MAHESHWARI DEVI JUTE MILLS Vs. STATE OF UTTAR PRADESH
LAWS(ALL)-1965-7-1
HIGH COURT OF ALLAHABAD
Decided on July 20,1965

MAHESHWARI DEVI JUTE MILLS Appellant
VERSUS
STATE OF UTTAR PRADESH Respondents


Referred Judgements :-

MANSA RAM SUSHIL KUMAR V. THE ASSESSING AUTHORITY, LUDHIANA [REFERRED TO]
MATHRA PARSHAD AND SONS VS. STATE OF PUNJAB [REFERRED TO]
QAMRUDDIN VS. COMMISSIONER SALES TAX [REFERRED TO]



Cited Judgements :-

KAMLA DAL MILLS VS. STATE OF U P [LAWS(ALL)-1966-2-3] [REFERRED TO]


JUDGEMENT

- (1.)THESE two petitions are under Articles 226 of 227 of the Constitution. They seek to quash provisional assessment orders passed under the U.P. Sales Tax Act. Petition No. 119 of 1965 relates to the second quarter of the assessment year 1964-65 ending 30th June, 1964. Petition No. 893 of 1965 relates to the third quarter of the assessment year 1964-65. The facts of both the writ petitions are similar. The question of law raised are identical. Both can, therefore, conveniently be decided together.
(2.)ON 28th July, 1964, the petitioner filed a return for the quarter ending 30th June, 1964, showing a net taxable turnover of Rs. 5,74,708.54 p. The petitioner did not deposit Rs. 22,917.50 the admitted tax payable on this amount. It made an application for three months' time to pay the admitted sales tax. The Sales Tax Officer rejected the prayer for extension of time and directed the petitioner to deposit the admitted tax immediately failing which necessary action shall be taken. The petitioner did not deposit the admitted amount of the tax. Ultimately on 31st October, 1964, without any prior notice to the petitioner, the Sales Tax Officer passed a provisional assessment order purporting to be under rule 41(3) of the rules framed under the U.P. Sales Tax Act for the quarter ending 30th June, 1964. In this assessment order it was stated that as the petitioner has failed to deposit the admitted amount of tax, the return filed by him is not in order and as such is rejected. The Sales Tax Officer then proceeded to assess the petitioner to the best of his judgment on a turnover of Rs. 10,60,000. On this turnover the tax liability came to Rs. 42,200. The petitioner was asked to deposit the same within 30 days of the receipt of the order. This order is sought to be quashed in Writ Petition No. 119 of 1965.
Similarly the petitioner filed a return for the third quarter ending 30th September, 1964, showing a taxable turnover of Rs. 5,54,101.73 p. on 28th October, 1964. The petitioner did not deposit the admitted tax which came to Rs. 22,067.78 p. He applied for extension of time which was refused. Ultimately the Sales Tax Officer passed a provisional assessment order on 6th January, 1965, to the best of his judgment. He assessed the petitioner on a turnover of Rs. 10,60,000 on the basis of which he directed the petitioner to deposit Rs. 42,200 as sales tax within 30 days of the receipt of the order and the enclosed demand notice. This assessment order is challenged in Writ Petition No. 893 of 1965.

(3.)SRI Jagdish Swarup, learned counsel for the petitioner, urged that the scheme of the U.P. Sales Tax Act clearly shows that sales tax is chargeable only on an yearly basis. The unit of the liability for assessment is the financial year. As such the provisions of rule 41(3) of the rules which provide for provisional assessment for a month or a quarter of the assessment year are ultra vires the powers of the rule-making authority. The second submission was that in so far as the rule 41(3) does not provide for any notice prior to the passing of the best judgment assessment, it is contrary to section 7(3) of the U.P. Sales Tax Act. In any event, it violates the principles of natural justice and is void on this ground.
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