TMI Blog1961 (12) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... B.P., KAPUR J.L., HIDAYATULLAH M. AND SHAH J.C. AND MUDHOLKAR J.R. JJ. S.M. Sikri, Advocate-General for the State of Punjab (B.K. Khanna and P.D. Menon, Advocates, with him), for the respondents. M.C. Setalvad, Attorney-General for India (S.N. Andley, Rameshwar Nath and P.L. Vohra, Advocates of M/s. Rajinder Narain Co., with him), for the appellants. -------------------------------------------------- The judgment of SINHA, C.J., HIDAYATULLAH, SHAH and MUDHOL- KAR, JJ., was delivered by HIDAYATULLAH, J. KAPUR, J., delivered a separate judgment. HIDAYATULLAH, J. -The appellants are a firm of general merchants, which sells, among other goods, manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954 (XII of 1954), which came into force in the State of Punjab from April 1, 1954. The firm is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded and that no sales tax would be charged during the current financial year in respect of sales of tobacco which fall under the Tobacco Vend Fees Act. Tobacco Vend Fees will be recovered at full rates for the whole year as and when rules under the Punjab Tobacco Vend Fees Act are finalised." It appears that the Rules under the Tobacco Vend Fees Act were not promulgated; nor were the forms and licences prescribed during the financial year ending on March 31, 1955. In the meantime, the appellants, as already stated, paid sales tax on sale of manufactured tobacco for the first quarter ending June 30, 1954, and the Notification exempting manufactured tobacco from sales tax was issued on September 27, 1954. The appellants had made enquiries from the Excise and Taxation Commissioner, Punjab, about the Press 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 toba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants. The first was that the Punjab Tobacco Vend Fees Act had pro tanto repealed the East Punjab General Sales Tax Act, and that sales tax on manufactured tobacco could not be levied after April 1, 1954. The second was that the State Government by its assurance in the Press Note of August, 1954, had estopped itself from reversing its policy and claiming the sales tax up to the date of the Notification. These points were not seriously pressed upon us, because there can be two taxes on the same commodity or goods without the one law repealing the other. No repeal can be implied, unless there is an express repeal of an earlier Act by the later Act, or unless the two Acts cannot stand together. The first argument was, therefore, rightly rejected in the High Court. The second argument is 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have already said that the latter Act did not repeal pro tanto the earlier. The liability for sales tax in this appeal is for two quarters ending June 30, 1954, and September 30, 1954. There is no dispute that after September 27, 1954, sales tax could not be levied, in view of the inclusion of item 5I in the schedule exempting manufactured tobacco from the operation of the Act. We must now examine those provisions of the Act which are claimed by the rival parties to indicate the moment of time from which the exemption granted by the Notification began to operate. "Turnover" has been defined in the Act to include the aggregate of the amounts of sales and parts of sales actually made by any dealer during the given period, less certain allowances, and "year" means the financial 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the tax is computed year- wise, and the exemption must, therefore, operate for the whole of the year in which it is made, irrespective of the date on which the Notification is made. The respondents, on the other hand, emphasise the words "gross turnover during any period " and "his turnover during that period" occurring in section 5, and contend that the tax is not year wise but accrues, so to speak, from day to day or at least from period to period within a year, and the exemption thus operates not for the whole of the year but for the period within which it is granted, and refer in aid of this argument, to sections 6 and 10. Sections 4(1) and 5(1) are subject to section 6, section 5(1), to other sections of the Act and so, section 10, and we have to see what they provide. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period and at such intervals, as may be applicable to an assessee. We cannot help saying that the Act and the Notification could have been framed to obviate such unnecessary questions by providing clearly in them the time from which such exemptions would begin to operate. Similarly, if the rules under the Punjab Tobacco Vend Fees Act had been framed in time and the Tobacco Vend Fees Act together with the Rules under it and the exemptions under the Sales Tax Act were brought into force together, a considerable amount of time to the department and the Courts would have been saved, as also trouble to the taxpayer. The Rules under the Punjab Tobacco Vend Fees Act were not framed during the whole of the financial year 1954-55. Contradictory Press Notes were issued, 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 ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licable in those cases where a dealer had elected to pay tax on the turnover of his previous year. The majority view on that occasion pointed out that it was not possible to divide the assessment year into two portions, in which the tax was levied at one rate in one part and another rate in another part. The case was confined to a dealer who had elected to pay the tax for a year different from that in which the exemption was granted. Those facts do not exist here; but if the case is considered at all relevant, it supports the appellants rather than the respondents. In the result, the appeal succeeds, and is allowed with costs. KAPUR, J. -The facts of this case have been set out in the judgment of my learned brother Hidayatullah, J., which I have had the advantage 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax if his sales in the year preceding the commencement of the Act are more than the taxable quantum [section 4(1)] or subsequently becomes so during any year. Section 5(1)-"Subject to the provisions of this Act, there shall be levied on the taxable turnover every year of a dealer a tax at such rates not exceeding two pice in a rupee as the State Government may by notification direct: Provided that Government may by notification in the Official Gazette declare that in respect of any goods or class of goods the dealer may pay such lump sum by way of composition of the tax payable under this Act, as the Government may notify from time to time. (2) In this Act the expression 'taxable turnover' means that part of a dealer's gross turnover during 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax on the turnover, and not that every year a tax was to be levied on the taxable turnover, i.e., aggregate of the sales made during a given period. It was also argued that if the exemption of the turnover was to operate for the quarter in which the exemption was notified, the consequence will be absurd as those who pay the tax on quarterly returns or monthly returns will not be able to get the advantage of the exemption whereas those who pay on yearly returns will be so entitled. I am unable to agree that the effect of the collocation of the words in section 5 and particularly of the words "shall be levied on the taxable turnover every year.........a tax" is what was argued by the appellants, 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 impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. e., on the taxable turnover for the period for which the return is made and which becomes the subject-matter of assessment. When the assessment has been made and the tax assessed is paid the assessment for that period is completed and all proceedings and liabilities end subject to what is stated as to escaped periods. This is further clear from the rules which have been made in regard to registration and furnishing of returns. In the registration certificate it has to be mentioned as to what goods are free of tax. Returns are required to be made in the Forms which are given, i.e., Form VIII or Form XXIII. A return under Form VIII may be monthly, quarterly or yearly. A return to be made also provides for mentioning the turn- over of tax-free goods and goods which are exempted from sales tax. If the contention of the appellants is correct then after all the returns have been filed, the amount of sales tax according to the returns assessed and payments made, there will have to be proceedings for reassessment, remission or refund as the case may be in regard to those periods, if any goods are added to the schedule exempting them from sales tax after the assessment or any goods are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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