Jurisprudentiol–Tomorrow's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Miscellaneous

When an order of a statutory authority is questioned on ground that same suffers from lack of jurisdiction, alternative remedy may not be a bar: Supreme Court

THE question as to whether the Notification could have a retrospective effect or retro-active operation being a jurisdictional fact, should have been determined by the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India as it is well known that when an order of a statutory authority is questioned on the ground that the same suffers from lack of jurisdiction, alternative remedy may not be a bar.

Income Tax

TDS - perquisite to expatriate employee - disallowance u/s 40(a)(iii) - perquisites have no identity independent of salary - assessee need not deduct TDS separately for perquisite as it is part of salary income: ITAT

ARE salary and perquisite two distinctively different terms? Does perquisite have its own identity as an income to an employee? Does an employer need to treat perquisite separately for deducting tax at source under Sec 192 or treat it as part of income under salary head? In an interesting case involving an expatriate, the ITAT has held that when the income under the head salary is computed, the valuation of the perquisites forms part of salary and there is no separate identity given for the purpose of sec. 192.

Service Tax

Amount collected prior to levy of service tax and service rendered after the service becoming taxable - the appellant is liable to pay service tax - any other view would amount to rigorous construction of machinery provisions: CESTAT

WHAT is the relevant date for deciding the service tax liability? Is it the date of receipt of payment? Is it the date of rendering the service? Is it the date of issuing the bill or invoice? How does one decide to pay service tax when the tax rate has been reduced, say from 12% to 10%? There seems to be no end to the confusion prevailing on this important issue and nobody is really seriously concerned.

In a recent case, this issue came up before the Tribunal. The appellant is engaged in providing commercial coaching or training service. The service was brought into tax net with effect from 1.7.2003. The contracts for providing the service were entered prior to 1.7.2003 and the amounts were also received in lump sum prior to 1.7.2003. But the service was actually rendered after 1.7.2003. The dispute is whether the service tax is payable on the amounts received prior to 1.7.2003, when the service was not taxable.

See our columns Tomorrow for the judgements