1976 (2) TMI 177 - HC - VAT and Sales Tax

Summary

Issues:
Assessment under section 7 for the year 1971-72 based on the dealer's request in reply to the preassessment notice. Interpretation of rules 15(4-A) and 15(4-B) regarding the dealer's option to be assessed under section 7. Applicability of rule 15(4-B) to the case considering its deletion in 1971.

Analysis:
The judgment concerns a dealer in butter and ghee assessed for the year 1971-72. The dealer reported turnovers in form A-2 returns, with discrepancies leading to a preassessment notice proposing additional turnover. The dealer requested assessment under section 7 for 1971-72, which was initially rejected by the assessing authority. The Tribunal later allowed the assessment under section 7, leading to the State's appeal against this decision.

The crux of the issue lies in the interpretation of rules 15(4-A) and 15(4-B) regarding the dealer's option to be assessed under section 7. Rule 15(4-A) allows the dealer to opt for section 7 assessment at the beginning of the year, while rule 15(4-B) permits this option before the final assessment. The dealer's contention was that even if initially assessed under rule 18, he could opt for section 7 assessment before the final assessment order.

The Court analyzed the rules and concluded that once a dealer opts for assessment under rule 18 by submitting form A-2 returns, the option for section 7 assessment is deemed waived. The Court emphasized the distinction between assessments under rule 15 and rule 18, highlighting that the dealer's choice at the time of filing returns determines the assessment method. Therefore, the dealer who initially chose rule 18 assessment cannot later claim section 7 assessment during the final assessment.

Additionally, the Court noted that rule 15(4-B), crucial to the case, was deleted in 1971, rendering it inapplicable post that date. Consequently, the Tribunal's decision allowing section 7 assessment for the dealer was set aside, restoring the original assessment order. The State's appeal was allowed, and costs were awarded to the revenue.

In summary, the judgment delves into the dealer's entitlement to opt for section 7 assessment, the nuances of rules 15(4-A) and 15(4-B), and the impact of rule deletions on the case's outcome. The Court's interpretation of the rules clarifies the dealer's assessment options based on the chosen method and timing of filing returns, ultimately upholding the original assessment order for the year in question.