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PETITIONER: STATE OF PUNJAB

       Vs.

RESPONDENT: SANT SINGH KANWARJIT     SINGH

DATE OF JUDGMENT: 04/12/1969

BENCH: SHAH, J.C. BENCH: SHAH, J.C. HEGDE, K.S.

CITATION:  1970 AIR  744            1969 SCR  (3) 311  1970 SCC  (1) 101

ACT: Punjab General, Sales Tax Act (Punj. 16 of 1948), s.  10(1)- Provision in Act and Rules for quarterly returns and payment of tax due there on-Submission of quarterly returns-Right of Sales Tax Officer to make assessment.

HEADNOTE: The  assessee, a dealer registered under the Punjab  General Sales  Tax Act, 1948, filed returns of the turnover  of  its business  for the quarters ending 30th June, 1962  and  30th September,  1962 and the Sales Tax Officer assessed the  tax for the two quarters. On  the question whether the tax could be assessed  only  at the end of the year and not during the year, HELD  : Under the Act, sales-tax is a yearly tax,  but  that does  not imply that assessment of tax quarterly is  illegal if  provision is made in the Act for quarterly  returns  and assessment.   Since the provisions relating to  returns  and assessment, namely, ss. 10 and I 1, and rule 20, contemplate submission  of  quarterly  returns, assessment  of  tax  due thereon and payment of the tax by the taxpayers, the tax was validly assessed. [313 D, F-G] Mathura  Prashad & Sons v. State of Punjab, [1962] Supp.   1 S.C.R. 913, explained. Om Prakash Rajinder Kumar v. K. K. Opal, I.L.R. [1967]  Vol. 1 Punjab & Haryana 155, approved.

JUDGMENT: CIVIL  APPELLATE  JURISDICTION: Appeal from the order dated October 20, 1965 of the  Punjab, High Court in Letters Patent Appeal No. 262 of 1965. V. C. Mahajan and R. N. Sachthey, for the appellant. Sobhag Mal Jain and B. P. Maheshwari, for the respondent. The Judgment of the Court was delivered by Shah,  J. Sant Singh Kanwarjit Singh-hereinafter called  the assessee is registered as a dealer under the Punjab  General Salestax  Act,  1948.   The assessee filed  returns  of  the turnover of its business for the quarters ending 30th  June, 1962 and 30th September, 1962, but without appending thereto

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the list of sales to registered dealers as required by  rule 30 framed under the Act.  The Sales-tax Officer proceeded to make "exparte assessments" for the two quarters. The  assessee  then moved a petition in the  High  Court  of Punjab  for  a writ quashing the orders  of  assessment.   A single 312 Judge  following  the Judgment of the Punjab High  Court  in Mansa   Ram  Sushil  Kumar  V.  The   Assessing   Authority, Ludhiana,(’) quashed the orders of assessment.  An appeal by the  State of Punjab was summarily dismissed by  a  Division Bench of the High Court. The  scheme of levy and assessment of tax under the Act  may be  briefly  noticed.   Every dealer  whose  gross  turnover during the year proceeding commencement to the Act  exceeded the  taxable  turnover  is liable to pay tax  on  all  sales effected  after  the quarter after the commencement  of  the Act.   Tax is to be levied on the taxable turnover  at  such rates  as the State Government may direct.  Tax  is  payable under  the Act in the manner provided and at such  intervals as  may  be prescribed.  S. [10(l)].   A  registered  dealer furnishing  a  return  has  to pay the  amount  of  tax  due according to the return into the Government Treasury. The  assessing authority may without requiring the  presence of  the  registered  dealer  or production  by  him  of  any evidence  hold  that the returns furnished are  correct  and complete,  and proceed to assess the amount of tax due  from the  dealer on the basis of these returns; if the  assessing authority  is not satisfied with the return he  may  require the  registered  dealer to remain present in  person  or  by pleader and to produce evidence on which he may rely upon in support  of the return.  The Assessing authority  may  after hearing  the  evidence as the dealer may  produce  and  such other  evidence  as  the  Assessing  authority-may  require, assess the amount of tax due from the dealer. The  scheme is plain.  A registered dealer must file  return of  the  turnover  in  the manner  prescribed  and  at  such intervals as may be prescribed.  The dealer while submitting the return has also to pay tax according to the return.  The Assessing Officer may accept the return or he may call  upon the  tax  payer to explain the.turnover, and support  it  by evidence. Under the Act sales-tax is a yearly tax, but the  provisions relating  to assessment contemplate assessments for  periods shorter than -a complete year, and for that purpose the  tax payers are required by the Act to submit periodical  returns of their turnover and to pay tax due thereon. In  Mansa  Ram  Sushil Kumar v. .  The  Assessing  Authority Ludhiana (1), a Division Bench of the Punjab High Court held that the tax imposed under the Punjab General Sales Tax  Act may be assessed only at the end of the year- and not  during the  pendency of the year as and when, the return is  filed, and  in  the  absence of machinery in  the  Act  for  making Assessment for (1) (1964) 16 S.T.C. 857. 313 period  shorter  than the year of assessment, the  order  of assesment  of  tax for a quarter before the  expiry  of  the assessment year is illegal.  In reaching that conclusion the High  Court relied upon the judgment of this Court  in  M/s. Mathura  Prasad  &  Sons v. State of  Punjab  (1).   But  in Mathura  Prashad’s case(’) this Court considered whether  an exemption granted by the State, Government during the course of  the year was applicable to the whole or only a  part  of the year of assessment.  This Court held(Mr.  Justice  Kapur

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dissenting)  that  the  exemption operated  for  the  entire financial  year.   The  Court observed that the  tax  was  a yearly  tax levied on the taxable turnover of a  dealer  for the  year; it was collected in some cases  quarterly,  some, cases  yearly;  and  proceeded to  hold  that  whenever  the exemption  came  in,  in  the year for  which  the  tax  was payable,  it  exempted  sales  throughout  the  year  unless notification fixed the date of commencement of the tax.   In our judgment the principle, of that case has no, bearing  on the  question  arising in this case. :The Court  in  Mathura Prasad’s  case(’)  merely  emphasised that the  tax  was  an annual  tax  but that did not imply that assessment  of  tax quarterly  was illegal.  Adjustment may possibly have to  be made when the .assessment of the final quarter is made,  but the taxing authorities are not debarred from determining and assessing  the quarterly turnover of tax.  Mansa Ram’s  case (2) has since been over-ruled by a full Bench of the  Punjab High Court in M/s.  Om Parkash Rajinder Kumar v. K. K.  Opal (3).   The  Court in that case held that  Sales-tax  may  be assessed  under  section  1 1 of the Act  on  the  basis  of quarterly  returns submitted by the dealer pursuant  to  the notice  served on him under sec. 10(3) before the  close  of the relevant financial year. In our judgment the High Court was right in holding in  Mis. Om  Parkash Rajinder Kumar’s case (3) that  the,  assessment proceeding under the Punjab General Sale tax may be  started even  before the expiry of the year where provision is  made for   submission  of  periodical  returns,  and  that   such assessments are not provisional. The appeal is allowed and the order passed by the High Court set aside and the petition is dismissed.  There will be-  no order to cost throughout. V.P.S.                 Petition dismissed. (1)  [1962] Supp. 1 S.C.R. 913. (2)  {1964] 15 S.T.C. 857. (3)  I.L.R. (1967) Vol. 1. Punj. & Har, 155. 314