C. T. O. MORADABAD versus H. FARID AHMED & SONS.

Citation: [1976] 1 S.C.R. 776 · Decided: 12-09-1975 · Supreme Court of India · Bench: V.R. KRISHNA IYER, S. MURTAZA FAZAL ALI · Disposal: Appeal(s) allowed

Judgment (excerpt)

776 
C.T.O. MORADABAD 
v. 
H. FARID AHMED & SONS. 
September 12, 1975 
[V. R. KRISHNA IYER AND S. MURTAZA FAZAL ALI, JJ.J 
U.P. Sales Tux Act, Section 7A and 7(3) and rule 41(3) of the 
Rules--
provisional best judgn1ent assess1nc11t, if could be n1ade when assessee filed a 
return. 
By an order dated 31st December, 1968, the sales-tax officer found from 
the turn-over .of the respondent firm as revealed from the quarterly returns 
filed by th~ assessec that it disclosed an assessable income. 
He proceeded to 
make a provisional assessment in respect o.f the portion of the assessment year 
1968 concerned purporting to act under section 7A of the U.P. Sales Tax A.ct. 
The respondent challenged the same before the High Court prayjng that the 
sales..tax officer had no jurisdiction to make a provisional assessment, because. 
the assessee had in fact filed a return. The High Court of ~-'\.liah1bad accepted 
the contention and quashed the ord~r of the sales-tax officer. 
'The High Court 
held that as conditions mentioned in section 7(3) did not apply to the facts 
of the case in as much as it was not a case in which the assessee had not 
filed a return at all, no assessment could have been made by the sales-tax 
officer. 
Allowing the appeal by special ]cave, 
HELD : Section 7 A clearly authorises the assessing authority to make 1, 
provisional assessment in respect of the assessment year to the best of his judg-
n1ent, and does not contain any pre-conditions at all. 
On the other hand. it 
applies the .provisions of the Act which includes the provisions of section 7 (3), 
which· is the provision that confers power on the assessing authority to make 
an assessment to the best of his judgment. 
It is true that sub-rule (3) of n1le 
41 contains a provision that the provisional assessment to the best of the judg-
ment can be made where no return is submitted, but this rule has to be read 
as supplemental to the provisions of the parent Act. What this rule implies 
is that whether the return is filed by the assessee or not, the assessing authority 
will have the pawer to make provisional assessment. 
There is no inconsistency 
between 5ection 7 A and rule 41 (3) of the Rules framed under the Act. 
[778-A-B, D-FJ 
CNIL APPELLATE JURISDICTION : Civil Appeal Nos. 95 and 96 
of 1971. 
From the Judgment and Order dated 3rd October, 1969 of the 
Allahabad High Court in Writ Petitions Nos. 351 and 462/69. 
S. C. Manchanda and 0. P. Rana, for the Appellants. 
Promod Swarup and S. Markendeya, for the Respondent. 
The Judgment of the Court was delivered by 
FAzAL ALI, J. 
These appeals by the sales-tax officer have come 
up to this Court by certificate of fitness granted by the High Court 
of Allahabad. 
The appeals involve a very short point, turning upon 
the interpretation of rule 7 A of the U.P. Sales Tax Act (hereinafter 
referred to as the Act). It appears that the respondent is a partner-
ship firm, carrying on business in the--.district of Moradabad. 
The 
assessment quarters in question are two quarters of 1968. 
By an 
order dated 3 lst December, 1968, the sales-tax officer found from the 
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s. T. 0. v. H. FARID AHMED & SONS (Fazal Ali, /.) 
777. 
turn-over of the firm as revealed from the quarterly returns !iled by 
the assessee that it disclose an assessable income. The 
sales-tal<'. 
officer, therefore, proceeded to make a provisional assessm"nt in res-
pect of the portion of the 
assessment year concerned, purporting 
lo act under section 7 A of the U.P. Sales Tax Act. 
The assessee 
being aggrieved by this order, instead. of going in appeal against the 
order, challenging the same before the High Court praying that the 
sales-tax officer had no jurisdiction to make a provisional assessment, 
·because the asscssee had in fact filed a return. This argument appears 
to have found favour with the High Court which quashed the order. 
of the sales-tax officer and held that the sales-tax officer could have 
made a provisional. assessment to the best of his judgment only if no 
return had been filed by the assessee. 
Mr. Manchanda appearing in support of the appeals bas contended 
that the High Court has completely overlooked the purport. and ambit 
of section 7 A of the Act, which does not exclude but in fact implies 
the provisions of the· Act, including section 7 (3). The sheet-anchor 
of the High Court's judgment is section 7 (3) which runs thus : 
"If no return 

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