable turnover is this, that to arrive at the taxable turnover of any period some deductions have to be made for the same period. This clearly shows that the tax is for a year. The method of collection allows collection of tax at intervals; in some cases, the tax is collected at the end of the year; in some others, the tax is collected quarterly and in still other cases, even monthly. If the exemption can be said to operate for that period for which the tax is payable according as it is annually, quarterly or monthly, the tax would be different for different persons. Those who are paying the tax annually would get exemption for the whole year; but those who are paying it quarterly ....
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....vantage of reading and as I am unable to agree with the conclusion that the effect of the exemption given by Notification No. 4556-E & T(CH)-54/957 dated September 27, 1954, issued under section 6(2) of the Punjab General Sales Tax Act (Act 46 of 1948), hereinafter called the "Act" on manufactured tobacco becomes effective as from the beginning of the financial year, I proceed to give my reasons for the same. The period in regard to which the disputed amount of sales tax is sought to be levied was from April 1, 1954, to September 27, 1954. Previous to the issuing of the Notification of September 27, 1954, the Punjab Government issued a Notification required under section 6(2) of the Act for the purpose of information of persons likely to be affected thereby and to give them an opportunity to file any objections or suggestions in regard to the same. A Press Note was issued on August 4, 1954, stating that no sales tax will be leviable on manufactured tobacco for the financial year 1954-55. In order to resolve the controversy as to whether the exemption is effective from the commencement of the financial year or from the date of the notification it is necessary to refer to the s....
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.... any period which remains after deducting therefrom- (a) his turnover during that period on- (i) the sale of goods declared tax-free under section 6; (ii) ...................... (iii) ..................... Section 6 which makes provision for giving exemption is as follows: Section 6(1)-"No tax shall be payable under this Act on the sale of goods specified in the first column of the Schedule, subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof, and no dealer shall charge sales tax on the sale of goods which are declared tax-free from time to time under this section. (2) The State Government, after giving by notification not less than three months' notice of its intention so to do, may by like notification add to or delete from the Schedule and thereupon the Schedule shall be deemed to be amended accordingly." Section 10 deals with payment of taxes and returns. Clause (1) of section 10 provides: Section 10(1)-"Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed." ....
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....ts, i.e., it was a yearly tax like the income-tax. Section 6 which provides for exemption specifically envisages the declaration from time to time of exemption of goods which are to be tax-free. The use of the words "tax-free from time to time," in my opinion, means that the exemption may be given at any time during the year but it does not suggest that the exemption will operate from the beginning of the year and not from the time that the exemption is given. If this were not so then the imposition of sales tax by excluding an article exempt from tax from the schedule say about the end of the financial year would render the dealer liable to sales tax for the whole year even though he may not have collected any sales tax from his customers which under the law he would be entitled to do if the article is not in the schedule. It will be an imposition which is not envisaged by the general scheme of the Sales Tax Act because the tax is exigible on taxable turnover in every return made monthly or quarterly or yearly as the case may be. It appears that it is for that reason that in the definition of the word "turnover" the Legislature has chosen the words "during the given period", i.e.,....