Jurisprudentiol – Monday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Valuation - Certainty in taxation is fundamental cannon of taxation - payment of Net Present Value (NPV) of deferred taxes under Package Scheme of Incentives - difference between sales tax collected from customers and sales tax paid to state authorities at NPV cannot be treated as an additional consideration: CESTAT

THE issue involved is that the appellants had applied for eligibility certificates for new units for sales tax incentive under Sales Tax Incentive 1988 Scheme or Part-I of 1993 packages scheme as notified by the Government of Maharashtra Resolution dated 30/09/88 or 1998 Power Generation Promotion Policy Sales Tax Deferral Scheme. The appellants were also issued with the eligibility certificates by SICOM Ltd./ MEDA, Pune (implementing agencies under the Schemes). As per the scheme which related to deferment of sales tax, the appellants were permitted to charge sales tax for the sale of goods and the amount of sales tax collected were permitted to be retained by the appellants and the same were required to be paid by the appellants to the State Government in five equal yearly installments on expiry of the 10th year as computed from the last date of filing returns.

It was the stand of the department that the difference between sales tax collected from the customers and the sales tax paid to the state authorities at NPV should be treated as an additional consideration received from the buyers of the goods and, therefore, they should form part of the transaction value.

Income Tax

Whether actual expenditure incurred by employee on conveyance in performance of official duty and reimbursed by employer is liable to TDS or is a permissible deduction u/s 10(14) - HC rules against Revenue: HC

THE AO while scrutinising Form-24 and Form-16 submitted by the LIC of India after issuing a notice to the responsible officers of LIC of India created a demand of Rs. 1,06,800/- on the ground that the responsible officers of the LIC have wrongly allowed deduction of conveyance allowance and additional conveyance allowance which resulted in short deduction of tax. The shortfall and interest u/s 201 was computed and arrived at. The CIT(A) affirmed the order of the AO. The Appellate Tribunal insofar as the amount regarding recovery of tax is concerned directed the AOs to reinvestigate into the matter after giving reasonable opportunity of being heard to the assessee and direct to produce the evidence of payment of tax by the Development Officers on the matter in question and to give finding thereafter. Insofar as the interest part was concerned, the appeal of the LIC was rejected.

See our columns Monday for the judgements