The manufacturing of goods in any industry may quite often involve captive consumption of the input goods either directly or indirectly in the course of the production of final goods which are meant for marketing to the consumers. The Government, in its wisdom, in order to avoid the cascading effects of the taxes and duties, prior to the introduction of the scheme of extending availment of input credits of various taxes and duties [popularly known as MODVAT when it was introduced and now known as CENVAT credit scheme, was issuing specific notifications granting exemption from the levy and collection of taxes and duties on such input goods. The wordings used in such notifications gave rise to a series of litigations between the manufacturer-assessee and the Department of Revenue [i.e. the Central Excise and Customs]. Such litigations were engaging the precious time of various adjudicating / appellate authorities as well as the Tribunals / High Courts and even the highest Court in India [i.e. Supreme Court] over the past 30-35 years. In the process, lot of time and money was/is being spent by both the sides [i.e. the assessee and the Customs and Central Excise authorities whose primary duty is to levy and collect the taxes and duties in accordance with the law [ i.e. in terms of the provisions contained in the Customs and Central Excise Acts and the rules made thereunder]. The latest judgement of the Supreme Court of India in Civil appeal no. 1130 of 2003 decided on 06/11/2008 in re: COMMISSIONER OF CENTRAL EXCISE MUMBAI vs NATIONAL ORGANIC CHEMICAL INDUSTRIES LTD [NOCIL] is one such case where the direct or indirect consumption of the input goods became the main issue. [for reading the full text of the judgement, click on www.taxesinidia.com. If we read through this judgement, as an individual we may wonder as to why such an issue was required to be agitated before the Apex Court in spite of a series of judgements pronounced in the past 30 years or so. But that is what the prevailing system in India is [quite likely that similar system may still be going on in other countries also]. However, over the last two decades the Central Government has been seriously making efforts to simplify the Acts, the rules made thereunder as well as the procedures for levy and collection  of taxes/duties by way of amenments and replacements of those mind-bogging legal provisions. A time has come when the industries as the assessees develop the culture of tax compliance in accordance with the laws and in the process enable the levy and collection of taxes and duties as a smooth process, with litigations becoming a rare feature. The result can be that the industries concentrate on bringing prosperity to the nation through their productions and the tax administrators augment the revenue collections and enrich the treasury to enable the planners to implement all developmental plans on time.

MERA BHARATH MAHAN

Taxes Systems In India

With the liberalisation in the mode of postal communication, the Department of Posts and the Private courier services have jumped into the services of effective delivery of postal letters,parcels etc., to the people of India. When the system of change was brought about the Dept., laggled behind in coping up with the delivery speed as compared to the private courier service. But as things started improving in the administrative side of the Postal department by way of computerisation and better working facilities, the dept. has gradually and steadily is showing lot of improvements in their handling and the public are standing to gain. At the same tine, the private players, though started with a big bang, have slowly got into the system of franchising thru local players who never had any prior experience in handling postal delivery system. The result is the local franchisee engages cheap labour to deliver the posts to the public without admininstrative facilities like proper travel facilities and the cheaply paid employees do not care to deliver the post to the proper person on time.Really speaking, most of the time, people see such delivery boys dumping the posts in some corner of the residential areas and manage to get the signatures for proof of delivery in their own ways. On the contrary the postman contuinues to be a loyal servant of the postal dept. and continues to dohis public service as he was doing in the past and in fact more cordial and courteous to the people on the fear that the public have got more scope to fight for their rights under the changed provisions of laws in the country. The private players should learn the lesson from the present situation and eliminate the franchise system and get into direct dealings with the public so as to win their confidence.

Taxes Systems In India

North Eastern Region

Govt’s Budgetary Proposals and Implementation [all Figs. in Rs./Crores]

Particulars		Budget Year
		2004 – 05	2005 – 06	2006 – 07	2007 – 08	2008 – 09
North East Region
	Budget Allocations *	5,823.00	9,308.00	12,041.00	14,365.00	16,447.00
	Non Lapsable Central Pool	650.00
	DONER			1,350.00	1,380.00	1,455.00
	Highway Development Fee		450.00
	Special Fund * *					500.00
* Budget allocation include provision for Non Lapsable Central Pool DONER Highway Development Fee * * Special fund is allocated additionally to study special problems of North Eastern Areas.

“The Government is committed to the speedy development of the North-Eastern States and Sikkim.” – an assertion made by the Finance Minister of India in the Finance Bill of 2004. The whole Nation welcomed this because it was expected to pacify to a large extent the agitating minds of the so-far under privileged people of the said region.. The Government is continually working for development of projects and schemes to fulfill the promises nade.

In the Budget 2004-2005

To pursue its commitment for development of ‘North Eastern Region’ (NER), the total allocations for the region’s development stood at Rs.5,823 crores in 2004-05. Unspent amount out of these allocations, which stood at Rs.650 crores in this year was put into a non-lapsable central pool of resources for specific projects and schemes development in the NER. This amount was up from Rs.550 crores put into central pool in the budget year 2003-04. By January 2005 Rs.492.44 crores was already allocated out of the central pool of resources of Rs.650 crore.

In the Budget 2005-2006

The allocation amount was increased to Rs.9,308 crore in 2005-06.. The emphasis was laid on the development of two railway lines, one on Kumarghat-Agartala and the other on Lumding-Silchar-Jiribam-Imphal sectors as projects of national importance. For this, additional funds were to be allocated over and above what was provided in Railway budget. Another 450 crores was allocated for development of highway in the region. Revenue year 2005-06 saw the allocations for the region to be a little more than 18%, which was about 10% more than what was allocated in the budget year. Railway line development in Kumarghat – Agartala and Lumding – Silchar – Jiribam – Imphal sectors got an allocation of Rs.165 crores. Project approval for Phase A of developing 1310 km of the highway was granted. Rs.4,618 crore was approved for this Phase of highway development. Detailed project report preparation for the development of another 5122 km highway in phase B was set underway.

In the Budget 2006-2007

The allocations amount increased to Rs.12,041 crores including Rs.4,870 crores for development of flagship programmes and Rs.1,350 crore that was provided to Ministry of Development of North Eastern Region (DONER).

In the Budget 2007-2008

2007-08 budget included Rs.14,365 crore allocated for NER. Out of total allocations DONER was allocated 1,380 crores for the projects. The emphasis was on coming up with a new Industrial Investment Policy before the commencement of budget year for the NER. The North East Industrial and Investment Promotion Policy (NEIIPP), 2007 was approved and notified with effect from April 1, 2007.

In the Budget 2008-09

DONER allocations increased to Rs.1,455 crore this year with total allocations mounting to Rs.16,447 crore for NER. Government was concerned about the special problems faced by Arunachal Pradesh and other border areas and proposed a special mechanism to address these problems. An allocation of Rs.500 crore was proposed to jumpstart the process.

EXPECTATION:

Based on the consistent approach shown by the Govt. in power towards allocation of adequate funds to the NER, the Nation would anxiously looking to know in the coming years as to what extent the people in NER reap the benefits of these projects and grow prosperous and feel that they are no longer neglected. LIFE IS ALWAYS MEANT TO BE BUILT ON HOPES and that cannot be different for our NER as well.

Taxes Systems In India

In my earlier write-up on BASIC PRINCIPLES OF NATURAL JUSTICE it was concluded that when Natural Justice is denied then the Justice itself is denied in every manner. Now let us understand from a specific judgement of the Supreme Court of India as to what would be the outcome of violation of Natural Justice by a Statutory authority.

The Apex Court emphasised that the Statutory authorities under the Act exercise Quasi-Judicial function. This is well known to everyone whether it is the adjudicating or appellate authority or an assessee. It is so because there are thousands of judgements of Tribunals, High Courts and even the Supreme Court passed by in the past several decades. In spite of it, in the case of a dispute matter between KOTHARI FILAMENTS vs COMMISSIONER OF CUSTOMS [PORT] KOLKATA, a Civil Appeal No.7307 OF 2008 came up before the Apex Court. In delivering the judgement, the Apex Court observed that there was no doubt whatsoever that the principles of Natural Justice was violated in the said case. Before arriving at such a categorical conclusion, the Apex Court remarked that the Commissioner of Customs was conscious of the fact that the result of the enquiry was not conclusive one way or the other. It is one thing to say that denial to supply the documents collected in the said enquiry has a statutory backing but it is another thing to say that use thereof was to be made without supplying the copies thereof. The Statutory authorities under the Act exercise Quasi-Judicial function. In the event a finding as regards violation of the provisions of the Act is arrived at, several steps resulting in civil or evil consequences may be taken. The principles of Natural Justice, therefore, were required to be complied with. The Act does not prohibit application of Natural Justice. A person charged with misdeclaration is entitled to know the ground on the basis whereof he would be penalised. He may have an answer to the charges or may not have. But there cannot be any doubt whatsoever that in law he is entitled to a proper hearing which would include supply of the documents. Only on knowing the contents of the documents, he could furnish an effective reply.

The Supreme Court made a reference to its earlier judgements in re: RAJESH KUMAR & ors. vs DEPUTY COMMISSIONER OF INCOME TAX & ors. [2007--2--SCC--181] and in re: S.L. KAPOOR vs JAGMOHAN & ors. [1980--4--SCC--379] and concluded in this case that in view of the aforementioned settled legal principles, there cannot be any doubt whatsoever that the principles of Natural Justice have been violated.

The MORAL of this story is that the Statutory authorities, when they are required under the Act to function as a Quasi-judicial authority, continue to ignore the need for extending the principles of Natural Justice to the parties and pass orders which, when taken up by the Tribunals, High Courts and even the Supreme Court in some cases, are straightaway set aside and the matter gets remitted back to the said authorities for consideration of the dispute matter afresh, with further directions that the said authority should supply the relevant copies of the documents relied upon to decide the case or at least allow the appellant to inspect the same.

What follows next is that in future if any statutory authority continues to violate the principles of Natural Justice in the course of his adjudicating a matter involving points of Law, then, they should be awarded NEGATIVE RATIING in their Annual Character Confidential Reports and such NEGATIVE RATINGS should be duly taken into account while crediting them for their performances to earn their career progression. Of course, the admnistrative authorities, who would be taking such steps, should also extend the Principles of Natural Justice to such authorities so that they can either get convinced or get the opportunity to contest such negative ratings. If the principles of Natural Justice are apllied at every stage, then, the day may come soon when we would be enjoying a RAM RAJ or DHARM RAJ and the Tribunals or High Courts or the Supreme Court would not be compelled to repeat their observations about of denial of Natural Justice.[by VENKATRAMAN RAGGHUPATHY, ex. GENERAL MANAGER [EXCISE & CUSTOMS] INDIAN OIL CORPN. LTD.

Taxes Systems In India

Sarva Shiksha Abhiyan

Government’s Budgetary Proposals and Implementation [all Figs. in Rs./Crores]
Particulars Budget Year
2004 – 05 2005 – 06 2006 – 07 2007 – 08 2008 – 09

Sarva Siksha Abhiyan
Budget Allocations 3,057.00 4,754.00
Additional Reserves 2,000.00
Prarambhik Shiksha Kosh *1 7,156.00 10,041.00 10,671.00 13,100.00
Revision in the Kosh 13,171.00

“The poor want basic education for their children: we shall provide it, and we shall make sure that the child remains in school for at least eight years.” – so reads the statement of the Nation’s Finance Minister in the Finance Bill 2004 presented on the floor of the Parliament on the Budget day. The whole Nation felt proud of the positive step proposed to be taken by the Government in power and looked forward to see thru its success in the long run.

In the Budget 2004-2005

‘Sarva Siksha Abhiyan’ was started as a National Mission in the month of December 2004. It was an effort of the Government in continuation of its promise made in the Budget for the year 2004-05.

The Abhiyan aims to ensure that all children in the age group of 6 to 14 years complete 8 years of education by the year 2010. The Government proposed the creation of a non-lapsable ‘Prarambhik Siksha Kosh’ to collect the Education Cess levied to fund this Abhiyan. The budgetary allocations were for Rs.3,057 Crores for this with an additional provision for Rs.2,000 Crores.

In the Budget 2005-2006

The non-lapsable ‘Prarambhik Siksha Kosh’ was constituted in October 2005. Rs.7,156 Crores was allocated to the Kosh. The Budgetary allocation was raised to Rs.4,754 Crores in 2005-06, from Rs.3,057 Crores in 2004-05.

The Government claimed this to be a hugely successful program where more than 93% children in the target age group of 6 – 14 years were attending school. During the year, the number of children not attending schools went below 1 Crore.

In the Budget 2006-2007

The outlay for the Abhiyan was proposed to be increased to Rs.10,041/- Crores in 2006-07 from Rs.7,156 Crores in 2005-06. The budget focus was to construct 500,000 additional classrooms and appoint 200,000 teachers under this program. The proposal was approved and the work on both was underway.

In the Budget 2007-2008

The amount allocated to the Abhiyan was increased to Rs.10,671/- Crores while the provision for teachers training institutions was increased from Rs.162 Crores to Rs.450 Crores. The aim was to appoint another 200,000 teachers and 500,000 additional classrooms in this budget year as well.

STATUS AS ON DEC 2007

Till December 2007 end, 67,864 new teachers were recruited and 208,000 additional classrooms were functional. The work on another 310,000 classrooms was in full swing. The budget allocations were revised to Rs.13,171 crore for the Abhiyan while only Rs.9,613 crore was utilized till the end of January 2008. The estimate for the teachers training institutions was revised to Rs.312 crore.

In the Budget 2008-09

The allocation for SSA in the year 2008-09 was kept at Rs.13,100/- crore which is marginally less than the revised estimate for the year 2007-08. Primary focus on the current year was on ways and means of improving retention and the quality of learning rather than building up on infrastructure, as was focused upon in the earlier budgets. Also upper primary level education was to be made accessible.

EXPECTATION:

At the end of the five year i.e. by March 2009, the Nation would be anxiously looking forward to the Government in power to highlight the degree of success achieved in this laudable programme as to how the literacy level in the country has been raised substantially by ensuring compulsory education all the children in the age group of 6-14 years. SARVE JANA [CHILDREN] SUKHINO BHAVANTHU

Taxes Systems In India