The Kerala High Court directed the Assessing Authority to redetermine tax in the matter that the TCS collected by dealer not includable in purchase value of vehicle.
The writ petition was filed to issue a writ of mandamus or other appropriate writ or order or direction, declaring that 1st petitioner is not liable to pay the additional tax as demanded in the light of the provisions of ‘Income Tax Act’ and the ‘Kerala Motor Vehicles Taxation Act, 1976’ and judgment of the Kerala High Court.
In Paulose K.V. v. The Transport Commissioner the Kerala High Court, after considering the submissions of both sides and the provisions of Section 206C(1F) of the Income Tax Act, 1961 and Section 2(e) of the Kerala Motor Vehicles Taxation Act, 1976 observed that “The Legislature to avoid this anomaly in the definition clause of the purchase value under Section 2(e) of the Kerala Motor Vehicles Taxation Act, 1976 by way of Amendment by Finance Act, 2020, added proviso in Section 2(e) of the Kerala Act, specifically providing that TCS collected by the dealer would not include the purchase value of the vehicle. This Court is therefore, of the view that proviso has to be treated as clarificatory.”
A Single Bench of Justice Dinesh Kumar Singh observed that “In view of the above, the present writ petition is also allowed in terms of the judgment dated 2.8.2023 in Paulose K.V. Hence, the demand notices impugned herein are hereby set aside and the assessing authority may redetermine the tax, if it so required, in the light of the observations made by this Court in Paulose K.V.”
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