TMI Blog1977 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... tax credit certificate in respect of certain categories of goods or merchandise specified in column 2 which were exported to destinations specified in column 4 and the dates of export of which fell after 28th February, 1965, for an amount calculated at the rates specified in column 3 of the Table attached to the scheme. Jute carpet backing cloth was covered by item 1 in column 2 of the Table which specified " goods made of jute not otherwise specified ". If the scheme had remained unamended, the appellant would have been entitled to tax credit certificates in respect of the exports made by it of jute carpet backing material, but a notification was issued by the Central Government on 6th June, 1966, in exercise of the powers conferred by section 280ZE read with section 280ZC, whereby paragraph 3 of the scheme which provided for grant of tax credit certificates was amended by re-numbering that paragraph as sub-paragraph (1) and adding a sub-paragraph (2) to the following effect : " No certificate shall be granted under sub-paragraph (1) in respect of any sale proceeds referred to in that sub-paragraph or part of such sale proceeds, received after the 5th day of June, 1966, in Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat both the notifications were outside the power conferred on the Central Government under section 280ZE read with section 280ZC, since the Central Government had no power under these sections to make a scheme providing that no tax credit certificate shall be granted in case of any goods or merchandise at all. This ground found favour with the single judge of the High Court but on appeal under clause 15 of the Letters Patent, a Division Bench of the High Court took a different view and negatived the challenge. Since the writ petition was dismissed by the Division Bench, the appellant preferred the present appeal after obtaining a certificate of fitness from the High Court. The Indian Income-tax Act, 1922, as originally enacted, did not contain the fasciculus of sections under Chapter XXII providing for grant of tax credit certificates. This chapter comprising sections 280ZC and 280ZE was inserted by the Finance Act, 1965, with a view to providing incentive for export purpose, of which sections 280ZC and 280ZE are material. Section 280ZC reads as follows : " 280ZC. (1) Subject to the provisions of this section, a person who exports any goods or merchandise out of India after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligations of persons who jointly subscribe to an eligible issue of capital ; (f) the determination of the rights and obligations of persons who subscribe to an eligible issue of capital, on behalf, or for the benefit, of any other person ; (g) the appointment of any officer of Government or of the Reserve Bank of India to exercise any rights or perform any duties in connection with the grant of the said certificates (h) the goods or merchandise and the rate or rates for the purposes of section 280ZC and section 280ZD and the destination of the export of such goods or merchandise for the purposes of section 280ZC ; (i) any other matter which may be necessary or proper for the effective implementation of the provisions of this Chapter or the scheme. (3) The Central Government may, by notification in the Official Gazette, add to, amend, vary or rescind, any scheme made under this section." It was in exercise of the power conferred on the Central Government under section 280ZE read with section 280ZC that the Central Government made the Tax Credit Certificate (Exports) Scheme, 1965. The first notification dated 6th June, 1966, amended paragraph 3 of the scheme by p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . of the amount of such sale proceeds. But this right conferred on an exporter is subject to the other provisions of section 280ZC and these other provisions include sub-sections (2) and (3). Sub-section (2) provides in so many terms that the goods or merchandise in respect of which a tax credit certificate shall be granted under sub-section (1) and the rate at which the amount of such certificate shall be calculated, shall be such as may be specified in the scheme. It is, thus, left to the scheme to be framed by the Central Government to specify the goods or merchandise in respect of which an exporter shall be entitled to tax credit certificate as also the rate at which the amount of such certificate shall be calculated. It is not in respect of every category of goods or merchandise that an exporter can claim to be entitled to tax credit certificate but it is only in respect of such goods or merchandise as are specified in the scheme. The policy an the principle which would guide the Central Government in selecting the goods or merchandise for this purpose are set out in sub-section (3) which provides that in specifying the goods or merchandise as also the rates, the Central Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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