2017 (9) TMI 320

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....in List I of the Seventh Schedule to the Constitution of India. Learned Additional Advocate General appearing in support of the writ petition has contended at the hearing of the writ petition that, the impugned Chapter if read down in the manner suggested, then, the entire Chapter can pass the test of constitutionality. He has referred to the budget speech of the Hon'ble Finance Minister while introducing Chapter XII-H to the Act of 1961. He has submitted that, Fringe Benefits Tax was introduced by such Chapter. The Chapter was, thereafter, deleted subsequently in the year 2009-2010. He has referred to the budget speech for such year also. Referring to Section 115WB(2) of the Act of 1961 learned Additional Advocate General has submitt....

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....3 Supreme Court Cases page 467 (Southern Motors v. State of Karnataka & Ors.) and has submitted that, although equity and taxation are often strangers, the Court should attempt that they do not remain always so. Learned Advocate appearing for the revenue has submitted that, the section as it stands, does not require a reading down. Chapter XII-H has to be read as a whole. There is no justification in the apprehension that the first petitioner or an assessee would be slapped with a Fringe Benefits Tax when such assesse is not liable for the same. In any event, assuming that, such a situation does arise, such individual assesse is entitled to challenge the order of assessment in terms of the Act of 1961. He has relied upon (2015) 374 Incom....

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....an Bulk Carriers (supra) is concerned, he has submitted that, the Court should reject a construction of a statute which will defeat the plain intention of the legislature. With regard to Ajmera Housing Corporation (supra) he has submitted that, the principle of reading down can be pressed into service to save any provision from the vice of unconstitutionality. The issues that have arisen in this writ petition can be summarised as follows:- (i) Is Chapter XII-H of the Income Tax Act, 1961 or any part thereof unconstitutional being opposed to Articles 14 and 246(1) read with Entry 82, List I of the Seventh Schedule to the Constitution of India ? (ii) Is Section 115WB(2) of the Income Tax Act, 1961 required to be read down ? (iii) ....

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.... if the employer has, in the course of his business incurred any expense on or made any payment for, the purposes stipulated thereunder. Basically 17 heads have been specified under Sub-section (2) of Section 115WB which attracts the legal fiction. Nandkishore Ganesh Joshi (supra) and Sadan K. Bormal & Anr. (supra) have held that, a fiction cannot be extended beyond the purpose for which it is created. Chapter XII-H of the Income Tax Act, 1961 is premised upon the legal fiction of fringe benefits being given by the employer to the employee. It has been contended that, the 17 broad heads stipulated in Subsection (2) of Section 115WB will prompt any Assessing Officer to charge Fringe Benefits Tax whenever an expenditure on such broad accou....