TaxTMI 
TaxTMI 
2009 (3) TMI 970
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....ments so made shall be appropriated first towards interest accrued on such tax or other amount under subsection (3) of section 23 on such date of payment and the balance available shall be appropriated towards principal outstanding, notwithstanding any request to the contrary by the dealer or any person making such payments. (2) Notwithstanding anything contained in sub-section (1) where any dealer or other person has paid any amount towards tax or any other amount and such payment has been set off towards the principal amount prior to the coming into effect of this section, no recomputation of such payment shall be made under sub-section Section 55C was inserted with effect from January 1, 2000. The petitioner has paid sums toward....
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....d by the creditor then the amounts should be treated as adjusted towards the principal amount. Applying the said doctrine embodied in section 59 he would argue that when the payment is made with the specific request that it should be adjusted towards tax it was incumbent on the taxing authority to comply and it is not permissible to adjust the payment against interest. The further argument which he would advance is that the payments were relatable to assessment years prior to 2000-01. The law governing each assessment is the law laid down for that year. In taxation law it is impermissible to allow a provision of law which is inserted subsequently to interfere with the working of the law which governed the particular assessment year or years....
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....treated as several distinct debts. In fact, learned counsel for the petitioner also fairly did not pursue this contention in the light of the decision. With regard to his further contention also I would not find much merit. In Reliance Jute & Industries Ltd. v. Commissioner of Income-tax, West Bengal, Calcutta [1979] 120 ITR 921 (SC); AIR 1980 SC 251, the assessment year was 1960-61. The court took the view that loss of the assessment year 1950-51 cannot be set off against the business income of assessment year 1960-61. The court held as follows: "It is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. When an asses....
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....nt has been set off towards principal amount on the basis of any payment made towards tax or any other amount then no recomputation of the payment is to be made under sub-section (1). In other words, but for the non obstante clause contained in sub-section (2) every payment which was made prior to coming into force of section 55C and which was adjusted towards principal would have to be recomputed and amounts appropriated towards interest and the balance alone towards the principal. It is this eventuality which was avoided by insertion of sub-section (2). The facts of this case are to be noted. Admittedly, all payments were made after January 1, 2000. The words of section 55 are clear and unambiguous, namely, if any payment is made it has ....