Wa/437/2014 Of Kerala State Beverages (M&M) Corporation Ltd v. The Assistant Commissioner Of Income Tax, Circle-1(1)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR &THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE FRIDAY, THE 14TH DAY OF MARCH 2014/23RD PHALGUNA, 1935 WA.No. 437 of 2014 () ----------------------------- AGAINST THE JUDGMENT DATED 25-02-2014 IN WP(C).NO. 5406/2014. ...... APPELLANT/APPELLANT: -------------------------------------- M/S.KERALA STATE BEVERAGES (M&M) CORPORATION LTD., P.B. 2263, SASTHAKRIPA OFFICE COMPLEX, SASTHAMANGALAM, THIRUVANANTHAPURAM. BY ADVS.SRI.ANIL D. NAIR, SRI. SREEJITH R.NAIR, SRI. SULEKHA BEEVI C.S., SRI. ROSIE ATHULYA JOSEPH. RESPONDENTS/RESPONDENTS: ------------------------------------------------- 1. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1), TRIVANDRUM - 695 001. CIRCLE-1(1), TRIVANDRUM - 695 001. 2. THE INCOME TAX APPELLATE TRIBUNAL, COCHIN -682 018. BY SRI.P.K.R. MENON, SENIOR SC. ADV. SRI.JOSE JOSEPH, SC, INCOME TAX. THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 14-03-2014, ALONG WITH W.A. NO. 438 OF 2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs. MANJULA CHELLUR, C.J & A.M.SHAFFIQUE, J. ---------------------------------------------- W.A. Nos. 437 of 2014 and 438 of 2014 ---------------------------------------------- Dated this the 14[th] March, 2014 JUDGMENT Manjula Chellur, C.J. Heard learned counsel for appellant Mr.Anil Nair and alsolearned senior standing counsel for income tax. 2. So far as Writ Appeal No. 437/2014 it pertains toassessment years 2009-2010 and 2010-2011 and Writ AppealNo.438/2014 pertains to assessment year 2011-2012. Theappellant before us is Kerala State Beverages (M&M) CorporationLimited. 3. It is not in dispute that by virtue of incorporation ofprovision as per Section 40(ii) (b) it would come into effect from1.4.2014. The same would have some impact on the controversyinvolved in this case. However, the controversial issue ispending consideration before the appellate tribunal and also firstappellate authority. In these two appeals the issue is whether W.A. Nos. 437 of 2014 and438 of 2014 surcharge paid by the petitioner under the Kerala Surchargeon Taxes Act, 1957 and also turnover tax paid in terms ofprovisions of Kerala General Sales Tax Act, 1963 are liable to bededucted from the total income as envisaged under Section 37of the Income Tax Act while computing the taxable income. Theassessing authority has opined that though the appellantCorporation is not entitled to pass on this burden to thepurchasers, still is liable to pay. This issue is pending beforetwo different appellate authorities as stated above. Meanwhile,learned single Judge, having regard to the total liability againstthe appellant-assessee was of the opinion, as the appellateauthorities concerned have to decide the controversial issuepending before them, it would be just and proper to satisfy 40%of the outstanding liability in both the cases. According toappellant's counsel, in the absence of any certainty with regardto their liability to pay, it would be nothing but a hugeuncomfortable burden on the assessee-Corporation to shell outsaid amount which ultimately may be found not liable to pay. Having regard to the amount involved and especially theadditional provision which is going to be effective from 1.4.2014which has to be interpreted, we are of the opinion, 10% of the W.A. Nos. 437 of 2014 and438 of 2014 outstanding liability should be deposited to have the benefit ofinterim order of stay during pendency of the appeals pendingbefore the concerned appellate authorities and the amount shallbe paid on or before 31[st] of March. We also direct theconcerned appellate authorities to dispose of the appeals onmerits within three months from today. Sd/- MANJULA CHELLUR, Having regard to the amount involved and especially theadditional provision which is going to be effective from 1.4.2014which has to be interpreted, we are of the opinion, 10% of the W.A. Nos. 437 of 2014 and438 of 2014 outstanding liability should be deposited to have the benefit ofinterim order of stay during pendency of the appeals pendingbefore the concerned appellate authorities and the amount shallbe paid on or before 31[st] of March. We also direct theconcerned appellate authorities to dispose of the appeals onmerits within three months from today. Sd/- MANJULA CHELLUR, CHIEF JUSTICE Sd/- A.M.SHAFFIQUE, JUDGE rka 15.3.14 /true copy/