text stringlengths 5 5.67k |
|---|
It was contended that the said notification was issued in public interest in view of the peculiar position; and that while the States of Gujarat and Maharashtra are fully developed States, on the other hand, Punjab is comparatively a backward State in industry. ARG |
Unless some incentives are given, the industries which have already shifted to other States, will have further deterring effects. Ratio |
Hence, in view of the situation the concessional rate was introduced and was not discriminatory. Ratio |
As mentioned hereinbefore, reliance was placed mainly on H. Anraj vs Govt of Tamil Nadu, (supra) to which one of us was a party. Ratio |
That was a decision dealing with lottery tick ets, and dealt with the question whether lottery tickets amounted to movable property so as to be within the purview of the Sale of Goods Act. Ratio |
But in relation to the question relevant to the present purpose it was reiterated that the real question is, whether direct and immediate result of the impugned notification was to impose an unfavourable and discriminatory tax burden on the imported goods (in those cases lottery tickets of other 756 States) when they a... |
It has to be reiterated that more or less all States used to issue and sell lottery tickets, hence, the lottery tickets from other States were specifically discriminated against in the sense that there was differentiation without any valid or justifiable reason. Ratio |
That would certainly work as deterrent. Ratio |
Trade, commerce and intercourse throughout the territory of India, come within article 301 of the Constitu tion. Ratio |
It prevents imposing on goods imported from other States a tax to which similar goods in the State are not subject so as to discriminate between the goods so imported and goods produced locally. Ratio |
In that light the decision in Anraj 's case has to be understood. Ratio |
The cases of India Cement & Ors. vs State of Andhra Pradesh & Ors., (supra); Weston Electronics vs State of Gujarat & Ors., (supra) and West Bengal Hosiery Assn. & Ors.vs State of Bihar & Anr., (supra) were cases where there was a naked blanket preference in favour of locally manufactured goods as against goods coming ... |
These cases, as we read these, dealt with a conferment of exemp tion without any reason or concession in favour of indige nous manufactured goods which was not available in respect of the goods imported into that State. Ratio |
In case, however, of U.P. as well as State of Punjab the provisions which we have examined, proceeded on a different basis. Ratio |
In these cases, it cannot be suggested, in our opinion, that there is discrimi nation against goods manufactured outside the State. Ratio |
In case of Punjab an Overwhelmingly large number of local manufac turers of similar goods are subject to sales tax and, there fore, the general statement that the manufacturers within the State are favoured against the manufacturers outside the State, is incorrect. Ratio |
Under the notifications in case of Punjab, only newly set up units are eligible to claim the benefits thereunder for a limited period of 5 years and that also only if they strictly comply with the terms and condi tions set out in the notification. Ratio |
It has to be reiterated that sales tax laws in all the States provide for exemption. Ratio |
It is well settled that the different entries in lists I, II and III of the 7th Schedule deal with the fields of legislation, and these should be construed widely, liberally and harmoniously. Ratio |
And these entries have been construed to include ancillary or inciden tal power. Ratio |
Power to grant exemption is inherent in all taxing legislations. Ratio |
Economic unity is a desired goal, economic equilibrium and prosperity 757 is also the goal. Ratio |
Development on parity is one of the com mitments of the Constitution. Ratio |
Directive principles enshrined in articles 38 & 39 must be harmonised with economic unity as well as economic development of developed and under developed areas. Ratio |
In that light on article 14 of the Constitu tion, it is necessary that the prohibition in article 301 and the scope of article 304(a) & (b) should be understood and construed. Ratio |
Constitution is a living organism and the latent meaning of the expressions used can be given effect to only if a particular situation arises. Ratio |
It is not that with chang ing times the meaning changes but changing times illustrate and illuminate the meaning of the expressions used. Ratio |
The connotation of the expressions used takes its shape and colour in evolving dynamic situations. Ratio |
A backward State or a disturbed State cannot with parity engage in competition with advanced or developed States. Ratio |
Even within a State, there are often backward areas which can be developed only if some special recentives are granted. Ratio |
If the incentives in the form of subsidies or grant are given to any part of units of a State so that it may come out of its limping or infancy to compete as equals with others, that, in our opinion, does not and cannot contravene the spirit and the letter of Part XIII of the Constitution. Ratio |
If there is none, it will amount to hostile dis crimination. Ratio |
Judge in this light, despite the submissions of Mr. Sanjay Parikh and Mr. Vaidyanathan, we are unable to accept the contentions that the petitioners sought to urge in this application. Ratio |
The next petition is W.P. No. 1124/88 Computer Graphics (P) Ltd. & Anr. Ratio |
vs Union of India & Ors., which challenges the concession given in favour of manufacturers in U.P. and Goa. Ratio |
The same contentions were reiterated for the reasons discussed hereinbefore. Ratio |
We are unable to accept this peti tion. Ratio |
It may be relevant to refer to Associated Tanners Vizianagram, A. P. vs C.T. 0. Ratio |
, Vizianagram, Andhra Pradesh & Ors., ; where it was stated that when a taxing statute was not imposing rates of tax on imported goods different from rates of tax on goods manufactured locally, article 304 had no application. Ratio |
In case an exemption was granted applying the same rate the resulting tax might be somewhat higher but that did not contravene the equality clause contemplated by article 304. Ratio |
In the instant writ petition in view of the terms of the notification impugned and the facts and the circumstances stated in the affidavit of the State Government as well as the interveners, Goa and Pondicherry, being comparatively under developed in electronic industry, in 758 our opinion, it cannot be said that there... |
This application must also, therefore, fail. Ratio |
Writ petition No. 70/89 Spartek Ceramics India Ltd. vs Union of India & Ors., under article 32 also challenges the notification under the and the U.P. Act as mentioned hereinbefore. Ratio |
In the state of facts as appearing, this petition also fails. Ratio |
We have considered the submissions and the statements made by the interveners in these matters. Ratio |
Writ Petition No. 761/89 Weston Electronics Ltd. & Anr. vs State of Punjab & Anr., dealing with the notifications issued by the State of Karnataka and writ petition No. 1140/88 M/s Survo Udyog Pvt. Ltd. & Anr. vs State of Bihar & Anr., deal with the same controversy and with similar notification. Ratio |
In view of the averments made which we have examined in detail on behalf of the concerned State Governments in the light of the principles we have reiterated before, we are of the opinion that the notifications impugned cannot be challenged and the petition cannot succeed. Ratio |
We have also considered writ petition No. 10 16/88 M/s Disco Electronics Ltd. & Anr.vs State of U.P. & Others, and in light of the facts and the circumstances and the aver ments made in the background of the principles reiterated, we are unable to sustain the challenge to the impugned notifications. Ratio |
In these matters we had the advantage of having the views of the interveners and we have considered the submissions made on their behalf. Ratio |
In the aforesaid light the intervention applications are allowed, submissions considered and the aforesaid writ petitions are dismissed but in the facts and the circum stances of the case, there will be no order as to costs. RPC |
Y. Lal Petitions dismissed. RPC |
vil Appeal Nos.1177 to 1184 (NT) of 1990. FAC |
From the Judgments and Order dated 5.3.85, 21.1.85, 25.2.85, 11.2.85, 14.10.85, 11.2.85 and 20.10.86 of the Madras High Court in T.C. Nos.694/82,565/80, 1404/80, 637/81,638/81,521/81,429/83 and 572/83. FAC |
T.A. Ramachandran and Mrs. Janki Ramachandran for the Appellant. FAC |
S.C. Manchanda, B.B. Ahuja and Ms. A. Subhashini for the Respondent. FAC |
The Judgment of the Court was delivered by VENKATACHALIAH, J. FAC |
These Special Leave Petitions arise out of and are directed against the orders of the High Court of Judicature at Madras disposing of references made under Section 256(1) of the Income Tax Act 1961 (Act for short) in Tax Case Nos. 694 of 1982, 565 of 1980, 1404 of 1980, 637 and 638 of 1981, 521 of 1981, 429 of 1983 and... |
The High Court following its earlier pronouncement of that Court in Commissioner of Income tax vs O.M.S.S. Sankaralinga Nadar & Co., answered the question of law, similar in all the cases, in favour of the revenue. FAC |
The question was whether in making a disallowance for the inter est paid by a partnership firm to a partner under Section 4O(b).of the Act the interest, in turn, paid by the partner on his borrowings from the firm should be taken account of and deducted and only the balance disallowed under Section 40(b). Ratio |
On this question, there is a sharp divergence of judi cial opinion in the High Courts. Ratio |
In Sri Ram Mahadeo Prasad vs C.I.T., 1; C.I.T. vs Kailash Motors, ; C.I.T. vs T.V. Roman sigh & Sons, ; C.I.T. vs Kothari & Co., ; C.I.T. vs Balaji Commercial Syndicate, ; C.I.T. vs Motiisi Ramjiwan and Co., ; C.I.T. vs Precision Steel and Engg.Works, & Har.), the High Courts have taken the view that where a firm pays ... |
However, in C.I.T. vs O.M.S.S. 250 Sankaralinga Nadar & Co., , the High Court of Madras has taken a contrary view. Ratio |
We have heard Shri Ramachandran, learned senior counsel for the appellants and Sri Manchanda, learned Senior Counsel and Sri B.B. Ahuja for the revenue. Ratio |
Special Leave is granted. Ratio |
The appeals are taken up for final hearing, heard and are disposed of by this common judgment. Ratio |
We may refer to the facts in SLP(C) No. 14291/1985 which is representative of and typifies the context in which the question arises. Ratio |
The appellant, M/s. Keshavji Ravji & Co. is a registered firm consisting of 6 partners and car ries on a business in the manufacture and export of stain less steel articles. FAC |
In the accounting year ended 13.11.1974, corresponding to the assessment year 1975 76, the firm paid interest to the partners on the amounts standing to their respective credits in the firm. FAC |
The firm also received from the partners interest on their borrowings from the firm. FAC |
For the relevant assessment year, the appellant filed a return disclosing a total income of Rs.2,55,225. FAC |
The Income tax Officer while disallowing the amount of interest paid to partners did not set off the interests received from the partners on their own borrowings. FAC |
With this disallow ance, the income of the firm was assessed at Rs.2,79,730. FAC |
In the assessee 's appeal, the Appellate Assistant Commissioner of Income Tax by his order dated 18.10.1977 allowed the claim of the appellant that only the net interest paid to the partners, after setting off the interest received from them, was to be disallowed. FAC |
The Revenue took up the matter in further appeal before the Income Tax Appellate Tribunal which by its order dated 6.1.1979 dismissed the appeal and affirmed the appellate order of the Assistant Commissioner. FAC |
The Tribunal, as did the Appellate Assistant Commissioner, placed reliance on the decision of the Allahabad High Court in Sri Ram Mahadeo Prasad vs C.I.T., At the instance of the revenue the Tribunal stated a case and referred the following question of law for the opinion of the High Court. "Whether, on the facts and i... |
This reference under Section 256(1) of the Act was registered in 251 the High Court as Tax Case No. 694/82 and the High Court by its order dated 5.3.1985 answered the question in the negative and against the appellant relying, as stated earli er, on its earlier pronouncement in Sankaralinga Nadar 's case. FAC |
Broadly, similar are the circumstances under which the other appeals arise. FAC |
Before we advert to and evaluate the merits of the contentions, it is appropriate to refer to the statutory provision as it then stood. Ratio |
Section 40 of the Act provided: "40. "Notwithstanding anything to the contrary in sections 30 to 39, the following amounts shall not be deducted in computing the income chargeable under the head 'Profits and gains of business or profession", (a) ] (1) ] to ] Omitted as unnecessary (v) ] (b) in the case of any firm, any... |
One of them was the introduction of Explanation 1 in clause (b) of Section 40. Ratio |
That Explanation reads: "Explanation 1: Where interest is paid by a firm to any partner of the firm who has also paid interest to the firm, the amount of interest to be disallowed under this clause shall be limited to the amount by which the payment of interest by the firm to the partner exceeds the payment of interest... |
" Referring to the new Explanation inserted in clause (b) of Section 40 by the amendment, the "Notes on Clauses" say: 252 "This clause seeks to insert three new Explanations to section 40(b) of the Act. Ratio |
Explanation 1 seeks to provide that where interest is paid by a firm to a partner who has also paid interest to the firm, the amount of interest to be disallowed under section 40(b) of the Act shall be limited to the net amount of interest paid by the firm to the part ner, that is, the amount by which the payment of in... |
"The proposed amendments will take effect from 1st April, 1985, and will, accordingly, apply in relation to the as sessment year 1985 86 and subsequent years. Ratio |
" The Explanation I, which was introduced in 1984, proprio vigore, does not apply to the assessment relating, as here, to an earlier year. Ratio |
Whether the Explanation brings about a change in, or admits of being understood as an exposition of, the law is, however, a different matter. Ratio |
It is, perhaps, also appropriate here to refer to the circular No. 33 D (XXV 24) of 1965 of the Central Board of Direct Taxes, the operative part of which provides: "However where a firm pays interest to as well as receives interest from the same partner, only the net interest can be stated to have been received or pai... |
This view also finds support in the decision of the Allahabad High Court in the case of Sri Ram Mahadeo Prasad, In view of the above, the in structions contained in Board 's Circular No. 55 of 1941 may be treated as modified accordingly . Ratio |
Section 40 imposes a restriction on the deductibility of certain outgoings and expenses which are, otherwise, enabled under Sections 30 39 of the Act and constitutes an exception to these sections. Ratio |
Clause (b) of Section 40 is analogous, with some enlargement, to Section 10(4)(b) of the predecessor Act of 1922. Ratio |
The prohibition in Section 40 against the deductibility of certain outgoings is in mandatory terms. Ratio |
It is this aspect that has loomed large in the reasoning supporting the view accepted by the Madras High Court in Sankaralinga Nadar 's case and emphasised by the learned counsel for the Revenue. PRE |
The reasoning of the Madras High Court in that case and of the Andhra Pradesh High Court in Commissioner of Income tax vs T.V. Ramanaiah & Sons, 157 illustrate the rival points of view. PRE |
The Madras High Court held: "The collocation of the words shows that what is disallowed in the matter of payment of interest cannot be the net interest, but can only be interest paid with refer ence to a given account relating to payment of interest by the firm to the partner. PRE |
This is because the subject of disallowance in the matter of payment of interest appears in section 40(b) cheek by jowl with salary, bonus, commission or remuneration made by the firm to the partner. PRE |
There cannot be any net salary or net bonus or net remuneration as mat ters of disallowance. PRE |
They can only be salary, as such, or bonus, as such, or commission, as such, or remuneration as such which are the subject of disallowance. PRE |
In like manner, when the section speaks of payment of interest by the firm to a partner as the subject of disallowance, it can only be payment of 'gross ' interest in the particular account in which interest is payable. PRE |
Salary, bonus, commission or remuneration do not have what may be characterised as a two way traffic . " " . . PRE |
In the earliest of the cases, the Allahabad High Court endorsed the Tribunal 's decision to disallow only the net interest. Ratio |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.