A S KASSAM AND COMPANY MADURAI Vs. STATE OF MADRAS

JUDGEMENT

(1.) THE assessees are dealers in cloth. Before the Deputy Commercial Tax Officer, the levy of tax on a turnover of Rs. 2, 92, 761 was disputed. THE dealers had imported cloth from outside the State and had sold the goods they were sought to be taxed under section 3(2) of the Act as the first sellers and the additional levy of 8 per cent. was made. THEy contended that they were not the first sellers, but no evidence to establish that fact, the onus of proving which is laid upon the dealer by the proviso to section 3(2) of the Act, was let in. Another part of the turnover of Rs. 61, 782 was also in dispute. That part related to the stock of imported cloth held as on 13th December, 1957, in respect of which the dealers were given the option of compounding the additional tax. No applications for compounding had been made in conformity with the law. THE request to compound was accordingly negatived and they were taxed as stated.

(2.) IN the appeal to the Appellate Assistant Commissioner, the principal ground that was advanced was that Government had waived the collection of the additional tax in respect of the sales from 1st April, 1957, to 17th December, 1957, and that in the light of this waiver, the tax should not be levied on these turnovers. The Appellate Assistant Commissioner pointed out that while it was true that the Government had waived the levy of additional tax, they did so on condition that the assessees had not collected any tax on the sales during that period. It was however found that the assessees in this case had collected the amount of additional tax of 8 per cent. but had noted it in their accounts as "contingent liability." Since, as a matter of fact, the assessees had collected the tax, the Government order waiving the levy was not applicable to these dealers. IN that view, the appeal was dismissed. IN the further appeal to the Tribunal, the same contention was put forward. While the assessees did not deny the fact that they had made collections of certain amounts styled "contingent deposits" from their buyers they urged that these collections were not tax collections and that, therefore, they were not disentitled to the benefit of the waiver of the collection of tax. The Sales Tax Appellate Tribunal however took the view that the relevant order of the Government was an administrative instruction which it was not competent for them to enforce in a judicial determination of the liability of the assessees.IN this petition, it is contended that the Tribunal acted erroneously in not giving effect to the order of the Government and that their application to compound in respect of part of the turnover should also have been permitted.

(3.) ORDINANCE IV of 1957 was promulgated. Clause 3 of that ORDINANCE provided thus :