LexCOMMISSIONER OF SALES TAX, UTTAR PRADESH versus THE MODI SUGAR MILLS LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
2 S.C.R. SUPREME COURT REPOl{.TS
189
COMMISSIONER OF SALES TAX,
UTTAR PRADESH
v.
THE MODI SUGAR MILLS LTD.
(8. K. DAS, M. HIDAYATULLAH, K. 0. DAS GUPTA
J.C. SHAH and N. RAJAGOPALA AYYANGAR, JJ.)
Sa1es Tax -
Previous year turnover opted for assessment--
Change of law and tax rates during assessment year-If applicable
to previous year turnover-Modification in the tax levied-If per-
missible-United Provinces Sales Tax Act, r948 (XV of 1948),
ss. 3, 3A, 7, IO and 22---U. P. Sales Tax Rules, mlc 39--U. P.
Government Notification dated June 8, r948.
The respondent company was a manufacturer of edible and
non-edible oils and was registered as a "dealer " under the
United Provinces Sales Tax Act, 1948. Its year of account com-
menced on June 1, and ended on May 31 of the next year.
Under s. 7(1) of the Act read with rule 39 of the rules framed
thereunder the respondent exercised the option of being as>essed
on the turnover of the previous year and submitted its return
for the assessment year 1948-49 on its taxable turnover of the
previous year ending May 31, 1947· The Sales Tax Officer
assessed the turnover in respect of edible oil at 3 pies per rupee
under s. 3, but in respect of non-edible oil he held that since a
notification dated June 8, 1948, issued under s. 3(A) had come
into force from June 9, of the assessment year providing for
the levy of tax at 6 pies per rupee, the assessee was liable to be
assessed at 3 pies per rupee on the turnover during the first 69
days of the year and at 6 pies per rupee for the remaining days
of the year. On appeal by the assessee the appellate authority
modified the order and directed that the tax be levied at a fiat
rate of 3 pies on both edible and non-edible oils. This order
was set aside by the rnvising authority and the order of the
Sales Tax Officer was restored. On a direction made by the
High Court the revising authority submitted a question for
opinion.. The High Court held that the assessee was liable to
pay the tax at a fiat rate of 3 pies per rupee. On appeal by the
Commissioner of Sales Tax by special leave,
Held, (per Hidayatullah, Das Gupta and Shah, JJ), affirm-
ing the view of the High Court, that the assessee who elected
to submit his return on the turnover of the previous year, is
liable to be assessed to sales-tax at the rate in force on the first
day of the year of assessment because the liability arises on
that date, and any subsequent enhancement of the rate by
virtue of a notification under s. 3(A) does not alter that liabi-
lity.
A taxing statute must be interpreted in the light of what
1y60
October 31.
190
SUPREME COURT REPORTS
[1961]
,96u
is clearly expressed therein and nothing can be implied nor can
provisions be imported into them so as to supply an assumed
The Co1ntnissioner deficiency.
01 Sales-tax,
Per S. K. Das and Ayyangar, JJ.-The rate of tax as
Uttar Pradesh applied by the sales tax officer was in accordance with law.
The ·~1 odi
Having reg~rd to the scheme underlying the option to
5
M 11
L d elect for a prev10us year turnover conferred by s. 7(1) of the
ugar
' '
1 ·Act the change in the law and in the rate of tax effected during
the assessment year must apply to the turnover of the previous
year which is deemed to be the turnover of the assessment year
and sales effected during that period have to be assessed at_ the
rate prevailing in that year.
Although the notification was prospective and was made
with the object of changing the rate of taxation during the
assessment year, the date mentioned therein did not prevent
the application of the assessment year rate to the opted previous
year turnover.
It is not correct to say that there is absence of machinery
for reassessrnen t and refund of tax to justify the conclusion
that the basis of the tax liablity for an assessment year is that
which prevailed on the first day of that.¥ear since there are
•
provisions in the Act such as for instance ss. 10 and 22 which
provide for reductions, refunds and rectification of errors re-
garding taxation and even for enhancement of tho tax already
levied.
·
Shah ].
There was no ambiguity in the notification and the prin-
ciple of reso!.ving ambiguities in favour of the asscssee could
not be applied in this case.
CIVIL APPELLATE JURISDICTION :
Ci vii Appeal
No. 443 of 1957.
Appeal by special leave from the judgment and
order dated April 25, 1955, of the Allahabad High
Court in CivExcerpt shown. Read the full judgment & AI analysis in Lexace.