TIOL-DDT 1163 · the untouched capture
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<strong><font color="#660099" size="3">TIOL-DDT 1163</font><br>
28.07.2009<br>
Tuesday </strong></font> </div>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Smooth
Road Ahead – No Service Tax on Road Repair</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT </strong>was a long journey through the pot holed road of Indian Taxation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
all started with a letter from the Madhya Pradesh Chief Minister, Shivraj Singh
Chauhan nearly two years ago to the Finance Minister, seeking exemption from
Service Tax on maintenance or repair of roads.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Promptly
the Department swung into action and Show Cause Notices started flying in all
directions.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
<strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6764" target="_blank">TIOL-DDT
798 - 06.02.2008</a></strong>, we asked, Is it worth taxing the road repair?
99% of the roads belong to the Government – state or central, municipal
bodies, panchayats. As mentioned earlier, should the cost of maintaining the
horrible roads be enhanced for these fund starved bodies? Perhaps the FM can
graciously accede to the request of the Madhya Pradesh CM and exempt road repair
from Service Tax and for this he need not wait for the budget. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide<strong>
<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2009/sercir110.htm" target="_blank">Circular
No. 110/4/2009-ST Dated: February 23, 2009</a></strong>, Board clarified that
maintenance or repair of roads is a taxable service under the purview of ‘Management,
Maintenance or Repair Service'.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
<strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=ODgwNQ==" target="_blank">DDT
1079 26.03.2009</a></strong>, we reported a case where the Commissioner (Appeals)
held that road repair was not liable to Service Tax.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This
issue was the hot topic debated in our seminars last year and the matter was
placed before the senior officers of the Department including the Chairman of
CBEC.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr.
S. Vijay Kumar, Chairman, Builders Association of India (Vizag Chapter), who
had been relentlessly pursuing this matter had written an article in TIOL- <strong>Is
road-laying service liable for Tax?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We
had also carried an article by G Jayaprakash, - <strong>Service Tax on road
repairs - When in doubt, consult Higher Authority</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Pranab
<em>Da</em> Repairs the Damage</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
needs a hard core politician to understand the woes of the people.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
his reply to the Finance Bill, the Finance Minister said,</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Roads
serve as a lifeline of the country. Therefore the Government has accorded
the highest priority in developing and maintaining roads across the Country.
Construction or laying of new roads is excluded from Service Tax. However,
repairs and maintenance of roads are chargeable to Service Tax. Several requests
have been received to exempt repairs and maintenance of roads from Service
Tax. Therefore I propose to remove this anomaly by also <strong>exempting
repairs and maintenance of roads from service tax with immediate effect”.</strong></font></p>
</blockquote>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">But
why not a retrospective exemption?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While
the whole nation, especially State Governments and local bodies and contractors
will be grateful to the Finance Minister, he should have gone a step further
and granted the exemption with retrospective effect. In any case he has exempted
this with effect from 27.07.2009, IN PUBLIC INTEREST. Apparently there could
not have been any public interest in taxing this activity prior to 27.07.2009!</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Babus
LTC also only by Air India</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
<strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9371" target="_blank">DDT
1153 - 14.07.2009</a></strong>, we reported the Government’s instructions
that Government officers can make official tours only by Air India. Somebody
had a doubt whether these instructions would apply to LTC – Leave Travel
Concession, also. Government has now clarified that these orders/conditions
will apply in cases of LTC also.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When
the government runs an airline, it is reasonable to ask its employees to travel
by that airline. But when that airline is so inefficient – that its fares
are high and given a chance nobody wants to travel by it, is it wise to torture
the employees into travelling by that airline just to prop it up?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And
the travel plans of the officers are sure to get affected as now they will not
be able to return to headquarters on the same day – means more expenditure
on accommodation and food.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Air
India should be ashamed to get these forced passengers on their flights.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
future the Government should issue instructions that</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.
Government servants travelling by bus should do so only in State Transport
Corporation buses.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.
Food served in Government functions should be only from government run hotels.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.
Government officials should stay only in Tourism Corporation hotels.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.
Government offices/guest houses having TVs should have access only to Doordarshan.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.
If you are buying a newspaper, it should be only “Rozgar Samachar”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6.
Courier Services should not be used – use only Speed Post.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.
Should you get sick of all this, never go to a Private Hospital – go
only to a Government Hospital.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And
make a rule that all government directions/laws/notifications are invalid unless
a copy of the gazette printed in the Government of India Press reaches at least
half the government offices. That way we will have less governance.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/oms/officememoranum_2.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">OFFICE
MEMORANDUM No.31011/2/2006-Estt.(A) Dated : July 27, 2009</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Prevention
of sexual harassment of working women in the workplace – Government Instructions</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A
DOPT OM says, “It is necessary to have in place at all times an effective
Complaint Mechanism for dealing with cases of sexual harassment of working women
and to create awareness in this regard, particularly amongst working women.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
complaint mechanism should be adequate to provide, where necessary, a Complaints
Committee, a special counsellor or other support 'service, including the maintenance
of confidentiality.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Complaints Committee should be headed by a woman and not less than half of its
member should be women Further to prevent the possibility of any undue pressure
or influence from senior levels, such Complaints Committee should involve a
third party, either NGO or other body who is familiar with the issue of sexual
harassment.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Complaints Committee must make an annual report to the Government department
concerned of the complaints and action taken by them.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
employers and person in charge will also report on the compliance with the aforesaid
guidelines including on the reports of the Complaints Committee to the Government
department.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Committee constituted for redressal of the complaints by the victims of sexual
harassment should be headed by an officer sufficiently higher in rank so as
to lend credibility to the investigations. <font color="#FF6633">(Does this
mean that higher ranking officers will not sexually harass women in work place?
In fact most of the harassment comes from top officers only.)</font></font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/ccs_conduct_rules.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">OFFICE
MEMORANDUM No. 11013/3/2009-Estt. (A)Dated : July 21, 2009</font></strong></a></p>
<p align="center"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600" size="2">Jurispruden</font><font color="#FF6633" size="2">tiol</font><font color="#006600" size="2">– Wednesday's cases</font></strong></font></strong></font></p>
<p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income
Tax</strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Penalty
- vires of retrospective insertion of sub-section (1B) in Sec 271 vide
Finance Act, 2008 upheld; It is not violative of Article 14 of Constitution:
High Court</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
position of law both pre and post amendment is similar, in as much, the Assessing
Officer will have to arrive at a prima facie satisfaction during the course
of proceedings with regard to the assessee having concealed particulars of income
or furnished inaccurate particulars, before he initiates penalty proceedings.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Prima
facie 'satisfaction' of the Assessing Officer that the case may deserve the
imposition of penalty should be discernible from the order passed during the
course of the proceedings. Obviously, the Assessing Officer would arrive at
a decision, i.e., a final conclusion only after hearing the assessee.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">FERA</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Culpable
state of mind of the petitioner should be proved beyond reasonable doubt and
not on the basis of assumptions – Foreign Currency seized ordered to be
returned – penalty quashed: Delhi High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
findings of the respondent are based on its own presumptions and assumptions
and cannot be termed to be based on legal principles and therefore the Court
would be justified in inferring with such perverse findings. The findings have
been arrived at without any basis which has been successfully rebutted by the
petitioner and in the circumstances it has to be held that adjudication order
is not sustainable.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central
Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mere
absence of clearance from COD or delay in obtaining clearance from COD cannot
be a ground for dismissal of appeal or any application – CESTAT recalls
order and restores appeal</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
is settled law that the remedy of appeal is a creation of statute and no such
remedy can be availed unless the statute under which the proceedings are initiated
specifically provides for such remedy.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At
the same time, once such a remedy is provided under a statute, the right in
that regard arises with the initiation of the original proceedings themselves.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See
our columns Tomorrow for the judgements</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
Tomorrow with more DDT </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice day.</font></p>
<p><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail
your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<a href="mailto:vijaywrite@taxindiaonline.com" target="_blank">vijaywrite@taxindiaonline.com
</a></font></p>
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