ivil Appeal Nos
948 950 of 1975
From the Judgment and order dated 1291974 of the High Court of Patna in Tax Case Nos
2 to 4 of 1968
Harish N Salve Mrs AK Verma Ms section Sethna and Joel Peres for the Petitioner
D Goburdhan for the Respondent
The Judgment of the Court was delivered by RANGANATHAN J
These three appeals by the Fertiliser Corporation of India Limited hereinafter referred to as the asses see  arise out of its sales tax assessments for the assessment years 1959 60 1960 61 and 1961 62 under the Bihar Sales Tax Act 1959 hereinafter referred to as the Act 
They raise a very short but interesting question
regarding the entitlement of the assessee to the rebate of tax provided for in section5 of the Act
At the outset a reference may be made to the salient portions of certain relevant provisions of the Act
Section 141 provides that every registered dealer shall furnish such returns within such period and to such authority as may be prescribed
The prescribed authority is the Assistant Commissioner of Sales Tax who is also the assessing authority
Under rule 10 of the Rules framed under the Act the assessee should file quarterly returns
Such returns are to be filed within one calendar month of the expiry of the period to which they relate
Sub section 3 of section 14 provides for an extension of time for the filing of the return
It reads If the prescribed authority is satisfied that a dealer is for reasonable cause unable to furnish any return within the prescribed period or the period fixed under the proviso to sub section 1 the said authority may extend the period for submission of the return Section 20 of the Act requires that before any registered dealer furnishes a return under the Act he should pay into a Government Treasury the full amount of tax due under the Act according to such return and should also furnish along with the return a receipt from such Treasury showing the payment of the said amount
section 15 is the 151 provision entitling the assessee to a rebate
It reads as follows Rebate A rebate at the rate of one per centum of the amount of tax admitted to be due in the return furnished under sub section 1 of section 14 in the prescribed manner and within the prescribed or extended period shall be allowed to a registered dealer who has paid such amount according to the provisions of sub section 2 of section 20
Provided that where the amount finally assessed on the dealer is less than the admitted amount rebate at the said rate shall be allowed only on the amount so assessed C Provided further that the State Government may by notification and subject to such conditions or restrictions as may be specified therein enhance or reduce the rate of rebate in respect of registered dealers generally or any class of such dealers  It may be noted that under the proviso to section 22 of the Act a registered dealer is entitled to deduct from the amount of tax due from him under the Act according to his return any amount which may be admissible as rebate under the provisions of section 15
In the present case the assessee filed its quarterly returns under section 141 of the Act but except for the second quarter of 196061 the returns were all filed belatedly
To illustrate the returns for the second third and fourth quarters of 1959 60 were filed by the assessee only on the 7th November 1959 11th February 1960 and Ist June 1960
In other words the returns were late by a few days
It is common ground that there was no application made by the assessee to the prescribed authority for extension of the time prescribed under the Act for the filing of the return
The assessee however paid the taxes before the due dates of the respective returns availed itself of the rebate and deducted the same while paying the tax due on the returns filed by it
The short question that arose before the Tribunal as well as the High Court was whether the assessee was entitled to the rebate under section 15
The Tribunal held that the rebate is available to an assessee only if 152 i the tax on the basis of returns is paid as prescribed in section 20 and ii the quarterly returns of the assessee ha d been filed within the prescribed period or extended period
As the assessee had not filed its returns within the prescribed period and since the assessee had sought no extension it was held that the assessee was not entitled to the rebate
The assessee sought for a reference and before the High Court relied on a decision of the same High Court in Jamuna Flour  oil Mills Pvt Ltd vs State of Bihar 1968 22 STC 1
The facts of the case were similar to those of the present case and the assessee had been held entitled to the rebate
It is sufficient to extract the relevant portion of the head note For the quarter ending 30th June 1961 the assessee had paid the tax due before 31st July 1961 but it actually filed the return only on Ist August 1961
The assessee was assessed on the basis of the return submitted by it but its claim for rebate under section 15 of the Bihar Sales Tax Act 1959 was rejected by the taxing authority on the ground that for the purpose of eligibility for rebate under section 15 the assessee must fulfil two conditions viz 1 the tax due for the quarter must be paid before the end of succeeding month and 2 the return must also be filed by the end of the succeeding month Held that the assessee was entitled to the rebate under section 15 for the quarter ending 30th June 1961
Although the return was submitted one day late as the assessee was assessed not under the best of judgment principle but on the return submitted by it it must be said that impliedly the period for furnishing the return was extended by one day as permitted by section 143
The passing of an express order by the taxing authority regarding its satisfaction about the existence of reasonable cause for failure to furnish the return by 31st July 1961 was not necessary
on a proper construction of section 15 read with section 20 the eligibility for claiming rebate arises if the amount is paid under section 202
That portion of 153 section 15 which refers to the filing of return within the prescribed period should not be construed as a condition for a right to claim rebate
The reference to the return in section 15 is for the purpose of ascertaining the amount of tax admitted to be due and it is not meant to restrict the assessee s right to claim rebate
 The two judges who heard the case of the assessee were divided in their opinion on the question at issue
The matter was therefore referred to a larger bench
This Bench by a majority of 2 to 1 took the same view as Tribunal
The assessee is in appeal before us convassing the correctness of the decision of the Full Bench
We have given careful thought to the contentions of the counsel tor the parties and the differing views expressed by the Judges who heard the above two cases
We have reached the conclusion that the view taken by the High Court in Jamuna Flour and oil Mills Pvt Ltd vs State of Bihar 1968 22 STC 1 is the better view on a proper construction of the relevant statutory provisions
The object of section 15 of the Act is to confer a benefit on an assessee for prompt payment of the tax
In this case there is no dispute that the assessee had paid the tax before the due dates
There is also no dispute that the tax paid accords with the tax due on the basis of returns
The only question is whether the assessee should be penalised by being denied the rebate due to it because there was a short delay in the filing of the returns
The argument on behalf of the Revenue which has appealed to the High Court is this
Section 15 is not a taxing provision but one which confers a benefit or concession to assessee
Settled principles of construction of taxing statutes require that such conditions should be strictly construed
The section lays down two conditions for the grant of benefit or concession of which one is not fulfilled
Though the assessee had paid the taxes in time it had neither filed returns within the prescribed time nor cared to obtain an extension for filing the same
There is no reason why such an assessee should be shown any leniency and given a benefit which it does not deserve on the language of the statute
Granting the correctness of the above argument and assuming that it is also a condition precedent for the grant of rebate that the assessee should have filed its return within the prescribed or extended period we think it can be said that the said condition is fulfilled 154 in the present case
The return was admittedly not filed within the time prescribed under section 141
Has it been filed then within the extended period In answering this question certain features of the Act have to be kept in mind
The first is that the Act does not set out any particular procedure for obtaining extension of time
It does not prescribe any form of application
It does not say that such application must be filed before the expiry of the prescribed period
It does not require that the prescribed authority must pass an order recording his satisfaction that the time should be extended and granting time
The second is that under the provisions of the Act three consequences are envisaged where a return is not filed within the prescribed time or extended time i the assessee will lose the benefit of rebate under section 15 ii the assessee will run the risk of a penalty under section 144 iiithe assessee will also run the risk of a best judgment assessment under section 164
In the present case the assessing authority has neither levied a penalty nor made a best judgment assessment
The assessment orders while adverting to the delay in the filing of the returns do not record a finding that the delay was without reasonable Cause
These are circumstances from which we think it is reasonable to infer that the returns though filed belatedly have been accepted and acted upon by the prescribed authority
We see no reason why an extension of time cannot be inferred from the attendant circumstances in this case
Learned counsel for the assessee also suggests a different kind of approach to the issue before us
He submits that all that section 15 aims at is to grant a tax rebate of 1 of the amount of tax admitted to be due as per the return filed by the assessee
The further words used in section 15 to describe the return namely that it should be a return filed in the prescribed manner and within the prescribed or extended period are merely words descriptive of the procedure of filling a return
The basic condition necessary for claiming the tax rebate is only that there should be a valid return and that the tax on the basis of the valid return should have been paid by the assessee
He submits that while the substantive part of the condition should be strictly construed by insisting upon the presence of a valid return the procedural aspect referred to can well receive a liberal construction
In the present case he points out there is no dispute that the returns 155 filed by the assessee were valid
In fact the assessments have been made on the basis of the returns filed
The tax has been paid even before the submission of the returns
There is no suggestion that the tax paid fell short of the tax due on the return
This is also not a case where the assessed tax is much higher than the tax admitted on the basis of the return
In these circumstances he argues the assessee must be held to have fulfilled the conditions prescribed in section 15
Learned counsel for the assessee referred to certain decisions in support of such a rule of construction
In CI T vs Kulu Valley Transport Co Pvt Ltd 1970 77 ITR 518 the court had to construe a provision intended to benefit the assessee
Under section 22 2A of the Income Tax Act 1922 a return of loss had to be filed within the time prescribed for return under section 221 if the assessee wanted to carry forward the loss claimed
It was not so filed but was nevertheless treated as a valid return by reading the provisions of section 221 and 223 of the Act jointly and giving a liberal interpretation to section 222A
In the case of Gursahai Saigal vs CIT 1963 48 ITR SC 1 the question was regarding the charge of interest section 18A8 of the same Act
This provision did reveal a lacuna but reading the provision along with section 18A6 the Court gave effect to the intendment of the Legislature
It was explained that section 18A8 was not a provision creating a charge of tax but only laying down the machinery for its calculation or procedure for its collection
The dictum of Scott LJ in Allen vs Trehearne that machinery provisions should be interpreted largely and generously in order not to defeat the main object of liability laid down by the statute was referred to
The following observations of the Privy Council in CIT vs Mahaliram Ramjidas were also relied upon The section although it is part of a taxing Act imposes no charge on the subject and deals merely with the machinery of assessment
In interpreting provisions of this kind the rule is that that construction should be preferred which makes the machinery workable
 Though the above decisions arose under a different enactment and on different statutory language they dealt with somewhat analogous situations and furnish useful guidance here
They do lend support to the assessee s contention
It does seem that the condition in section 15 referring to a return has a substantive as well as procedural content and it may not be inappropriate to construe the latter 156 somewhat liberally and generously so long as the principal object of the provision is not frustrated
For these reasons we are of the opinion that the High Court should have answered the question as re framed by it in the negative and in favour of the assessee
We approve the decision in Jamuna Flour  oil Mills Pvt Ltd vs State of Bihar 1968 22 STC 1 and reverse the decision in the present case
The appeal is allowed
But in the circumstances of the case we make no order as to costs
PSS Appeal allowed


Summary:
 The Chandigarh administration wanted the printing presses scattered all over Chandigarh in the residential premises or small shops to be located in an industrial area
For that purpose the administration earmarked forty three sites in the industrial area Phase lI and invited applications for allotment of the sites
Several persons submitted the applications with deposits of earnest money of Rs1000 in each
That was ten per cent of the premium payable for each site
The appellants in the CA No 97 of 1981 who were among the said applicants were called upon to deposit 25 per cent of the premium calculated at the rate of Rs15 per square yard
The appellants complied with that demand
The authorities decided to draw lots as the applicants were more than the number of the sites available
In October 1977 lots were drawn and the appellants won
But the authorities did not issue the letters of allotments
The authorities had a second thought about the scheme of the allotment of the sites
They wanted to accommodate as many applicants as possible which however could not be done in the industrial area phase II
The authorities also came to hold the view that for setting up the printing industry larger sites as earmarked earlier would not be necessary and smaller sites would meet the requirements
Consequently the sites proposed in the industrial phase II were given up and a lay out of smaller sites in the industrial area phase I was prepared wherein about 131 sites were reserved for allotment to the printing press owners
The appellants as also the other applicants were intimated by letters that the said sites would be allotted at the rate of Rs35 per square yard and that the allotment would be made by draw of lots on October 3 1979
The appellants did not participate in the proceedings
They moved the High Court by a writ petition challenging the 158 revised policy of the allotment of the smaller sites on the ground inter alia that they had a right to take possession of bigger plots in respect which lots were earlier drawn in their favour
The High Court did not give substantial relief to the appellants holding that there was nothing illegal in the said revised policy since the appellants did not acquire right to get bigger sites in the phase II it directed that the appellants would be liable to pay at the rate of Rs15 and not Rs35 per square yard
The appellants appealed to this Court by special leave against the decision of the High Court CA 97 of 1981
The respondents the Chandigarh Administration also moved this Court by special leave CA No 98 of 1981 against the direction of the High Court as to the reduced premium to be recovered from the appellants
Dismissing both the appeals the Court  HELD There was no substance in the appeal by the respondents
If the applicants had been allotted sites as per the original plan and as per the first draw in 1977 they would have been liable to pay at the rate of Rs15 per square yard
In fact the other enterpreneurs who were allotted sites in the industrial area phase II paid premium only at the rate of Rs15 per square yard
Why then should there be a higher rate payable by the appellants They had not asked for the sites in the industrial area phase I Secondly the applicants were not responsible for the delay in the allotment of sites
Thirdly there was no evidence that the Chandigarh Administration had to incur more expenditure in forming the new sites in the phase I The High Court was right in directing the authorities to recover only at the rate of Rs15 per square yard
161H 162A C In the case of the appeal by the appellantsowners of the printing presses admittedly at the relevant stage there was no intimation of the allotment of the sites to the appellants
There was no official communication to them as required under sub rule 3 of Rule 8 of the Chandigarh Lease Hold Sites and Building Rules 1973
Such an intimation alone could confer the right on the appellants to obtain possession of the sites
In the absence of any such communication the appellants could not be held to have the right to get the sites
163F G Emphasis was laid on the word shall used in sub rule 3 of Rule 8 which provides that when 10 per cent of the premium has been tendered the Estate officer shall subject to such directions as may be issued by the Chief Administrator in that behalf allot a site of the size 159 applied for
There is not much force in this contention
Generally the use of the word shall prima facie indicates that the particular provision is imperative but that is not so always
The meaning to be given to a word depends upon the context in which it is used
The right of every applicant under sub rule 3 of Rule 8 is only a right to have his application considered
The acceptance of the application does not create a right for allotment of a site
The word shall used in the sub rule must be considered as not mandatory
imperative meaning would defeat the purpose of the rule
163H 164A B F It is not known under what provision the authorities asked the appellants to pay 25 per cent of the premium payable in respect of the sites even before allotment
There was no specific assurance or representation made by the authorities promising to allot the sites applied for
Even if there was any such assurance the Court did not think that it would give rise to the doctrine of promissory estoppel in the case
The authorities cannot give assurance contrary to the statutory rules
They are bound by the rule of procedure and cannot make any representation or promise to allot particular sites to the applicants
Even if they make such a promise or assurance the doctrine of promissory estoppel cannot be invoked to compel them to carry out the promise or assurance which is contrary to law
166B D If there were enough plots to accommodate all the applicants in the industrial area Phase II it would not be proper for the authorities to revise the policy and allot smaller sites in phase I
But no material was placed before the Court to come to the conclusion that there were enough industrial plots to accommodate possibly all the applicants
The authorities formed another lay out in phase I for want of plots in phase II
The action of the authorities was bona fide and there was no reason to doubt it
166F G The revised policy of the Chandigarh Administration did not suffer from any act of arbitrariness either in classifying the appellants as a separate group or in considering them for allotment of smaller sites in phase I All the persons who had applied for industrial sites for establishing printing presses were grouped together
They were considered together
They could not be accommodated in phase II for want of enough sites
So another lay out was formed in phase I The grievance of the appellants about the revised policy of the Chandigarh Administration to allot smaller sites to them being discriminatory was not justified
168H t69A C 160 Delhi Cloth  General Mills Ltd vs Union of India Civil Appeal No 223 of 1974 disposed of by this Court on October 8 1987 and Shri Ram Krishna Dalmia vs Shri Justice SR Tendolkar and Ors   referred to