2009 (2) TMI 797

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....e petitioner has filed its return before the first respondent declaring the total turnover and taxable turnover. Petitioner has paid the tax on the basis of the taxable turnover furnished in the said return. There was a dispute whether rubber purchased by the petitioner was liable to be included in he purchase turnover. When the earlier demand was made, that was disputed and a Full Bench of this court in Madras Rubber Factory Ltd. v. State of Kerala ((1989) 74 STC 56) held that it is not liable to be included in the purchase turnover.   Therefore, at the time of filing the return his declaration was correct and the tax as per the return was paid. But, subsequently the Hon'ble Supreme Court by judgment dated 19.12.1997 in State....

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....x v. Hindustan Electro Graphites Ltd. ((2000) 243 ITR 48). In that case, the Hon'ble Supreme Court held that if the return was filed correctly as per law   applicable on the date of filing the return, subsequent introduction of Clause (iiib) in Section 28 of the Income Tax Act is not applicable as assessee has not committed fault. Even if a retrospective liability was made, that cannot be applicable. It was held by the Supreme Court as follows:    "The decision of the Calcutta High Court in  Modern Fibotex India Ltd.'s case ((1995 212  ITR 496), squarely covers the issue involved in  the present appeal. Then we have t see the law  on the date of filing of the return. To attract  penal ....

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....within the Revenue cannot be  heard to say that the levy of additional tax is  automatic under section 143(1A) of the Act. If  additional  tax could  be  levied in  such  circumstances, it will be punishing the assessee  for no fault of his.  That cannot even be the  legislative intent. It shocks the very conscience  if in the circumstances section 143(1A) could be  invoked to levy the additional tax. The following  observations by the Constitution Bench of this  court in Pannalal Binjraj v. Union of India  ((1957) 31 ITR 565 are apt (page 597):  "A humane and considerate administration  of the relevant provisions of the Income-tax Act  would&n....