TaxTMI 
TaxTMI 
2019 (5) TMI 352
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.... respect of export business under Section 80 HHC of the Income Tax Act, particularly against the proviso inserted in Section 80HHC by the Taxation Law (Amendment Act, 2005) with retrospective effect from 01.04.1998. The said proviso reads as under - "Deduction in respect of profits retained for export business. 80HHC - (1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, [a deduction to the extent of profits, referred to in sub-section (1B)] deriv....
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....3 of 2011 came to be filed before the Hon'ble Apex Court for transferring all the matters before one and the same Court. To avoid conflicting judgments by various High Courts and multiplicity of the proceedings, the Hon'ble Supreme Court, by an order dated 03.04.2012, allowed the transfer petition by transferring all the matters to the High Court of Gujarat. A Division Bench of the Gujarat High Court has, by order dated 02.07.2012, disposed of all the Writ petitions in the following terms: "25.On consideration of the entire materials on record, we, therefore, find substance in the contention of the learned counsel for the petitioners that the impugned amendment is violative for its retrospective operation in order to overcome th....
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....ts are quashed only to the extent that the operation of the said section could be given effect from the date of the amendment and not in respect of earlier assessment years of the assessees, whose export turn over is above Rs. 10 Crores. In other words, the retrospective amendment should not be deterimental to any of the assessee. Consequently, the impugned assessment orders stand quashed and the respondents are directed to issue fresh assessment orders, if warranted, without reference to the proviso to Section 4 of the Amendment Act. Consequently, connected miscellaneous petitions are closed. No costs." 4. Against the said decision of the Division Bench of the Gujarat High Court, the Union of India approached the Apex Court by way of ....
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.... who are the exporters, belong to the second category. They filed the Writ petitions challenging conditions mentioned in third and fourth proviso to Section 80HHC(3). In fact it was their precise contention that these conditions are severable and therefore, these two conditions should be declared ultra vires and severed. The rationale behind seeking such a prayer was obvious inasmuch as the Writ petitioners did not went entire Notification to be declared ultra vires which was to their advantage. What they wanted was that the benefit of amended provision be accorded, without insisting on the aforesaid conditions. 3.The High Court vide impugned judgment has decided the issue in favour of the writ petitioners by concluding as under: 26.On ....
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....ns would not operate retrospectively. At the same time, he accepts that the legal position would be that those exporters with turnover of rupees less than Rs. 10 crores and other like the respondents with turn over of more than Rs. 10 crores would be at par and both would be entitled to the benefits. 5.We find that in essence the High Court has quashed the severable part of third and fourth proviso to Section 80HHC(3) and it becomes clear therefrom that challenge which was laid to the conditions contained in the said provisos by the respondent has succeeded. However, to make the position crystal clear, we substitute the direction of the High Court with the following direction: Having seen the twin conditions and since 80HHC benefit is n....