Gujarat Court February 2005 Judgments

Gujarat State Fertilizers and Chemical Ltd. Vs. Commissioner of Income ...

Court: Gujarat

Reported in: (2005)194CTR(Guj)423; [2006]283ITR149(Guj)

D.A. Mehta, J.1. Rule. Mr. D.D. Vyas, the learned standing counsel for the respondent-Revenue waives service. With consent of both the learned counsel, the matter is taken up for final disposal.2. The petitioner-company produces various types of fertilizers and one of them is urea. The Ministry of Fertilizers, Union of India, has evolved a scheme of subsidy through its 'Fertilizer Industry Coordination Committee' (FICC). The urea produced by the petitioner is required to be sold to farmers at a specified price and under the scheme, FICC computes the retention price; the difference between the controlled sale price and the retention price so fixed is paid to the manufacturing unit as subsidy every month. It appears that the petitioner has been showing such subsidy as its income from year to year. That despite there being requirement of revision of retention price every three years, in actual practice, such revision does not take place at such fixed periodical intervals. It is the case o...