TaxTMI 
TaxTMI 
TaxTMI 
1967 (4) TMI 175
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....n both its branches, in the affirmative: "Whether section 18(4) takes away the right of election of the assessment year conferred on every dealer by the first proviso to section 7 read with rule 39(1) and whether tax is to be imposed on a new dealer on his turnover computed in accordance with section 18(4) in spite of his election of the assessment year by filing quarterly returns." The Commissioner of Sales Tax has appealed to this Court with special leave. The respondents commenced business in cotton textiles at Bulandshahr in U.P. during the assessment year 1949-50 and they were assessed to sales tax under section 18(3) of the U.P. Sales Tax Act, 15 of 1948, on their turnover of that year. During the assessment year 1950-51 the respon....
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....ied in such manner as may be prescribed: Provided that the State Government may prescribe that any dealer or class of dealers may submit, in lieu of the return or returns specified in this section, a return or returns of his turnover of the assessment year at such intervals, in such form and verified in such manner as may be prescribed, and thereupon, all the provisions of this Act shall apply as if such return or returns had been duly submitted under this section." Sub-sections (2) and (3) of section 7 provided that the assessing authority may, after such enquiry as he considers necessary, complete the assessment and assess the tax on that basis; if no return is submitted by the dealer or if the return submitted by him appears to be inco....
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....sment year during which the business is carried on and, if the average monthly turnover is not less than Rs. 1,000 he shall assess the tax on the basis of the total turnover so determined by him. (4) The assessing authority shall fix the turnover of the dealer for the next succeeding assessment year at the amount of average monthly turnover determined by him in accordance with clause (b) or (c) of sub-section (3), as the case may be, multiplied by 12 and shall assess the tax thereon." In exercise of the powers conferred by section 24 of the Act, the State Government framed rules to carry out the purposes of the Act. Rules 39, 40 and 41 are relevant: "39. (1) Any dealer may elect to submit returns of his turnover of the assessment ....
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....) read with section 18 of the Act, their turnover in respect of the broken period, and they were assessed to tax on that turnover. For the year 1950-51 the respondents filed quarterly returns and the assessing authority assessed the respondents under section 7(2) of the Act read with rule 41(5). The respondents contend that even though they had submitted their quarterly returns for the year 1950-51 and those returns disclosed a taxable turnover of Rs. 1,15,711-11-3 they were liable to be assessed to tax by the express terms of section 18(4) on the turnover computed at 12 times the monthly average determined in the assessment year 1949-50. Ordinarily a dealer is required by section 7(1) of the Act to submit his return of turnover for the pr....
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....ervation. Counsel says that sub-section (1) of section 7 alone and not the proviso thereto is subject to the provisions of section 18, and therefore when under the rules framed by the Government it is prescribed that a dealer or class of dealers may submit a return or returns of his turnover of the assessment year, and if the dealer avails himself of that option, sub-section (4) of section 18 has no application. In other words, the argument is that a dealer commencing business during the course of an assessment year is liable to be assessed in that year on the monthly statements of his turnover under section 18(3)(b) and (c), and the right to claim that his turnover be determined in the next succeeding year, in the manner provided by sectio....
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....e been liable to pay tax wholly unrelated to his true turnover of that year. In order to provide against these contingencies, section 18 was enacted. The scheme of the Act, as it stood originally enacted, was consistent and practical. But when the Legislature added the proviso to sub-section (1) of section 7 by Act 25 of 1948 giving an option to the dealer to submit in lieu of his return of the previous year the return of turnover of the current year, the significance of section 18(4) in the altered set up was apparently forgotten. Sub-section (4) of section 18 became inconsistent with the scheme of assessment of a dealer who exercised an option under rule 39(1) to submit his turnover of the assessment year. We may assume that it may not ha....