AVANI EXPORTS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) All these writ-applications were taken up together pursuant to the order passed by the Supreme Court of India. By the said order, the Apex court transferred these matters pending before various High Courts to this court for considering whether the severable parts of the 3rd and 4th proviso to section 80 HHC (3) of the Income Tax Act, 1961 [the Act, hereafter] are ultra vires Articles 14 and 19 (1) (g) of the Constitution of India. By way of consequential relief, the petitioners have prayed for direction upon the respondents not to give effect to those severable parts of the third and the fourth proviso to section 80 HHC (3) of the Act and for prohibiting them from taking any action by taking aid of those provisos.

(2.) The facts giving rise to the filing of these matters may be summed up thus:

(3.) These applications have been opposed by the respondents thereby contending that the amendment made in section 80 HHC by the Taxation Law and (Amendment) Act, 2005 with retrospective effect from 1st April 1998 by way of adding second, third, forth and fifth proviso to section 80 HHC (3) and inserting clause (iiid) and (iiie) in section 28 with effect from 1st April 1998 and 1st April 2001 respectively was a beneficial legislation conferring the benefit of section 80 HHC on the assessees also in respect of the profit on the transfer of the DEPB Scheme and Duty Free Replenishment Certificate which was not available before this amendment. According to the respondents, it would appear from paragraph 3 of the Statement of Objects and Reasons made while introducing the Taxation Laws (Second Amendment) Bill 2005 that in order to extend certain tax incentive to the export business with effect from the Assessment Year 1998-99, it was proposed that the deductions allowable under section 80 HHC of the Act for export business may be extended to any profit on transfer of the DEPB Scheme or the Duty Free Replenishment Certificate subject to certain specified conditions.