Vrajlal Parekh vs Assistant Commercial Tax Officer, Park Town Division

Ramaprasada Rao, J.—The petitioner is a dealer in toys. For the assessment year 1966-67, he submitted a return in form A but

contemporaneously opted for payment of the local sales tax u/s 7 of the Tamil Nadu General Sales Tax Act. The revenue accepted the request and

caused a provisional assessment to be made under that section. Ultimately, the petitioner returned a total taxable turnover of Rs. 25,646.36 in form

A-l for 1966-67 and he reiterated, the original stand taken by him regarding his option for the payment of the general sales tax under the local law

u/s 7. After a check of the accounts, which the authorities are entitled to u/s 7(3) of the Act, it was discovered that the petitioner effected local

purchases to the tune of Rs. 382.34 and the rest of the purchases were from outside the State, covered by the usual C form. Consequent upon this

discovery on the scrutiny of the accounts, the revenue charged the petitioner u/s 7 of the Tamil Nadu General Sales Tax Act as also u/s 5 therein in

respect of their inter-State purchases as provided therein. For such ultimate charge on the assessable turnover made by the revenue, the petitioner

discovered that he ought not to have exercised an option u/s 7 as the tax liability by the adoption of such an alternative course would be more than

if he were taxed under the general provision, viz., Section 3(1) of the Act. He, therefore, on receipt of the provisional notice of reassessment dated

16th October, 1967, purported to back out from his original option exercised u/s 7 and requested the revenue to assess them under the normal

provisions of the statute. As this withdrawal of the option was not in accordance with the rules prescribed, the revenue could not give the petitioner

the benefit of the later stand taken by him. Ultimately, the petitioner had to suffer the tax ''as demanded under the revised notice. His further appeal

to the Appellate Assistant Commissioner was unsuccessful. Without furthering his remedy before the Sales Tax Appellate Tribunal, the petitioner

has filed this writ petition to quash the proceedings of the original as well as the appellate authorities.

The learned counsel for the petitioner raises two contentions : Firstly it is said that the option exercisable by an assessee u/s 7 being intended to

benefit him, he could, if he discovers that by such exercise of an option he would be prejudiced, withdraw the same at any time before the payment

of tax on the assessable turnover. Secondly, it is said that as the tax payable u/s 7 and u/s 5 has now been held by our court to be independent and

not telescopable, as contended, equities should prevail and the petitioner''s additional but unwanted tax liability be shorn off.

As regards the second contention, the learned counsel for the petitioner rightly points out the law as stated by this court in O.M.S.S.

Sivamurugan v. Assistant Commercial Tax Officer VIII, Madurai-13 [1970] 26 S.T.C. 68, and reiterated in Writ Petition No. 3122 of 1969 and

urges that he is bound to suffer the local sales tax at the appointed rate u/s 7 and at the same time, suffer the tax payable u/s 5 of the Act in respect

of his inter-State purchases and subsequent sale of such purchased goods. The point, however, made out is that equity should step in, in such an

extraordinary circumstance, and assist the unguided petitioner. At the time when he exercised the option the law was not certain and before he

could get the benefit of the option exercised by him, the law became clear and it is this clarification of the existing law that has prejudiced, instead

of benefiting the petitioner by reason of the option. It may be that the petitioner has correctly gauged the situation earlier, but he is bound to suffer

the consequences by reason of the supervening declaration of law. That would not be a ground to avoid a tax and taxing statute because it is often

said that there is no equity in a tax. The petitioner may be justified in urging that he is prejudiced and, in equity, he should be protected. Such a

contention might prevail in normal courts of our country, but, in a tax court, such a contention is not available because the position cannot be

helped under the taxing law. If, therefore, the taxes u/s 7 and u/s 5 as pointed out by Ramanujam, J., who spoke for the Bench in O. M. S. S.

Sivamurugan v. Assistant Commercial Tax Officer VIII, Madurai-13 [1970] 26 S.T.C. 68, are separate and independent charges, then, no

amount of equitable consideration can prevail to avoid such a sufferance.

The other contention of the learned counsel is that the option once exercised by him should be capable of variation till the petitioner actually pays

the tax under the provisions of the local Sales Tax Act. This is an extreme contention. u/s 7, effectively, a concession is granted to the assessee in

the matter of quantum of tax. This is given in consideration of the option exercised by the assessee at the appropriate time. The lawmakers have

also given the option to the assessee to revoke his option before a particular stage. That is reflected in Rule 16(4-C) of the Madras General Sales

Tax Rules of 1959. This rule says that :

If a dealer who was provisionally assessed for any year at the rates laid down in Section 7 is desirous of being assessed under Sub-section (1) of

Section 3 of the Act, he may at the time of filing the return referred to in Sub-rules (1) to (3), revoke the option given at the time of provisional

assessment and request the assessing authority to assess him under Sub-section (1) of Section 3 of the Act, provided that the dealer is able to

furnish to the satisfaction of the assessing authority all the particulars for so assessing him.

The concession sought u/s 7, therefore, need not be availed of if the assessee so desires. But such a decision to wriggle out of the request to

adopt the concessional tax u/s 7 should be made as prescribed and within the time allowed. The outer limit of time fixed under the Rules to revoke

the option given at the time of the provisional assessment being fixed, then any attempt to get out of the situation at a time later than the prescribed

period, would be of no avail. The petitioner, in the instant case, did not revoke the option before he filed his returns. He did it long after he filed his

returns, and, as a matter of fact, reiterated the option when he filed such returns. In these circumstances, as the benefit which could be availed of

u/s 7 is conditioned upon that being available to the petitioner unless it is revoked prior to or at the time of filing of the returns, as contemplated in

the rule above, he cannot be heard to say that he could revoke it at any time he desires and particularly, before the payment of the tax which he

should surfer normally u/s 7 of the Act.

In these circumstances, both the contentions fail and I do not think that the petitioner can invoke any of the provisions of the Constitution so as

to attack the sustainability or vires of the relevant provision which I have considered above. In this view, the petitioner''s writ petition should fail.

On the ground that he failed to avail himself of the alternative remedy of preferring an appeal before the Sales Tax Appellate Tribunal, he cannot

seek a rule under Article 226 . But, as I have considered the case on other merits also, I am not satisfied that the rule nisi should be sustained. It is

discharged and the writ petition is dismissed with costs. Counsel''s fee Rs. 100.