TaxTMI 
TaxTMI 
2009 (4) TMI 433
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....eneral Sales Tax Act, 1963 (for short, "the KGST Act") as well as the Central Sales Tax Act, 1956. In lieu of payment of tax under section 5(1) of the KGST Act for the assessment year 2001-02, the appellant opted to pay turnover tax under section 7 which provides for payment of tax at the compounded rate. In short, the appellant opted for an alternate method of taxation provided for by section 7 of the KGST Act. To complete the chronology of events, it may be stated that the appellant had applied for permission for payment of tax under section 7 read with rule 30 of the Kerala General Sales Tax Rules, 1963. That application was made on April 9, 2001 for the financial year commencing from April 1, 2001 to March 31, 2002. Vide order dated ....
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....hich came into effect from July 23, 2001, were applicable for the assessment year 2001-02 as there was no provision under the Act for making the assessment of the compounded tax under section 7(1)(b), either for part of the year or the fraction of the year. This reference was disposed of by the Division Bench by a very cryptic reasoning, which is reproduced hereinbelow: "Merely because there is no provision in the amendment brought in for making an assessment of compounded tax coming under this clause for a fraction or part of the year, the petitioner cannot claim that it is entitled to pay tax at the rates applicable at the beginning of the assessment year in question, i.e., April 1, 2001, nor can it be said that the amendment would be o....
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....ent" could cover all the three stages, viz., accrual of liability, computation of liability and its recovery whereas in certain other enactments, mere payment of fixed quantum of tax could also come within the meaning of the word "assessment". According to the learned senior counsel, although the word used is "assessment" in the 1963 Act, strictly, it covers recovery of tax at the rate fixed by the Legislature and, therefore, it is always open to the Legislature to introduce, by the Finance Act, in the midst of the assessment year the revised rate of tax in section 7(1)(b)(i). We have broadly indicated the arguments advanced in this case on both sides. Our attention has also been invited to some of the important judgments of this court in ....
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.... The Income-tax Officer included the difference between the original cost and the written down value of the ship in the total income of the assessee for the assessment year 1946-47. The Tribunal upheld that decision and referred the question, whether the sum representing the difference between the original cost and the written down value was properly included in the assessee's total income computed for the assessment year 1946-47. It was argued that the fourth proviso to section 10(2)(vii) of the Income-tax Act (inserted by the Amendment Act of 1946 with effect from May 4, 1946) under which the inclusion of the amount was justified by the Department, had no application to the case. (10) The learned judges held that as it was the Finance Ac....
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....at page 199 of SCR); (at page 1051 of AIR), as follows See page 190 of 12 STC.: 'A legal fiction must be limited to the purposes for which it has been created and cannot be extended beyond its legitimate field. The turnover of the previous year is fictionally made the turnover of the year of assessment: it is not the actual or the real turnover of the year of assessment. By the imposition of a different tariff in the course of the year, the incidence of tax liability may competently be altered by the Legislature, but for effectuating that alteration, the Legislature must devise machinery for enforcing it against the taxpayer and if the Legislature has failed to do so, the court cannot resort to a fiction which is not prescribed by the Legi....
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....be applied is that in force in the assessment year, unless otherwise stated or implied. The facts of the said decision are different and distinguishable and the High Court was clearly in error in applying that decision to the facts of the present case. (14) The Surcharge Act having come into force on September 1, 1957, and the said Act not being retrospective in operation, it could not be regarded as law in force at the commencement of the year of assessment 1957-58. Since the Surcharge Act was not the law in force on April 1, 1957, no surcharge could be levied under the said Act against the appellant in the assessment year 1957-58." It may be noted that the above-quoted paragraphs are not only confined to the Income-tax Act, they also de....