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Then another letter dated 10.02.2003 addressed by the appellant to the Dy. Commissioner of Sales Tax (Adm.) wherein appellant has requested Dy. Commissioner of Sales Tax (Adm.) to issue "Certificate of Payment of deferred tax at the Net Present Value". Copy of this letter is also enclosed as Annexure 4 of this order. There are several such letters covering all the payment wherein appellant has requested for issue of certificate that it has paid sales tax liability and the Sales Tax Department has issued the certificate that the appellant has paid the deferred sales tax liability. None of these documents mentioned the word 'loan'. All J.V.Salunke,PA ITXA.450.2013.Judgment.doc these documents only mentioned 'deferred sales tax liability'. The combined reading of these documents proves beyond a shadow of doubt that appellant had collected sales tax which was not paid earlier and which remained as deferred sales tax liability. It was never converted into loan. What was paid was Net Present Value of the deferred sales tax liability resulting into remission of balance amount. In view of these undisputed facts, it is not open to the appellant to claim that what it had received was a loan and the remission of the same was on capital account. The appellant has also made a plea that it has not gained any benefit on the remission of liability. In its written submission, it has given an analogy of X & Y wherein if X pays his dues of Rs.500/- prematurely valued at Rs.100/-, the gain of Rs.400/- would be only notional. This analogy is completely baseless and intended to mislead. In the case of appellant, the liability is not increasing with efflux of time. The Sales Tax Department is not charging any interest on the deferred tax. The amount of Rs.7.52 crores have actually been collected and appropriated by the appellant. It has been given the benefit to use this money for a period without any cost. The amount of Rs.7.52 crores is not a notional figure but actually collected and determined in Sales Tax Orders. Net Present Value (NPV) refers to value as it would accrue to Sales Tax Department. According to Deferral Scheme, the Sales Tax Department has to wait for a number of years to recover its own money. However, if the Sales Tax Department realizes a part of that money in presenti, it would be value-wise same as full amount due after 12 years. In the present example, the NPV means that Rs.3,37,13,393/- is same as Rs.7.52 crores after 12 years so far as Sales Tax Department is concerned. For appellant, it is only a remission of an actual liability of Rs.4,14,87,985/-. The question is if it is only a notional figure, why the appellant has taken the amount to reserve. Therefore, this ground of appeal is dismissed and it is held that the amount of Rs.4,14,87,985/- has been correctly brought to tax u/s. 41 of the I. T. Act."

38. The Tribunal also refers to the dictionary meaning of the term "Net Present Value". On analysis of the definition of the term Net Present Value it is the conclusion of the Tribunal that the positive NPV means a better return and negative NPV means a worse return.

31) In the present case, it is not in dispute that the Assessee collected the total amount towards the Sales Tax of Rs.7,52,01,378/-

and in para 76, the Tribunal holds that it was collected from 1989-90 to 2001-02. The Assessee treated this liability as unsecured loans in its books of account. After amendment to section 38 of the Bombay Sales Tax Act, a Notification was issued by the State Government on 16 th November, 2002 introducing Rule 31D in the Bombay Sales Tax Rules, J.V.Salunke,PA ITXA.450.2013.Judgment.doc 1959. That laid down the procedure for determination of NPV. Once the proviso was inserted and the Rules were published, the deferral units can exercise the option and of paying prematurely the Sales Tax.

There was a table provided in Rule 31D of the Bombay Sales Tax Rules.

The Tribunal extensively referred to this aspect in para 77 of the order under challenge and found that the payment of Sales Tax was deposited in some period four months before the due date and that is how the discounted percentage of deferred Sales Tax to be paid as NPV was prescribed. The NPV amount of Bombay Sales Tax dues and Central Sales Tax dues was worked out as per Certificate dated 27 th December, 2002. The amount under the Certificate was paid on 30 th December, 2002. That is also evident by a further Certificate dated 25 th August, 2003. This amount was paid by the Assessee as per the offer made by the State Government and after the State appointed SICOM for settlement of deferred Sales Tax liability by immediate one time payment. The Assessee paid a sum of Rs.3,37,13,393/-, which, according to the Assessee, represented the NPV as determined by SICOM. This amount was paid by the Assessee, as evidenced by the above Certificates. The Revenue placed no material on record to show that the value does not reflect the NPV or that the NPV is yet to be calculated. The Tribunal found that the Revenue has not put up a case that there is no conversion provided under the BST or the table J.V.Salunke,PA ITXA.450.2013.Judgment.doc provided for determination of NPV is not applicable to the case of the Assessee. It is in these circumstances that it accepted the contentions of the Assessee and rejected that of the departmental representative.

40) It is not possible to agree with Mr. Gupta. Because, premature payment of Sales Tax already collected but its remittance to the Government, as Mr. Gupta envisages, is not covered by this provision else the sub-sections and particularly section 43B(1) would have been worded accordingly. Therefore section 43B has no application. Insofar as applicability of section 41(1)(a), there also the applicability is to be considered in the light of the liability. It is a loss, expenditure or trading liability. In this case, the scheme under which the Sales Tax liability was deferred enables the Assessee to remit the Sales Tax collected from the customers or consumers to the Government not immediately but as agreed after 7 to 12 years. If the amount is not to be immediately paid to the Government upon collection but can be remitted later on in terms of the Scheme, then, we are of the opinion that the exercise undertaken by the Government of Maharashtra in J.V.Salunke,PA ITXA.450.2013.Judgment.doc terms of the amendment made to the Bombay Sales Tax Act and noted above, may relieve the Assessee of his obligation, but that is not by way of obtaining remission. The worth of the amount which has to be remitted after 7 to 12 years has been determined prematurely. That has been done by finding out its NPV. If that is the value of the money that the State Government would be entitled to receive after the end of 7 to 12 years, then, we do not see how ingredients of sub section (1) of section 41 can be said to be fulfilled. The obligation to remit to the Government the Sales Tax amount already recovered and collected from the customers is in no way wiped out or diluted. The obligation remains. All that has happened is an option is given to the Assessee to approach the SICOM and request it to consider the application of the Assessee of premature payment and discharge of the liability by finding out its NPV. If that was a permissible exercise and in terms of the settled law, then, we do not see how the Assessee can be said to have been benefited and as claimed by the Revenue. The argument of Mr.Gupta is not that the Assessee having paid Rs.3.37 crores has obtained for himself anything in terms of section 41(1), but the Assessee is deemed to have received the sum of Rs.4.14 crores, which is the difference between the original amount to be remitted with the payment made. Mr. Gupta terms this as deemed payment and by the State to the Assessee. We are unable to agree with him. The Tribunal J.V.Salunke,PA ITXA.450.2013.Judgment.doc has found that the first requirement of section 41(1) is that the allowance or deduction is made in respect of the loss, expenditure or a trading liability incurred by the Assessee and the other requirement is the Assessee has subsequently obtained any amount in respect of such loss and expenditure or obtained a benefit in respect of such trading liability by way of a remission or cessation thereof. As rightly noted by the Tribunal, the Sales Tax collected by the Assessee during the relevant year amounting to Rs.7,52,01,378/- was treated by the State Government as loan liability payable after 12 years in 6 annual/equal installments. Subsequently and pursuant to the amendment made to the 4th proviso to section 38 of the Bombay Sales Tax Act, 1959, the Assessee accepted the offer of SICOM, the implementing agency of the State Government, paid an amount of Rs.3,37,13,393/- to SICOM, which, according to the Assessee, represented the NPV of the future sum as determined and prescribed by the SICOM. In other words, what the Assessee was required to pay after 12 years in 6 equal installments was paid by the Assessee prematurely in terms of the NPV of the same.