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TMI Blog1982 (7) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... see is a firm deriving income from kirana business. In respect of the relevant previous year to the assessment year 1968-69, with which we are concerned, in the separate sales tax account, there were credits of Rs. 20,445 and debits of Rs. 10,458. The closing balance was shown at Rs. 9,987 in the balance-sheet. This shows that the total credits for sales tax collected during the said year amounted to Rs. 20,445 whereas only Rs. 10,458 were paid to the Government on account of sales tax and the assessee retained the balance of Rs. 9,987 in its hands. However, the order of the ITO shows that the assessee had shown the said amount of Rs. 9,987 as a liability in its balance-sheet. There is nothing to show that the assessee disputed its liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax on the said amount in the assessment year, but might be entitled to claim a deduction for it in the next assessment year in which he paid over the said amount to the Government. It is not possible for us to accept the submission of Mr. Sajnani. In Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC), it has been held by the Supreme Court that the moment a dealer made either purchases or sales which were subject to sales tax, the obligation to pay the tax arose. Although that liability could not be enforced till quantification was effected by assessment proceedings, the liability for payment of tax was independent of the assessment. In view of this decision, the liability to pay over the said amount of Rs. 9,987 to the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sajnani relied upon the decision of a Division Bench of the Allahabad High Court in Deep Chand Shyam Sunder v. CIT [1980] 125 ITR 724. In that case, during the previous year relevant to the assessment year in question, as pointed out by the Division Bench, the assessee was not liable to pay purchase tax on arhar dal at all but his liability to pay the said tax arose by reason of a subsequent amendment to the relevant Sales Tax Act. In view of this, we fail to see how that case has any application to the question before us, because the assessee before us never disputed his liability to pay the sales tax and the said liability clearly existed during the relevant previous year. In fact the Allahabad High Court in the aforesaid decision has h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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