TIOL-DDT 1362 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1362</font><br> 19.05.2010<br> Wednesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Disputes between Government and PSUs – a re-look needed </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> <em>OIL AND NATURAL GAS COMMISSION Vs COLLECTOR OF CENTRAL EXCISE </em>– <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-196-SC-CX.htm" target="_blank"><font size="1">2002–TIOL–196–SC-CX</font></a></strong></em>, the Hon'ble Supreme Court delivered a landmark ruling that no dispute between a Public sector Undertaking and a Central Ministry should go to any court or tribunal without clearance from a high power Committee of Secretaries, known earlier as COS (Committee of Secretaries) and now as COD (Committee on Disputes) </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Writing in the ELT dated 01.04.2003, I had commented,</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“After 10 years of the Supreme Court's order, today the concept of Public Sector Undertaking has totally changed, What with a minister for disinvestment vigorously pursuing disinvestments and hoping to collect more than the whole year's customs revenue, from selling PSUs , the PSUs are not really that Public. Today the Government's share in many of the major PSUs is less than 50%. And the management control is also in private hands. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court's decision in the ONGC case was in the context of one wing of the Government spending money and time against another wing and wasting the time of the courts – all for nothing. But today when the PSUs are not really PSUs , and when management control is in the hands of private agencies, the question of wasting one department's money and time against another department may not be all that valid. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I humbly suggest that the matter may be taken back to the hon'ble Supreme Court to decide whether in the context of large privatisation, the ONGC order is still valid.” </font></em></p> </blockquote> <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=1146" target="_blank">DDT 52 11 02 2005</a></strong>, I had questioned, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“How much of paper, stationery and precious man hours are wasted for this totally avoidable procedure? Should valuable judicial time be spent in dismissing and restoring the appeals by PSUs ? In the court, precious time is lost on this insignificant piece of work. The members have to pronounce the order in the court, somebody has to type it out and make about 20 copies, the honourable members have to sign it and then the registry has to issue a certified copy and then despatch it to several people – at the time of dismissing the appeal. At the time of restoration – ditto!. Can we really afford this luxury? </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why can't we do away with this useless unproductive work? Why can't we change the law so that PSUs can file their appeals after obtaining clearance from COD? If they <strong>don't give it</strong> (Strictly, the COD cannot refuse permission to appeal; In Canara Bank v Power Grid Corporation of India Ltd, the Delhi High Court held that <strong>“it does not lie with the High Power Committee to refuse clearance; it has only two options - either to resolve the dispute or to grant clearance for the litigation</strong>.”) at least the appeal papers can be saved.” </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Supreme Court is of the opinion that the working of the COD has failed and the time has come to revisit the decision in the ONGC case. I had suggested this seven years ago and feel a sense of déjà vu that it is now being considered. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this Supreme Court decision today. Please see <strong>Breaking News</strong>. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Security of e filing portal - CBDT clarifies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> section of the media has reported that e-filing of income tax returns had turned risky as the security certification of the Income Tax department's Internet portal had lapsed on 8th May 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this regard, it has been clarified by the Central Board of Direct Taxes (CBDT) that the process for renewal of the security certificate of the department's e-filing portal was initiated well in time before it lapsed on 8th May 2010. Pending completion of certification procedure, the e-filing facility for AY 2010-11 has been temporarily suspended. This will not affect taxpayers in any way, as the earliest income tax return for AY 2010-11 falls due on 31st July 2010. The facility is expected to be renewed very shortly. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is also clarified that the e-filing portal of the Income Tax department remains fully secure and lapse of the security certificate does not mean that its security features are slackened or compromised. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But why did the security certificate lapse and why was it allowed to be lapsed ? Who is responsible? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the CBEC any better? They were the certifying authority and they lost that status because they were also sleeping. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Computerization is too serious an affair to be left to bureaucrats. Both the Boards should realize this elementary fact. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">What is this ‘security' all about? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SSL</strong> - Secure Sockets Layer is a global standard security technology developed by Netscape in 1994. SSL is all about encryption. It creates an encrypted link between a web server and a web browser. The link ensures that all data passed between the web server and browser remains private and secure and is recognized by millions of consumers by a secure padlock, which appears in their browser. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This certificate ensures that you will not be sending sensitive data to a hacker or imposter site. The browser also makes sure the domain name matches the name on the CA, and that the CA has been generated by a trusted authority and bears a valid digital signature. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">You can digitally sign your IT RETURN - but what is a digital signature? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> digital certificate authenticates electronic documents in a similar manner a handwritten signature authenticates printed documents. This signature cannot be forged and it asserts that a named person wrote or otherwise agreed to the document to which the signature is attached. The recipient of a digitally signed message can verify that the message originated from the person whose signature is attached to the document and that the message has not been altered either intentionally or accidentally since it was signed. Also, the signer of a document cannot later disown it by claiming that the signature was forged. In other words, digital signatures enable the "authentication" and “non-repudiation” of digital messages, assuring the recipient of a digital message of both the identity of the sender and the integrity of the message. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A digital certificate is issued by a Certification Authority (CA) and is signed with the CA's private key. A digital certificate typically contains the: Owner's public key, the Owner's name, Expiration date of the public key, the Name of the issuer (the CA that issued the Digital ID), Serial number of the digital certificate, and the digital signature of the issuer. After availing the digital certificate from a CA, the user can use it to electronically sign any document and the same is true for E-filing returns too. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But there is no digital signature in the ACES programme of CBEC. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To err is human but to really mess up things, you need a computer and both the Revenue Boards are messing up things beyond repair and we are planning to implement GST which has to depend wholly on computers! God will save the country from all its ignorant intellectuals !!!. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Thursday's cases</font></strong></font></strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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"><strong><font color="#663399">Central Excise </font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sales Tax incentive scheme - amount of sales tax collected from customers but not paid to State Government by assessees availing above incentive is deemed to have been paid to Government – such amount is not an additional consideration and is excludible from Assessable value u/s 4 of CEA , 1944: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant did not include in the assessable value of the excisable goods the amount of sales tax which they collected from their customers but did not pay to the exchequer. According to Revenue, such amount of sales tax is an additional consideration forming part of the transaction value of the excisable goods under section 4(3)(d) of the Central Excise Act. And thus, the differential Central Excise duty was demanded and the same was confirmed by the original adjudicating authority and the Commissioner( Appeals). </font></p> <p align="justify"><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">Contribution to building fund of stock exchange claimed as revenue expenditure – DCIT directed to consider all contentions put forth by petitioner and pass appropriate orders in tune with earlier directions of High Court – Stand taken by Stock Exchange before High Court also to be considered – Order passed by DCIT holding contribution as capital expenditure set aside: High Court</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> petitioner approached the High Court through a Writ Petition urging that the Deputy Commissioner of Income Tax passed an arbitrary order completely disregarding the earlier remand directions of this High Court in a statutory appeal filed by the petitioner against an order passed by the Appellate Tribunal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue involved was claim of building contribution fund made by the petitioner to Cochin Stock Exchange as revenue expenditure whereas the assessing authority held it as capital expenditure. Earlier, in the first round of litigation, the first appellate authority extended the benefit to the petitioner but the same was reversed by the Tribunal . Aggrieved by the Tribunal's order an appeal was filed before the High Court in terms of Section 260A of the Income Tax Act.</font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Valuation – assessment made purely on basis of LME Bulletin without any corroborative evidence of contemporaneous import, not valid: Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EVEN</strong> though there is a reference to contemporaneous import in the order passed by the Deputy Commissioner, no material regarding such import has been placed or made available by the appellant at any point of time. Therefore, assessment in this case has to be taken as having been made purely on the basis of LME Bulletin without any corroborative evidence of imports at or near that price which is not permissible under law. </font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p> <p><font color="#FF6666" 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">vijaywrite@taxindiaonline.com</a></font></p> </body> </html>