Case: Modi Sugar Mills Ltd Vs. Commissioner Of Sales Tax, U.P., Lucknow

1. This appeal by special leave is directed against the judgment of the High Court of Judicature at Allahabad passed in a reference made to it under S. 11 of the U. P. Sales Tax Act 1948 (U. P. Act XV of 1948) - hereinafter referred to as the Act. In this reference the following question was referred by the Judge (Revision), Sales Tax at the instance of the appellant, Modi Sugar Mills Ltd., hereinafter called thea dealer who has been assessed to tax on the turnover of the previous year according to his election can change his option and elect the assessment year by filing quarterly returns without the previous sanction of Sales TaxHigh Court answered the question in the negative.

Reasoning:
6. In our opinion the Judge (Revision) was in error in holding that the assessee was not entitled to make an election under R. 39 (1) without the sanction of the Sales Tax Commissioner, and the answer to the question referred to the High Court should be in favour of the assessee. Rule 39 (2) specifically mentions an election under sub-r. (1) and there is only one kind of election under R. 39 (1) and that is for a dealer to elect to submit returns of his turnover for the assessment year in lieu of the returns of the turnover of the previous year. In other words, under R. 39 (1) the dealer makes a choice that he will be assessed in respect of the turnover not of the previous year, which is normally the rule under S. 7, but in respect of the return of the turnover of the assessment year. It seems to us that R. 39 (2) covers only the case where election has been made by a dealer to be assessed in respect of the turnover of the assessment year. It is true that R. 40 also uses the word elects but this may have reference to the lines in form IV which we have already reproduced above. But assuming that when a dealer submits a return in respect of the previous year under R. 40 and he is treated to have elected within R. 40, yet there is no provision like R. 39 (2) which debars him form exercising the option under R. 39 (1).In our opinion an express provision like R. 39 (2) was necessary to prevent a dealer from exercising the option given to him under R. 39 (1). We do not express any opinion whether such a rule could validly be made under S. 7 (1).We are not impressed by the argument of Mr. Agarwala that general principles debar the assessee from exercising the option under R. 39 (1). It is a statutory right given to the assessee and the general principles, if applicable, cannot displace the statutory right.7. We may mention that the reasoning in the judgment under appeal has been doubted in an unreported judgment of the Allahabad High Court in Mahesh Company Kahoo Kothi Kanpur v. Commissioner Sales Tax, Uttar Pradesh, STR No. 1623 of 1956, D/- 13-3-1963 (All).