Ajit K.Sengupta, J. - (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1976-77, the following questions of law have been referred to this court: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the liability to tax raised in 1958 under the Assam Taxation (on Goods Carried by Road or Inland Waterways) Act, 1954, continued to be an ascertained liability for the year in which it was ascertained notwithstanding the fact that the said Act of 1954 was struck down as void and unconstitutional by the hon'ble Supreme Court on the 26th September, 1960 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was not entitled to claim deduction of its liability under the Assam Taxation (on Goods Carried by Road or Inland Waterways) Act, 1954, in computing its business income for the assessment year 1976-77 ?"
(2.) Shortly stated, the facts are that the assessee is a non-resident company and its method of accounting is mercantile. In the course of the assessment proceedings for the calendar year 1975 corresponding to the assessment year 1976-77, the assessee-company claimed deduction in respect of liability of Rs. 4,33,982.09 representing taxes levied by the tax authorities under the Assam Taxation (on Goods Carried by Road or Inland Waterways) Act, 1954. The said sum of Rs. 4,33,982.09, was the demand raised in pursuance of the assessments made upon the assessee-company under the said Act for the period ending September 30, 1956. The said Act was passed by the State Legislature of Assam in 1954. When an attempt was made to assess the assessee-company under the Act of 1954, it was, inter alia, contended on behalf of the assessee-company that it was not liable to be assessed under the said Act as the assessee-company was a non-resident, and it was an outside dealer. This contention was rejected by the tax authorities and, some time in the year 1958, assessments were made upon the assessee-company under the Act of 1954 raising a tax demand of Rs. 4,33,982.09 in respect of the period ending on September 30, 1956.
(3.) The tea gardens situated in Assam filed a representative case challenging the constitutional validity of the Act of 1954. On September 25, 1960, the Supreme Court declared the said Act as void. Subsequently, on April 6, 1961, the Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act, 1961, was enacted with retrospective effect from April 25, 1954. This Act was effective up to March 31, 1962. The constitutional validity of the 1961 Act was also challenged and the Assam High Court held this Act also as void by a judgment delivered on August 1, 1963. Subsequently, however, the Supreme Court, by a judgment delivered on December 13, 1963, declared the 1961 Act as valid.;