TaxTMI 
TaxTMI 
2008 (5) TMI 34
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....Section 143(1)(a), the cases were taken up for scrutiny, and after completing requisite formalities revised assessment orders were passed. Since in the present matters the controversy relates only to the admissibility of deduction under Section 43B, we think it appropriate to confine on that aspect of the matter only. 4. In the revised assessment order, the learned Assessing Officer found that the assessee had collected sales tax during the relevant year, and did not deposit it in the State Treasury, in view of the fact, that the assessee was issued Eligibility Certificate under the Rajasthan Sales-tax Deferment Scheme, 1987, published in the gazette on 29.9.1987, which was framed in exercise of the powers conferred under Section 7(2B) of the Rajasthan Sales Tax Act 1954, hereafter referred to as the Act of 1954, according to which the assessee was not required to pay to the Government the sales tax collected by it for a period of 7 years, and was to pay thereafter in accordance with the scheme, and during this interregnum period, the amount of sales tax collected was deemed to have been actually collected by the Government, and disbursed as loan to the present assessee. In this r....
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.... by the learned Commissioner (Appeals) vide order dt. 14.9.1999, inter alia holding, that it is not in dispute, that the State Government has issued notification, to the effect, that the sales tax collected by the appellant to the equal of the loan liability raised by RIICO/RFC or Industries Department will be treated as loan, that too interest free, and the same should be paid in instalment in subsequent years, as desired by the Sales Tax Department. Thus, the observation of the Assessing Officer about no conversion of sales tax into loan was not accepted, in view of the certificate issued by the Industries Department. Thus, the CBDT circular no. 674 (see [1994] 205 ITR (st.) 119) was found applicable, and to the extent of this conversion of deferred sales tax amount as loan, the addition was deleted. 7. In view of the above, for the assessment years 1993-94 and 1994-95, the assessee filed appeals before the learned Tribunal, which were decided, as noticed above, vide order dt. 12.10.2004, while in the case of assessment year 1996-97, the Revenue filed appeal before the learned Tribunal, which was decided vide order dt. 18.10.2004. Since the order dt. 18.10.2004 simply foll....
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....-94 and 1994-95, had also relied upon its earlier judgment in Devendra Udhyog's case[2003] 264 ITR-701, which according to the learned counsel for the Revenue, has been set aside by this Court in the said judgment reported in Commissioner of Income Tax Vs. Devendra Udhyog reported in [2003] 264 ITR-701. 12. To distinguish these cases, learned counsel for the assessee invited our attention to the provisions of Section 7(2B) of the Act of 1954, which was inserted by amendment w.e.f. 10.9.1987, and provides, that notwithstanding anything contained in sub-section (2) or sub-section (2A), where the State Government is of the opinion, that it is necessary or expedient in the public interest so to do, it may, by notification in the Official Gazette, defer the payment of tax payable by any class of dealers for any period on such conditions and under such circumstances as may be specified in the notification. According to the learned counsel, since the sales Tax Deferment Scheme, 1987 has been issued in exercise of powers conferred by this provision, it clearly amounts to effecting amendment in the State Sales Tax Act, as contemplated in the judgment of Hon'ble the Supreme Court in Gujarat....
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....ly quote the provisions of Section 7(2B) of the Act of 1954, which is introduced by amendment w.e.f.10.9.1987, so also the provisions of proviso to para-4 of the Scheme, which was inserted vide notification dt. 27.3.1995, (without specifying as to, with effect from what date it has been introduced). These read as under:- "(2B) Notwithstanding anything contained in subsection (2) or sub-section (2A), where the State Government is of the opinion that it is necessary or expedient in the public interest so to do, it may, by notification in the Official Gazette, defer the payment of tax payable by any class of dealers for any period on such conditions and under such circumstances as may be specified in the notification." "4. Deferment of tax on sales:…………………………….. Provided further that notwithstanding anything contained in this notification but subject to such conditions as the State Govt. may, by general or special order specify, where a dealer to whom incentive by way of deferment of sales tax has been granted by virtue of Eligibility Certificate issued under this notification, and where a loan liability equal to the amount of any such tax payable by suc....
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....g the Sales-tax Act, have issued Government Orders notifying schemes under which sales tax is deemed to have been actually collected and disbursed as loans. Such Government Orders also provide that entries shall be made in the Government accounts giving effect to deemed collections by crediting the appropriate receipt-heads relating to sales-tax collections and debiting the heads relating to disbursal of loans. It has, therefore, been represented that, as such conversion of the sales tax liability into loans have similar statutory effect as can be achieved through amendments of the Sales-tax Act, the amounts covered under the scheme should be allowed as deduction for the previous year in which the conversion has been permitted by the State Governments. 3. The Board have considered the matter and are of the opinion that such deferral schemes notified by the State Governments through Government Orders meet the requirements of the Boards Circular No. 496, dated 25-9-1987 (see [1988] 169 ITR (st.) 53) in effect though in a different form. Accordingly, the Board have decided that the amount of sales tax liability converted into loans may be allowed as deduction in the asses....
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....(see [1994] 205 ITR (st.) 119) if the sales tax collected, has neither been paid actually, nor that liability has been converted into loan, that amount is hit by the provisions of Section 43B, and in that case, the amount of sales tax had not been converted into loan, as required by circular no. 674. (see [1994] 205 ITR (st.) 119) This Court after noticing the submissions found, that neither there is an amendment in the Sales Tax Act, to give effect to the provisions of the scheme, nor sales tax collected has been converted into loan, as required by circular no. 674. (see [1994] 205 ITR (st.) 119).With these conclusions, the judgment of the learned Tribunal was set aside. As against this, in the cases in hand, as is clear from the narration of facts, made above, that admittedly the sales tax collected has been converted into loan, as required by circular no. 674. (see [1994] 205 ITR (st.) 119) Thus, this judgment also cannot be said to be of any assistance to the Revenue. 18. Then, we may refer to recent Division Bench judgment of Gujarat High Court, in the case of Commissioner of Income Tax Vs. Shree Talal Taluka Sahakari Khand Udyog Mandli Ltd., reported in [2000] 259 ITR-21. In....