Jurisprudentiol–Tomorrow's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Commercial Tax

Is Oxygen gas used in manufacture of steel, raw material? – Question cannot be decided on basis of Wikipedia alone – matter remanded to AO to decide the issue: Supreme Court

WE do not know what are the manufacturing processes involved and what role oxygen gas has to play in the matter of manufacturing of steel. It is also not possible for us to base our decision solely on the basis of a diagram contained in Encyclopaedia Britannica. Whether oxygen gas can be considered to be a raw material is essentially a question of fact. Evidence is required to be adduced. Such evidence although may be in possession of TISCO. In the event, such a question is raised by the assessee, namely, BOC, the Assessing Authority must go therein. For the purpose of claiming exemption from payment of tax and/or special rate of tax applicable to a particular gas or commodity or goods, the assessee itself must bring on record sufficient materials to show that it comes within the purview of the notification. Both in M/s Ballarpur Industries Ltd and Tata Engineering & Locomotive Company Limited, the question as to whether sodium sulphate and/or batteries, tyres, tubes were raw materials or not could be determined by this Court as such a question had been raised by the Assessing Authority.

Income Tax

Sales tax collected from customers, not deposited with Government under a deferral scheme - Future liability settled for a lesser amount – Difference is Revenue Income and chargeable to income tax: ITAT

THE sales tax collected by the assessee being a trading receipt was required to be deposited with the sales tax department. Otherwise it would be chargeable to tax. But, it was not deposited and benefit of section 43B was claimed by the assessee on account of deferral scheme of the State Government and the Circular of the CBDT and this sales tax liability which is a trading liability was converted into a loan liability payable from April 2010 in five annual equal instalments. But, in fact, the entire amount of liabilities was not at all paid by the assessee and it was settled on payment of lesser amount. On payment of the lesser amount, the entire trading liabilities seized to exist. the entire sales tax deferral liability from the loan liability has been discharged on payment of a lesser amount. Whatever difference is there, it would be the income of the assessee for the assessment year in which the liability is discharged.

Customs

Pre-deposit - appellants adopted various dilatory methods and present appeal is nothing but an abuse of process of law - Conduct of appellants disentitles them from any relief: Supreme Court

THE factual scenario as noted clearly goes to show that the appellants adopted various dilatory methods and the present appeal is nothing but an abuse of the process of law.

The counsel for the appellant submitted that the case has not been heard on merits, and the effect of Rule 16(a) of the Rules has not been considered. It is also submitted that some time may be granted to make the deposit. Both the pleas are without any substance. The question of applicability of Rule 16(a) could have been gone into the appeal filed before CEGAT. That stage has not arrived at. The CEGAT was only dealing with the application to dispense with the requirement of pre-deposit.

See our columns tomorrow for the judgements