I am writing this in continuation of the earlier one on the same subject. I drive my car with my grandchildren from Shipra Suncity to Bharathi Public School in Mayur Vihar Phase III everyday around 7 a.m. On the way I pass thru Father Agnel School area in Noida and thru the so called nick-named crossing called the Labour chowk. I am pained to see that, every day during that early hours when many cars, vans and school buses are carrying school going children from Indirapuram area including Shipra Siuncity towards Noida schools as also vice-versa, many over-crowded private buses as well as tractors [which are meant as subsidised transport vehicles for agricultural purposes] and even long trailer carriers carrying heavy iron and steel goods are driven by unscrupulous drivers at high speeds, causing great stress and strain to the school going children. I am further surpised that there are no warning boards of the local Governmental authorities carrying the words “SCHOOL ZONE — SPEED LIMIT 20 KMs” so as to caution the errant drivers. Added to this, there are hardly any Traffic regulating Police personnel seen anywhere around these school zones to stop these high speed vehicles. In my school / college days during the 1950s and 1960s I had seen such precautionary steps being taken by the local governmental bodies / jurisdictional police stations, keeping in mind the prime need to provide safe travel to the young school goings children who are to be regarded as the future leaders for the nation. I do not understand why these basic issues to protect the young and upcoming children is not being seriously taken up by the public service oriented local / state bodies. I am also not able to appreciate how the traffic police personel are not preventing the tractors meant for agricultural purposes from utilising the same for purely commercial purposes in terms of the Motor Vehicle rules. I wonder whether the tractor drivers are being checked for their driving licences or not, on surprise cheking basis, as is being done for the two wheeler drivers almost everyday. Another thing which is disturbing my mind is the blatant mis-use of the school zone area [near Bharathi Public School in Mayur Vihar] as market place on every tuesday afternoon, thereby causing unhygenic conditions on the following days. How the local authorities are justified to allow such things to happen causing serious damage to the health of the young children. Why not the local authorities direct that the market place should be away from the declared school zone? Why not the local MLAs and MPs also do their best to bring in due reforms in these matters so that the young children go to school and grow well with rich knowledge to shape the nation in future days. Last but not the least suggestion from my end is that more public awareness needs to be kindled by other well wishers also.

SUPREME COURT JUDGEMENTS

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

“In the medium to long term, it is my goal that the entire production–distribution chain should be covered by a national VAT, or even better, a goods and services tax, encompassing both the Centre and the States.” – So goes the committed statement of the Finance Minister of India in the Finance Bill of 2005 that saw the first steps towards a welcome change in the tax system of Indian states.

From April 1, 2005, the Indian states adopted VAT, a modern, simple and transparent tax system in place of the prevalent Central and State sales tax. The system was adopted to eliminate the cascading effect of sales tax., in line with the global practice.

In the Budget 2004-2005

By emphasizing the need to have a uniform, modern, and efficient tax system, the states were encouraged to adopt Value Added Tax [VAT] system. The state Governments agreed to April 1, 2005 as the date of implementation of VAT through the consensus in a meeting of State Finance Ministers.. The State Governments were persuaded to pass the VAT legislation by the year end.

To make States comfortable and to take care of the possible loss of revenue with the implementation of VAT it was proposed to evolve a formula for determining the extent of loss in such revenue and compensate the states suitably.

The formula for compensation to the states in case of revenue loss because of VAT implementation was:

(a) 100% compensation in the year 2005-06, 75% in the year 2006-07 and 50% during 2007-08 for the loss incurred in revenue because of VAT implementation. The States were to assume responsibility of successful implementation. The States could start getting Empowered committee’s assistance starting from 01.04.05.
(b) The states were to choose 3 of the best revenue years out of preceding 5 years starting from 2004-05 for the purposes of determining their average revenue growth rate.

In the Budget 2005-2006

The Finance Minister in his budget speech appreciated the sprit of co-operation displayed by various states in implementing of VAT from April 1, 2005. He reiterated his medium and long term goal of covering the entire gambit of production–distribution chain with a national VAT / Goods and Services Tax (GST).

In the Budget 2006-2007

The adoption of VAT by most of the states and its resounding success was applauded by the House. Since implementation of further reforms was dependent on successful implementation of VAT, the remaining states were urged to adopt VAT quickly. The phasing out of Central Sales Tax (CST) was recommended by the Empowered Committee of State Finance Ministers.

On the request of the Empowered Committee to compensate the states for the loss of revenue, the Finance Minister proposed to compensate the States for the loss of revenue through monetary and non-monetary measures and promised to come out with firm proposals.

LPG was included in the list of ‘declared goods’ under the CST Act for moderating the price of the Liquified Petroleum Gas (LPG), since states were taxing LPG at high rates..

In the Budget 2007-2008

The success of VAT implementation was applauded given the fact that the revenue of states that implemented VAT increased by an average of 13.8 % in the year 2005-06 and by 24.3 % in the first 9 months of 2006-07. Phasing out of Central Sales Tax (CST) was discussed as the next logical step and in that direction the CST was proposed to be reduced from 4% to 3% w.e.f. April 1, 2007. A provision of Rs.5,495 crore was proposed to compensate revenue losses of the states on account of VAT implementation and on account of phasing out of CST.

The Finance Minister expressed his gratitude and appreciation to the state governments for unanimously agreeing to prepare a roadmap for introducing a national level Goods and Services Tax (GST) with effect from April 1, 2010.

In this regard the Empowering Committee set up a Joint Working Group consisting of officials from Central and State Governments, on May 10 2007. The Joint Working Group submitted its report to the Empowering Committee which was to be finalized along with EC’s recommendation.

In the Budget 2008-09

Central Sales Tax was proposed to befurther reduced from 3 % to 2 % from April 1, 2008 and consultations were to be done for compensation of resulting losses.

EXPECTATION:

The Finance Bill for 2009-2010 is not likely to be tabled in the month of Feb 2009 [end] as per the convention, in view of the election for the new Lok Sabha in the early part of 2009. We have to wait for the full-fledged Finance Bill sometime in June/July 2009 to know how definite will be the introduction of GST .w.e.f. 01/04/2010. Let us keep our fingers crossed and hope for the best to happen.

[authored by: S/Shri R. VENKATRAMAN, KAMAL JOSHI & GEETHA JOSHI]

Taxes Systems In India

I am writing this in continuation of the earlier one on the same subject. I drive my car with my grandchildren from Shipra Suncity to Bharathi Public School in Mayur Vihar Phase III everyday around 7 a.m. On the way I pass thru Father Agnel School area in Noida and thru the so called nick-named crossing called the Labour chowk. I am pained to see that, every day during that early hours when many cars, vans and school buses are carrying school going children from Indirapuram area including Shipra Siuncity towards Noida schools as also vice-versa, many over-crowded private buses as well as tractors [which are meant as subsidised transport vehicles for agricultural purposes] and even long trailer carriers carrying heavy iron and steel goods are driven by unscrupulous drivers at high speeds, causing great stress and strain to the school going children. I am further surpised that there are no warning boards of the local Governmental authorities carrying the words “SCHOOL ZONE — SPEED LIMIT 20 KMs” so as to caution the errant drivers. Added to this, there are hardly any Traffic regulating Police personnel seen anywhere around these school zones to stop these high speed vehicles. In my school / college days during the 1950s and 1960s I had seen such precautionary steps being taken by the local governmental bodies / jurisdictional police stations, keeping in mind the prime need to provide safe travel to the young school goings children who are to be regarded as the future leaders for the nation. I do not understand why these basic issues to protect the young and upcoming children is not being seriously taken up by the public service oriented local / state bodies. I am also not able to appreciate how the traffic police personel are not preventing the tractors meant for agricultural purposes from utilising the same for purely commercial purposes in terms of the Motor Vehicle rules. I wonder whether the tractor drivers are being checked for their driving licences or not, on surprise cheking basis, as is being done for the two wheeler drivers almost everyday. Another thing which is disturbing my mind is the blatant mis-use of the school zone area [near Bharathi Public School in Mayur Vihar] as market place on every tuesday afternoon, thereby causing unhygenic conditions on the following days. How the local authorities are justified to allow such things to happen causing serious damage to the health of the young children. Why not the local authorities direct that the market place should be away from the declared school zone? Why not the local MLAs and MPs also do their best to bring in due reforms in these matters so that the young children go to school and grow well with rich knowledge to shape the nation in future days. Last but not the least suggestion from my end is that more public awareness needs to be kindled by other well wishers also.

Taxes Systems In India

The phrase NATURAL JUSTICE is quite often raised in almost all cases either by the appellant / petitioner or the respondent before a Tribunal or a High Court and even before the highest Court in India [i.e. the SUPREME COURT OF INDIA].

According to the Courts, the basic rule of Natural Justice requires recording of reasons in support of an order which is being passed in deciding an appeal / petition in terms of the relevant law. The order has to be self-explanatory and should not keep the higher Court guessing for reasons because reasons provide live link between conclusion and evidence. That vital link is a safeguard against any arbitratiness, passion and prejudice. Reason is a manifestation of mind of the adjudicating authority. It is also a tool for judging the validity of the order which is challenged by the aggrieved person before the next higher appellate forum [ may be a Tribunal or a High Court, according to the relevant law for seeking justice in the matter].It also gives the opportunity to such higher appellate forum to see whether or not the adjudicating authority had proceeded on the relevant consideration, material and evidence.

It has been held time and again that justice should not only be done but should appear to have been done.

Some of the examples where Natural Justice was held to have been denied are:-

- a quasi-judicial authority excludes from his consideration the materials which were relevant
- when the revenue authority resorts to non-supply of the documents which are relied upon while issuing a show cause notice / which were collected at the back of the assessee
- denial of personal hearing to the asseessee , as many occassions as may be required, if he justifies such a request.

If we have to list all such situations, it may run to many pages. It is not the objective of this writing. What is being emphasised here is that every adjudicating authority / quasi-judicial authority / Tribunals /Courts would be appreciated to have delivered due and proper justice to an aggrieved party only when they had extended the principles of Natural Justice before passing an order / judgement. That is what the Supreme Court of India and the makers of various Laws in the country desire from those adjudicators. JUSTICE DONE WITHOUT EXTENDING THE PRINCIPLES OF NATURAL JUSTICE AMOUNTS TO JUSTICE DENIED.

Taxes Systems In India