9911796707
TMI Blog2003 (1) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the case and having regard to rule 41D and rule 45(3) of the Bombay Sales Tax Rules, 1959, the Tribunal was right in law in deleting the disallowance of Rs. 4,05,744 under section 43B of the Act?" 3.. In order to appreciate the question, it is necessary to refer to rule 41D and rule 45(3) of the Bombay Sales Tax Rules. Rule 41D provides for grant of draw back, set-off or refund of the aggregate of the sums determined in accordance with the provisions of rule 44D in respect of purchases made by a claimant-dealer on or after the notified date of any goods specified in Part II of Schedule C and used by him within the State in the manufacture of taxable goods for sale, which manufactured goods have, in fact, being sold by him or expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct, then such assessee would be entitled to set-off or adjustment of its liability to pay sales tax payable on the sale of such finished product. The assessing officer and the appellate authority had found that this amount cannot be deducted under section 43B, inasmuch as, though the amount represents a liability to pay tax, the tax has not been paid though collected by the assessee. This amount was allowed to be retained by the assessee by way of adjustment or set-off against the equal amount of tax paid by the assessee on the purchase of raw materials used for the product, on the sale whereof this amount was collected as sales tax. Therefore, it was not a tax payable and as such not a tax liability. 6.. The learned Tribunal, on the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. Otherwise, the very purpose of the credit is defeated. He further relied on the decision reported in Kalpana Lamps and Components Ltd. v. Deputy Commissioner of Income-tax [2002] 255 ITR 491 (Mad.) and G.L. Didwania v. Income-tax Officer [1997] 224 ITR 687 (SC). 8.. Learned counsel for the respondent, on the other hand, contended that the amount was never paid and was retained by the assessee. Even if any adjustment or set-off is claimed, there was no actual payment. Unless there is actual payment, section 43B of the Income-tax Act does not come into play. Therefore, the assessee cannot claim any benefit thereout. Secondly, he contends that this amount was not paid within the previous year relevant for the assessment year. He claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deduction seems to be misapprehended. The assessee was liable to pay the tax of Rs. 4,05,744, which has been set off or adjusted. The assessee has retained the said amount in terms of rule 45(3) of the Bombay Sales Tax Rules. This is a deemed payment of the amount. This is the benefit or incentive allowed under rule 41D of the Bombay Sales Tax Rules. If this amount was paid, in that event, the liability would have been discharged. But because of this benefit given by the Bombay Sales Tax Rules, this amount was adjusted against payment allowing the assessee to retain the said amount, a benefit arising out of the Bombay Sales Tax Rules. Therefore, there is no scope for assuming that there was double deduction. 11.. That apart, even in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpress its intention that such deduction is allowed once, either on the actual payment or on the liability, as the case may be. 13.. A part of the sales tax collected has since been paid. The balance has been sought for being adjusted or being set off under rule 41D read with rule 45(3) of the Bombay Sales Tax Rules. Therefore, it is to be presumed to be a deemed payment within the time to be included in the relevant assessment. The allowance is allowed in respect of the sales tax payable by the assessee, which is qualified by the Explanation to section 43B of the Income-tax Act to mean to have been actually paid or incurred. That the liability was incurred is not in dispute. In this case it has not been actually paid, but was sought to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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