TaxTMI 
TaxTMI 
2001 (12) TMI 442
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....ircraft was issued for not depositing a sum of Rs. 10,40,90,255/- on the ground that the carrier has failed to observe Inland Air Travel Tax Rules (hereinafter referred to as the 'IATT Rules'). The aircraft was detained in terms of Rule 14(4) of the IATT Rules as "belonging to or under control of M/L". The said aircraft belonged to Air UK Leasing Ltd. (in short, 'AUKL'), which had been leased out to the ModiLuft. AUKL filed a writ petition in this Court, which was marked as CWP No. 110 of 1997 for quashing the aforementioned detention memo dated 14-11-1996. This Court by an order dated 20-1-1997 directed release of the aircraft stating :- "Having heard learned Counsel for the parties and balancing the equities, we think that release of the Aircraft without any condition would not be just and fair. Thus, having regard to the facts and circumstances of the case, we direct that the Aircraft in question be released to the petitioner subject to the petitioner depositing, without prejudice to the rights and contentions to the parties, a sum of Rs. 8 crores and furnishing a Bank Guarantee in the sum of Rs. 4.50 crores, to the satisfaction of Commissioner of Customs, Air Cargo Unit, New ....
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....e from the petitioner as it could not be recovered in terms of the IATT Rules. With the said letter, a certificate purported to have been issued under Section 46A of the Act read with Rule 14(4) of the Rules issued by the Deputy Commissioner had been annexed. By a letter dated 26-4-2000, it was, however, clarified that the tax was recoverable from ModiLuft alone and not from the petitioner, as was earlier indicated in the letter dated 24-4-2000. The Deputy Commissioner Customs, IATT curiously by a letter dated 25-7-2000 addressed to the District Collector (Revenue) stated as under :- "This is with reference to the aforesaid subject and my earlier letter C. No. VIII(PLM)/IATT/Recovery/215/96/PT/8146, dated 24-4-2000 and subsequent corrigendum of the same number issued on the same subject. You are hereby requested to discontinue the recovery of IATT dues against M/s. ModiLuft Ltd. and my earlier authorization issued to you for the recovery of arrears stands cancelled." Thereafter on 9-5-2000, an order was issued against ModiLuft by the Assistant Collector (Revenue) to the effect that Rs. 40.5 crores were recoverable from it. Despite the same, on 3-8-2000, the Assistant Commissione....
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.... ... ..." 7. IATT is payable by the carrier. Section 46A(4) and Rule 14(4), which are applicable in the instant Case are as under :- "S. 46A. Modes of recovery. - ... ... ... ... ... ... ... ... ..." (4) The authority may distrain or arrest any aircraft and any other property belonging to, or under the control of, the carrier or other person, as the case may be, and detain the same until the tax, interest or penalty so determined is paid; and in case any part of the tax, interest or penalty or of the cost of the distress....
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.... undo the work of legislation by making a definition clause of their own. People cannot escape from the obligation of a statute by putting a private interpretation on its language." The courts will always examine the real nature of the transaction by which it is sought to evade the tax." However, recently in Central Bank of India v. Ravindra & Ors. reported in JT 2001 (9) SC 101, the law has been laid down in the following lines :- "It was submitted by the learned amicus and other Counsel for the borrowers, that the expression "on such principal sum" as occurring twice in the latter part of Section 34(1), which refers to interest pendente lite and post-decree, should be interpreted to mean principal sum arrived at by excluding the interest even if it has stood capitalized. This would be consistent with the legislative intent as reflected in the report of joint committee and sought to be fulfilled by 1956 amendment. For two reasons, this contention has to be rejected. Firstly, entertaining such a plea amounts to begging the question. As we have already held that the interest once capitalized ceases to be interest and becomes a part of principal sum or capital. That being so the in....