The Chief Justice.- This appeal arises cut of a suit filed by the appellant in the Court of the Subordinate Judge of Cochin for a declaration that certain orders passed by the Deputy Commercial Tax Officer, by the Commercial Tax Officer on appeal and by the Board of Revenue on revision in respect of sales tax assessment for 1945-46 are illegal ultra vires, unauthorised and opposed to the provisions of the Madras General Sales Tax Act and the rules framed thereunder. The learned Subordinate Judge dismissed the suit and hence the appeal.

The facts of this case can be better understood by first referring to the material provisions of the Madras General Sales Tax Act (Act IX of 1939). and the rules framed thereunder. This Act was amended in 1947 and 1949. But we are concerned in this case with the provisions of the Act as they stood before these amendments. The descriptive title of the Act is:

"An Act to provide for the levy of a general tax on the sale of goods in the Province of Madras." The following definitions in section 2 are important:

"(b) ‘dealer’ means any person who carries on the business of buying or selling goods.

Explanation (2) The agent of a person resident outside the Province who carries on the business of buying or selling goods in the province shall be deemed to be the dealer in respect of such business for the purposes of this Act;

(c) ‘goods’ means all kinds of moveable property other than actionable claims, stocks and shares and securities and includes all materials, commodities and articles;

(h) ‘sale’ with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge or pledge; Explanation. - A transfer of goods on the hire purchase or other instalment system of payment shall notwithstanding the fact that the seller retains the title in the goods as security for payment of the price, be deemed to be a sale.

(i) ‘turnover’ means the aggregate amount for which goods are either bought by or sold by a dealer, whether for cash or for deferred payment or other valuable consideration provided that the proceeds of the sale by a person of agricultural or horticultural produce grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover."

Section 3 is the charging section and is in the following terms:

"3. (1) Subject to the provisions of this Act, every dealer shall pay in each year a tax in accordance with the scale specified below:

(a) If his turnover does not exceed twenty thousand rupees .. Five rupees per month.

(b) If his turnover exceeds twenty thousand rupees .. One half of one per cent of such turnover.

Provided that any dealer whose turnover in any year is less than ten thousand rupees shall not be liable to pay the tax under this sub-section for that year."

There is another proviso which is not relevant. Section 3(2) provides that the turnover for all the purposes of the Act shall be determined in accordance with, and the tax shall be assessed, levied and collected in such manner and in such instalments as may be prescribed by the rules made by the Government. Every dealer whose turnover is Rs. 10,000 or more for a year shall submit such return or returns of his turnover in such manner and within such periods as may be specified in the rules made under sub-section (2) of section 3 [section 9(1)]. If the assessing authority is satisfied that any return so submitted is correct and complete he shall assess the dealer on the basis thereof [section 9(2)(a)]. If no return is submitted before the prescribed date or if the return submitted appears to the assessing authority to be incorrect or incomplete the assessing authority shall proceed to determine the turnover in accordance with the rules, provided t

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