Sikri, J. - (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 the assessee: "Whether a 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 Tax Commissioner - The High Court answered the question in the negative.
(2.) The answer to this question depends upon the interpretation of S. 7 (1) of the Act, and Rr. 39, 40 and 41 of the U. P. Sales Tax Rules, and form IV prescribed under these rules. These provisions are as under: "Section 7 (1). Subject to the provisions of S. 18, every dealer whose turnover in the previous year is Rs. 12,000 or more in a year shall 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: Provided that the Provincial Government may prescribe that any dealer or class of dealers may submit, in lieu of the return or returns specified in this section, a return or returns of his turnover of the assessment year at such intervals, in such form and verified in such manner as may be prescribed, and thereupon all the provisions of this Act shall apply as it such return or returns had been duly submitted under this section. Provided further that the assessing authority may in his discretion extend the date of the submission of the return by any person or class of persons. ********** Rule 39:Election of Assessment year. (1) Any dealer may elect to submit returns of his turnover of the assessment year in lieu of the returns of the turnover of the previous year, and shall signify such election in the return filed by him in form IV. Provided that a dealer who did not carry on business during the whole of the previous year shall elect to submit his returns of the assessment year. (2) A dealer who has once signified his election under sub-rule (1) shall not again exercise his option so as to vary the basis of assessment: Provided that the Sales Tax Commissioner may, for reasons to be recorded in writing and on such condition as he deems fit permit a dealer to exercise a fresh option. Rule 40. Submission of returns:Every dealer elects to submit return of his previous year shall, within sixty days of the commencement of the assessment year, submit to the Sales Tax Officer a return in form IV showing his turnover for the previous year: Provided that no dealer whose turnover in the previous year was less than Rs. 15,000 shall be required to furnish such returns. Rule 41. Returns of assessment year. (1) Every dealer whose estimated turnover during the assessment year is not less than Rs. 15,000 and who elects to submit returns 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, respectively, in form IV: Provided that every dealer or firm, to whom the provisions of sub-section (3) of S. 18 are applicable shall submit such returns within seven days of the expiry of each month during the year in which the business is commenced."
(3.) Before we deal with the interpretation of the section and the rules it is necessary to give a few relevant facts. It appears that for the assessment years 1948-49, 1949-50 and 1950-51, the assessee was assessed on the basis of returns filed for the turnover of the previous year relevant to each of these assessment years. For the assessment year 1951-52, however, the assessee purporting to make an election under R. 39 of the rules filed returns of his turnover of the assessment year instead of the returns of the turnover of the previous year. The Judge (Revision) held that without sanction of the Sales Tax Commissioner the assessee was not entitled to do so.;