9911796707
TMI Blog1987 (6) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... ---------------- 1. 930/85 M.V. Textiles Entry Tax 11,231 1984-85 4-11-83 2. 931/85 Himmatmal -do- 20,000 1984-85 4-11-83 Swaroopchand & Co. 3. 932/85 Singhvi Mithalal -do- 19,410 1984-85 4-11-83 Madanraj & Co. 4. 933/85 Mishrimal -do- 13,411 1984-85 4-11-83 Vasraj & Co. 5. 934/85 Yemkay Turnover 60,360 1984-85 31-12-83 Distributors Tax --------------------------------------------------------------------------------------------------------------------------------------------------- It would be noticed that in respect of the first four assessees the dispute is in respect of entry tax while in respect of the last assessee it is in respect of turnover tax. The departmental authorities had rejected the claim of the assessees by relying on the provisions of sec. 43B of the Act which had come into force with effect from 1-4-1984 in the statute book. Since the assessees had not paid these amounts during the previous year but had only made a provision for them in their accounts. 3. Before us, Shri Nagin Kincha, the learned Chartered Accountant for the assessees contended that the provisions of sec. 43B of the Act relied on by the departmental authorities was inapplicable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for applying section 43B of the Act in the said case. The learned departmental representative submitted that it is this decision of the Allahabad Bench which is apposite to the facts of the present case and that the same should be followed in the case of these assessees. 5. The learned Chartered Accountant in his reply relied on the decision of the Kerala High Court in the case of L.J. Patel a Co. v. CIT [1974] 97 ITR 152 wherein it has been held that where the liability of the assessee, who was maintaining the mercantile system of accounting, to pay excise duty arose in 1952, but as he was contesting the liability, the amount was paid only in 1962, the deduction of the amount paid could have been claimed only in 1952 in accordance with section 13 of the Indian Income-tax Act, 1922 and sec. 145(1) of the Income-tax Act, 1961, and that the assessee could not claim the deduction in the assessment year 1963-64. The learned counsel pointed out that in this case, the Kerala High Court had followed the decision of the Supreme Court in the case of Kedarnath Jute Mfg. Co. Ltd. 6. We have carefully considered the rival submissions of the parties In light of the authorities relied on by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts of tax or duty which are payable by the assessees under any law for the time being in force, is actually paid by the assessees during the previous year even though the assessees might have incurred the liability to pay such tax or duty during the previous year. Section 43B is a special provision as could be seen from the opening words of the section which overrides the provisions of sec. 37 of the Act as it starts with non obstante clause. We are unable to agree with the learned counsel when he draws a distinction between the tax due and the tax payable by the assessees. There is no dispute in the case of the present assessees that they had actually incurred the liability to pay these amounts of entry tax or turnover tax, as the case may be, during the previous year. There is also no dispute that the assessees had not actually paid these amounts of tax to the Karnataka Government during the previous year. The order of the Supreme Court dated 30-1-1984 in Civil Miscellaneous Petition Nos. 39197 to 39203 of 1983 insofar as they are relevant for our purpose reads as follows : " 1. THAT there will be no stay of recovery of entry tax if the same is assessed hereafter but the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further the word "payable" also means "due" as could be seen from Chambers' Twentieth Century Dictionary, (Revised edition). Therefore, the distinction sought to be drawn by the learned counsel is one without a difference. 9. In the case of CIT v. Shahzada Nand & Sons [1966] 60 ITR 392, the Supreme Court held at pages 400 & 401 as follows : " Before we advert to the said arguments, it will be convenient to notice the relevant rules of construction. The classic statement of Rowlatt J. in Cape Brandy Syndicate v. Inland Revenue Commissioners still holds the field. It reads : '. . . In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is read in, nothing is to be implied. One can only look fairly at the language used.' " To this may be added a rider: in a case of reasonable doubt, the construction most beneficial to the subject is to be adopted. But even so, the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise. " The underlying principle is that the meaning and intention of a statute must be collected from the plai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion of ours. In fact, in para 15, at page 368 of the reports, the Appellate Tribunal has followed the decision of the Supreme Court in the case of Kedarnath Jute Mfg. Co. Ltd. In this decision of the Kedarnath Jute Mfg. Co. Ltd.'s case, the Supreme Court held that the moment a dealer made either purchases or sales which were subject to sales-tax, the obligation to pay tax arose, that although that liability could not be enforced till the quantification was effected by assessment proceedings, the liability for payment of tax was independent of the assessment and that the assessee which followed the mercantile system of accounting was entitled to deduct from the profits and gains of its business, liability to sales-tax which arose on sales made by it during the relevant previous year. Their Lordships further pointed out that the assessee in the said case was entitled to the deduction of the sum of Rs. 1,49,776 being the amount of sales-tax which it was liable under the law to pay during the accounting year and that the said liability did not cease to be a liability because the assessee had taken proceedings before higher authorities for getting it reduced or wiped out so long as ..... 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