TaxTMI 
TaxTMI 
2000 (2) TMI 189
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.... - Rs. 12,88,772 (Barley Husk) Rent Recoveries - Rs. 12,871 --------------- ....
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....; Rs. 56,65,969 ------------- In the assessment, the Assessing Officer has considered the abovementioned two items to be includible within total turnover of the business carried on by the assessee. His action has been upheld by the CIT(A). 2. At the stage of hearing of the appeal filed by....
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....ght or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962): Provided that in relation to any assessment year commencing on or after the first day of April, 1991, the expression "total turnover" shall have effect as if it also excluded any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28." 4. The ld. counsel for the assessee strongly contends in this connection that firstly this definition of "total turnover" is an excluding definition and not an including definition. The definition merely excludes freight and insurance with effect from 1-4-1987 and the sums referred to in clauses (iiia), (iiib) and (iiic) of section 28 w.e.f. 1-4-1991. He argues that as such the expression "turnover" should mean the sale proceeds alone and not other items of receipts. So far as this particular definition given under clause (ba) of the Explanation to section 80HHC is concerned, the ld. counsel for the assessee strongly argues that although the exclusion of the sums as referred to in clauses (iiia), (iiib) and (iiic) of section 28 is specifically provided w.e.f. 1-4-1991, the said provision....
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....(i) K.P. Varghese v. ITO [1981] 131 ITR 597 (SC) at pages 605-606; (ii) CIT v. J.H. Goila [1985] 156 ITR 323 (SC) at page 339; (iii) Seaford Court Estates Ltd v. Asher 1949 2 All E.R. 155 at page 164 (extract from this judgment in the following language was used by the Supreme Court in its judgment in the case of M. Pentiah v. Muddalala Veeramallappa AIR 1961 SC 1107 at page 1115. "When a defect appears, a judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive act of finding the intention of Parliament ........... and then he must supplement the written word so as to give 'force and life' to the intention of the Legislature ............... a judge should ask himself the question how, if the makers of the act had themselves, come across this ruck in the texture of it, they would have straightened it out ? He must then do as they would have done. A judge must not alter the material of which the act is woven, but he can and should iron out the creases." 6. The ld. counsel for the assessee thereafter argues that the Supreme Court has held in the following two cases that amendments which appear to be prospective but at the same time are c....
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....t exclusion of these items from "total turnover" was omitted specifically in the statute, from first day of April, 1991 and hence, during the year under present appeal, i.e., assessment year 1987-88, these items should, consequently, be considered to be includible within turnover. The ld. D.R. furthermore argued that, inasmuch as, the language used herein is clear, there is no scope for causing any violence to the language, inasmuch as, the language used in the Act does not lead to any, absurdity at all. He relied on a judgment of the Supreme Court in the case of M/s. Punjab Tin Supply Co. v. Central Government AIR 1984 SC 87 at page 94. The Supreme Court held in this case as below :--- "All laws which affect substantive rights generally operate prospectively and there is a presumption against the retrospectivity if they affect vested rights and obligations unless the Legislative intent is clear and compulsive." On the other hand, the ld. counsel for the assessee relied on a judgment of the Calcutta High Court in the case of CWT v. India Exchange Traders' Association [1992] 197 ITR 3561 at page 382. In this particular case, the Calcutta High Court upheld the declaratory validity ....
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....sp; - Rs. 12,871 (ii) Cash discount from Metal Box - Rs. 3,59,650 (This item rather seems to be a deduction from the total purchase made by the assessee from Metal Box Co. Hence, it does not have any direct connection with the sale operations). (iii) Octroi recovery - Rs. 4,81,768 ....
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....t the fact that "total turnover" shall exclude the sums referred to in clauses (iiia), (iiib) and (iiic) of section 28 with effect from assessment year 1991-92. That by itself would, however, not lead to the necessary conclusion that prior to that date, these items must be considered to be includible within "total turnover". At the same time again, there is nothing in the proviso to suggest that it is merely clarificatory in nature and hence, for periods prior to assessment year 1991-92, "total turnover" must exclude these three items. The entire question of includibility or excludability of the items during a year prior to assessment year 1991-92 should, therefore, depend on whether "total turnover" can be considered to include these items or not. If these items per se are not includible within the definition of "total turnover", then even in such earlier years also, the items would not be includible, irrespective of whether the proviso was ever brought to the statute book or not. In other words, the retrospectivity of the proviso is not suggested by the proviso by making a clear mention of the date being "1st April, 1991". The Explanatory Memorandum to Finance (No. 2) Bill, 1991,....
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....nbsp; Total turnover. It may be noted that in the expression on the right-hand side of the abovementioned equation, two quantities are used in the numerator and one in the denominator. Mathematically, the two expressions in the numerator are inter-changeable and if they are actually inter-changed, the value of the entire expression would remain the same, or in other words, the expression can be rewritten as below :--- Export turnover X Profits & gains of business --------------------------------------------- Total turnover. It may be seen that w....