Three stages of imposition of taxes and duties :

All taxes and duties are imposed in three stages, which are levy, assessment and collection :-

(a) Levy is the stage where the declaration of liability is made and the persons or the properties in respect of which the tax or duty is to be levied is identified and charged.

(b) Assessment is the procedure of quantifying the amount of liability. The liability to tax or duty does not depend upon assessment.

(c) The final stage is where the tax or duty is actually collected. The collection of tax or duty may for administrative or other reasons be postponed to a later time as done in the case of excise duty, wherein the liability towards duty arises upon manufacture of excisable goods, the duty is collected only upon removal of goods from the factory.