TMI Blog2004 (10) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Rules framed by the State Government, the assessee was not required to make the payment under the relevant sales tax laws. The Tribunal was thus right in allowing deduction to the assessee - we answer the question of law against the Revenue and in favour of the assessee." - - - - - Dated:- 11-10-2004 - Judge(s) : G. S. SINGHVI., AJAY KUMAR MITTAL. JUDGMENT The judgment of the court was delivered by Ajay Kumar Mittal J. - At the instance of the Revenue, the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short "the Tribunal"), has referred the following questions of law under section 256(1) of the Income-tax Act, 1961 (for short, "the Act"), for the opinion of this court: "Whether, on the facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 1987-88 and 1988-89, the question of law as mentioned in para. 1 has been referred for the opinion of this court. It is not disputed that the Sales Tax Department of the Haryana Government has formulated a scheme called "Deferred payment scheme". Under that scheme, the assessee was allowed to retain the amount of sales tax collected by it as incentive for setting up industry in the backward area and the payment was to be made after a certain number of years. The amount was to be paid to the Government either in a lump sum or in instalments in accordance with the scheme. The scheme came into force with effect from May 6, 1986. The assessee, who was eligible under the scheme, was permitted to retain the collected amount of tax on excise b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been received from various State Governments and others that cases of deferred sales tax payments should be excluded from the purview of section 43B as the operation of this provision has the effect of diluting the incentive offered by the deferral schemes. 4. The matter has been examined in consultation with the Ministry of Law and the various State Governments. The Ministry of Law has opined that if the State Governments make an amendment in the Sales tax Act to the effect that the sales tax deferred under the scheme shall be treated as actually paid, such a deeming provision will meet the requirements of section 43B. 5. The Government of Maharashtra have by the Bombay Sales Tax (Amendment) Act, 1987, made the amendment according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general manager of the District Industries Centre or the Director of the Industries, as the case may be, shall issue the requisite certificate and the first voucher to the industrial unit. Rule required the eligible industrial unit to make application every year for the second and subsequent annual vouchers. These vouchers are to be issued by the officers of the Industries Department on the recommendation of the committee. Under rule 17, the Deputy Commissioner of Excise and Taxation is required to make an enquiry and thereafter to demand a mortgage deed or to enter into an agreement with the industrial unit for the purposes of security. The security is to cover the amount of tax. The unit is also permitted to furnish a bank guarantee. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1988, and the said resolution was made operative from April 1, 1983. The period involved in the present assessment is, therefore, covered by the said resolution. The benefit as given vide circular dated September 25, 1987 (see [1988] 169 ITR (St.) 53), wherein the Board has made it clear that if the sales tax due to the Government is converted as a loan which may be repaid by the assessee subsequently by instalments, the Department shall treat the sales tax dues as actually paid for all purposes, is available to the assessee. The combined reading of this circular of the Central Board of Direct Taxes as well as the resolution issued by the State Government would make it clear that the assessee is entitled to relief and, benefit given under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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