G. Dubey Vs. Commr. of I.T., Jabalpur
EmailAppeal: Civil Appeal No. 12278 of 1996
Petitioner: G. Dubey
Respondent: Commr. of I.T., Jabalpur
Apeal: Civil Appeal No. 12278 of 1996
Judges: S.P. BHARUCHA & V.N. KHARE, JJ.
Date of Judgment: Dec 09, 2000
Head Note:
INCOME TAX
Income Tax Act, 1961
Section 43-B – Applicability – Unpaid liability towards royalty – Royalty if not tax. Held that in view of judgment in India Cement Ltd.’s case (JT 1989 (4) SC 190), royalty is tax and it is tax for all purposes includ-ing Section 43-B. Appeal dismissed. Quarry Owners Association’s case (JT 2000 (8) SC 539) distinguished.
(Paras 2, 3)
Cases Reffered:
1. The Quarry Owners Association v. State of Bihar (JT 2000 (8) SC539) (Para 2)
2. State of M.P. v. Mahalaxmi Fabric Mills Ltd. (JT 1995 (3) SC 93) (Para 1)
3. India Cement Ltd. v. State of Tamil Nadu (JT 1989 (4) SC 190) (Para 1)
JUDGEMENT:
ORDER
1. The question with which the High Court was concerned reads thus:
“Whether on the facts and in the circumstances of the case, the Tribunal was right in law to hold that the provisions of Section 43-B of the IT Act were not applicable to the unpaid liability towards royalty payment of Rs. 76,956/- since royalty was neither tax nor duty?”
The High Court answered the question in the negative and against the assessee relying upon the judgments of this Court in India Cement Ltd. v. State of Tamil Nadu (JT 1989 (4) SC 190 = 1990 (1) SCC 12) and State of M.P. v. Mahalaxmi Fabric Mills Ltd. (JT 1995 (3) SC 93 = 1995 Suppl. (1) SCC 642). The assessee is in appeal by special leave.
2. This Court in The Quarry Owners Association v. State of Bihar (JT 2000 (8) SC 539) has considered afresh the submission that royalty was not a tax. It has, however, followed the decisions in India Cement Ltd. and Mahalaxmi Fabric Mills Ltd. and explained that tax on royalty is distinct from other forms of taxes; it does not constitute usual tax as commonly understood. Learned Counsel for the assessee relied upon this latest judgment to contend that royalty was not a tax within the meaning of Section 43-B of the Income Tax Act, 1961.
3. It is not possible to accept the submission. The Constitution Bench judgment in India Cement Ltd. lays down the law, namely royalty is tax, and it is a tax for all purposes including Sec-tion 43-B.
4. In the result, the judgment and order of the High Court is affirmed and the appeal is dismissed.
5. No order as to costs.
1. The question with which the High Court was concerned reads thus:
“Whether on the facts and in the circumstances of the case, the Tribunal was right in law to hold that the provisions of Section 43-B of the IT Act were not applicable to the unpaid liability towards royalty payment of Rs. 76,956/- since royalty was neither tax nor duty?”
The High Court answered the question in the negative and against the assessee relying upon the judgments of this Court in India Cement Ltd. v. State of Tamil Nadu (JT 1989 (4) SC 190 = 1990 (1) SCC 12) and State of M.P. v. Mahalaxmi Fabric Mills Ltd. (JT 1995 (3) SC 93 = 1995 Suppl. (1) SCC 642). The assessee is in appeal by special leave.
2. This Court in The Quarry Owners Association v. State of Bihar (JT 2000 (8) SC 539) has considered afresh the submission that royalty was not a tax. It has, however, followed the decisions in India Cement Ltd. and Mahalaxmi Fabric Mills Ltd. and explained that tax on royalty is distinct from other forms of taxes; it does not constitute usual tax as commonly understood. Learned Counsel for the assessee relied upon this latest judgment to contend that royalty was not a tax within the meaning of Section 43-B of the Income Tax Act, 1961.
3. It is not possible to accept the submission. The Constitution Bench judgment in India Cement Ltd. lays down the law, namely royalty is tax, and it is a tax for all purposes including Sec-tion 43-B.
4. In the result, the judgment and order of the High Court is affirmed and the appeal is dismissed.
5. No order as to costs.
