AIR FINANCE Vs. UNION OF INDIA

JUDGEMENT

(1.) This is a petition filed by the petitioner against levy of foreign travel tax on the petitioner whereas as per the Notification the tax was to be levied on the passangers. As per the Notification, it is the admitted case of the parties that the petitioner as well as other Air Lines were depositing the tax collected by them from the passengers in the treasury of the respondent. The Assistant Collector of customs,

(2.) Foreign Travel Tax, issued show cause notice to the petitioner asking for deposit further amount on account of shortfall in collection of tax, which according to the parties is from 1971 onwards amounting to Rs.77 lakhs approximately. Similarly, notices were sent to the other Air Lines like British Airways, KLM etc. However, the British Airways and KLM challenged the notices before the appropriate authorites in the Ministry of Finance, Government of India. The basic contention of Mr.Goburdhun, learned counsel for the petitioner, is that Rule-9 of the Foreign Travel Tax Rules, 1971 only envisages the issuance of show cause notices in cases where tax is collected under Rule-4 and not paid in whole or in part into the treasury within the prescribed time. The procedure prescribed under the Rules cannot be used to demand from the petitioner the alleged shortfall in collection of tax payable by a passenger in terms of sub-section (1) of Section 45 of the Finance Act. He has also taken me on the similar plea, which was raised before the Government on an application filed by the British Airways against the show cause notice issued on the similar demand raised by the Assistant Collector of Customs. Government of India, Minsitry of Finance, Department of Revenue vide Order No.383/85 dated 12.3.1985 upheld the contention of British Airways and passed the following orders:-

(3.) Against the show cause notices issued to the British Airways and KLM, appeals were preferred but no appeal was preferred by the petitioner against the show cause notices issued to it. Mr.Goburdhun has contended that once State has itself come to a conclusion that the demand could not be raised under Rule-9, even if no appeal was preferred by the petitioner, the respondent ought to have withdrawn the show cause notices on their own in view of the aforesaid order passed by the respondents themselves.