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Showing 301 to 320 of 1750 Records
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2018 (1) TMI 1453
TP Adjustment - selection of comparable - HELD THAT:- As far as the Revenue’s grievance with respect to the exclusion of two comparables i.e. Tata Elxsi Limited and Thirdware Solutions, is concerned, the Court is of the opinion that so far as these two comparables are concerned, the findings with respect to functional similarity of these entities vis-a-vis the assessee are borne out from the record.
Inclusion of SIP Technologies and Export Limited as a comparable is concerned, the approach adopted by the ITAT – of ignoring the low margin, is in consonance with this Court’s judgment. However, with respect to the exclusion of two other comparables, the Court is of the opinion that a question of law arise.
Treatment of forex gain/loss - HELD THAT:- This Court has ruled against the Revenue holding that the forex gain/loss cannot be treated as a part of income and made the subject matter of adjustment, in the cases of Principal Commissioner of Income Tax v. Cashedge India Pvt. Ltd.[2016 (5) TMI 1348 - DELHI HIGH COURT] as well as Principal Commissioner of Income Tax v. B.C. Management Services Pvt. Limited [2017 (12) TMI 255 - DELHI HIGH COURT]
Appeal Admitted on:-
(1) Did the ITAT fall into error in excluding the Tata Consultancy Services Limited (TCS) and Infosys Technologies Limited from the list of comparables having regard to the previous decisions of this Court?”
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2018 (1) TMI 1452
Re-export of confiscated Jewellery - no such request for re-export of the confiscated gold was made before Commissioner (Appeals) by the applicant - Held that:- It is noticed from the order of Commissioner (Appeals) that no such request for re-export of the confiscated gold was made before him by the applicant. The applicant has also not provided any evidence to show that she had requested the Commissioner (Appeals) to allow her to re-export the confiscated gold. Therefore, no defect can be attributed to the order of the Commissioner (Appeals) on this account and the Government being only a revisionary authority in this case and not an appellate authority, it does not consider it proper at this juncture to entertain an additional prayer of the applicant which was never raised before Commissioner (Appeals).
Reduction of redemption fine and penalty - Held that:- Additional Commissioner of Customs has imposed redemption fine of ₹ 2,00,000/- only which is just 15% of value of confiscated goods. Whereas it is generally seen that redemption fine in such case is imposed at the rate of more than 30% of the value of the confiscated goods. Thus the redemption fine imposed by Additional Commissioner of Customs and upheld by the Commissioner (Appeals) is already very modest and reasonable. Therefore, the Government finds that no further reduction in redemption fine is warranted.
Revision application allowed.
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2018 (1) TMI 1451
Erroneous paid Duty Drawback - applicant took nine months to reply to the deficiency memo issued by the department when it was mandatory to reply within 30 days of the issuance of deficiency memo under the said Rules, 1995 - Held that:- Rule 5(4)(a) of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 stipulates that any claim which is incomplete in any material particular or is found without the documents specified in sub-rule (2) shall not be accepted for the purpose of Section 75A and such claim shall be returned to the claimant with the deficiency memo in the form prescribed by the Commissioner of Customs within fifteen days of submission and shall be deemed not to have been filed - But in the instant case, the applicant’s drawback claim was never returned in accordance with the above stated rule and instead it was sanctioned after being satisfied about the admissibility of the drawback claim. Accordingly there is no scope for the application of above Rule 5(4)(a) & (b) in this case and initiation of recovery proceeding against the applicant has been entirely without any legal basis - revision application allowed.
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2018 (1) TMI 1450
Recovery of Duty Drawback - all Industry rates - export of “Cotton Made ups ITEM” - Rule 16/16A of the Drawback Rules - Held that:- On examination of Rule 16/16A of the Drawback Rules, the Government finds that drawback amount is recoverable only if the foreign proceeds for export of the goods has not been realised within six months from the export of the goods. But in this case it is noticed that the applicant has received the sale proceeds in time and the mistake on the part of the applicant is only that they did not submit C.A. certificate in time on six monthly basis as per C.B.E. & C. Circular No. 5/2009-Cus., dated 2-2-2009.
The applicant has realised the sale proceeds well in time and as a result the applicant’s case is not covered under Rule 16/16A of Drawback Rules, 1995. While non-submission of CA certificate on six monthly basis as per C.B.E. & C. circular is certainly a lapse, it cannot be termed as violation of above Drawback Rules. For non-realisation of ₹ 2142.13 against shipping bill No. 546, the applicant has already deposited the drawback amount of ₹ 152/- along with interest of ₹ 80/- and its correctness has not been disputed by the Commissioner (Appeals) or even by the lower authority.
The Government is of the clear view that drawback of duty has been correctly availed by the applicant in respect of above referred six shipping bills and its recovery is not warranted in this case as the applicant has realised sale proceeds within stipulated period of six months - revision application allowed.
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2018 (1) TMI 1449
Imposition of penalty - Evasion of Customs duty - violation of post import condition imposed in Explanation 2 vide Notification No. 24/2008-Cus., dated 1-3-2008 in Notification No. 84/97-Cus., dated [11-11-1997], as amended - import of ‘Electronic Sensor Paver Model Super 1800 with AB600-2 TV Screed’ - Held that:- The Bench observes that the applicant has made true and full disclosures of their liabilities, deposited the same and is therefore inclined to settle the case of applicant under Section 127C(5) of the Act.
This order shall be void and immunities withdrawn if the Bench finds, at any point of time, that the applicants had concealed any particular material to the Settlement or had given false evidence or had obtained this Order by fraud or mis-representation of facts.
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2018 (1) TMI 1448
TDS u/s 195 - Assessee-in-default by levying a tax u/s 201(1) & 201(1A) - payment to a Non- Resident, but had not deducted tax at source before making the payment - HELD THAT:- The assessee has made the payment to the non-residents only. In such circumstances, the assessee is required to deduct the tax at source u/s 195 before making the payment. The assessee has clearly failed to do so and therefore, the AO has initiated the proceedings u/s 201(1) of the Act by issuance of a notice dated 19.6.2013.
The contention that section 201(1) proceedings have been initiated only because the vendors have not paid the tax also is incorrect as in the case of the vendors, notices u/s 148 were issued on 14.2.2014 i.e. after initiation of the proceedings u/s 201(1) of the Act in the case of the assessee on 19.06.2013. Further, it is noticed that the order u/s 201(1) is dated 27.1.2016 i.e. after introduction of the proviso to section 201(1) of the Act, wherein it has been provided that an assessee shall not be treated as ‘an assessee in default’ if the recipient has filed the return of income and has offered the receipt to tax. Therefore, we are of the opinion that the AO’s recitals about the non-filing of the return and non-offering of the income by the vendors is only to demonstrate that the income of the vendors has escaped assessment.
The second objection the assessee is that Article 26 of Indo-US DTAA is applicable - As regards Article 26 of Indo-US DTAA, we find that it is against discrimination of non-residents vis-à-vis the residents of the contracting States under similar circumstances. The underlying principle of Article 26 is that the non-resident shall not be treated less favourably than the residents of the contracting state and the requirements connected with taxation shall not be more burdensome than they are for residents. But in the case before us, there is no discrimination against the NRI’s. We are dealing with the liability of the assessee to deduct TDS and not about the liability of the non-residents.
The income in the hands of the NRI’s is taxable under the head capital gains and the provisions of section 195 are attracted also because they are non-residents.
As rightly argued by the assessee, the assessee is required to make the TDS from credit or payments made by it and not on what the vendors are deemed to have received from the sale of their property. Therefore, as far as the liability of the assessee is concerned, we have no hesitation to hold that it shall only be on the actual consideration credited or paid by the assessee, whichever is earlier. Further, as seen from the assessment order, the assessee has already paid taxes on the LTCG accruing to the vendors on the actual payment made by him. Therefore, we are of the opinion that the assessee cannot be treated as an “assessee in default” u/s 201(1) of the Act, but is only liable for interest u/s 201(1A) of the Act till the date of payment of taxes by him.
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2018 (1) TMI 1447
Addition on account of milling gain - HELD THAT:- AO being a quasi judicial authority ought to have recorded specific reason for making any addition in the hands of the assessee.
The first appellate authority, whose powers are co-terminus with that of the Assessing Officer, could have deliberated upon the rights and liabilities of the assessee on the very fact that assessee could not attend the hearing because he was medically unwell and relevant evidence was also placed which was not considered by the CIT(A). We find that this addition is being made by the Department without any enquiry being conducted or without there being any material on record and, therefore, we are of the considered view that the addition made by the AO and confirmed by the CIT(A) is without any basis and liable to be deleted - delete the addition made on account of milling gain.
Machinery repairing expenses debited under the head “machinery repairing expenses” - AO on examination of bills and vouchers relating to expenses, noticed that some of the expenses were not supported with verifiable vouchers and were in cash. - HELD THAT:- On a perusal of the written submission and the case record, we find that the business of the assessee is trading in food grains and producing Maida which is supplied to various biscuit manufacturers. It is common in factory set up that certain repairs and maintenance work are conducted for which vouching is not always possible. These expenses relate to the fundamentals of the assessee’s business and just because they were not vouched, there cannot be any addition. The practical aspects involved in relation to the type of business of the assessee, who is also a tax payer, should be taken into consideration by the Department and taking these facts in totality, we are of the considered view that such ad hoc addition without any basis cannot be sustained and hence liable to be deleted. Accordingly, the addition on account of machinery repairing expenses is deleted. - Decided in favour of assessee.
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2018 (1) TMI 1446
Reopening of assessment - bogus entry of gift given by Sh. Gupta to the assessee - eligibility of reasons to believe - HELD THAT:- A perusal of the reasons recorded by the AO shows that the allegation as per the reasons to believe escapement of income is bogus purchase/sale of shares, while the impugned addition has been made with respect to gift, which shows that the A.O. had no specific information. Hence, as rightly contended, the reasons recorded are vague and farfetched.
Assessee categorically submitted that he had not entered into any transaction of purchase/sale of shares. No new adverse information has been brought on record which could suggest any justification for satisfaction to initiate proceedings u/s 147/148, in spite of specific request of the appellant vide letter dt. 24.11.2010. In the proceedings u/s 147, the burden is on the A.O. to prove income escaping assessment as it is the belief of the A.O. for income escaping assessment which can trigger such proceedings.
This onus has not been discharged by the AO herein, rendering the initiation of the reassessment proceedings void. - Decided in favour of assessee.
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2018 (1) TMI 1445
The Appellate Tribunal in the case condoned a delay of 14 days in preferring the appeal. I.A. No. 924 of 2017 was disposed of.
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2018 (1) TMI 1444
NCLT territorial jurisdiction over the Winding up petition - No formal notice issued on the respondent that petition has to be transferred to NCLT - HELD THAT:- The judgment of the Bombay High Court in West Hills Realty Private Ltd. and Ors. vs. Neelkamal Realtors Tower Pvt. Ltd.[ 2016 (12) TMI 1253 - BOMBAY HIGH COURT ] gives the correct position. As rightly noted by the Bombay High Court, Rule 26 of the Companies (Court) Rules,1959 deals with Service of petition whereas Rule 27 deals with Notice of petition. There is nothing in Rule 26 to show that the service of the petition is to be effected only when the petition is admitted. In fact, admission of a winding up petition is dealtwith the Rule 96 of the Companies (Court)Rules 1959.
Rule 96 also provides foran eventualityof service of notice to be given to the company before directions as to the advertisement of the petition. ClearlyRule 26 does not deal only with situationswhere copy is served on the respondent after admission of the winding up petition. Hence, the present petition is liable to be heard by this Court.
The learned counsel for the respondent seeks some time to file surrejoinder in view of the additional documents filed by the petitioner along with petition. Needful be done in three weeks.
List on 16.04.2018.
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2018 (1) TMI 1443
The Supreme Court dismissed the Special Leave Petition after finding no legal grounds for interference. The delay was condoned and the application for exemption from filing certified copy of the impugned order was allowed.
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2018 (1) TMI 1442
Rate of tax - works contract - grievance of the petitioners is that even though nature of works contract undertaken by the petitioners’ firm with the local bodies and other departments of the State of Karnataka involved two or more specified categories mentioned at Sl.Nos.1 to 21 and 22 of the Sixth Schedule of KVAT Act and leviable for tax at the rate of 5.5%, respondent No.3 has levied tax at the rate of 14.5% by classifying their business as non-specified category mentioned at Sl.No.23 of the Sixth Schedule of KVAT Act - Held that:- In the facts and circumstances of the case if the Assessment Order at Annexure-F is set aside and if the Assessing Authority is directed to reconsider the matter, no serious prejudice will be caused to the respondents, as the petitioners have already paid the admitted tax at the rate of 5.5% and the difference of tax as demanded under Annexure-F may be around ₹ 10,00,000/- that can be safeguarded if the petitioners are asked to furnish bank guarantee to a tune of ₹ 10,00,000/- to respondent No.3-Assessing Authority.
The Assessment Order passed by respondent No.3 at Annexure-F is set aside - Matter stands remitted to respondent No.3 Assessing Authority with a direction to reconsider the matter afresh after providing opportunity to the petitioners to produce documents on which they want to rely upon and after providing personal hearing - petition allowed.
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2018 (1) TMI 1441
Restoration of the name of the petitioner company on the Register of Companies maintained by the office of the ROC, NCT of Delhi and Haryana - section 560(6) of the Companies Act, 1956 - Held that:- The reason for striking off the name of the petitioner company is non-filing of Balance Sheet and Annual Returns since 1999 which resulted in the belief that the petitioner was not carrying on any business. Notice for striking off was published in the Official Gazette on 23.6.2007. Further the petitioner company has failed to produce any statutory return as proof of it being in operation and carrying on business. The name of the petitioner company has been struck off by following the procedure laid down by Section 560 of the Companies Act, 1956.
One of the following three conditions are required to be satisfied before exercising jurisdiction to restore company to its original name on the register of the ROC namely: A) that the company at the time of striking off of its name was carrying on business, or B) it was in operation, or C) otherwise that it is just that the name of the company be restored to the register.
When we apply the aforesaid statutory parameters to the facts of the present case the petitioner has not been able to show that on 23,06.2007 when it was struck off it was in fact carrying on business or it was in operation, On its own showing the petitioner filed his last annual returns in the year 1999. The petitioner has not been able to show any evidence to prove that it had filed even income tax returns from 2005 till 2014 - section 560(6) would not come to the rescue of the petitioner as no credible evidence has been shown to prove that the petitioner company was carrying on its business or was in operation on the date of striking off, or that it would be just that the name of the company be restored on the register of ROC.
Petition dismissed.
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2018 (1) TMI 1440
Reopening of assessment - non-granting an opportunity of personal hearing to the Petitioner - scope of alternative remedy - Held that:- We note that the proceedings under Section 148 of the Act have not culminated in any order being passed. Admittedly, the Revenue has withdrawn the reopening notice. Prima facie we see no confusion on the part of the Petitioner, as prior to passing of the impugned order, a Show Cause Notice was issued to the Petitioner and it was responded to. In any case the Petitioner's case that the reopening notice resulted in some misunderstanding is also an issue which could be agitated before Appellate Authority under the Act.
Therefore, in view of efficacious alternative remedy being available under the Act, we see no reason to exercise our extra ordinary jurisdiction under Article 226 of the Constitution of India to entertain this Petition.
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2018 (1) TMI 1439
CENVAT Credit - input - M.S. HR Coils, Aluminium Coils, Welding Rods etc., used for the purpose of repairing and maintenance of their capital goods - Held that:- Repair and maintenance of plant and machinery is an activity without which smooth manufacturing is not possible. Commercially, manufacturing activity is not possible with malfunctioning machines, and leaking tanks, pipes and tubes. Therefore the activity of repair and maintenance of plant and machinery is an activity which has direct nexus with manufacture of final products and the goods used in this activity would be eligible for Cenvat credit.
For eligibility of an input for Cenvat credit what is relevant is whether the activity in which that input is used has nexus with the manufacture of final product and the nexus has to be determined on the basis of criteria as to whether that activity is commercially essential for manufacture of the final products.
Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 1438
Validity of assessment order in the name of the amalgamating company - assessment framed in the name of the non-existent company - procedural defect - successor-in-interest - Held that:- Tribunal had ruled that the assessment made, in the name of Suzuki Power Train India Limited, was a nullity since the entity was no longer in existence and was subjected to an approved scheme for amalgamation; the transferee company was amalgamated with Maruti Suzuki India Limited. This Court notices that for A.Y. 2011-12, on the same facts, the assessment was held to be invalid – a decision, that was ultimately upheld by this Court in the Pr. Commissioner of Income Tax-6, New Delhi vs. Maruti Suzuki India Limited (Successor of Suzuki Powertrain India Limited - 2017 (9) TMI 387 - DELHI HIGH COURT.
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2018 (1) TMI 1437
Principles of natural justice - refund claim - case of petitioner is that the petitioner had no opportunity to explain to the Authority, that their action was not justified - Held that:- Since the partial rejection of the petitioner’s claim for refund results in civil consequence, the principles of natural justice demands that the petitioner be afforded an opportunity. The explanation sought to be given by the respondent, in Para No. 10 of the counter affidavit cannot be countenanced, as the statute does not put a bar for an opportunity being granted, and if statute is silent, then, principles of natural justice has to be read into the statute, so that the assessee has reasonable opportunity to put forth this case.
Petition disposed off.
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2018 (1) TMI 1436
Addition of suppressed sales made by the AO - Held that:- Even though the assessee had disclosed 1.7% net profit against the total sales of ₹ 71.99 lakhs, in view of the facts and circumstances of the case and the detailed finding of Ld. CIT(A) which goes un-rebutted at the end of both the parties, we find merit in the finding of Ld. CIT(A) estimating net profit @ of 8% on the Bhoomiyaji Land & Finance 9 sales of ₹ 1 crore which takes care of suppressed portion of sales unearthed by the Ld. AO on the basis of his investigation and estimating of higher profit earned on the suppressed sales. We therefore, in the given facts and circumstances of the case find no reason to interfere in the finding of the Ld. CIT(A) deleting the addition of ₹ 1,00,19,593/- in sustaining the addition at ₹ 6,29,657/-.
Unproved creditors - advance receipts for plot booking - Genuineness of the transactions - Held that:- In the case of assessee for A.Y. 2005-06 [2011 (3) TMI 1771 - ITAT INDORE] decided in favour of the assessee on the issue of advance receipts for plot booking by holding that the booking amounts were not purely in the nature of cash credit for which the assessee was required to prove the creditworthiness of the persons who books the plot with him. CIT(A) examined the issue in detail by verifying respective registry placed on records and details mentioned in the registry duly tallied with the payments shown by the assessee. Genuineness of the transactions stands proved with the copies of registries and the amounts refunded through banking channels. We, therefore, respectfully following the decision of coordinate bench in assessee’s own case for A.Y. 2005-06, detailed finding of CIT(A) which goes uncontroverted by the Revenue as well as in the given facts and circumstances of the case and the documents placed before the lower authorities, find no reason to interfere in the finding of Ld. CIT(A), deleting the addition.
Addition on account of alleged extra cash found during the course of survey u/s 133A - Held that:- As during the course of survey proceedings inventory of cash found at the business premises was made and cash of ₹ 814340/- was found. ₹ 11198/- was cash in hand in the books of assessee as on 15.03.2007. The partner of the assessee firm could not explain the excess cash found at ₹ 803142/- in light of these facts the contention of the assessee as well as the Ld. Counsel before the lower authorities and before us that no cash was found during the course of survey is not accepted. We therefore, uphold the view taken by the ld. CIT(A) and confirm the addition of ₹ 803142/-. Ground No.1 of assessee’s appeal is dismissed.
Addition confirmed u/s 68 on account of unexplained cash credit - Held that:- Letters were issued u/s 133(6) of the Act, by the AO on the address provided by the assessee as in turn provided by the prospective buyers. Coordinate bench, Indore in the case of assessee for A.Y. 2005-06(supra) also held in the favour of assessee that if address given by the prospective buyers were not correct or they have not responded in proper manner to the AO then the assessee could not be penalized for their action. Genuineness of the transactions stands proved with the copies of registries. Assessee has been unable to prove source of cash credit of ₹ 35,37,500/- even up to the stage of appellate proceedings before first appellate authority and nor any substantial evidence has been placed before us.
Disallowance of refund of advance money and cancellation charges paid by the assessee to its customers - Held that:- From perusal of the records we find that the forfeiture of the amount was as per the agreement and in the independent enquiry conducted by the AO during the remand proceedings the customers have confirmed to have received back the amount. Further the assessee recognizes the sale on the date of registry of sale deed and the amount received as advance on account of plot booking is being capitalized and shown as liability in the balance sheet till the date of sale. During the year under appeal the assessee has returned the advance to difference customers and reduced the liability to that extent. The view taken by the CIT(A) deleting the addition of ₹ 39,71,000/- being the repayment of advance of plot booking received by the assessee in earlier years and the same has been duly proved by the assessee with documentary evidences.
Cancellation charges allowability - extra payment over and above the advance for plot booking - Held that:- We are unable to support the contentions of the Ld. Counsel, because the assessee has paid extra payment over and above the advance for plot booking. There is no clause in the agreement about payment of extra amount. The plot booking has been cancelled after substantial time gap of 2 to 3 years. As there was no clause in the agreement for payment of cancellation charges, by debiting the extra amount of plot booking charges in trading account the assessee has increased the purchase cost reduced the gross profit. We, therefore, agree with the view taken by the Ld. CIT(A) that as the assessee has capitalized the amount of advance and recognized sales on the date of registry for sale deed the amount paid over and above the advance amount should be in the nature of capital expenditure and not Revenue expenditure.
Disallowance u/s 80IB(10) - Held that:- The assessee executed 127 sale deeds and to sale the plots it had to incur the expenses at various stages. Out of the 127 sale deeds, 28 pertained to the Gaurav Nagar Extension for which the assessee is eligible for deduction u/s 80IB(10). We therefore, find substance in the finding of Ld. CIT(A) adopting 25% of total expenses for ‘Gaurav Nagar Extension’ project because 28 sale deeds were of Gaurav Nagar Extension out of the total 127 sale deeds. The Ld. CIT(A) has given detailed working for each expenses in his findings in para 4.1 of his appellate order and accordingly sustained the disallowance at ₹ 5,25,614/-.
Disallowance on account of plot booking cancellation - Held that:- We find that this issue of plot booking cancellation came up in the appeal for A.Y. 2008-09 also. The assessee has furnished the party wise list of plot cancelled and the same forms part of appellate order of Ld. CIT(A). These details have been examined by the first appellate authority. The Ld. counsel for the assessee has been unable to controvert the finding of Ld. CIT(A). It is not disputed that assessee has furnished the list of plots to the AO for examination and is also offered the revenue from sale of these plots for taxation. In backdrop of these facts we uphold the finding of Ld. CIT(A) deleting the addition.
TDS liability on on account of supervision charges and towards electrification work and system development - addition u/s 40(a)(ia) - Held that:- This fact is not in dispute that M/s. MPPKVV Co. Ltd. is a State Government undertaking and Ld. CIT(A) deleted the disallowance for the very reasons that the amount was paid to State Government undertaking. The Ld. DR could not controvert this finding of Ld. CIT(A). We therefore confirm the finding of Ld. CIT(A) that no disallowance was called for as payment was made to the electricity company for various charges and tax was not required to be deducted and therefore, no disallowance was called for u/s 40(a)(ia)
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2018 (1) TMI 1435
CENVAT Credit - imported input sold as such - re-packing/re-labelling of imported goods is done - whether this can be considered as manufacturing activity undertaken or removal of inputs as such? - violation of import conditions - time limitation - Held that:- The re-packing/re-labelling activity which was carried out by the appellant alone will not amount to manufacture but along with re-packing/re-labelling there should be an activity i.e. conversion from bulk pack to retail pack to render the product as manufactured goods - The appellant’s activity being only re-packing/re-labelling of imported goods does not amount to manufacture, therefore, the clearance of such goods shall be correctly treated as removal of input as such - In this position the appellant was required to pay the duty equal to the cenvat credit availed on such inputs, whereas, the appellant have paid lesser duty on transaction value treating the re-packing/re-labelling as manufacture activity - the demand on merit is correct.
Time limitation - Held that:- When the department itself was of the view that the activity of re-packing/re-labelling alone is amount to manufacture. The same bonafide belief was entertained by the appellant which cannot be construed as malafide intention to evade the payment of duty, therefore, the demand for the extended period cannot be raised.
In the present case, demand of the period 2006-07 to 2007-08 was raised by SCN dated 16.02.2009, therefore, the entire demand is under extended period, hence the same will not sustain on the ground of limitation.
Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 1434
Payment of tax at compounded rates - levy of turnover tax on liquor - Interpretation of statute - Amendment in section 7 of Kerala General Sales Tax Act, 1963 - time of amendment coming into effect - whether effective from the commencement of year or from the date of amendment? - clauses a and b of section 7 - scope of expression 'whichever is higher', whether confined only to clause b or is applicable to both clauses? - Whether Section 7(b) of the Kerala General Sales Tax Act, 1963 introduced on 24.10.2006 with retrospective effect from 01.07.2006, could be applied to those dealers who had contracted for payment of turnover tax at the compounded rate (by way of the alternate method of taxation provided for), under the unamended Section 7 of the 1963 Act for the assessment year 2006-07? - Held that:- The amended provision of S. 7(b) of the KGST Act introduced through the Finance Act with retrospective effect from 01.07.2006 could be applied to those dealers who had opted for payment of compounded tax for the year 2006-07 under the unamended provision as well
Whether Section 7(a) and 7(b) of the 1963 Act operate in different spheres and if not, would the said amended provision violate Article 14 and Article 19(1)(g) of the Constitution of India as contended in the Writ Petition? - Held that:- The term 'whichever is higher' used in S. 7(b) is not in respect of the three instances of the tax shown payable in the return, shown in the accounts or the tax paid in respect of the previous three consecutive years, but something else, which has to be dealt with more meticulously. It is in this context that the expression used- 'the highest turnover" in the very same provision requires consideration. Even going by the grammatical peculiarities and interpretations, 'super relative degree' is used in the first limb of the provision, qualifying the same with the word "the". In English language, 'comparative degree' is used only to compare between two instances, whereas super relative degree is to be used when there are more instances than two.
For the very same reason, usage of the expression 'the highest Turn Over Tax payable' as conceded by the assessees in the return or the accounts or the turnover tax paid, definitely refers to more than two instances and as such it, evidently, is in respect of the three previous consecutive years, i.e., the amount which is the highest in respect of three different consecutive years has to be reckoned for working out the quantum of 115%. The expression 'whichever is higher'\s only an instance using 'comparative degree'. It cannot be with reference to the three different instances of the tax conceded in the return or accounts or turnover tax paid (as contended by the assessees) and it is definitely in respect of something else.
That apart, since the highest figure is stipulated to be taken as contained in the first limb/opening part of the sentence, if the version of the assessees is accepted, the words 'whichever is higher used in the very same provision will become otiose. For this reason also, it has to be held that the expression "whichever is higher" is not confined to S. 7(b), but is in the context of a comparison to be made between the two figures available under S. 7(a) and (b).
The amended provision of S. 7(b) of the KGST Act introduced through the Finance Act with retrospective effect from 01.07.2006 could be applied to those dealers who had opted for payment of compounded tax for the year 2006-07 under the unamended provision as well - S. 7(a) and S. 7(b) of the Act do not operate in different spheres and it is in respect of the same sphere facilitating to identify the proper figures, i.e., the higher one of the figures worked out separately under S. 7(a) and under S. 7(b). There is no violation of Article 14 or Article 19(1) (g) of the Constitution of India in any manner.
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9911796707
