Case: Assam Oil Company Limited Vs. Commissioner of Wealth Tax (Central), Calcutta

These two appeals, which are, arise out of the same judgment of the High Court of Calcutta. The former was filed by the Assam Oil Company Ltd., and the latter, by the Commissioner ofx (Central), Calcutta. The following two questions were referred to the High Court for its decision      (1) Whether, on the facts and in the circumstances of the case, the sum of pound 2, 486, 180 which had been set apart by they as an estimated provision for meeting its tax liability in future less the last instalment of demand under section 18A(1) of the Indianx Act was a debt owed by the assessee on the relevant valuation date within the meaning of clause (m) of section 2 of thex Act ?      (2) Whether, on the facts and in the circumstances of the case, in Computing the net wealth of the assessee the final instalment of Rs. 47, 86, 207 due under section 18A of the Indianx Act constituted a debt owed by the assessee within the meaning of clause (m) of section 2 of thex Act as on the valuation date being 31st December, 1956 ?      A Division Bench of the Calcutta High Court answered the first question in the negative and the second question in the affirmative. The correctness of the answer to the first question is canvassed in Civil Appeal No. 66 of 1965 and that of the second question, in Civil Appeal No. 67 of 1965

Reasoning:
A Division Bench of the Calcutta High Court answered the first question in the negative and the second question in the affirmative. The correctness of the answer to the first question is canvassed in Civil Appeal No. 66 of 1965 and that of the second question, in Civil Appeal No. 67 of 1965We have held in Kesoram Industries & Cotton Mills Ltd. v. Commissioner of, in which judgment was just now delivered, that the liability to pay tax under the Indianx Act is a debt owed by the assessee on the relevant valuation date within the meaning of clause (m) of section 2 of thex Act. Following that judgment, we answer the first question in the affirmative. The result is that Civil Appeal No. 66 of 1965 is allowed with costsThis court in Commissioner ofx v. Standard Vacuum Oil Co. Ltd. held that demand for advance payment of tax under section 18A of thex Act was a debt within the meaning of section 2(m) of theFollowing that judgment, we dismiss Civil Appeal No. 67 of 1965 with costs