O M S S SIVAMURUGAN Vs. ASSISTANT COMMERCIAL TAX OFFICER VIII MADURAI 13
HIGH COURT OF MADRAS
O. M. S. S. SIVAMURUGAN
ASSISTANT COMMERCIAL TAX OFFICER VIII, MADURAI
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RAMANUJAM, J. -
(1.) THE petitioner herein is a registered dealer under the Madras General Sales Tax Act of 1959 doing business in tamarind and soap-nut powder. He is also a registered dealer under section 7(3) of the Central Sales Tax Act, 1956. He reported a gross turnover of Rs. 30, 465.99 and a taxable turnover of Rs. 19, 688.95 in his return in Form A-1 for the year 1967-68. He contended that the turnover of Rs. 10, 777.04 out of the gross turnover related to outside State sales, the goods having been purchased and sold in Mysore State.
(2.) THE said return filed by the petitioner was found to be correct by the assessing authority after check of his accounts. The assessing authority however found that the net turnover of Rs. 19, 688.95 included a turnover of Rs. 7, 202.90 being the sales turnover of goods purchased in Mysore State against 'C' form declarations and sold within the State of Madras. Since the petitioner had opted to pay the tax under section 7, the tax payable under section 3(1) was computed on the total turnover of Rs. 19, 688.95 apart from the tax payable by the dealer, under section 5 of the Act at 3% on the turnover Rs. 7, 202.90.
The petitioner has questioned the validity of the assessment order on various grounds in this writ petition. But only one ground was pressed before us at the time of the hearing. The objection was that the assessing authority was in error in levying tax under section 5 of the Act on a part of the turnover already subjected to levy under section 7. It is contended on behalf of the petitioner that once tax is collected under section 7 on the entire turnover, whether it is taxable under section 3(1) or under section 5, it is not possible for the State to levy in addition a tax under section 5. It is urged that the tax, leviable under section 5 on a portion of the turnover, is at the same rate as is mentioned in section 3(1), that as such even if the tax is levied under section 5, it is in substance a tax levied under section 3(1) and that the tax collected under section 7 is in lieu of the tax leviable either under section 3(1) or under section 5. We are not in a position to accept the contention advanced on behalf of the petitioner that there has been a double levy on the turnover of sales of Rs. 7, 202.90 being the sales of goods purchased in Mysore State and sold in this State, coming under section 5 and that the levy of tax under section 5 in addition to the collection of tax under section 7 violated article 19(1)(f) and (g) of the Constitution.
(3.) ON a conjoint reading of sections 3(1), 5 and 7 of the Act, it is clear that the levy of tax under section 5 is a separate and independent charge apart from the levy of tax under section 3(1) and that the levy of tax under section 7 is only in lieu of the tax leviable under section 3(1) and not in lieu of the tax leviable under any other provision of the Act. Section 7 gives an option to an assessee to pay tax at the rates specified therein based on his total turnover, instead of paying an ad valorem tax as provided in section 3(1) and this section does not concern itself with the tax leviable under section 5 at all. Of course for the purpose of levy under section 7 it is the total turnover of the dealer that matters and not his taxable turnover, while section 3(1) levies tax only on the taxable turnover. From the mere fact that the total turnover of an assessee is taken for the purpose of levying tax under section 7 it is not possible to say that the entire turnover has been subject to tax under section 3(1) and that the levy of tax under section 5 is barred.;
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