THE COMMISIONER OF INCOME-TAX, vs. GUJARAT STATE FOREST DEVELOPMENT CORP.

ITA/291/1998HC GujaratGJHC24024329199803 May 1999Author: HONOURABLE MR. JUSTICE R.BALIA,HONOURABLE MR. JUSTICE ANIL R. DAVE2 pages
AI SummaryRemanded

What were the facts?

The Commissioner of Income-Tax filed an application under Section 256(2) of the Income Tax Act, 1961, before the High Court of Gujarat. The application arose from an assessment made pursuant to an order under Section 263 of the Act. The Income Tax Appellate Tribunal (ITAT) had set aside the order passed under Section 263. A reference was already pending before the High Court concerning a question of law arising from the ITAT's order. The present application sought to have another question of law referred to the High Court at the instance of the Commissioner.

What did the High Court hold?

The High Court allowed the application filed by the Commissioner of Income-Tax under Section 256(2). The Court directed the Income Tax Appellate Tribunal to submit a statement of case and refer the specified question of law for the opinion of the High Court. The question pertains to whether royalty can be treated as 'tax' or 'duty' under Section 43B, in light of the Supreme Court's ruling in India Cement Company (188 ITR 690). The Court did not decide the merits of the question itself but facilitated its referral for judicial determination. No costs were awarded.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that royalty cannot be treated as 'tax' or 'duty' within the meaning of Section 43B, when it is clearly held by the Supreme Court in the case of India Cement Company (188 ITR 690) that royalty is a tax? Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The revenue, through the Commissioner of Income-Tax, argued that royalty should be treated as 'tax' or 'duty' within the meaning of Section 43B, relying on the Supreme Court's decision in India Cement Company (188 ITR 690). The revenue sought to have this question of law referred to the High Court for its opinion.

Which sections of the Income-tax Act were involved?

Section 263,Section 256(2),Section 43B

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX APPLICATION No 291 of 1998

For Approval and Signature:

Hon'ble MR.JUSTICE R.BALIA. and MR.JUSTICE A.R.DAVE ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge?

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The order continues below.

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