IN THE HIGH COURT OF DELHI, while deciding on 29.8.09 the Writ Petition (Civil) No. 1793 of 3008 in re: VIRENDER KUMAR YADAV vs UNION OF INDIA, it was observed as follows:-

QUOTE: From various judicial pronouncements on this issue, the position which emerges is that the Tribunal while considering any application for waiver of deposit is to take into account firstly the existence of a PRIMA FACIE case. In case, it is found that a party has a very strong PRIMA FACIE case, and / or where the errors in the impugned order are writ large on the record, in such a case, it would be competent for the Court in the exercise of its jurisdiction to grant waiver of pre-deposit since in such a case requiring a pre-deposit itself would amount to UNDUE HARDSHIP. There is no denying of the fact that while dealing with the application for stay it is neither desirable nor proper for the Tribunal or any other authority to embark upon a detailed inquiry to find out whether the stand of the applicant before it is correct or not because expression of any opinion on merits at that juncture, without full-fledged hearing and consideration of entire material, is likely to cause prejudice to either side. But at the same time, the authority concerned is required to consider whether with reference to the material placed before it, a PRIMA FACIE case for grant of stay is made out or not and the balance of convenience lies in whose favour. UNQUOTE

[for full text of the judgement, please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_del_wpc_1793]

HIGH COURT ORDER

[EDITOR's NOTE:  This judgement of the Delhi High Court re-emphasises what a quasi-judicial authority as well as a Tribunal shall keep in mind while considering an application for grant of stay of any order which is under appeal, from the aggrieved party [whether it is the Dept. of Revenue or the asseessee / importer]. In fact, this is how the appellate / revisionary authorities as well as the Tribunal benches [since its inception in 1982] have been dealing with the stay applications. If this practice continues, then, lot of relief would be available to the aggrieved persons and their confidence on their application on merits being dealt with by the adjudicating forum would also increase. SATHYAMEVA JAYATHE]

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS DISPENSATION, ERROR IN ORDER MANIFEST ON RECORD, PRE-DEPOST, PRIMA FACIE, STAY, UNDUE HARDSHIP

        

IN THE HIGH COURT OF JUDICATURE AT BOMBAY, while deciding on 24.9.09 the Customs Application No.9 of 2001 in re: COMMR. OF CUS. [PREVENTIVE] vs LEELA SCOTTISH LACE PVT. LTD, it was held as follows:-

QUOTE: It would be clear that what the Supreme Court has held that Clause (o) of Section 111 of the Act contemplates confiscation of goods which were exempted from duty subject to a condition which is not observed by the importer within the time prescribed. The occassion for the action under this clause arises only when the condition is not observed within the period prescribed. In the instant case, the respondents had not cleared the goods. The Bill of Entry was filed by some other person. Therefore, the question of breach of condition by the respondents would not arise. What Section 111(o) of the Act reiterates is “the condition is not observed”. The stage for observing the condition had not yet arisen as the goods themselves had not been clered by the respondents. In our opinion, therefore, the learned Tribunal was right in placing reliance on the judgement of the Supreme Court in the case of SAMPAT RAJ DUGAR [UNION OF INDIA vs SAMPAT RAJ DUGAR - 1992-58-ELT-163-SC] UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_bom_cusa_9]

HIGH COURT ORDER

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS confiscation, CUSTOMS ACT 1962, PENALTY, SEC 111(O)

        

UNION FINANCE MINISTER SAID FURTHER :-

QUOTE : The third challenge relates to the weakness in government system, structurs and institutions at different levels of governence. Indeed, in the coming years, if there is one factor that can hold us back in realising our potential as a modern nation, it is the bottleneck of our public delivery mechanisms. There have been many initiatives in this regard, in different sectors, at different points of time. Some of them hve been effective in reforming the way the Government works in those areas. But we have a long way to go before we can rest on this count. The Union Budget cannot be a mere statment of Government accounts. It has to reflect the Government’s vision and signal the policies to come in future. With development and economic reforms, the focus of economic activity hs shifted towards the non-governmental actors, bringing into sharper focus the role pf Government as an enabler. An enabling government does not try to deliver directy to the citizens everything that they need. Instead it creates an enabling ethos so that individual enterprise and creativity can flourish. Government concentrates on supporting and delivering services to the disadvantaged sections of the society. It is this broad conceptualisation of the Budget that informs my speech today. UNQUOTE

[for full text of FM speech, please visit http://www.taxesinindia.com  ]

FINANCE MINISTER SPEECH

[EDITOR's note: It takes many decades for the Finance Minister to discover the WEAKNESS in Government systems, structures and institutions. BETTER LATE THAN NEVER.]

VENKATRAMAN RAGGHUPATHY, Web admin.

FINANCE MINISTER SPEECH governance, weakness in government systems. structures and institutions

        

FINANCE MINISTER further said : -

QUOTE: GROWTH is only as important as what it enables us to do and be. Therefore, the SECOND CHALLENGE is to harness ECONOMIC GROWTH to consolidate the recent gains in making development more inclusive. The thrust imparted to the development of INFRASTRUCTURE in rural areas has to be pursued to achieve the desired objectives within a fixed time frame. We have to strengthen FOOD SECURITY, improve EDUCATION OPPORTUNITIES and provide HEALTH FACILITIES at the level of households, both in rural and urban areas. These are issues that require significant resources, and we have to find those resources. UNQUOTE

[for full text of the FM speech, please visit http://www.taxesinindia.com ]

FINANCE MINISTER SPEECH

VENKATRAMAN RAGGHUPATHY, Web admin.

FINANCE MINISTER SPEECH economic growth, education opportunities, food security, GROWTH, health facilities, infrastructure

        

FINANCE MINISTER – UNION OF INDIA says: -

QUOTE: -TODAY I CAN SAY WITH CONFIDENCE THAT WE HAVE WEATHERED THE CRISES WELL. INDIAN ECONOMY NOW IS IN A FAR BETTER POSITION THAN IT WAS A YEAR AGO. THAT IS NOT TO SAY THAT THE CHALLENGES TODAY ARE ANY LESS THAN WHAT THEY WERE NINE MONTHS AGO WHEN UPA UNDER THE LEADERSHIP OF MRS. SONIA GANDHI WAS ELECTED BACK TO POWER AND PRIME MINISTER DR. MANMOHAN SINGH FORMED THE GOVERNMENT FOR THE SECOND TIME. THE THREE CHALLENGES AND THE MEDIUM TERM PERSPECTIVE THAT I HAD OUTLINES IN MY LAST BUDGET SPEECH REMAIN RELEVANT, EVEN TODAY. THESE WOULD CONTINUE TO ENGAGE THE INDIAN POLICY-PLANNERS FOR THE NEXT FEW YEARS. THE FIRST CHALLENGE BEFORE US IS TO QUICKLY REVERT TO THE HIGH GDP GROWTH PATH OF 9 PER CENT AND THEN FIND THE MEANS TO CROSS THE DOUBLE DIGIT GROWTH BARRIER.THIS CALLS FOR IMPARTING A FRESH MOMENTUM TO THE IMPRESSIVE RECOVERY IN GROWTH WITNESSED IN THE PAST FEW MONTHS. IN THIS ENDEAVOUR, I SEEK LORD INDIRA’s HELP TO MAKE THE RECOVERY MORE BROAD-BASED IN THE COMING MONTHS. = UNQUOTE.

[for full text of the FM speech, please visit  http://www.taxesinindia.com  ]

FINANCE MINISTER SPEECH

VENKATRAMAN RAGGHUPATHY, Web admin.

FINANCE MINISTER SPEECH challenges, double digit growth, GDP, INDAN ECONOMY, Indian Policy

        

IN THE HIGH COURT OF DELHI, the C.M. No. 1180 of 2008 in ITR 23 of 1989 was decided on 23.10.2009 in re: COMMR. OF INCOME TAX vs MMTC OF INDIA, with the following observations: -

QUOTE: We are of the view that the application is without merit, for more than one reason. First, the right to file a reference is conferrd  by the statute, the judgement of the Supreme Court does not seek to take away this right. A careful analysis of OIL & NATURAL GAS COMMISSION vs COLLECTOR OF CENTRAL EXCISE [1994-70-ELT-45  = 2004-6-SCC-437] and those which preceded and followed it, would show that they injunct  the prosecution of an action where two entities of the State are involved. If a reference is filed without , an approval it cannot be held, as not being maintainable. In somewhat similar circumstances where an issue arose with respect to interpretation of Section 171 of the Indian Cpmpanies Act, 1913 as regards as to what, would be the position in respect of a suit or proceeding which is instituted by an official liquidator without the leave of the court, as mandated by the said provision. The Supreme Court, held that, a suit or a proceeding instituted without the leave of the court may be ineffectiveuntil leave is obtained, but once leave is obtained the proceedings “will be deemed instituted on the date granting leave.” [See: BANSIDHAR SHANKARLAL vs MOHD. IBRAHIM -- 1971-41-Com. Cases-21-S.C.]. Second, in view of the fact that it is not disputed that the judgement of a Division Bench of this Court, in  CIT vs NATIONAL AGRICULTURAL CO-OPERATIVE  MARKETING FEDERATION F INDIA LTD. [1999-236-ITR 766 ] covered the issue raised in the reference, the Committee on Disputes could have either prevailed upon the assessee to comply, or in the alternative, give permission to the department, to file a reference. There was no third alternative available with  the Committee on Disputes. Third, we are of the view that the reference to the Committee on Disputes is mandated only if a dispute exists. In the absence of such a circumstance, there was no occassion to approach the Committee on Disputes for approval; as the issue raised was not RES INTEGRA. Lastly, the State and/or its instrumentalities do not frittere away valuable funds, and clog the courts with disputes which perhaps can be resolved inter-departmentally. In the instant situation, where the court has already provided the answer, to the issues raised in the reference, an approval for filing the reference was not a pre-requisite – since all that the reference sought to achieve was to bring the mpugned judgement in line with an earlier decision of this Court. If we are to take a strict view of the matter, the institution of the instant review application ought to have had the approval of the Committee on Disputes. Which, it does not have. UNQUOTE

[for full text of the judgement, please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_del_cm_11880]

[Editor's note: This Delhi High Court order becomes binding on both the Revenue authorities and the Public Sector Unit assessees as also the High Powered Committee on Disputes which is required to grant necessary clerance/ reject the C.O.D. application, to incorporate / to insist incorporation , in each COD application the facts regarding the availability or otherwise of any Court orders directly applicable to the matters covered by the respective COD application, so that the HPC may  straightaway give the clearance or direct the COD applicant to re-confirm as to whether the subject matter of the dispute is or is not covered by any court orders. In this process, the HPC can grant clearance in covered cases, without much time taken before the HPC , for arguments on either side.]

HIGH COURT ORDER

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS COMMITTEE ON DISPUTES, ENTITIES OF THE STATE, INJUNCT THE PROSECUTION

        

SUPREME COURT OF INDIA while deciding the Civil Appeal No. 786 of 2010 with C.A. Nos. 787-792 of 2010, on 20.01.10, in re: COMMISSIONER OF INCOME TAX, MUMBAI vs EMPTEE POLY-YARN PVT. LTD, observed as follows: -

QUOTE: Repeatedly this Court has recommended to the Deaprtment, be it under Excise Act, Customs Act or the Income Tax Act, to examine the process applicable to the product in question and not to go only by the dictionary meanings. This recommendation is not being followed over the years. Even when the assessee gives an opinion on a given process, the Department does not submit any counter opinion wherever such counter opinion is possible. PRIMA FACIE, however, in this case, we do not see possibility of any counter opinion to the opinion given by the Mumbai University, vide letter dated 10th July, 1999.

[for full text of the judgement please visit http://www.taxesinindia.com      and click on the citation taxind_2010_sc_ca_786]

SUPREME COURT ORDERS

VENKATRAMAN RAGGHUPATHY, Web admin.

SUPREME COURT JUDGEMENTS Customs Act, DICTIONARY MEANING, Excise Act, INCOME TAX ACT, PRIMA FACIE

        

The Central Board of Excise and Customs, in the Department of Revenue of the Ministry of Finance, vide Circular No. 913/03/2010-CX dt 03/02/2010  have advised the field formations that in view of the developments that taken place after the decision of the CESTAT, Mumbai Bench vide Final order No. A/220/09/EB/C-II dt 17.6.2009 holding the view that the price as per MOU cannot be considered as “transaction value” under Section 4 and decided the case in favour of the Revenue dept., against which the aggrieved BPCL have reportedly filed an appeal against the said final order before the Supreme Court after obtaining COD [Committee on Disputed, under the Cabinet Secretariat], it has been decided to withdraw the Board’s instructions issued under 14F.NO.6/21/2003-CX-I (Pt) dt .14.2.2007. However, the CBEC has also advised the field formations that as the appeal of BPCL is pending before the Supreme Court, field formations are directed to consign all the pending show cause notices on the issue to the call book pending a final verdict from the Supreme Court. Further, for the cases within the review / appeal period necessary action to file appeal may be taken immediately.

By a careful reading of the over-abundantly cautiously worded circular now issued,  it is clear that the CBEC is keen to go back to the square one and wants to leave it to the Apex Court to decide finally.

In this context, it is worth to recapitulate the background under which the Cabinet Secretariat issued the guidelines for settlement of disputes between the Central Govt. departments and the Central Govt. controlled Pubic Sector units in tax related disputes. In fact the Supreme Court directed the Cabinet Secretariat to take steps to evolve a system by which such dispute matters between the Govt. and the PSUs are as far as possible resolved through inter-ministerial meetings / discussions so as to minimise all disputes being rushed to the High Courts and the Apex Court. For nearly two decades, the High Power Committee on Disputes have been doing the best to fulfill the expectations of the Apex Court. When such is the situation, it is a moot point to ponder over as to why the CBEC [Legal cell] have chosen to play safe in such a very vital dispute matter involving crores of revenue at stake. Why not the GROUP OF MINISTERS be approached by both the Finance and Petroleum Ministries to resolve this dispute matter and if need be take the approval of the Parliament through a legislative change on a prospective basis and take a lenient view on past cases ?

Everyone expects that the present day approach of the Ministries of the UPA-II Govt. to adopt a dynamic approach and not to adopt a play-safe technique especially in tax disputes matters of Petroleum sector.

VENKATRAMAN RAGGHUPATHY, Web admin.

CENTRAL EXCISE CIRCULARS sale amongst oil cos., Transaction value, Valuation

        

IN THE HIGH COURT OF JUDICATURE OF BOMBAY AT GOA, while deciding on 27.3.2008 the Criminal appeal no. 39 of 2006 in re: ASST. COMMR. OF CUSTOMS [PREV.], GOA vs ANTHONY SEBASTIAN L D’SOUZA,  it was observed as follows:-

QUOTE: A peruslal of the judgement clearly supports the contention of the appellant that there is no discussion of the evidence of investigating officer. The learned Trial Judge has merely stated : “P.W. 5 has investigated the case.” in the judgement in para 11. The learned Trial Judge is the Chief Judicial Magistrate, Margao. It is difficult to understand how the learned Chief Judicial Magistrate could have made a statement like that and rested, though he was bound by his duty as a Magistrate trying the offence, to consider the evidence adduced by the prosecution. Indeed the credibility of criminal Courts trying an offence rests on discussion of the evidence brought by the prosecution and the reasonings of the Court thereon. There is complete dereliction of duty by the Magistrate in discussing material evidence adduced by the prosecution in a case which requires serious consideration. This dreliction of duty has resulted in an acquittal of the respondent which PRIMA FACIE appears to be unjustified. UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2008_hc_bom_cra_39]

HIGH COURT DECISION.

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS complete derelictgion of duty, credibility of criminal courts

        

SUPREME COURT OF INDIA while deciding the Civil appeal no.8036 of 2009 with C.A.Nos. 8037-8044 of 2009, on 2.12.09, in re: INCOME TAX OFFICER, UDIAPUR vs ARIHANT TILES & MARBLES (P) LTD observed as follows:-

QUOTE : In the present case, we have extrated in detail the process undertaken by each of the respondents before us. In the present case, we are not concerned only with cutting of marble blocks into slabs. In the present case we are also concerened with the activity of polishing and ultimate conversion of blocks into polished slabs and tiles. What we find from the process indicated hereinabove is that there are various stages through which the blocks have to go through before they become polished slabs and tiles. In the circumstances, we are of the view tat on the facts of the cases in hand, there is certainly an acitivitywhich will come in the category of MANUFACTURE or PORDUCTION under Section 80 IA of the Income Tax Act. As stated hereinabove, the judgement of this Court in AMAN MARBLE INDUSTRIES (PVT). LTD was not required to construe the word PRODUCTION in addition to the word MANUFACTURE. One has to examine the scheme of the Act also while deciding the question as to whether the activity constitutes MANUFACTURE or PRODUCTION. Therefore, looking to the nature of the activity stepwise, we are of the view that the subject activity certainly constitutes MANUFACTURE or PRODUCTION in terms of Section 80 IA. In this connection, our view is also fortified by the following judgements of this Court which have been fairly pointed out to us bt learned counsel appearing for the Department. UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2009_sc_ca_8036]

SUPREME COURT JUDGEMENT

VENKATRAMAN RAGGHUPATHY, Web admin.

SUPREME COURT JUDGEMENTS manufacture, production section 80 IA of the Income Tax Act