The provisions of the Madras General Sales Tax Act and the rules framed thereunder can reasonably be construed to give effect to the legislative intention.

( 1 ) THE Order of the Court was delivered by the Hon ble The Chief Justice. This is an appeal against the order of our learned brother Satyanarayana raju J. in Writ Petition No. 314 of 1954.

( 2 ) THE relevant facts are stated in the judgment under appeal and they may be briefly re-stated. The appellants are a firm carrying on tannery business at Guntur. Though they had taken out a licence under Section 5 (vi) of the Madras General Sales Tax Act (hereinafter referred to as the Act) for the year 1951-52, they did not get it renewed for the subsequent years. Nor. did they submit a return of their turn-over for the year 1952-53. The Commercial tax Officer, on a scrutiny of the accounts, found that their turnover of sales of tanned hides and skins amounted to Rs. 5, 36,001-14-2. To a notice given to them to show cause against assessment on the said turnover, they contended that, as they did not take out a licence, there was no provision under the Act to tax them. Rejecting the plea, the Commercial Tax Officer made the assessment on the basis of the aforesaid turnover and called upon them to pay a tax of Rs 8,375-0-6. The appellants filed a petition under Art. 226 of the Constitution of India for quashing the said order levying sales tax on the appellants for the year 1952-53. Rejecting their plea that they were not liable to be taxed, Satyanarayana Raju J. dismissed the application. The contention f Mr. K. V. Venkatasubrahmanya Ayer, learned Counsel for the appellants may be stated thus: In the case of hides and skins, section 5 (vi) of the Act supersedes the charging section 3 of the Act and under section 5 (vi) the said commodity is taxable only at such single point in the series of sales by successive dealers as may be prescribed. Section 16 (5) of the Turnover and Assessment Rules prescribing the point of taxation on the turnover of unlicenced dealers has been held to be ultra vires by the Supreme court. As there is no rule prescribing the single point in the case of unlicenced dealers, there is no charging provision at all under the Act or the rules framed thereunder in their case and therefore the tax imposed upon the appellants was invalid. The Government Pleader, on the other hand, argues that S. 5 (vi) gives a concession to dealers in hides and skins only on condition they take out a licence and, as the appellants have not taken a licence for the period in question, by operation of section 6-A, they are liable to be assessed to tax under S. 3 as if the provisions of Sec. 5 do not apply to such sales. He further contends that Rule 16 (5) is not ultra vires of the powers of the Government and is consistent with the Scheme of the Act. To appreciate the rival contentions, it is necessary and convenient at this stage to read the relevant provisions of the Act and the two sets of rules viz. , the Madras General Sales Tax (Turnover and Assessment) Rules and the madras General Sales Tax Rules, framed thereunder. Section 3 (1): subject to the provisions of this Act: (a) every dealer shall pay for each year a tax on his total turnover for such year : section 3 (3) : a dealer whose total turnover in any year is less than ten thousand rupees shall not be liable to pay any tax for that year under sub-section (i) or sub-section (2 ). (4) For the purposes of this section and the other provisions of this Act, turnover shall be determined in accordance with such rules as may be prescribed. Provided that no such rules shall come into force unless they are approved by a resolution of the legislative Assembly. (5) The taxes under sub-section (1) and (2) shall be assessed, levied and collected in such manner and in such instalments, if any, as may be prescribed. Provided that (i) In respect of the same transaction of sale, the buyer or the seller, but not both, as determined by such rules as may be prescribed, shall be taxed, (ii) Where a dealer has been taxed in respect of the purchase of any goods in accordance with the rules referred to i

Click Here to Read the rest of this document