TMI Blog1956 (8) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ject to the final assessment and adjustments consequent thereon, and the final assessment under rule 14 is to be made after the close of the year and on the basis of the actual turnover for the whole year. Rules 12 and 13 provide for the issue of a notice to the dealer about the provisional assessment and for payment of the tax provisionally fixed in monthly instalments. Rule 15 provides for the adjustment after the final assessment. If the final assessment is lower than the provisional assessment the dealer has the option either to get a refund of the excess tax paid by him under the provisional assessment or to have the excess credited against the next year's tax, and if the final assessment is higher than the provisional assessment the dealer has to pay the difference. 3.. For the year 1953-54 the accused in C.C. No. 507 of 1955 on the file of the Additional First Class Magistrate, Ernakulam, was provisionally assessed to sales tax in accordance with the provisions of rules 9 to 11 by the Sales Tax Authorities, and a demand notice was also issued to him on 25th May, 1953. Although the assessee accepted the notice on 5th June, 1953, he did not pay the tax, nor did he show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istrate considered that a reference to this Court was necessary under section 432(1) of the Code of Criminal Procedure and has made the reference accordingly. 4.. Two points arise for decision in the reference, namely, (i) whether the Magistrate was competent to decide himself the validity or otherwise of rules 10 and 11 or whether he was bound to make a reference to this Court under section 432(1) of the Code of Criminal Procedure for deciding that question, and (ii) whether rules 10 and 11 are repugnant to section 3 of the Act and ultra vires of the powers of the rule-making authority. Page No: 20 5.. Section 432(1) of the Code of Criminal Procedure reads as follows: "Where any court is satisfied that a case pending before it involves a question as to the validity of any Act, Ordinance or Regulation, or of any provision contained in an Act, Ordinance or Regulation, the determination of which is necessary for the disposal of the case, and is of opinion that such Act, Ordinance, Regulation or provision is invalid or inoperative, but has not been so declared by the High Court to which that Court is subordinate or by the Supreme Court, the court shall state a case setting out its opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statute authorising the making of the order provides that it shall have effect as if it were enacted in the statute." and observed that there is abundant authority in decisions of the courts in India for this position. While this is the general law, the matter stands on a slightly different footing so far as subordinate criminal courts are concerned, by reason of section 432(1) of the Code of Criminal Procedure. When the validity of a particular rule made under a provision in the Act, which says that the rules made thereunder shall have effect as if enacted in the Act, is challenged if the court decides that the particular rule is valid, that rule will have to be treated as part of the Act. The challenge is in effect about the validity of a provision which has to be treated as part of the Act. In such a case, on account of section 432(1) of the Code of Criminal Procedure, a subordinate criminal court is incompetent to pronounce the rule to be invalid or inoperative until the Supreme Court or the High Court to which that court is subordinate has declared it to be so. The question of the validity of rules 10 and 11, which by virtue of section 24 have to be considered as part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Tax Act, which is the charging section, the tax for each year is on the turnover for that year itself. The section is "every dealer shall pay for each year a tax on his total turnover for such year". Under section 4 of the Indian Income-tax Act the tax for each year is not on the income of that year but on the income of the previous year. Section 18A was inserted in the Income-tax Act by an amendment in 1944, and regarding the necessity for the enactment of that section it is said at page 643 of the third edition of "The Law and Practice of Income-tax" by Kanga and Palkhivala: "It has been noted above that under this Act the subject of charge is the income of the previous year and not the income of the assessment year; in other words, the tax is assessed and paid in the next succeeding year upon the results of the year before. Secondly, there is no liability of tax until the annual Finance Act is passed charging the income of the previous year. This section contrives to reconcile the principle of advance payment of tax with the scheme of the Act which is to tax the income of the previous year. The basis of the section is the principle of 'pay as you earn', i.e., paying tax b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for: (a) all matters expressly required or allowed by this Act to be prescribed." Under these three provisions the Government has the power to frame rules as to how the turnover is to be ascertained, the manner of the assessment, levy and collection of the tax, and for assessing, levying and calculating the tax in such manner and such instalments as they deem fit. As the provisional assessment under rules 10 and 11 are subject to the final assessment under rule 14 and final adjustment under rule 15, the rules for making provisional assessments are nothing more than provisions for making the assessment for the year and the levying and the collection of tax in instalments. These sections read with section 3(1)(a) confer upon Government ample powers for making the rules to enable provisional assessments subject to final assessment and for determining the turnover for the purpose of the provisional assessments. Considering the scheme of the Sales Tax Act which is quite unlike the scheme of the Indian Income tax Act and the provisions referred to above we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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