Chennai: The Madras High Court yesterday quashed an Income Tax department's order which asked Tamil Nadu government-run liquor shops to pay a little over Rs 1,236 crore as income tax in 20 equal instalments at Rs 60 crore per month.
Justice K K Sasidharan, who quashed the order passed by the Assistant Commissioner of Income Tax, Company Circle III, Chennai, remitted the matter back to authorities for fresh consideration on merits and as per law.
Tamil Nadu State Marketing Corporation (TASMAC), a state government undertaking engaged in liquor retail, had challenged the order which asked it to pay Rs 1,235,78,93,762 in 20 equal instalments as income tax.
The matter relates to the assessment year 2010-11. TASMAC claimed a special privilege fee paid to the government in the profit and loss account for the year ended March 31, 2010 during the assessment of 2010-11.
But the assessing officer declined to permit deduction of special privilege fees and passed identical orders for assessment years 2004-05 to 2009-10.
TASMAC challenged the same before the Tribunal which set aside the order.
Even after TASMAC produced these orders, the assessing officer passed the order to pay the amount in 20 equal instalments. Hence, TASMAC moved the High Court.
The judge quashed the order, remitted back the same to the assessing authority and directed that the issue be considered within four weeks in the light of earlier orders passed by the Tribunal in the assesses case.
