SHRIKANT TEXTILES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference under S. 66(1) of the Indian INCOME TAX ACT, 1922, the following question arises for decision :

(2.) BY its attorneys' letter, dated September 18, 1958, the assessee -firm made diverse contentions regarding the firm being not liable to pay the duty demanded under the above notice and called upon the Assistant Collector, Central Excise, to cancel and withdraw the notice. In the letter it was, inter alia, pointed out that business of the assessee -firm was not of manufacturing cloth and it had not got manufactured the cloth in question. Reference was made to diverse sections in the Central Excises and Salt Act as also the Central Excise Rules, 1944. It was contended that under the Act and the Rules the assessee -firm (being not a manufacturer) was not liable to pay any excise duty. The assessee -firm had accordingly not failed to pay duty in accordance with the provisions in r. 9 (1). The demand for payment of excise duty under r. 9(2) was accordingly misconceived. The attorneys of the assessee -firm sent a reminder, dated September 30, 1958, for cancellation and withdrawal of the notice of demand. By his reply letter dated October 22, 1958, the Assistant Collector, Central Excise, referred to the above two letters of the attorneys of the assessee -firm. In the letter it was, inter alia, stated that :

(3.) BY a fresh notice of demand dated December 22, 1958, issued under r. 10A of the Central Excise Rules, the Superintendent of Central Excise, Sangli, called upon the assessee -firm to pay excise duty in the sum of Rs. 2,42,090 within 10 days from the date of the notice in respect of the same cotton fabrics as were mentioned in the prior notice of demand, dated September 5, 1958, on the same ground as mentioned in the prior notice. In the second paragraph of the particulars of demand mentioned in the notice it was stated that the prior notice of demand dated September 5, 1958, may be treated as cancelled and the demand made by the notice dated December 22, 1958, may be treated as served in lieu of the demand made by the prior notice.