Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Third Party Administrator providing health insurance claim services, makes payments to hospitals – liable to deduct TDS – High Court

TPA is responsible for making the payment to the hospital for rendering the medical service to the policy holders. The TPAs enter into an agreement with the hospitals for the aforesaid purpose. It is not necessary as to when the services are required to be provided by the TPA . Services can also be said to have been provided if they are provided through someone else on the request of the TPA . Indeed the TPA is given unbridled power in this regard. This would be in the nature of TPA taking over a part of the work of the insurance company. The TPA who is the authority or the person to pay the amount to the hospital is required to deduce the tax at source under section 194J

Service Tax

Service rendered by DISCOM under ‘outright contribution scheme' through their electrical engineers to consumers of electricity falls within the ambit of “taxable service” viz. Consulting Engineer Service under section 65(105)(g) of Finance Act, 1994 – CESTAT

THE issue is whether the appellant – company, successor to Maharashtra State Electricity Board ( MSEB ) , was rendering taxable service in the nature of “Consulting Engineers service” to the consumers of electrical energy during the period of dispute (April 2000 to March 2005).

Customs

Suppression not shown to have been indulged with intent to evade payment of duty, however suppression ipso facto would render vessel liable to confiscation under section 111 of Customs Act – Penalty u/s 112 imposable – ONGC ordered to make pre-deposit - CESTAT

At the outset, the appellants argued that upon confiscation, the vessel vested in the Central Government and came under their control and, therefore, there is no question of pre-deposit of any duty amount under section 129E of the Customs Act. The Bench rejected this argument by noting - “We were told at the bar that the vessel had sunk in Indian Designated Waters as early as in 2005. Anybody who claims the benefit of waiver of pre-deposit of duty under section 129E on the ground of the subject goods being under government control should prove that the goods are actually under such control. There is no evidence in this case of the vessel being under the control of the Central Government. Therefore, the question whether pre-deposit of duty should be dispensed with in this case requires to be argued out.”

See our columns Tomorrow for the judgements