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1961 (3) TMI 5 - SUPREME COURTWhether there are materials for the Tribunal to hold that the aforesaid sales tax payments of ₹ 30,221 were unreasonable and unnecessary having due regard to the requirements of the business, and not consequently deductible under rule 12 of Schedule I of the Excess Profits Tax Act ? Held that:- Reasonableness or the necessity of payments under rule 12, Schedule I of the Excess Profits Tax Act must be ascertained in the light of what may be regarded as commercially expedient and not on any legalistic considerations. It would not be expected of a businessman to start a litigation in respect of a tax which the Legislature of the State was competent to levy on the ground that the method devised for computing the tax liability was ultra vires. The tax was duly assessed and paid and the reasonableness and necessity must be adjudged in the light of the circumstances then prevailing and not in the light of subsequent developments. The High Court was right in answering the question in the negative. Appeal dismissed.
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