State of Madras vs N.R. Kuppuswami Gounder and Sons, Pollachi

Satyanarayana Rao, J.—Only two points arise for consideration in this case.

The first point is, whether the assesses is liable to include in his turnover the sum of Rs. 444,787-8-0. The assesses is a dealer in ground-nuts

among other things. He also owns a decorticating mill. Certain dealers entrusted to him ground-nut for decortication and obtained advances on the

goods deposited. On these advances the dealers had to pay interest. After decortication the goods were sold by the assessee on behalf of the

dealers; and from and out of the amount realised he appropriated to himself the advances he made together with interest thereon, as well as the

charges payable for decorticating the ground-nuts of the dealers and he paid the balance to the dealers. The transaction does not in any way

involve the purchase of the ground-nuts by the assessee and therefore it cannot be included in his turnover. Dealings in ground-nuts attract tax only

at the point of purchase and not at the point of sale. The Tribunal therefore took the view that this amount need not be included in the turnover of

the assessee. On the statement of facts no authority is required for this position; it is obvious that the transaction is not a purchase by the assessee

and therefore the amount does not constitute his taxable turnover. It was rightly excluded from the turnover by the Tribunal.

The second point raised is under rule 18 of the Madras General Sales Tax (Turnover & Assessment) Rules, 1939. Under rule 18 Sub-clause

(2) every registered manufacturer of groundnut oil is entitled to deduction under clause (K) of Sub-rule (1) of rule 5 of an amount equal to the

value of the ground-nut and/or kernel purchased and converted by him into oil and cake provided he included the amount for which the oil is sold

in his turnover. In order to obtain this deduction Sub-rule 3 of rule 18 requires that the manufacturer should 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 relating to the previous month.

Before 10-2-1949 there was no express power vested in any authority to condone the delay if the return was not submitted within the time fixed

by Sub-rule 3. But on 10-2-1949 Sub-rule 3-A was introduced which empowered the Commercial tax Officer to condone the delay in filing the

return as required by Sub-rule 3. It was contended that in respect of the returns which should have been submitted before 10-2-1949 there was

no power of authority to condone the delay in making the returns and therefore the deduction should not have been granted, it was also contended

that it was a condition precedent for claiming the deduction mat the return should be submitted before the 25th of every month and that if the

assessee did not do so he lost the right. In view of the new amendment introduced, which relates to procedure, we think that it is retrospective in

its operation; and so long as the assessment was not completed, the concerned authority had ample power or discretion to condone the delay in

submitting the return or the omission to submit the return at all. No question of vested right accruing arises, and therefore the view taken by the

Tribunal that the authority concerned could condone the delay is in our opinion, correct.

The petition is dismissed with costs, Rs. 250.