KRISHNA RAO P Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE referred cases are being disposed of by this common judgment as the question of law involved in them are similar.

(2.) IN R.C. No. 1/75 the INcome-tax Appellate Tribunal formulated the following two questions :

(3.) MR. D. V. Sastry, the learned advocate appearing on behalf of the assessees, contends that the department was incorrect in not giving retrospective effect to Sections 5 and 11 of the Act of 1970. According to him, it might be correct that there was no liability on the assessees to pay sales tax for the relevant assessment years in view of the judgment of the High Court, but the Act of 1970 had placed the liability on the assessees to pay sales tax for the relevant years. Although the amended Act was passed in 1970, it was to take effect from April 1, 1963. He submits that in these circumstances the sales tax collected by the assessee during the relevant period cannot be treated as trading receipts as the assessees are bound to pay sales tax so collected to the sales tax authorities. In support of his contention, he has cited the following decisions, viz., State of U.P. v. Raja Syed Mohammad Sadat Ali Khan , Commissioner of Income-tax v. Straw Products Ltd. , Commissioner of Sales Tax v. Bijli Cotton Mills , Venkatachalam, ITO v. Bombay Dyeing and Mfg. Co. Ltd. , M. S. Narayanacharlu v. Assistant Controller of E.D. , Kedarnath Jute Mfg. Co. Ltd. v. Commissioner of Income-tax and Jonnala Narasimharao and Co. v. State of A.P. .