TMI Blog1967 (4) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... ------------------------------------- The judgment of the Court was delivered by SHAH, J. -The following question referred for opinion under section 11 of the U.P. Sales Tax Act, 1948, was answered by the High Court of Allahabad, in 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 respondents filed quarterly returns. The Sales Tax Officer, Bulandshahr, rejected the contention of the respondents that they were liable to be assessed on the turnover computed in accordance with section 18(4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commencing business during the course of an assessment year whose monthly turnover is estimated to be not less than Rs. 1,000 shall give notice of the fact to the assessing authority within fifteen days of such commencement and shall submit monthly statements of his turnover within seven days of the expiry of each month in such form and verified in such manner as may be prescribed in respect of the portion of such year during which the business is continued. (b) If the assessing authority, after making such enquiry as he considers necessary, is satisfied that such returns submitted under clause (a) are correct and complete and that the average monthly turnover is not less than Rs. 1,000 he shall assess the dealer on the total turnover shown in the returns. (c) If no returns are submitted by the dealer under clause (a) before the period specified, or if the returns submitted by him appear to the assessing authority to be incorrect or incomplete, the assessing authority shall, after such enquiry as he deems necessary, determine to the best of his judgment, the average monthly turnover and the total turnover for the period of the assessment year during which the business is carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erly 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 previous year. But that rule is subject to two exceptions. The dealer may elect under rule 39(1) to return his turnover for the assessment year. Again a dealer who commences business as a dealer in the course of an assessment year is enjoined to submit monthly statements of his turnover during that year. If the dealer elects to make a return of the turnover for the assessment year, instead of the previous year, he will be assessed to tax under section 7(2) and (3) read with rule 41(5). If the dealer has commenced a new business during an assessment year, he is liable to be assessed under section 18(3)(b) and (c). He cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t option was exercised for the year 1950-51 the tax had to be assessed under section 7(2) read with rule 41(5) on the turnover returned by the respondents. We are unable to agree with the contentions raised by counsel for the State. It appears that when the Act was originally enacted, it was intended that sales tax shall be levied on a dealer on his turnover of the previous year. Provision was also made in section 18 for determining the turnover of a dealer who commenced business during the course of an assessment year. Otherwise the dealer commencing his business during the course of an assessment year would have escaped liability to pay tax altogether, and even in respect of the next succeeding year he would have 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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