State Sales Tax Authority empowered to levy and collect tax.

VEERASWAMI, J.

The validity of sub-rule (7) of rule 5 of the Central Sales Tax (Madras) Rules, 1957, and sub-section (3) of section 9 of the Central Sales Tax Act, 1956

We are of the view that the petitioner's first contention is well founded but not the second. Section 13 of the Central Act provides for power to make rules. Sub-section (1) authorises the Central Government to make rules providing for certain matters specifically mentioned and the rules made by the Central Government are required by sub-section (2) to be placed before both Houses of Parliament. Under sub-section (3), the State Government is given the power to make rules to carry out the purpose of the Act, but the rules so made should not be inconsistent with the provisions of the Act and the rules made under sub-section (1). The next sub-section enumerates certain purposes in respect of which the State Government will have power to make rules and this power is given without prejudice to the powers conferred by sub-section (3). In purported exercise of the powers conferred by sub-section (3) and (4) of section 13, the State Government made the Central Sales Tax (Madras) Rules, 1957, of which rule 5 provides for submission of returns and the procedure to assess them. Sub-rule (5) says that after the close of the year, the assessing authority shall, after such scrutiny of the accounts and after such enquiry as he considers necessary, satisfy himself that the return or returns filed are correct and complete and finally assess under a single order the tax or taxes payable under the Act for the proceeding year or for the year to which the return submitted relates as the case may be. The sub-rule further provides that if the assessing authority finds that the returns are incorrect or incomplete, he shall assess the turnover to best of his judgment after giving the dealer an opportunity to prove the correctness and completeness of his returns. Sub-rule (7) is as follows :

"If, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax in any year, the assessing authority may, at any time within five years next succeeding that to which the tax relates, determine to the best of his judgment the turnover which has escaped assessment and assess the tax payable on such turnover after issuing a notice to the dealer and after making such enquiries as he considers necessary." *

This sub-rule, therefore, provides for (1) assessment of escaped turnover, (2) period of limitation for applying the power to assess such turnover, namely, five years, and (3) determination by best judgment of the escaped turnover. The provisions of the Central Act do not themselves provide for any of these matters and certainly section 13(4) does not specifically confer power on the State Government to make a rule like sub-rule (7). The Madras General Sales Tax Act, 1939, by section 9 provided power for the assessing authority to assess the turnover on the basis of the return and where it does not accept the correctness or completeness of the return, to assess it to the best of his judgment and by section 19(1) authorised the State Government to make rules to carry out the purposes of the Act, and by sub-section (2) certain matters were particularised without prejudice to the general power to make rules for the purposes of the Act in respect of which the State Government could make rules. One of such matters specifically mentioned is

"the assessment to tax under this Act of any turnover which has escaped assessment, and the period within which such assessment may be made not exceeding five years" *

. Section 13(4) of the Central Sales Tax Act does not contain any such specific enabling provision, though the Act was made when the Madras General Sales Tax Act, 1939, was still in force which the Parliament should have been aware of. The Madras General Sales Tax Act, 1959, has not left to the rule-making authority the power to make rule relating