V.G Sabhahit, J.:— These two writ petitions are disposed of by this common order as they involve a common question of law.

2. Writ Petition No. 5334 of 2003 is filed challenging the demand made by the respondent as per annexure C in so far as it relates to the demand pertaining to levying of interest under sections 234B and 234C of the Income-tax Act, 1961 (for short “the Act”), aggregating to Rs. 71,12,704 for the assessment year 2001-02 for the alleged default in payment of advance tax and Writ Petition No. 39460 of 2003 is filed challenging the intimation annexure C in so far as it demands the interest payable under sections 234B and 234C of the Act aggregating to Rs. 45,49,720 for the assessment year 2002-03 for the alleged default in payment of advance tax. It is the contention of the petitioner which is common in both the petitions that a Division Bench of this court has held that there is no obligation to pay advance tax in excess of assessment corresponding to the provisions of section 115J which was in force earlier and consequently there should be no levy of interest under sections 234B and 234C of the Act and if the first respondent seeks to rely as is seemingly done in view of the amendment of section 115JB effected by the Finance Act, 2002, with retrospective effect from April 1, 2001, enabling him to levy such interest. The said amendment in so far as it relates to retrospective operation for levy of interest under sections 234B and 234C of the Act with effect from April 1, 2001, is unconstitutional being contrary to articles 265 and 300A of the Constitution of India and being expropriatory.

3. It is averred in the petition that the petitioner is engaged in power generation and supply of electricity generated to the Grid and Jindal Vijayna-gar Steel Limited. The business commenced during the previous year 1999-2000 (around January 2000) relevant to the assessment year 2000-01 and the petitioner was not liable to pay tax on the total income either under the normal provisions of the Act or under section 115JB of the Act as it did not earn sufficient profit. However, for the succeeding previous year 2000-01 relevant to the assessment year 2001-02 the petitioner had good profits and hence 7.5 per cent, of such book profits was deemed to be the tax payable in terms of section 115JB of the Act which the petitioner paid on its own as self-assessment tax under section 140A. It is averred in the petition that minimum alternate tax (hereinafter called MAT) was introduced in Chapter XII-B of the Act providing for imposition of MAT in the absence of total income chargeable to tax. It is averred that section 207 of the Act creates the charge for payment of advance tax on every assessee in accordance, with the provisions of sections 208 to 219. Such obligation arises with reference to the total income of the assessee which is to be estimated and such estimated total income is described as “current income”. Consequently, unless it is established that an assessee is likely to earn current income, he is not liable to pay advance tax. Chapter XII-B was inserted by the Finance Act, 1987 with effect from April 1, 1988, providing for levy of tax on companies and such a tax was levied on the book profits of the company and not on the total income computed under the normal provisions of the Act. Initially as per section 115J which was the only section under Chapter XII-B, tax on 30 per cent, of the book profit was levied if the same was found to be more than the total income computed under the Act and the assessee was required to pay income-tax at the regular rates and section 115J(1) provided that where the total income computed under the Act is found to be less than 30 per cent, of the book profit the total income of the assessee chargeable to tax shall be deemed to be an amount equivalent to 30 per cent, of such. Thus, the concept of “deemed total income” emerged. The liability to pay MAT would arise only on the determination of book profits which by necessary implication could be determined only after the accounts are audited and the Division Bench of this court in the case of 1Kwality Kwality Biscuits Ltd. v. Commissioner Of Income-Tax, [2000] 243 ITR 519 held that the provisions of Chapter XVII-C dealing with advance tax would not apply to tax payable under section 115J of the Act and, therefore, the interest under sections 234B and 234C of the Act is not leviable, if advance tax is not paid on the tax payable under section 115J of the Act. It is further averred that section 115J ceased to be effective from the assessment year 1991-92. The scheme of MAT, however, was revived effective from the assessment year 1997-98 by the Finance (No. 2) Act, 1996, by insertion of a new charging section 115JA into Chapter XII-B of the Act and under the said provision where the total income computed under the provisions of the Act is found to be less than 30 per cent, of the book profit, the total income chargeable to tax shall be deemed to be an amount equivalent to 30 per cent, of the book profit and section 115JA operated up to and including the assessment year 2000-01 when it gave way to another charging section seemingly comparable to section 115JA. The new provision, viz., section 115JB was brought into the statute by the Finance Act, 2000, effective from the assessment year 2001-02. It was materially different from its predecessor in one respect—in not seeking to deem any total income but providing for tax simpliciter and this provision as initially introduced pointedly departed from its predecessor that as against 30 per cent, of the book profit being deemed to be the total income, it only provided that where the income-tax payable by the assessee, which is a company, for any assessment year commencing from 2001-02, is less than 7½ per cent, of such book profit, then the “tax payable for the relevant previous year shall be deemed to be 7½ per cent, of such book profit”. However, there is no deeming of book profit as total income as in the case of section 115JA but just ordaining every company to pay 7½ per cent, book profit as income-tax. Section 115JB was amended by the Finance Act, 2002 with retrospective effect from April 1, 2001, substituting for the words “the tax payable for the relevant previous year shall be deemed to be 7½ per cent, of such book profit”, the words “such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of 7½ per cent.” was included. It is averred that the main difference between the provision as introduced initially and as later amended is that while the former provided for an obligation to pay tax at 7½ per cent, of the book profit without deeming the book profit for two things, viz., (i) deeming the book profit to be total income; and (ii) providing for tax 7½ per cent, of such book profit. It is further averred that section 115JB doubtless being a charging section, the law as in force on April 1, 2001, relevant to the assessment year 2001-02 only provided for payment of 7½ per cent, of the book profit as tax and nothing more. It is further averred that advance tax is payable in the case of a company in June, September, December and March of the previous year in relation to the income of the assessment year. Thus, for the assessment year 2001-02, advance tax, if any, was payable in June, September and December, 2000 and March, 2001 and on the view that there was no obligation to pay in advance, tax arising under Chapter XII-B as confirmed by the Division Bench of this High Court, the petitioner did not pay any advance tax in relation to its book profit for the assessment year 2001-02, The petitioner was advised that in the absence of a fiction that the book profits being deemed to be the total income for the purpose of the Act, the charge for payment of advance tax under section 207 of the Act is not attracted and, therefore, the petitioner was not liable to pay MAT payable under section 115JB as advance tax and the book profit arrived at was Rs. 42,79,20,950 in relation to which the petitioner was liable to tax at 7½ per cent, in terms of section 115JB and the petitioner paid the tax under section 115JB including surcharge aggregating to Rs. 3,62,66,300 as self-assessment tax under section 140A and in the absence of any obligation to pay advance tax, the petitioner did not incur any liability to penal interest under sections 234B and 234C and the second respondent examined the return of income and issued an intimation dated December 24, 2002, under section 143(1) of the Act taking the position that the petitioner was liable to interest under sections 234B. and 234C and the second respondent assumed the obligation to pay MAT in advance and, therefore, proceeded to levy Rs. 43,87,341 as interest under section 234B and Rs. 27,25,364 under section 234C and the petitioner is aggrieved by the action in levying interest with retrospective effect. It is further averred that retrospectivity given to the amendment be struck down or read down since it is only the amendment with retrospective effect which has foisted interest liability on the petitioner whereas on the basis of the law actually in force during the previous year, it was not liable to pay such interest and when the petitioner was not liable to pay such interest on the due dates for the payment of advance tax, the retrospective amendment appears to foist a liability to pay advance tax long after the expiry of the due dates and the non-payment could attract interest under sections 234B and 234C of the Act and the petitioner is confronted with a situation where it is liable to pay interest because of the retrospective amendment though there was no default on the due dates for the payment of advance tax and such amendment is liable to be struck down on the grounds of impossibility of performance and compliance. Admittedly, no interest can be levied with retrospective effect and any such levy will be expropriatory and liable to be struck down on that account and wherefor the amendment be read down as of being prospective effect, i.e, effective from April 1, 2002, and not affecting the past and amendment made by the Finance Act, 2002 should be made applicable to the previous year 2002-03 relevant to the assessment year 2003-04 onwards and to that extent the provisions of the Finance Act, 2002 in so far as it gives retrospective effect for imposition of interest and penalty under sections 234B and 234C of the Act is unconstitutional and liable to be struck down as such and wherefor the petitioner has sought for a declaration in that behalf and has also sought for a declaration that the petitioner was not liable to pay interest under section 234B or 234C of the Act prior to the assessment year 2003-04 for the previous year 2002-03.

4. The respondents have filed the statement of objections averring that the writ petitioner has challenged the intimation demanding interest under sections 234B and 234C of the Act and it is stated in the intimation itself that if the assessee has any grievance regarding the additions/disallowances made, it can move an application before the Assessing Officer under section 154 of the Act and the petitioner has an alternative and efficacious remedy available as per the provisions of the Income-tax Act and wherefor the writ petition is not maintainable. It is further averred that the contention that the provisions of the Finance Act, 2002 giving retrospective effect to the amendment to section 115JB of the Act with effect from April 1, 2001, is not correct and is liable to be rejected. It is averred that section 115JB was brought into force by including the same under the Finance Act, 2000 with effect from April 1, 2001, and would be fully applicable to the assessment year 2001-02. It was promulgated with effect from April 1, 2000 itself and the petitioner was fully aware of the provisions of the Finance Act and, therefore, the rate also came to be clearly contemplated by the Finance Act which was within the knowledge of the petitioner and by the Finance Act, 2002 certain amendment to section 115JB of the Act being incorporated with retrospective effect from April 1, 2001, and the relevant amendments which were in the nature of substitution which is under challenge in these writ petitions and the amendment is for the words “the tax payable for the relevant previous year shall be deemed to be seven and one-half per cent, of such book profit” the words “such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of seven and one-half per cent.” is substituted and the Legislature has expressly made the Amendment Act retrospective which it is competent to do and the petitioner was liable to pay advance tax even prior to the amendment in view of the provisions of section 115JB as introduced by the Finance Act, 2000 and no hardship would be put to the petitioner and only certain words in the section have been substituted for making the Amendment Act, 2000 clear. It is further averred that the Legislature has power to amend the provisions of the Act with retrospective effect and the same is reasonable in the present case and would not cause any hardship to the petitioner as the petitioner was under an obligation to pay advance tax even prior to the amendment and in the absence of advance tax is liable to pay interest under sections 234B and 234C of the Act and the petitioner is fully aware of the facts, has not chosen to pay the advance tax and where-for he is liable to pay interest under sections 234B and 234C of the Act and wherefor there is no merit in the petition and the same is liable to be dismissed.

5. I have heard learned counsel appearing for the parties.

6. Learned senior counsel appearing for the petitioner submitted that the petitioner has already paid tax for the assessment years 2001-02 and 2002-03 and the challenge in the writ petitions is only regarding levy of interest under sections 234B and 234C of the Act for non-payment of advance tax. Learned counsel submitted that there was no liability to pay tax in advance prior to the amendment introduced by the Finance Act, 2002. What was payable was tax of 7½ per cent, on such book profit and in the absence of any provision deeming the book profit as the total income, there was no liability to pay advance tax in view of the provisions of section 207 of the Act which creates charge for payment of advance tax in respect of the total income of the assessee and wherefor the retrospective operation of the Finance Act, 2002 amending the provisions of section 115JB of the Act in so far as it relates to demand pertaining to interest under sections 234B and 234C is unconstitutional as the same would cause irreparable loss to the petitioner and would also be unreasonable as the petitioner which was not liable to pay advance tax and thereunder no obligation to pay interest under sections 234B and 234C has now to be made to pay the interest under sections 234B and 234C of the Act which was not payable prior to the Amendment Act and wherefor the retrospective amendment by the Finance Act, 2002 is unreasonable and expropriatory and impossible of performance and compliance. Learned senior counsel submitted that the Legislature has power to amend the Act retrospectively. However, retrospective operation of the Act is liable to be set aside as unconstitutional or read down as prospective where the same would cause unreasonable hardship to the petitioner. Learned counsel has relied upon the decisions in National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India, [2003] 260 ITR 548 (SC), Shamanur Kallappa and Sons v. State of Karnataka, [2004] 136 STC 132 (Karn), Star India P. Ltd. v. Commissioner of Central Excise, [2006] 280 ITR 321 (SC) in support of his contention that the Finance Act, 2002, in so far as it relates to retrospective operation with effect from April 1, 2001 and enables the respondents to impose tax under sections 234B and 234C of the Act is unconstitutional and is liable to be set aside as such.

7. On the other hand, learned counsel appearing for the respondents submitted that the petitioner does not dispute the competency of the Legislature in amending the provisions of section 115JB and the challenge in the writ petition is only in respect of retrospective operation of the amendment of section 115JB by the Finance Act, 2002 in so far as it relates to imposition of interest under sections 234B and 234C of the Act and the Legislature has specifically amended the said provision with retrospective effect from April 1, 2001, and the said retrospective operation does not in any way affect or cause any hardship to the petitioner as the provisions pertaining to section 115JB have been introduced under the Finance Act of 2000 itself and the petitioner was aware of the fact that he was liable to pay advance tax under section 115JB which was introduced by the Finance Act, 2000 and despite the same no advance tax was paid and wherefor the petitioner who has failed to pay advance tax as required under the provisions of section 115JB even prior to the amendment by the Finance Act, 2002, has not paid the advance tax and has paid the tax belatedly and wherefor he is liable to pay interest under sections 234B and 234C of the Act. Learned counsel further submitted that the said provisions are compensatory and what is sought to be done by the amendment is only substitution of certain words to clarify the amendment made by the Finance Act, 2000 and does not in any way affect the liability of the petitioner and liability to pay advance tax was imposed under the Finance Act, 2000 and wherefor for the relevant assessment years 2000-01 and 2001-02 is pertaining to which these writ petitions are filed, the petitioner under liability to pay advance tax and in the absence of payment of advance tax and payment of tax belatedly, the petitioner is liable to pay interest under sections 234B and 234C of the Act for default in payment of advance tax and for deferment of advance tax. Learned counsel has relied upon the speech of the Minister of Finance while introducing the Finance Bill for 2000-01, the Finance Bill, 2000 and the Finance Act, 2000 and also the amendment carried out by the Finance (Amendment) Act, 2002 and submitted that in view of the fact that even substantive law can be amended retrospectively and the amendment is by way of substitution in view of the decision of the hon'ble Supreme Court in National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India, [2003] 260 ITR 548 and Dr. S. Reddappa v. Union of India, [1998] 232 ITR 62 (Karn), the amendment is justified and the petitioners have failed to prove that the said amendment is unconstitutional and, accordingly, the writ petitions are liable to be dismissed.

8. In reply, learned senior counsel for the petitioner submitted that every word in a statute has to be given a meaning and since there was no deeming provision to treat book profit as total income the provision for payment of advance tax under section 207 was not applicable and every word in a statute has to be given meaning and a construction which would leave without effect any word would normally be rejected and only in view of the Amendment Act the book profit is treated as total income thereby making the payment of advance tax mandatory under section 207 of the Act and wherefore, to that extent the provisions of the Amendment Act are liable to be quashed as sought for in the writ petition.

9. It is clear from the contentions of learned counsel appearing for the parties that the competency of Parliament to amend the provisions of section 115JB of the Act by the Finance Act, 2002 is not questioned in these writ petitions. It is also clear from the provisions of the Amendment Act that the amendment is made specifically retrospective with effect from April 1, 2001, and the limited extent to which the amendment is impugned in these writ petitions is regarding the action on the part of the respondent demanding interest under sections 234B and 234C of the Act and wherefore the point that arises for determination in these writ petitions is:

“Whether the amendment of section 115JB by the Finance Act, 2002, in so far as it relates to retrospective operation with effect from April 1, 2001 and the action of the respondents to demand interest under sections 234B and 234C of the Act is liable to be declared as to be unconstitutional as excessive or harsh or unreasonable as sought for in the writ petitions?”

10. I have considered the contentions of learned counsel appearing for the parties and the material on record in the light of the decisions relied upon by learned counsel appearing for the parties and I have been taken through the provisions of section 115JB of the Act as amended from time to time as also the documents referred to by learned counsel appearing for the respondents and I answer the point for determination in the negative for the following:

Reasons

11. It is well-settled that the legislative power either to introduce enactments for the first time or to amend the enacted law with retrospective effect, is not only subject to the question of competence but is also subject to several judicially recognized limitations. The first is the requirement that the words used must expressly provide or clearly imply retrospective operation. The second is that the retrospectivity must be reasonable and not excessive or harsh, otherwise it runs the risk of being struck down as unconstitutional and the third is apposite where the legislation is introduced to overcome a judicial decision as held by the hon'ble Supreme Court in National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India, [2003] 260 ITR 548. The constitutional validity of the provisions of sections 234B and 234C of the Act have been held to be compensatory in nature and found to be constitutional and the constitutional validity has been upheld by a Division Bench of this court in Dr. S. Red-dappa v. Union of India, [1998] 232 ITR 62.

12. Learned senior counsel appearing for the petitioner submitted that when the provisions contained in section 115JB as amended by the Amendment Act, 2000 and the Amendment Act, 2002 are compared, it is clear that it is only by virtue of the amendment made to the section by the Amendment Act, 2002 that the book profit is treated as total income and the liability to pay advance tax would arise and but for the retrospective operation of the provisions of the amendment by the Finance Act, 2002 there was no liability to pay interest under sections 234B and 234C and when there was no liability to pay advance tax in view of the provisions that necessitated prior to the amendment which is now made retrospective with effect from April 1, 2001, the same would be unreasonable, harsh and excessive and wherefore liable to be struck down as unconstitutional. Learned senior counsel submitted that in view of the provisions of section 207, the liability for payment of advance tax would arise only in respect of total income of the assessee which would be chargeable to tax and it is only by the Finance Act, 2002 the amendment is made to deem book profit to be the total income of the assessee and prior to the amendment the provisions contained in section 115JB did not treat the book profit as total income and there was no liability to pay advance tax and it is also contended by learned counsel that every word used by the Legislature in the section should be considered and if the same would express the intention to treat the book profit has already been treated as total income by the Finance Act, 2000. There was no necessity of amending the provisions of section 115JB(1) by the Finance Act, 2002 and wherefore the retrospective operation of the amendment to section 115JB(1) by the Finance Act, 2002, in so far as it relates to retrospective operation of the Amendment Act from April 1, 2001, and the consequent action of the respondent in demanding interest under sections 234B and 234C is liable to be struck down as unconstitutional.

13. On the other hand, learned counsel appearing for the respondents submitted that in view of the amendment to section 115JB by the Finance Act, 2000, the respondent was required to pay advance tax and non-payment of advance tax would attract imposition of interest under sections 234B and 234C of the Act and the amendment of the provisions of section by the Finance Act, 2002 the respondent was required to pay advance tax and non-payment of advance tax would make the petitioner liable to pay interest and the amendment of the section by the Finance Act, 2002, is only clarificatory and the circular had already been issued by the Revenue clarifying the position that after the amendment of section 115JB by the Finance Act, 2000 the petitioner was liable to pay advance tax in advance and wherefore the retrospective operation would not be in any way said to be unreasonable, harsh or excessive.

14. Before considering the contentions of learned counsel appearing for the parties, it would be appropriate to reproduce the provisions of section 115JB as it stood after the amendment under the Finance Act, 2000 and the provisions of the section as it stands after the amendment by the Finance Act, 2002 and the same are as follows:

Section 115JB as it stands now following the amendment by means of the Finance Act, 2002 with retrospective effect from the 1st day of April, 2001:

“(1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after 1st day of April, 2001, is less than seven and one-half per cent, of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of seven and one-half per cent.’“

15. It is clear from the abovesaid provisions of the Act that under the Finance Act, 2002 the amendment made to section 115JB(1) is as follows:

“for the words

‘the tax payable for the relevant previous year shall be deemed to be seven and one-half per cent, of such book profit‘,

the words

‘such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of seven and one-half per cent.’ shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2001;”

and the material on record has to be considered to find out as to whether the liability to pay advance tax under the Act had already come into force by the Amendment to the Finance Act, 2000 or the liability to pay advance tax arises only by virtue of the amendment to section 115JB by the Finance Act, 2002.

16. The Finance Bill was introduced in Parliament on February 29, 2000 and the Finance Act, 2000 received the assent of the President and section 115JB as introduced which was inserted by the Finance Act, 2000, reads as follows (see [2000] 243 ITR (St.) 65, 95):

“52. Insertion of new section 115JB.—After section 115JAA of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 2001, namely:—

‘115JB. Special provision for payment of tax by certain companies.— (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2001, is less than seven and one-half per cent, of its book profit, the tax payable for the relevant previous year shall be deemed to be seven and one-half per cent, of such book profit.

(2) Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956):

Provided that while preparing the annual accounts including profit and loss account,—

(i) the accounting policies;

(ii) the accounting standards adopted for preparing such accounts including profit and loss account;

(iii) the method and rates adopted for calculating the depreciation,

shall be the same as have been adopted for the purpose of preparing such accounts including, profit and loss account and laid before the company at its annual general meeting in accordance with the provisions of section 210 of the Companies Act, 1956 (1 of 1956):

Provided further that where the company has adopted or adopts the financial year under the Companies Act, 1956 (1 of 1956) which is different from the previous year under this Act,—

(i) the accounting policies;

(ii) the accounting standards adopted for preparing such accounts including profit and loss account;

(iii) the method and rates adopted for calculating the depreciation,

shall correspond to the accounting policies, accounting standards and the method and rates for calculating the depreciation which have been adopted for preparing such accounts including profit and loss account for such financial year or part of such financial year falling within the relevant previous year.

Explanation.—For the purposes of this section, “book profit” means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by,—.

(a) the amount of income-tax paid or payable, and the provision therefor; or

(b) the amounts carried to any reserves, by whatever name called; or

(c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or

(d) the amount by way of provision for losses of subsidiary companies; or

(e) the amount or amounts of dividends paid or proposed; or

(f) the amount or amounts of expenditure relatable to any income to which section 10 or section 10A or section 10B or section 11 or section 12 apply, if any amount referred to in clauses (a) to (f) is debited to the profit and loss account, and as reduced by—

(i) the amount withdrawn from any reserves or provisions if any such amount is credited to the profit and loss account.:

Provided that, where this section is applicable to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after 1st day of April, 2001 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation; or

(ii) the amount of income to which any of the provisions of section 10 or section 10A or section 10B or section 11 or section 12 apply, if any such amount is credited to the profit and loss account; or

(iii) the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account.

Explanation.—for the purposes of this clause, the loss shall not include depreciation; or

(iv) the amount of profits eligible for deduction under section 80HHC, computed under clause (a) or clause (b) or clause (c) of subsection (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in that section; or

(v) the amount of profits eligible for deduction under section 80HHE computed under sub-section (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in that section; or

(vi) the amount of profits eligible for deduction under section 80HHF computed under sub-section (3) of that section, and subject to the conditions specified in that section; or

(vii) the amount of profits of sick industrial company for the assessment year commencing on and from the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses.

Explanation.—For the purposes of this clause, “net worth” shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986).

(3) Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A.

(4) Every company to which this section applies, shall furnish a report in the prescribed form from an accountant as defined in the Explanation below sub-section (2) of section 288, certifying that the book profit has been computed in accordance with the provisions of this section along with the return of income filed under sub-section (1) of section 139 or along with the return of income furnished in response to a notice under clause (i) of sub-section (1) of section 142.

(5) Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company, mentioned in this section.’”

17. The Central Board of Direct Taxes Circular No. 13/2001 was issued on November 9, 2001 (see [2001] 252 ITR (St.) 50), regarding the liability for payment of advance tax under the new MAT provisions of section 115JB of the Act and it is abundantly made clear in the said circular that the new provision of the section 115JB as introduced by the Finance Act, 2000 is a self-contained code. Sub-section (1) lays down the manner in which income-tax payable is to be computed. Sub-section (2) provides for computation of “book profit”. Sub-section (5) specifies that save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company mentioned in that section. In other words, except for substitution of tax payable under the provision and the manner of computation of book profits, all the provisions of the tax including the provision relating to charge, definitions, recoveries, payment, assessment, etc., would apply in respect of the provisions of this section and in view of the scheme of the Income-tax Act. Section 4 of the Act charges to tax the income at any rate or rates which may be prescribed by the Finance Act every year and section 207 deals with liability for payment of advance tax and section 209 deals with its computation based on the rates in force for the financial year, as are contained in the Finance Act and the first proviso to section 2(8) of the Finance Act, 2001, provides that the tax payable by way of advance tax in respect of income chargeable under section 115JB as introduced by the Finance Act, 2000, and consequently the provisions of sections 234B and 234C for interest on defaults in payment of advance tax and deferment of advance tax would also be applicable where the facts of the case warrant. It is further clear from the material on record that the note to the Finance Bill, 2002 pertaining to the amendment to section 115JB states that section 115JB of the Act provides for MAT on companies and under the provisions of this section, a company is required to pay at least 7.5 per cent, of its book profit as corporate tax. In case the tax liability of a company under the regular provisions is more than this amount, the provisions of MAT will not apply and the company shall pay corporate tax as per the regular scheme and it is proposed to amend the section so as to provide that in case the tax liability of a company is less than 7.5 per cent, of the book profits, such book profits shall be deemed to be the “total income” chargeable to tax at the rate of seven and one-half per cent, and the provisions of the Finance Act, 2002 which received the assent of the President on May 11, 2002, amending sub-section (1) by substituting the words “such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate 7.5 per cent.” in place of the words “the tax payable for the relevant previous year shall be deemed to be at 7.5 per cent, of such book profit” and wherefore, it is clear that having regard to the provisions of section 115JB of the Act as introduced by the Finance Act, 2000 which is a self-contained code pertaining to MAT, it is clear that liability for payment of advance tax arose after the introduction of section 115JB by the Finance Act, 2000 and the liability for payment of advance tax would not arise only in view of the provisions of section 115JB(1) as introduced by the Finance Act, 2002 as it is clear from the provisions of the Finance Act, 2000 culled out above which has introduced the provisions of section 115JB that under sub-section (5) of the said section 115JB introduced by the Finance Act, 2000. Rates of income-tax under section 2(8) of the Finance Act, 2000 reads as follows (see [2000] 243 ITR (St.) 65, 67):

“2. (8) Subject to the provisions of sub-section (9), in cases in which income-tax has to be charged under sub-section (4) of section 172 or sub-section (2) of section 174 or section 175 or sub-section (2) of section 176 of the Income-tax Act or deducted under section 192 of the said Act from income chargeable under the head ‘Salaries’ or in which the ‘advance tax’ payable under Chapter XVII-C of the said Act has to be computed, at the rate or rates in force, such income-tax or, as the case may be ‘advance tax’ shall be so charged, deducted or computed at the rate or rates specified in Part III of the First Schedule and such tax as reduced by the rebate of income-tax calculated under Chapter VIII-A of the said Act shall be increased,—

(a) in the cases to which paragraphs A, B, C and D of that part apply, by a surcharge for purposes of the Union; and

(b) in the cases to which paragraph E of that Part applies, by a surcharge,

calculated in each case in the manner provided therein:

Provided that in cases to which the provisions of Chapter XII or Chapter XII-A or section 115JB or sub-section (1A) of section 161 or section 164 or section 164A or section 167B of the Income-tax Act apply, ‘advance tax’ shall be computed with reference to the rates imposed by this sub-section or the rates as specified in that Chapter or section, as the case may be:

Provided further that the amount of income-tax computed in accordance with the provisions of sections 112 and 113 of the Income-tax Act shall be increased by a surcharge for purposes of the Union or surcharge as provided in Paragraph A, B, C, D or E, as the case may be, of Part III of the First Schedule:

Provided also that in respect of any income chargeable to tax under sections 115A, 115AB, 115AC, 115ACA, 115AD, 115B, 115BB, 115BBA, 115E and 115JB of the Income-tax Act, ‘advance tax’ computed under the first proviso shall be increased,—

(a) by a surcharge, for purposes of the Union, calculated,—

(i) in the case of a co-operative society, a firm and a local authority, at the rate of ten per cent, of such advance tax’;

(ii) in the case of a person other than a company, a co-operative society, a firm and a local authority—

(A) at the rate of ten per cent, of such ‘advance tax’ where the total income exceeds sixty thousand rupees but does not exceed one lakh fifty thousand rupees; or

(B) at the rate of fifteen per cent, of such ‘advance tax’ where the total income exceeds one lakh fifty thousand rupees; and

(b) by a surcharge calculated at the rate of ten per cent, of such ‘advance tax’ in the case of a domestic company.”

18. It is not disputed that for the assessment year 2001-02 previous year (April 1, 2000 to March 31, 2001) the provisions of section 115JB which was introduced by the Finance Act, 2000 was applicable for the assessment year 2001-02 and it is not in dispute that the petitioner has not paid the advance tax on June 15, 2001, September 15, 2001, December 15, 2001 and March 15, 2002 nor paid the advance tax for the assessment year 2002-03. The petitioner has not paid the advance tax instalments on due dates June 15, 2000, September 15, 2000, December 15, 2000 and March 15, 2001 and for the assessment year 2002-03 (previous year was April 1, 2001 to March 31, 2002) the petitioner has not paid advance tax instalments on the due dates, i.e, on June 15, 2001, September 15, 2001, December 15, 2001 and March 15, 2002 and having regard to the above finding that the provisions of section 115JB as introduced by the Finance Act, 2000, imposed liability for payment of advance tax on the petitioner. The contention of the learned senior counsel appearing for the petitioner that liability to pay tax arose only in view of the provisions of the amendment of section 115JB(1) of the Finance Act, 2002 which is made retrospective with effect from April 1, 2001 and as on April 1, 2001, the petitioner was not liable to pay advance tax cannot be accepted and wherefore the retrospective operation of section 115JB(1) with effect from April 1, 2001, cannot at all be said to be unreasonable, excessive or harsh so as to declare it as unconstitutional as sought for in the writ petition and accordingly, I answer the point for determination in the negative. However, it is made clear that having regard to the fact that power has been conferred upon the Board under section 119(2)(a) of the Act, the Board has issued circulars by Notification No. F. No. 400/234/95-IT(B), dated May 23, 1996 (see [1997] 225 ITR (St.) 101), and empowered that the Chief Commissioner of Income-tax and Director General of Income-tax to waive or reduce interest charged under sections 234A, 234B and 234C of the Act in the class of cases or class of incomes specified in paragraph 2 of the said order for the period and on conditions which are enumerated therein, the dismissal of the writ petition would not preclude the petitioner to work out his remedy, in accordance with law. Accordingly, I pass the following order:

The writ petitions are dismissed with no order as to costs.