Sales tax under the Punjab General Sales Tax Act, 1948, is a yearly tax and the assessment has to be made at the end of the year, not during the pendency of the year as and when a return is filed.

A.N.Grover, J.

1. This is a petition under Articles 226 and 227 of the Constitution by which the order dated 22nd January, 1963, of assessment of sales tax for two quarters ending 30th June, 1962, and 30th September, 1962, have been challenged.

2. The petitioner is the sole proprietor of a firm known as Mansa Ram Sushil Kumar and is engaged in the business of selling oil at Ludhiana. This firm is registered under the Punjab General Sales Tax Act, 1948 (hereinafter called the Act), and also under the Central Sales Tax Act, 1956 . It appears that the petitioner-firm has to file quarterly returns and for the two quarters ending 30th June, 1962, and 30th September, 1962, it filed the returns and paid the amount of tax in accordance with the returns which were filed as required Under Section 10 of the Act. On 11th December, 1962, the respondent issued a statutory notice Under Section 11 in Form S.T. XIV. The petitioner appeared before the respondent on 31st December, 1962, and produced the declaration form as required under the Act in Form S.T. XXII. By the impugned order the respondent did not accept the contention of the petitioner that sales had been made to registered dealers and created a liability of Rs. 35,185-59 nP. It is unnecessary to state the other facts because the only question which is to be decided is whether the respondent had the power and the jurisdiction to make the order of assessment for the two quarters mentioned before prior to the expiry of the assessment year which admittedly was to end on 31st March, 1963.

3. The petition has been referred by my learned brother Gurdev Singh, J., to a Division Bench in view of a decision by D.K. Mahajan, J., in Tara Chand Lajpat Rai V/s. The Excise and Taxation Officer Civil Writ No. 1123 of 1962 in which it has been held that the department could make the assessment on the quarterly or monthly returns when filed and once the assessment is made, the tax can be recovered. My learned brother Gurdev Singh, J., however, felt doubtful about the correctness of such a view owing to the decision and the observations made in Mathra Parshad and Sons V/s. State of Punjab A.I.R. 1962 S.C. 745 in which the entire scheme of the Act was discussed by their Lordships.

4. It will be futile to refer to the relevant provisions of the Act because of their detailed examination in the majority judgment of the Supreme Court in Mathra Parshads case A.I.R. 1962 S.C. 745. There, the appellants were a firm of general merchants which sold, among other goods, manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954 , which came into force in the State of Punjab from 1st April, 1954. The firm was also a registered dealer Under Section 7 of the Act and till the end of March, 1954, was paying sales tax on manufactured tobacco also. It paid sales tax for the next quarter ending 30th June, 1954, as well. On 27th September, 1954, the Government issued a notification by which the schedule of exemptions Under Section 6 of the Act was amended by the inclusion of item 51 which was " manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954 ." Certain Press Notes were also issued by the State Government prior to the notification of 27th September, 1954, which need not be mentioned. The question which was raised before their Lordships was whether the exemptions contained in the notification issued on 27th September, 1954, had effect from that, date or from the beginning of the financial year. The arguments canvassed by the appellants and the respondents were noticed. The appellants emphasised the words " gross turnover during the year " in Section 4(1) and the words "taxable turnover every year of a dealer " in Section 5(1) and argued that the tax was to be computed yearwise and the exemption must, therefore, operate for the whole of the year in which it was made irrespective of the date on which the notification was issued. The respondents, on the other hand, emphasised th