MODERN TENTAGE INDUSTRIES Versus COMMISSIONER OF INCOME-TAX
This is a Constitutional petition under Article 199 of the Constitution praying for quashment of the order disallowing the petitioner's claim regarding Export Rebate and for direction to the respondent not to take coercive measures for recovery of Income‑tax from the petitioner pertaining to the assessment years 1963‑64 to 1968‑69 till the final and proper disposal of the said claim.
2. The petitioner claims to have earned income in Export Trade, He as assessed to income tax for the abovementioned assessment years. By section 8 of the Finance Act, 1963, the Exporters were allowed certain deductions which are called now as Export Bonus which reduced their liability to income‑tax. This provision continues in force. Notwithstanding this, the petitioner has been given Export Bonus only for the assessment year 1963‑64. After the enforcement of Martial Law in the year 1969, the petitioner submitted a fresh declaration of his income of the assessment years 1961‑62 to 1968‑69 and agreed to be assessed at net excess income of Rs. 13,92,000 to be spread equally over the said assessment years (Annexure P/6). The petitioner's income was computed afresh on this basis and was spread over each separate year from 1961‑62 to 1968‑69. It appears that the petitioner subsequently claimed the Export Rebate from the Income tax Officer and also moved the Commissioner, Income‑tax, in this connection. His claim was however turned down by the order dated the 20th February 1974 (Annexure P/12). This order reads as follows: ‑
"Subject.‑Sales tax request for adjustment of refund‑Instructions reg.
I am directed to refer to your applications dated 13‑4‑1973 and 30‑4‑1973, on the above subject and to say that there is no merit in your applications which have been rejected."
3. Learned counsel for the petitioner argued on the basis of the above section in the Finance Act, 1963, that it was the duty of the Income‑tax Authorities to calculate the amount on which income‑tax was payable after deducting the Export Bonus in accordance with the rate fixed in the above section. In reply to this the learned counsel for the respondent contended that this Bonus could not be granted to the petitioner since he never claimed in, the forms submitted by him, any deduction on the basis that his business was that of Export. The learned counsel for the petitioner, however, argued that the petitioner was liable to claim in his forms deductions which were permitted by the "Income‑tax Act itself and not the deductions which are permissible under a different Act e.g., the Finance: Act.
4. The learned counsel for the petitioner also urged that since the respondent's position is not that the petitioner's income was otherwise than on account of Export Sales the Commissioner should have granted this rebate to him under the provisions of the Finance Act.
5. On going through the record of the Commissioner, income tax, I find that he has not considered the claim of the petitioner. It appears from the noting (Serial No. 48) that the office had recommended that the Export Bonus will be available to the petitioner after the assessment which was pending before the Income‑tax Officer at that, time, was finalised. It was, therefore, suggested that if approved, the I. T. O. Coys. Circle II may be requested to complete pending assessments in this case. While dealing with the same question at Serial Nos. 50 and 51, the following noting was made: ‑
"I. A. C. Range II Lahore has forwarded the I. T. O. s report with his comments. For reference in this connection kindly see assessee's petitions at S. Nos. 47 and 48. The assessee in this case has been trying to avoid payment of huge arrears which are outstanding against him. The I. A. C.'s report would show that whatever adjustments are sought to be made by the assessee have already been finalised by the I. T. O. and refund claim is due for the present as stated to be admissible to the assessee. As would appear from I. A. C.'s report huge income‑tax arrears of Rs. 1,20,277 are outstanding against the assessee. If approved, we may turn down the request of the assessee and direct the I. T.O. to make recovery of the outstanding demand.
6. This was approved and the intimation was given to the petitioner on this basis. It is clear from the noting at serial No. 48 that there was no challenge to the stand of the petitioner that the was entitled to Export Rebate. Read in that context the approach in paragraph at Serial Nos.50‑51 does not appear to be legally justified. It also, appears to me that the learned Commissioner had not applied his independent mind to the question whether the petitioner was entitled to rebate. The point urged by the learned counsel for the petitioner that the rebate sought to have been granted to him, once this matter had come to the notice of the Authorities irrespective of any claim to the deduction of such rebate made in assessment form submitted by the by the petitioner, also requires consideration: In view of this, I 'set' aside the order Annexure P/12, dated the 20 th February, 1974, and remand the case to the learned Commissioner Income-tax, for consideration of the claim of the petitioner afresh in accordance with law. The parties shall bear their own costs.
Order set aside.