Case: Sales Tax Officer Vs. K. I. Abraham

2. The respondent (hereinafter called the assesses) was a dealer in Cocoanut oil business having inter-State sales. For the year 1959-60 the assessee was assessed to sales tax under S. 8 of the Central Sales Tax Act (Act 74 of 1956), hereinafter called the Act. Out of a total turnover of Rs. 2,30,990 and odd determined by the Sales Tax Officer, only a sum of Rs. 1,89,734 and odd was supported by proper declaration Form C. Tax was therefore imposed by the Sales Tax Officer at the rate of 1 per cent on the turnover of Rs. 1,93,346 and at 7 per cent on the balance namely. Rs. 37,645. The assessee did not file the declaration forms on or before the prescribed date, i. e., February 16, l961 but he actually filed the declaration forms on March 8, 1961 before the order of assessment was made, the delay being explained as due to late receipt of the declaration forms from the purchaser in Madras The assessee preferred an appeal to the Appellate Assistant Commissioner but the appeal was dismissed. The assessee took the matter in revision before the Deputy Commissioner of Sales Tax but the revision petition was dismissed. Thereafter, the assessee moved the Kerala High Court for grant of a writ under Article 226 of the Constitution for quashing the orders of the Sales Tax Officer dated June 13, 1961 and the order of the Appellate Assistant Commissioner dated December 13, 1961. By its order dated November 29, 1963, the High Court allowed the writ petition of the assessee and quashed the orders of assessment of sales tax and directed the Sales Tax Officer in make a fresh order of assessment after taking into consideration the declaration forms furnished by the assesses on March 8, 1961.

Court's reasoning:
In our opinion, the phrase "in the prescribed manner" occurring in S. 8 (4) of the Act only confers power on the rule-making authority to prescribe a rule stating what particulars are to be mentioned in the prescribed form, the nature and value of the goods sold, the parties to whom they are sold, and to which authority the form is to be furnished. But the phrase "in the prescribed manner" in S. 8 (4) does not take in the time-element. In other words, the section does not authorise the rule-making authority to prescribe a time-limit within which the declaration is to be filed by the registered dealer. The view that we have taken is supported by the language of S. 13 (4) (g) of the Act which states that the State Government may make rules for "the time within which, the manner in which and the authorities to whom any change in the ownership of any business or in the name, place or nature of any business carried on by any dealer shall be furnished." This makes it clear that the Legislature was conscious of the fact that the expression "in the manner" would denote only the mode in which an act was to be done, and if any time-limit was to be prescribed for the doing of the act, specific words such as "the time within which" were also necessary to be put in theview that we have expressed as to the interpretation of S. 8 (4) of the Act is also supported by the Note to the form of declaration - Form C - prescribed by Rule 12 of the Central Sales-tax (Registration and Turnover) Rules, 1957. The Note states that the form is to be furnished to the prescribed authority in accordance with the rules framed under Section 13 (4) (e) by the appropriate State Government.7. For the reasons expressed, we hold that the third proviso to Rule 6 (1) is ultra vires of S. 8 (4) read with S. 13 (3) and (4) of the Act. It follows therefore that the assessee was not bound to furnish declarations in Form C before February 16, 1961 in the present case. In the absence of any such time limit it was the duty of the assessee to furnish the declarations in form C within a reasonable time, and in the present case it is the admitted position that the assessee did furnish the declarations on March 8, 196l before the order of assessment was made by the Sales-tax Officer. We are accordingly of the opinion that the assessee has furnished the declarations in Form C in the present case within a reasonable time and there has been a compliance with the requirements of S. 8 (4) (a) of the Act. It follows that the High Court was right in quashing the order of assessment made by the Sales-tax Officer and directing him to make a fresh order of assessment after taking into consideration the declaration forms furnished by the assessee on March 8, 1961.