Law: Sacks Tax Act, (III of 1951)

Section: 4(d),8(1),9(1)

Sales-tax Act, 1951 -Sections 4(d), 8(1), 9(1) -- Manufacturer -Exemption -Annual licence -Application made and licence granted after the end of relevant quarter -Licence, whether operative for the whole year -Held yes -- Assessment made before due date for filing return had expired -Order, held, premature and ineffective -Assessment cancelled. Annual licence, if granted, operates for whole year and not from date of issue -Application for grant of such licence To be disposed of before taking up assessment -Taking out licence obligatory -Failure, however, does not entails penal action -Scheme of the Act. ORDER {The order was passed by A. AHMAD, Accountant Member}.--This appeal directed against the sales-tax assessment under Section 10(4) for the quarter ending on 31st December 1959 arises out of an order of the Appellate Assistant Commissioner. The grounds of appeal are in argumentative form. In substance the prayer is that "both the orders of the learned Appellate Assistant Commissioner and the Sales-tax Officer be set aside and the appellant declared not chargeable under the Act." 2. By an order dated the 10th February 1960 the Sales-tax Officer made an assessment under Section 10(4) of the Sales-tax Act to the best of his Judgement. The assessment resulted in a sales-tax demand of Rs. 37,343 on an estimated turnover of Rs. 11,95,000. The nature of the business and the reasons for recourse to Section 10(4) of the Act have been stated by the Sales-tax Officer in the following terms: "Assessee is engaged in the cotton ginning and pressing business. Ginning and pressing is being done on rate basis for one M/s. M. The assessee is not doing any ginning on own account. Section 2 of S.T. Act, as amended by Ordinance 28 of 1959, makes cotton ginning liable to tax in the hands of factory owners, if ginning in their factory is done on behalf of other persons. The assessee has gained and pressed 2000 bales of cotton for the ginners (M/s.M). The amended clause and its implications were clearly brought to the notice of the assessee before the factory started functioning and he was directed under Section 3(6)(c) to deposit tax on the value of cotton lint ginned in his…

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