COMMISSIONER OF INCOME TAX Vs. BHAGWATI AUTOCAST LIMITED

JUDGEMENT

(1.) In this reference, at the instance of the applicant-Revenue, the following question of law is referred to for the opinion of this Court for Assessment Year 1985-86:-

(2.) . In this reference, the only dispute is about disallowance under Section 43-B for unpaid sum of Rs.2,22,620.00 for Sales Tax. It is the stand of the assessee before the Assessing Authority that the State Government had allowed the assessee to return Sales Tax collected as a sort of incentive provided for the growth of industry. On this basis, it was contended by the assessee that its case was covered by the provisions contained in Section 43B of the I.T. Act. The Income Tax Officer has however, rejected the assessee's claim.

(3.) . Being aggrieved by the said order of the Income Tax Officer, the assessee has preferred an appeal before the Commissioner of Income Tax (Appeals) and while disposing of the said appeal, the Commissioner of I.T. (Appeals) has taken note of Circular No. 496 dated 29.5.1987 issued by the Central Board of Direct Taxes and on the basis of the said circular, the C.I.T. (Appeals) has restored the matter to the file of the Assessing Officer with a direction to verify as to whether any amendment of the Gujarat Sales Tax Act had been made in light of the Board's circular and then decide the matter afresh. Thereafter, the attention of the Taxing Authority was drawn to the Gujarat Government Resolution No. INC/1087/143-1 dated 21.3.88 wherein the entire position was clarified. The said resolution was made operative w.e.f. 1.4.1983. On the basis of the said resolution, it was contended by the Assessee before the Taxing Authorities that in the light of the Board's Circular No. 496 dated 25.9.1987, the assessee was entitled to the relief regarding deferred payment of sales tax not hit by Section 43B, as Gujarat Government Resolution dated 21.3.88 read with the clarification issued by the Sales Tax Department satisfied the condition laid down in Board Circulars. On the basis of the circular issued by the Central Board of Direct Taxes as well as the resolutions of the State Government as referred to above, the Tribunal has taken the view that the requirements of getting exemption from the mischief of Section 43-B in respect of Sales Tax Deferment Scheme of the Gujarat Government are satisfied. The Tribunal, therefore, held that the amount of Rs.2,22,620.00 of differed Sales Tax is not caught by mischief of Section 43-B of the Act.