TaxTMI 
TaxTMI 
2005 (1) TMI 27
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....n in spite of the fact that the assessee has not accepted this amount as liability and contesting the same?" The assessee is a liquor contractor and was holding licence for wholesale and retail sale of country liquor under the licence. The assessee was required to pay Rs. 80,15,872, as "issue price". This amount was payable by the assessee in 12 monthly instalments. The assessee has claimed a rebate of Rs. 2,39,527 from his aforesaid obligation, inter alia, on the ground that for certain period, the liquor shops had to remain closed on account of curfew during that year. The assessee did not pay the aforesaid amount to the Excise Department chargeable from him as a part of price under the contract. It has claimed a deduction in respect of the aforesaid amount also, which has not actually been paid by him, but on the basis of the accrued liability, in the computation of his taxable income. The Assessing Officer has considered the aforesaid amount payable under the licence as an amount of duty payable by way of licence fees amounting to tax and, therefore, not deductible unless actually paid in terms of section 43B(a) of the Income-tax Act, 1961. On appeal, the Commissioner ....
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....shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: Provided that nothing contained in this section shall apply in relation to any sum referred to in clause (a) which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return: Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid during the previous year on or before the due date as defined in the Explanation below clause (va) of sub-section (1) of section 36." In the aforesaid context, the provisions of section 43B, a bare perusal shows that "issue price" payable by the assessee under the UP Excise Act as he was hol....
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....ee' constituting a class, denotes various kinds of imposts by the State in its sovereign power of taxation to raise revenue for the State. Within the expression of each specie, each expression denotes a different kind of impost depending on the purpose for which they are levied. This power can be exercised in any of its manifestations only under any law authorising levy and collection of tax as envisaged under article 265 which uses only one expression that no 'tax' shall be levied and collected except authorised by law. It in its elementary meaning conveys that to support a tax, legislative action is essential, it cannot be levied and collected in the absence of any legislative sanction by exercise of executive power of the State under article 73 by the Union or article 162 by the State. Under article 366(28) 'taxation' has been defined to include the imposition of any tax or impost whether general or local or special and tax shall be construed accordingly. 'Impost' means compulsory levy. The well-known and well settled characteristic of 'tax' in its wider sense includes all imposts. Imposts in the context have the following characteristics: (i) The power to tax is an inc....
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....66(28) of the Constitution of India. It may be seen that under the substituted provisions, the Legislature has extended the operation of section 43B by using the expression 'tax, duty, cess or fee, by whatever name called' opening way to construe the provisions by applying the principle of ejusdem generis which was absent in its first incarnation. In such circumstances, it is not possible to extend the meaning of the expression 'tax' or 'duty' as it existed during the relevant period in question, to include all other species of taxation like cess or fee also within its ambit. It gives an altogether restricted operation to it. In their nature tax, duty, cess and fees differ on the basis of purpose for which such levies are imposed. The difference between tax, duty, cess or fees is well-known ... Therefore, in our opinion, when inhibition contained in section 43B was not extended to all species of taxation but only to two of its species, viz., tax and duty, the distinct nature of different form of levies become relevant for the purpose of applicability of section 43B. Since 'fee' as distinct from tax or duty has not been subjected to the provisions of section 43B prior to April....