TaxTMI 
TaxTMI 
1957 (9) TMI 34
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....ad been called upon to do so by the General Sales Tax department by notice dated 24th October, 1955, under Ex. P-2. Ex. P-3 is the application submitted by the petitioners for the licence. Having submitted the application for the licence so late, they did not also pay the licence fee, which should have been paid along with the application for the licence. Both the application and the licence fee should have been made and paid before the 30th September, 1955, as required by rule 5(1) of the Madras General Sales Tax Rules as amended by G.O. No. 1898 dated 17th June, 1955. Having failed to do so, the petitioners were prosecuted on two counts: (1) for failure to apply for the licence, and (2) for failure to pay the licence fee, an offence punishable under section 15(b) of the Madras General Sales Tax Act, as also under rule 32 of the General Sales Tax Rules. The petitioners' defence was that they, being subsequent dealers or second dealers, were not liable to pay the tax and therefore not liable to apply for the licence and pay the fee prescribed. The second line of defence was that the petitioners were liable to apply for the licence only if the turnover was Rs. 7,500 and above, an....
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....succinct manner the scheme of taxation and licensing as envisaged in the various sections and the rules framed under the Madras General Sales Tax Act. We appreciate the exposition of the points involved in this revision petition made by the learned Assistant Government Pleader. The first point to be noted while considering a case of this nature is that in this State the tax that is levied is still a multi-point tax, but there are exceptions to it. In order to avail of the exceptions to the multi-point tax, certain conditions prescribed by the sections as well as by the rules have to be observed by persons, who want to avail of such exceptions. To determine at which point tax should be levied as single point tax, various rules have been framed, and it has also been laid down under these rules that no one can derive *Since reported as Guruviah Naidu and Brothers and Others v. The State of Madras and Others [1957] (8 S.T.C. 690). any benefit of the exemptions provided under the scheme of multi-point tax, unless those conditions are fulfilled in their entirety. Another point to be noted in this connection is that the sections of the Act which govern the levy of the sales tax in respect....
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....957. But in this case, we are concerned only with the section as it stood when the petitioners failed to comply with the provisions of the Act and were prosecuted for such failure. Section 3 refers to the levy of tax and section 5 provides for exemptions and reductions in certain cases. Section 5 enacts that subject to such restrictions and conditions as may be prescribed, including conditions as to licences and licence fees, (1) the sale of handspun yarn and of any cloth woven on handlooms wholly with handspun yarn and sold by persons dealing exclusively in such cloth, shall be exempt from taxation under section 3, sub-section (1); (ii) the sale of cotton (including kapas) and of cotton yarn other than handspun yarn shall be liable to tax under section 3, sub-section (1), only at such single point in the series of sales by successive dealers as may be prescribed and only at the rate of one half of one per cent of the turnover at that point. The rest of the sub-sections of section 5 need not be referred to as they are not relevant for the purpose of this judgment. This section which provides for exemptions and reductions of tax in certain cases had been amended a number of times an....
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.... it is prescribed to be payable in advance along with the application. This is provided for by sub-rule 4(c); and sub-rule 4(d) provides that every applicant shall enclose a cheque along with the application for the licence fee. Sub-rule (5) of rule 6 gives the power to the licensing authority to satisfy himself as to the correctness of the estimated turn- over, and a return of the turnover is to be made in the form prescribed. In the present case it is conceded that in the application made by the petitioners, the estimated turnover was shown as Rs. 53,000 and odd, which was the same as the previous year's turnover. If such be the estimated turnover, then it exceeded the minimum prescribed, viz., Rs. 10,000, which was subsequently reduced to Rs. 7,500 as per an amendment issued under G.O. 1898, Revenue, dated 17th June, 1955. After the return is made under sub-rule 11(a) of rule 6 the assessing authority is entitled to make a scrutiny of the return and finally assess the turnover for purposes of tax and licence fee. In the petitioners' case, the question of the scrutiny of turnover had not yet arrived. But it is stated before us that the estimated turnover given was Rs. 53,000 and ....
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....d minimum so as to justify any refund. Upto a certain stage, the effect of a series of decisions of this Court was that a subsequent dealer was not compelled to take out a licence and that it was merely optional and such an option may or may not be exercised by the dealer, and it was also the trend of the decisions that if a dealer does not take out a licence, he could not be deprived of the benefit conferred on dealers under section 5. But both the learned counsel for the petitioners and the Assistant Government Pleader agree now that by reason of the amendments made to rules 5, 6 and 32, the option that was left with the dealer to apply or not for a licence, if he was to claim benefit under section 5, has been taken away and the application for a licence and payment of fee in respect thereof has now been made compulsory and it is conceded that this amended rule applies to the present case. If such be the case, it follows that the petitioners did not comply with an obligatory provision of law which compelled them to apply for and take out a licence and pay the prescribed fee in advance, and consequently there was infringement of the rules, which made their failure punishable un....