J.C.SHAH - (1.) (For himself and Hidayatullah and K. C. Das Gupta, JJ.) Judge (Revisions) exercising authority under S. 11 of the United Provinces Sales Tax Act XV of 1948 drew up a statement of case and referred to the High Court of Judicature at Allahabad the following question : "Whether the assessee, who is a manufacturer and a dealer of non-edible oils and who elected the previous year as the basis of his assessment in the assessment year, 1948-49, is liable to be assessed at the flat rate of 3 pies per rupee on the whole of the turnover of the previous year, or whether he is liable to be assessed at the rates of 3 pies per rupee & 6 pies per rupee on the turnover of the previous year in proportion to the two periods from 1st April to 8th June, 1948, and fr from 9/06/1948, to the 31/03/1949?"
(2.) THE High Court answered the question as follows : "THE applicant company is liable to pay tax for the assessment year 1948-1949 on the turnover of the previous year in respect of sales of non-edible oils at the flat rate of 3 pies per rupee." Against the order of the High Court recording its answer, this appeal with special leave is preferred. The facts which give rise to the appeal are briefly these :
(3.) THE Modi Food Products Co., Ltd. - hereinafter referred to as "the assessee", manufactures oils - edible and non-edible in its factory at Modinagar. District Meerut, State of Uttar Pradesh. THE assessee is registered as a "dealer" under the United Provinces Sales Tax Act XV of 1948. THE assessee's year of account commences on June 1, and ends on May 31, next year. For the year of account 1946-47, the assessee's sales of edible and non-edible oils amounted to Rs. 63,02,849-7-7. THE U. P. Legislature enacted with effect from 1/04/1948, the United Provinces Sales Tax Act XV of 1948, the United Provinces Sales Tax Act XV of 1948 providing for the levy of a tax on sales of certain commodities. This Act was amended by Act XXV of 1948, with retrospective operation from 1/04/1948. By the Act, "assessment year" was defined as meaning the twelve months ending on March 31 and "previous year" was defined as meaning the twelve months ending on the 31st March next preceding the assessment year, or, if the accounts of the dealer had been made up to a date within the said twelve months in respect of a year ending on any date other than the said twelve months in respect of a year ending on any date other than the said 31st March then, at the option of the dealer, the year ending on the day to which his accounts had so been made up. "Turn-over" was defined as meaning the aggregate of the proceeds of sale by a dealer. By section 3, a tax at the rate of 3 pies per rupee on turnover was, subject to certain exceptions, made payable by every dealer in each assessment year whose turnover in the previous year exceeded Rs. 12,000.00 or such larger amount as may be prescribed; the Provincial Government was however authorised to reduce the rate of tax on any dealer or class of dealers on the turnover in respect of any goods or class of goods. By S. 3-A, the Government of U. P. was authorised to introduce instead of the multiple point scheme of taxation provided by S. 3, a single point system of taxation and by notification to declare that the proceeds of sale of any goods or loss of goods shall not be included in the turnover of any dealer except to such single point in the series of sales by successive dealers as may be prescribed; and if the Government made such a declaration, the turnover of the dealer in whose turnover the sale of such goods was included was in respect of such sale to be taxed at such rate as may be specified not exceeding one anna per rupee. By S. 7, every dealer whose turnover in the previous year was Rs. 12,000.00 or more was directed to submit such return or returns of his turnover of the previous year within sixty days of the commencement of the assessment year in such form and verified in such manner as may be prescribed. By the proviso, the Government was authorised to prescribe that any dealer or class of dealers may submit in lieu of the return or returns specified in that section, a return or returns of his turnover of the assessment year at such intervals as may be prescribed. Provision was made by the Act for appeals against the order of assessment and revision against the order of the appellate authority. By S. 11, the High Court of Judicature at Allahabad was authorised to decide questions of law raised in any case in the course of assessment and referred to it on a statement of the case drawn up by the Revising Authority. By S. 24, the Provincial Government was invested with power to make rules to carry out the purposes of the Act and in particular in respect of certain specified matters. In exercise of the powers conferred by S. 24 of the Act, the Government of U. P. framed rules. Rule 39 of the U. P. Sales Tax Rules gave to every dealer an option to submit his return of the turnover of the assessment year in lieu of the return of the turnover of the previous year. A dealer who did not carry on business during the whole of the previous year had no option, but was bound to submit his return of the turnover of the assessment year. By R. 40, it was provided that every dealer who elected to submit a return of the turnover of his previous year shall within sixty days of the commencement of the assessment year, submit to the Sales Tax Officer a return showing his turnover of the previous year. By R. 41, it was provided that every dealer whose estimated turnover during the assessment year was not less than Rs. 15,000.00 and who elected to submit his return of such year shall before the last day of July, October, January and April submit to the Sales Tax Officer, a return of his gross turnover for the quarters ending June 30, September 30, December 31 and March 31.;