TaxTMI 
TaxTMI 
1981 (6) TMI 31
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....ercantile. The business of the assessee is one of processing cashewnuts. Up to September 1, 1970, the assessee was directly importing cashewnuts from outside India. Cashewnuts were liable to be taxed at the point of last purchase in the State. Since the purchases up to August 31, 1970, were in the course of import the assessee was not being taxed on such purchases. From September 1, 1970, the Cashew Corporation of India alone was permitted to import cashewnuts. The assessee and other traders like the assessee had to purchase cashewnuts from the Cashew Corporation. Thereupon the assessee became liable to pay sales tax on the purchase of cashew from September 1, 1970. It appears that the cashew traders had taken up the question of liability t....
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....r 23, 1973. The explanatory note mentioned that the government had, since passing the order, reconsidered the matter in all its aspects and were convinced that the said notification should be cancelled. Thus the notification dated October 12, 1973, published on October 23, 1973, was alive only for a few days. The accounts of the assessee were closed on March 31, 1974. In such accounts it claimed for the accounting year ended March 31, 1974, a deduction of Rs. 6,38,659 as purchase tax payable for the years 1970-71, 1971-72 and 1972-73. By that time, the assessment for the years ended March 31, 1972, and March 31, 1973, had not been completed and the assessee has claimed the deductions in respect of these years in the assessments for these ye....
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....n respect of the accounting years which closed on June 30, 1971, and June 30, 1972, the assessee did not make any provision towards the purchase tax liability under the impression that there will be no payment called for. But since by the time he could finalise the books of account for the year ended June 30, 1973, he had knowledge of the cancellation notification dated November 9, 1973, he made a provision for the purchase tax for that year. The question for reference concerned only the first two years that is that ending on June 30, l971, and on June 30, 1972. In respect of these periods the claim was made in the accounting year corresponding to the assessment year 1975-76. In this case, the Appellate Tribunal took the view that the liabi....
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....fication dated October 12, 1973, published in the Gazette dated October 23, 1973. Therefore, it is said that when once the said notification was passed it operated to save the assessee from the liability to pay tax from September 1, 1970, and it was only when by the subsequent notification dated November 9, 1973, the earlier notification was cancelled that the liability arose for the first time. It is, therefore, said that, consequently, such liability had to be debited in the books of account only then. Learned counsel, Sri Sugumaran submitted that though this court had earlier taken the view that the executive power under a statutory provision could not be exercised retrospectively that view expressed by a Full Bench of this court in S....
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.... be made for such liability. If the assessees had not made provision in that year but such provision was made in a later year that would not mean that the liability arose only in such later year. If by an exemption notification in a subsequent year the transactions of an earlier period are exempt from tax that would only mean that the existing liability is no longer in force by reason of the notification of exemption. In the case of the assessees before us, the liability to pay tax arose in the years in which the transactions of purchase took place, the liabilities had to be provided for in the respective years, when the exemption notification was published in October, 1973, such liability ceased to be operative, but on the later cancellati....