(1.) THIS revision is directed at the instance of the Assistant Commercial Taxes Officer, Writs, Jodhpur, on behalf of the State, against the order of the Deputy Commissioner, Sales Tax (Appeals), Jodhpur, dated 13. 4. 1964 on three grounds which will be taken up hereafter. The facts of the case in brief are that the dealer who runs a hotel and a restaurant deposited a fee of Rs. 250/-, which was apparently to cover his previous year's turnover of Rs. 69,578. 89. The turnover disclosed for the assessment year 1. 4. 1962 to 31. 3. 1963 was Rs. 79,584,20, and the fee on this should have been Rs. 450/ -. It was urged on behalf of the dealer assessee that the exemption certificate once issued was final and cannot be questioned. The assessing authority however, held that the present exemption will be available to the assessee only for the turnover of Rs. 70,000/ -. He assessed a fee of Rs. 100 for the short-fall of Rs. 10,000/-discovered on the basis of actual turnover in the year of assessment. On appeal, the Deputy Commissioner held that the fee recovered on the basis of turnover of previous year after necessary enquiry by the assessing authority was final as otherwise there would have been no necessity for provision of R. 11, whereunder the fee is to be considered as provisional fee. He thus set aside the order of the assessing authority asking for depositing an additional amount of Rs. 100/- ; and hence this revision.
(2.) I have heard the counsel for the State. The counsel for the non-applicant was absent despite notice, and ex-parte proceedings were taken against him. The question for consideration, as stated above, is whether if once the exemption certificate has been issued on a particular turnover, which may even be assumed or based on previous year's turnover, additional fee can be asked for, if the actual turnover during the assessment year exceeds the turnover which formed the basis of the fee charged for the issue of the exemption certificate. Under sec. 4 (2) of the Rajasthan Sales Tax Act, the State Government is competent to exempt any goods or class of goods or any person or class of person on such conditions and on payment of such fees as may be specified in the notification, if it is of the opinion that it is necessary and expedient in the public interest to do so. A notification under sec. 4 (2) was first issued on 14. 4. 1955, but it was substituted by notification No. D. 6788/f. 5 (72) ST/59, dated November 24, 1959, where-under the State Government exempted the keepers of hotels and restaurants from the Sales Tax on the condition that the person claiming exemption holds a valid certificate of exemption, on payment of following fees given in the notification on the basis of turnover - Turnover Fee If the turnover exceeds of Rs. 12,000/- but does not exceed Rs. 20,0,0/ -. . . . . . . . . . Rs. 50/- If the turnover exceeds Rs. 20,000/- but does not exceed Rs. 40,000/ -. . . . . . . . . . Rs. 100/- If the turnover exceeds Rs. 40,000/- but does not exceed Rs. 50,000/ -. . . . . . . . . . Rs. 150/- If the turnover exceeds Rs. 50,000/- for every Rs. 5,000/ -. . . Rs. 50/-
The turnover has been defined in S. 2 (1) inter alia as the aggregate of the amount of sales prices received or receivable by a dealer in respect of the sale or supply of goods or in respect of the sale or supply of goods in carrying out of any contract. Rules 8 to 12 of the Rajasthan Sales Tax Rules, 1955, deals with the certificate of exemption. R. 8 makes it obligatory on a person claiming exemption to obtain a certificate of exemption in accordance with the conditions laid down in the aforesaid notification. R. 9 lays down that where an exemption granted under sub-sec. (2) of sec. 4 specifies a fee to be calculated on the basis of turnover, the fee shall be paid in accordance with the provisions contained in this chapter, with such modifications as may be necessary in the circumstances of the case. R. 10 says that an application for obtaining an exemption certificate in accordance with the notification issued under sub-sec. (2) of sec. 4 shall be submitted to the assessing authority within thirty days from the date of the issue of the said notification, and such application shall be accompanied by a copy of the Treasury challan under which the fee specified for granting of such exemption has been deposited. If the assessing authority, after such enquiry as may be necessary, is satisfied that the information given in the application is correct and the fee has been correctly deposited, he shall issue an exemption certificate in form ST. 2. If the fee deposited is less than that payable in accordance with the notification, the assessing authority shall require the dealer to deposit the balance within a time to be fixed by him and shall not issue the exemption certificate unless such balance is deposited within such time. If the fee deposited is in excess of that payable, the assessing authority shall order the excess to be refunded to the depositor. R. 12 lays down that the exemption certificate once granted under R. 10 or 1. 1 (3) (which deals with such business which came into operation after the issue of the notification) shall remain valid till the expiry of the assessment year in respect of which the fee is paid, and shall also continue to be valid thereafter, provided the fee specified therefor, is paid for each subsequent year or years within thirty days or with any return that may fall due within three months before the commencement of any such year.
It appears from the above recital that it has not been anywhere specifically laid down that the basis of turnover has to be the assessment year in the case of applications for exemption certificate. As a matter of fact, if, as the rules envisaged, an exemption certificate is to be taken and fees paid before the commencement of the assessment year, the basis of payment of fees has to be the turnover for the previous year. R. 10 (1) envisages the payment of fee for the certificate to be deposited along with the application, and R. 10 (4) envisages that the refund of any fees payable if it is in excess of the amount actually payable on the turnover, as also under R. 10 (3) the person asking for the exemption certificate has to pay any difference found in his calculations. This is somewhat analogous to sec. 7 (2) but sec. 10 of the Act envisages subsequent assessment on the taxable turnover which may be different from what the assessee has given under sec. 10 (2) and deposited his tax. There is no rule corresponding to sec. 10 in the Rajasthan Sales Tax Rules, dealing with charging of fees for the exemption certificate. On the other hand, R. 12 specifically lays down that the exemption certificate, which it must be remembered, has to issue before close of the assessment year, shall remain valid till the expiry of the assessment year in respect of which the fee is paid. This shall continue to be valid provided the fee is paid for each subsequent year or years within thirty days, or with any return that may fall due within three months before the commencement of any such year. It is obvious that the fee which has to be paid with any return that may fall due within three months before the commencement of any such year has to be based on the turnover of previous years, otherwise the implementation of Rules 8 to 10 would be impossible. After all even the taxing authorities do not undergo any loss in this process as any increase in turnover in the assessment year will be taken care of in subsequent years, even though in the subsequent year the turnover may be less than for which the fee has been paid. In that case, because of R. 10, the person holding the exemption certificate will not be entitled to claim any refund. The only refund permissible to him under R. 10 (3) is when there is some mistake in calculation on the basis of the turnover of the previous year filed by him. Unfortunately, this point has not been made clear in this rule, but reading them together, the only interpretation possible is that the fee to be calculated for payment to obtain exemption certificate has to be based on the turnover of the previous year. For the reasons given above, I agree with the finding of the learned Deputy Commissioner (Appeals), and see no force in this revision and reject the same. .;