9911796707
TMI Blog1981 (6) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was directly importing cashewnuts from outside India. Cashewnuts were liable to be taxed at the point of last purchase in the State. Since the purchases up to 31st August, 1970, were in the course of import the assessee was not being taxed on such purchases. From 1st September, 1970, the Cashew Corporation of India alone was permitted to import cashewnuts. The assessee and other traders like the assessee had to purchase cashewnuts from the Cashew Corporation. Thereupon the assessee became liable to pay sales tax on the purchases of cashew from 1st September, 1970. It appears that the cashew traders had taken up the question of liability to pay such tax with the Government and pending a decision thereon were not paying the tax. The Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had, since passing the order, reconsidered the matter in all its aspects and were convinced that the said notification should be cancelled. Thus the notification dated 12th October, 1973, published on 23rd October, 1973, was alive only for a few days. The accounts of the assessee were closed on 31st March, 1974. In such accounts it claimed for the accounting year ended 31st March, 1974, a deduction of Rs. 6,38,659 as purchase tax payable for the years 1970-71, 1971-72, and 1972-73. By that time, the assessment for the years ended 31st March, 1972, and 31st March, 1973, had not been completed and the assessee has claimed the deductions in respect of these years in the assessments for these years. These were allowed. For the year ended 31st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the accounting years which closed on 30th June, 1971, and 30th June, 1972, the assessee did not make any provision towards the purchase tax liability under the impression that there will be no payment called for. But since by the time he could finalise the books of account for the year ended 30th June, 1973, he had knowledge of the cancellation notification dated 9th November, 1973, he made provision for the purchase tax for that year. The question for reference concerned only the first two years, that is, that ending on 30th June, 1971, and on 30th June, 1972. In respect of these periods the claim was made in the accounting year corresponding to the assessment year 1975-70. In this case, the Appellate Tribunal took the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exemption notification dated 12th October, 1973, published in the Gazette dated 23rd October, 1973. Therefore, it is said that when once the said notification was passed it operated to save the assessee from the liability to pay tax from 1st September, 1970, and it was only when, by the subsequent notification dated 9th November, 1973, the earlier notification was cancelled that liability arose for the first time. It is, therefore, said that, consequently, such liability had to be debited in the books of account only then. 5.. The learned counsel, Sri Sukumaran, submitted that though this Court had earlier taken the view that the executive power under a statutory provision could not be exercised retrospectively, that view expressed by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the transaction took place provision had to be made for such liability. If the assessees had not made provision in that year but such provision was made in a later year that would not mean that the liability arose only in such later year. If by an exemption notification in a subsequent year the transactions of an earlier period are exempt from tax that would only mean that the existing liability is no longer in force by reason of the notification of exemption. In the case of the assessees before us, the liability to pay tax arose in the years in which the transactions of purchase took place, and the liabilities had to be provided for in the respective years. When the exemption notification was published in October, 1973, such liability ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k that the Tribunal was in error in holding that the liability to pay tax for the period from 1st September, 1970, up to 31st March, 1973, in one case, and the assessment year ending on 30th June, 1971, and that ending on 30th June, 1972, in the other case arose only in the accounting year in which the cancellation notification of 9th November, 1973, was issued. We, therefore, answer the questions referred to us in the negative, that is, in favour of the department and against the assessees. A copy of this judgment under the seal of the High Court and signature of the registrar shall be sent to the Income-tax Appellate Tribunal, Cochin Bench, under section 260(1) of the Act. Reference answered in the negative. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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