SATISH CHANDRA, J. - (1.) THE question is whether a person who carries on the business of sale of country liquor under an annual licence can be said to have commenced business during the course of an assessment year.
(2.) THE petitioners are dealers registered under the U.P. Sales Tax Act. They do the business of selling country liquor under a licence granted to them by the excise authorities. The licence runs for a year commencing from 1st April and ending on the following 31st March. The petitioners took the requisite licence commencing from the 1st April, 1969, and continuing up to the 31st March, 1970. On the 17th June, 1969, the Sales Tax Officer, Hardoi, passed an ex parte provisional assessment order for the month of April, 1969. He also passed a similar order for the months of May and June, 1969, on the 20th of August, 1969. The petitioners in due course submitted their return for the first quarter of the assessment year 1969-70 on the 11th July, 1969. In it they denied their liability to pay sales tax on the ground that country liquor was not liable to sales tax. In the present writ petition the monthly provisional assessment orders have been challenged on the ground that they are without jurisdiction. The impugned assessment orders purport to have been passed under rule 41(3) of the U.P. Sales Tax Rules. Under that provision if no return is submitted in respect of any quarter or month, as the case may be, within the prescribed period, the Sales Tax Officer can determine the turnover to the best of his judgment and provisionally assess the tax payable for the quarter or the month, as the case may be. According to the learned Standing Counsel, the impugned assessment order has been passed under section 18(2), U.P. Sales Tax Act. Section 18 is headed as "assessment of reconstituted or new firms and change of partnership". Sub-section (1) of section 18 deals with the situation where the dealer discontinues the business during the course of assessment year. In that event he is required to file a return within fifteen days from the date of such discontinuance and within the same period give notice of the fact of discontinuance to the assessing authority. Under the explanation the dissolution or reconstitution of a firm or association of persons or partition of a joint Hindu family or transfer by a dealer of his business shall be deemed to be discontinuance of business within the meaning of this sub-section. Sub-section (2) deals with the commencement of the business during the course of the assessment year. It says "every dealer commencing business during the course of an assessment year ....... shall, within 30 days from the expiry of the month in which business was commenced, give notice of the fact to the assessing authority, and shall submit a statement of his turnover at such intervals, within such period, in such form and verified in such manner as may be prescribed." The relevant rule is rule 41 which provides : "Every dealer who is liable to pay tax under the Act 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 a dealer to whom sub-section (1) of section 18 applies shall submit the return for the quarter in which business is discontinued within thirty days of the date of such discontinuance : Provided further that every dealer to whom sub-section (2) of section 18 applies shall submit such returns within thirty days of the expiry of each month during the year in which the business is commenced." It will be seen that dealers are generally liable to file quarterly returns, but a dealer who commences business during the course of an assessment year, has to, in view of section 18(2) of the Act and the second proviso to rule 41, file monthly returns.
(3.) LEARNED counsel for the petitioner urged that section 18(2) applies to a dealer who commences business during the course of an assessment year. The expression "during" would, in law, exclude the point of time when the assessment year begins; and so, if a dealer commences business from the very first moment of the beginning of the assessment year, he cannot be said to have commenced the business "during" the course of that year. In S.T.R. No. 1634 of 1956 decided on the 17th August, 1963, a Bench of this court did not accept a similar contention. It was observed : "I also cannot accept the contention that 'in the course of an assessment year' means after the first day of the assessment year. Even if a business is commenced on the 1st of April it is a business commenced in the course of the assessment year beginning with that date. The assessment year began at the first moment of the 1st of April and even if the business commenced with that moment it would be a business commenced in the course of that assessment year." ;