The Government is the appellant in this appeal, which arises out of the decree and judgment of the learned First Additional City Civil Judge decreeing the suit filed by the respondent in its entirety only disallowing costs.

The suit itself was brought by the respondent for a declaration that the levy of additional sales tax for the year ending with 31st March, 1948, by the defendant Government against the plaintiff was illegal and for the issue of an injunction restraining the defendant from collecting the same from the plaintiff. The facts of the case have been set out in the judgment of the Court below in great detail and I do not think it is necessary for me to traverse the grounds over again.

The point that arises for consideration is whether in view of the fact that admittedly the respondent did not comply with rule 18(3) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939 and also rule 7 of the Madras General Sales Tax Rules, 1939, the respondent would be entitled to the relief he claimed in the suit The respondent has been a dealer in groundnut oil and cake. In regard to the assessment of such dealers to sales-tax, there are certain rules which have to be observed by the assessing authorities. Rule No.5(1) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, lays down:

“The tax or taxes under section 3 or 5 or the notification or notifications under section 6 (1) shall be levied on the net turnover of a dealer. In determining the net turnover the amounts specified in clauses (a) to (k) shall, subject to the conditions specified therein, be deducted from the gross turnover of a dealer.”

Rule 5(1)(k) says that all amounts which a registered manufacturer of groundnut oil (other than refined groundnut oil) and cake may be entitled to deduct from his gross turnover under rule 18 subject to the conditions specified in that rule, shall be deducted from the gross turnover. Rule 18 has got several sub-rules. Rule 18(1) is in the following terms:

“Any dealer who manufactures groundnut oil and cake from groundnut and or kernel purchased by him may, on application to the assessing authority having jurisdiction over the area in which he carries on his business, be registered as a manufacturer of groundnut oil and cake.

It is not disputed that the dealer in this case, who is the respondent, is registered as a manufacturer of groundnut oil and cake. Rule 18(2) is to the following effect:

"Every such manufacturer shall be entitled to a deduction under clause (k) of sub-rule (1) of rule 5 equal to the value of the groundnut and or kernel purchased and converted by him into oil and cake provided that the amount for which the oil is sold is included in his turnover."

The emphasis in this rule is on the proviso, namely, that the amount for which the oil is sold is to be included in the turnover of the registered manufacturer. The contention of the appellant is that the amount for which the oil is sold is not included in his turnover in order to enable the assessing authority to determine the total net turnover in accordance with rule 5 (1)(k). In order to secure that the amount for which the oil is sold is included in his turnover by the registered manufacturer, rule 18 (3) has been prescribed and it is in the following terms:

“Every such manufacturer shall submit so as to reach the registering authority not later than the 25th day of every month, a statement in Form A-9 in respect of the transactions of the previous month.”

Rule 18 (3)(i) runs as follows:

“the aggregate amount of groundnut and or kernel purchased by him and the total purchase price;”

It is the contention of the appellant, and it is not disputed that the respondent failed to comply with this rule 18(3) of the rules. There are two or three things -which are to be noted in this sub-rule (3) of rule 18. One is that there is a date within which the registering authority should receive a return from the assessee; secondly, the assessee should