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TMI Blog2002 (8) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant factual matrix of each writ petitions indicates that each of the petitioners has been assessed to tax covered under one or other Acts mentioned in Scheme and the petitioners' industries are availing the benefit of deferment scheme as per notification dated October 6, 1994. The State Government has issued the eligibility certificate and the petitioners have been given the benefit of deferment of amount due under the provisions of the State Act/the Central Act of the maximum of 300 per cent of total capital investment for the periods as per their entitlement in deferment Rules commencing from date of commencement of the production. It is also relevant to note that under the deferment scheme on the tax liability so deferred interest is not payable whereas with respect to tax liability which has not been deferred interest is payable at present at the rate of 24 per cent per annum. 3.. The State Government issued a Notification No. A-7-15-2001ST-V (98) dated January 5, 2002 for the purpose of liquidating the amount of arrears which include tax, penalty and interest under the Madhya Pradesh General Sales Tax Act, Madhya Pradesh Vanijyik Kar Adhiniyam, Central Sales Tax Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradesh General Sales Tax Act, 1958, Madhya Pradesh Vanijyik Kar Adhiniyam, 1994, Central Sales Tax Act, 1956 and Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976, which was outstanding for payment on 1st April, 2001. The facility granted under this Scheme shall be available for that amount of arrears, which is related to any year ending up to 31st March, 1997. 3. For the purpose of calculation of Samadhan of the amount in arrears in respect of a defaulter, the case shall be considered Act-wise for each year separately. 4. The cases of arrears shall be classified and the calculation of amount to be paid for Samadhan shall be made according to the following Schedule: Schedule S. No. Category of the case Amount to be paid for Samadhan (1) (2) (3) 1. Case in which the amount of arrears is up to Rs. 50,000 25 per cent of the amount of arrears. 2. Case in which the amount exceeds Rs. 50,000. 40 per cent of the amount of arrears. Explanation.-If any amount exceeding 25/40 per cent, as the case may be, has been deposited between 1st April, 2001 and the date of coming into force of this Scheme, the amount deposited in excess shall not be refunded. The Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, which is due for payment as on 1st April, 2001 after the completion of assessment and service of the demand notice." 7.. In W.P. No. 2248 of 2002 liability has been determined and has been deferred till March 31, 2002. In W.P. No. 1635 of 2002 deferment of the tax liability is up to March 31, 2002 as per order P/3. In W.P. No. 1400 of 2002 deferment of liability is up to financial year 2001-2002, i.e., March 31, 2002 as per order P/4. In W.P. No. 1634 of 2002 deferment of tax as per order P/3 is up to April 30, 2002 and as per order P/3 passed on April 27, 1996 deferment has been made for 10 years. Deferment is up to April 30, 2002 and for the financial year 1994 deferment is for 10 years. In W.P. No. 1643 of 2002 as per order P/2A deferment is up to September 30, 2001 and as per order P/2B dated November 28, 1994 deferment is up to September 30, 2001, as per P/2C order dated November 16, 1995 deferment is up to March 31, 2002. As per order P/2D dated October 30, 1995 deferment is up to March 31, 2003 as per order P/2E deferment is up to March 31, 2004 as per P/2F deferment is up to March 31, 2004, as per order P/2G deferment is up to March 31, 2004. In W.P. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g" for payment on April 1, 2001 and "amount of arrear" related to any year ending on or before March 31, 1997 both these requirements are fulfilled. It is further urged that they have to be treated as "defaulter" as defined in rule 2(1)(g) of Rules and the liability of tax deferred has to be treated as "amount of arrear" as defined in rule 2(1)(h) of the rules. They have been served with a "demand notice" to pay the dues along with the "assessment order" with reference to the date on which they have to pay the amount. This notice has been issued before April 1, 2001. The amount is due for payment, by deferment of liability it cannot mean that the amount is not due for payment as on April 1, 2001. 11.. Petitioners submit that the word "outstanding" means though payable but not paid. When the amount of tax is payable, but, is not paid, it would be outstanding. There is an existing debt that payment whereof is deferred. Hence, it is a case of "attachable debt". Payment of debt does not depend on any contingency. "Debt" used in the "Scheme" has to be interpreted so as to extend the benefit of the Scheme to the petitioners. Liability to pay the tax is a "debt", it arises on the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the defaulter. Assistant Commissioner, Commercial Tax, up to Rs. 3 lakhs and Deputy Commissioner, Commercial Tax, up to Rs. 10 lakhs and Additional Commissioner, Commercial Tax, exceeding Rs. 10 lakhs. 15.. Deferment Rules, 1994 gives the various period for deferment as per categories of industries fixed in Schedule IV. It is available to the new industrial unit. The period of eligibility to avail the facility of deferment of payment of tax under sub-clause (3) of clause (b) of rule 4 commences from the date of commercial production. Rule 5 of the Rules prescribes period for which the payment of tax shall be deferred. Sub-rule (1) of rule 5 contains a provision to the following effect: "5. Period during which the payment of tax shall remain deferred.-(1) The amount of tax payable by a registered dealer for every year of the period during which he avails of the facility of deferment of payment of tax under clause (a) of sub-rule (1) of rule 4 or the period for which he has availed of the said facility under clause (b) of the said sub-rule shall be deferred for a period of five years. In the sixth year the amount of tax the payment of which is deferred shall be liable to be pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a date subsequent to April 1, 2001 can be said to be due for payment as on April 1, 2001. 20.. The word "due" has been derived from latin word "debeo" indirectly through the French "du". The word "due" has many definitions or variety of meaning, influenced largely by the connection in which it is used, and, while it has been the subject of many decisions by the courts, no general rule of interpretation can be safely stated therefrom. It may, on the one hand, express the mere fact, or the state, of indebtment, as an equivalent simply of "owing" or, on the other hand, it may refer to the time of payment, indicating that the obligation is immediately enforceable, and is then an equivalent of "payable" as observed in Amey v. Augusta Lumber Co. 148 A. 687. It has been used in two senses; thus, in the latter sense, a bill or note is often said to be due, when the time for payment has arrived. In the former sense, a debt is often said to be due from a person, when he is the party owing it, or primarily bound to pay, whether the time for payment has or has not arrived. In the singular "due" in its broader sense, as meaning that which any one has a right to demand, or which may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d". 24.. In Potel v. Inland Revenue Commissioners [1970] T.R. 325, it was held that dividends are "due" under the Income-tax Acts when they become payable and not at the time they are declared. In Potel v. Inland Revenue Commissioners [1971] 2 ALL E.R. 504, it was held that a dividend became due, within the meaning of Income-tax Act, 1952 on the day it was declared payable and not at the time it was first announced. 25.. The Supreme Court in Union of India v. Raman Iron Foundry AIR 1974 SC 1265, considered the question of breach of contract and when damages become a sum "due" and "payable". Their Lordships held that it is to be applied in the context of whole situation, agreement, intention of the parties and clause 18 was interpreted to mean it applies only where the purchaser has a right presently to realise by the contract. A claim for damages for breach of contract is not a claim for a sum presently due and payable and the purchaser is not entitled, in exercise of the right conferred upon it under clause 18, to recover the amount of such claim by appropriating other sums due to the contractor. Their Lordships laid down that the claim for damages cannot be said to be amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority. The question arose in the backdrop of whether on the relevant date the principal amount of loan debt become "due and payable" in the backdrop of fact that surrender value of the policy as calculated under the terms of the policy on the relevant date was Rs. 15,875.50 and the amount due from the assured on the said date without adding the principal amount of loan was Rs. 12,676.29. Clause 4 of the loan bond specifies that the same shall be paid when called upon to make repayment at the said office of the said advance with all interest which may be due thereon on being given three months' notice to that effect. The defendant had not invoked the right under clause 4. Thus, it was held that the loan amount had not become due and payable. The words "all money due" found in the automatic non-forfeiture clause will have to be construed to mean such amounts which have become "not only due" but also "payable" under the terms of the agreement and construed in that manner. It was held that the principal of loan amount is concerned, the same had not become due and payable on the relevant date and the defendant is not entitled to deduct the same from the surrender value. 29.. The res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an existing debt, payment whereof is deferred, and a case where both the debt and its payment rest in the future. In the former case there is an attachable debt, in the latter case there is not. If, for instance, a sum of money is payable on the happening of a contingency, there is no debt owing or accruing. But the mere fact that the amount is not ascertained does not show that there is no debt.' In our view this is a full and accurate statement of law on the subject and the said statement is supported by English decisions we have discussed earlier. ............................... (22) We have briefly noticed the judgments cited at the Bar. There is no conflict on the definition of the word 'debt'. All the decisions agree that the meaning of the expression 'debt' may take colour from the provisions of the concerned Act: it may have different shades of meaning. But the following definition is unanimously accepted: 'A debt is a sum of money which is now payable or will become payable in future by reason of a present obligation: debitum in praesenti, solvendum in futuro.' The said decisions also accept the legal position that a liability depending upon a contingency is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down that while construing revenue Acts courts have to give a fair and reasonable construction to the language of the statute without leaning to one side or the other, meaning thereby that no tax or levy can be imposed on a subject by an Act of Parliament without the words of the statute clearly showing an intention to lay the burden on the subject. In this process courts must adhere to the words of the statute and the so-called equitable construction of those words of the statute is not permissible. The task of the court is to construe the provisions of taxing enactments according to the ordinary and natural meaning of the language used and then to apply that meaning to the facts of the case and in that process if the taxpayer is brought within the net he is caught, otherwise he has to go free. It has also been laid down that full effect should be given to the beneficial provision in a taxing statute. Same is the law laid down by the apex Court in Mysore Minerals Ltd. v. Commissioner of Income-tax [1999] 239 ITR 775. 33.. In the instant case the definition of "amount of arrear" in rule 2(1)(h) of the Rules makes it clear that the amount of arrear must relate to the period for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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