Decided on March 25,1970

National Company Limited Appellant
Deputy Director Of Tax Credit (Exports) Respondents


K.L. Roy, J. - (1.) The Petitioner is a private limited company which owns a jute mill and is also an exporter of jute goods including jute carpet backing cloth.
(2.) Chapter XXII -B, including Ss. 280Y to 280ZE, was inserted in the Income -tax Act, 1961, by Sec. 62 of the Income -tax Act, 1961, with effect from April 1, 1965. The object of the introduction of the said chapter was to give tax credit to certain classes of Assessees, as for example, equity share -holders, industrial undertaking on their shifting from urban areas, certain manufacturing companies in certain cases, in relation to increased production of certain goods and, lastly, to encourage export. In this application, we are concerned with the provisions of that chapter insofar as they provide for tax credit for exports and the relevant provisions are contained in Sec. 280ZC. Under Sub -section (1) of that Sec. a person who exports any goods or merchandise out of India after February 28, 1965, and receives the sale proceeds thereof in India in accordance with the Foreign Exchange Regulation Act shall be granted a tax credit certificate for an amount calculated at a rate not exceeding 15 per cent on the amount of such sale proceeds. Sub -section (2) of the said Sec. provides that the goods or merchandise in respect of which a tax credit certificate shall be granted under Sub -section (1) including the destination of their export and the rate at which the amount of such certificate shall be calculated shall be such as may be specified in the scheme: Provided that different rates may be specified in respect of different goods' or merchandise.
(3.) In Sub -section(3) of the said Sec. it is enacted that in specifying the goods or merchandise including the destination of their export and the rates, the Central Government shall have regard to the following factors, viz.: (a) the cost of manufacture or production of such goods or merchandise and prices of similar goods in the foreign markets; (b) the need to develop foreign markets for such goods or merchandise ; (c) the need to earn foreign exchange ; (d) any other relevant factor. Sub -section (4) entitles a person to whom a tax credit certificate has been granted to have the amount shown on such certificate adjusted against any liability under the Income -tax Act existing on the date on which such certificate is produced before the Income -tax Officer. It is to be mentioned that Clause (c) of Sec. 280Y defines a 'scheme' to mean a scheme made under that chapter. Sec. 280ZE(1) enjoins the Central Government, by notification in the Official Gazette, to frame one or more scheme or schemes to be called Tax Credit Certificate Scheme or Schemes in relation to tax credit certificates to be granted under that chapter. Sub -section (2) of that Sec. enumerates the various provisions to be made in such a scheme, while Sub -section(3) entitles the Central Government, by notification in the Official Gazette, to add, amend, vary or rescind any scheme made under that section. Sec. 280ZE(4) requires any scheme made under that Sec. to be laid before the House of Parliament which may either modify or delete any of the provisions of the scheme and, thereafter, the scheme as modified shall have effect.;

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