TIOL-DDT 1509 · 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 1509 </font><br> 16.12.2010 <br> Thursday</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone Case – Interesting Twists </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> is well known, the Supreme Court had asked Vodafone to deposit Rs . 2500 Crores in the mega IT case and also allowed the Income Tax Department to withdraw this amount if the DGIT gave an undertaking that if the Government loses the case, it would return the amount with interest. Vodafone had deposited the amount and a happy Income Tax Department went to the Supreme Court to collect the Rs . 2500 Crores , but it faced a new problem when the Supreme Court Registry asked it to pay Rs . 25 Crores as Court Commission. It may be noted that the Supreme Court had also asked for Bank Guarantee of Rs . 8500 Crores from a Nationalised Bank. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Entry 26 of Part III of Third Schedule of the Supreme Court Rules, 1966, on all moneys or <strong>securities</strong> paid to the Registrar or deposited with him, a Commission of 1 percent has to be paid. So whoever wins the case, the Supreme Court is sure to earn Rs. 25 Crores! It is not yet known whether this 25 Crores will go to the Consolidated Fund of India or can be used by the Supreme Court. If this can be used by the Supreme Court, this will set in a nice precedent for the Supreme Court to generate funds for its infrastructure without depending on the government for funds. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has filed an application in the Supreme Court to waive this one percent commission. The Government has also requested the Supreme Court to ask Vodafone to deposit another Rs. 25 Crores so that the Government gets its full 2500 Crores . Arithmetically this is still wrong as if Vodafone deposits another 25 Crores , the total deposit becomes 2525 Crores and one percent would become 25.25 Crores and the Government would get 2499.75 Lakhs – still 25 lakhs short. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Another issue is whether the one percent Commission is to be paid on the Rs . 8500 Crore bank guarantee – after all that is a security. If that is so, the Government will have to lose another 85 Crores and this will add 110 Crores to the Supreme Court kitty, which can be used for better facilities in the Supreme Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Budget allocation for the Supreme Court in the 2010-11 Budget is Rs. 85 Crores and this includes the provision for salaries and travel expenditure in respect of Chief Justice and other Judges, staff and officers of the Registry including the Departmental Canteen, the charges for professional service towards personnel deployed for security and the expenditure on establishment related needs including stationery, office equipments, security equipments, printing of Annual Report and maintenance of CCTV in the Supreme Court. Another 110 Crores can make a big difference to all these aspects and the Supreme Court can have a well deserved face-lift. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In any case if the money is going to the Consolidated Fund of India, how does it matter if the 25 Crores comes through the Supreme Court or through the Income Tax Department? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why should the Government be so fussy about the Rs. 25 Crores with the Supreme Court? After all it is not going to Pakistan! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems the IT Department's problem is - “how to account for this 25 Crores ?” And maybe they are afraid of the CAG! Government is really a complicated business! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In another development the Gujarat High Court refused to sanction the demerger scheme of Vodafone-Essar Gujarat Limited (VEGL) and its parent company Vodafone-Essar Infrastructure Limited (VEIL). However the order is suspended for two weeks, on a request made by Vodafone- Essar's counsel so that they can approach the higher court. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Delhi High Court again stays Service Tax on Renting of Immovable Property </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">WE</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> understand that the Delhi High Court has again stayed the Service Tax on Renting of Immovable Property, in the Home Solutions case. This is despite the recent Punjab & Haryana High Court upholding the levy as well as the retrospective amendment. <strong>[<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2010/2010-TIOL-765-HC-P-H-ST.htm" target="_blank">2010-TIOL-765-HC-P&H-ST</a></font>]</strong>. The Delhi High Court found the P&H High Court order to have only persuasive value and not binding. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This case should be decided by the Supreme Court as soon as possible to ensure certainty. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sugar Export to USA - DGFT Allocates </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DGFT has allocated a total quantity of 8,200 MTs of Raw Sugar, H.S. Code No. 1701 00 00 [in the Schedule 2 of ITC(HS) Classification of Export & Import Items] (at 98 degree Pol) out of non-levy(free sale) quota of 2010-2011(October, 2010 to September,2011 ) for export under tariff rate quota to USA for the US fiscal year 2011 (October 1, 2010 to September 30, 2011) through M/s. Indian Sugar Exim Corporation Ltd, New Delhi. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn018.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 18/(RE-2010)/2009-2014, Dated: December 15, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value of Brass Scrap decreased </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has decreased the Tariff Value of Brass Scrap from US Dollars 4204 to 4189 per MT. There is no change in the tariff value of other items. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_100.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION NO.100 /2010-CUSTOMS (N.T.) Dated: December 15, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Right To Information Rules 2010</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Government has merged the Right to Information (Regulation of Fee and Cost) Rules, 2005 and the Central Information Commission (Appeal Procedure) Rules, 2005 into a new Right to Information Rules, 2010. Both the earlier rules are superseded and the new Rules have come into existence from 10.12.2010.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now fee for information can be paid even electronically. Appearance by videoconference is provided for in the rules. Notice by the Commission can be sent by email, but they also don't recognise Speed post or Courier service. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Public Authority is required by rules to deduct penalty amounts from the monthly salary of the employees against whom penalty has been ordered.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Rules provide for appointment of a Secretary to the Commission of the rank of Additional Secretary to the Government who shall also be the Registrar General. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/rti_rules.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT Office Memorandum Dated December 10, 2010</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Cartooning with Dr. Gopalakrishnan, Rtd IAS</font></strong></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_1509.jpg" alt="Legal Corner Icon" width="250" height="336" hspace="5" border="0" align="center"></font></strong></font></p> <p align="center"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"Sir, the good news is that you will become Chief Minister. The bad news is that you will go to jail after that!" </font></strong></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"> – Monday's cases</font></strong></font></strong></font></p> <p><strong><font color="#663399" 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">Income Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sec 68 - Whether procedural compliance of cash deposits in assessee's account under Companies Act is enough to discharge onus cast upon assessee u/s 68 of I-T Act? - NO, says High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong> issue before the High Court is - Whether procedural compliance of cash deposits in assessee's account under the Companies Act is enough to discharge the onus cast upon the assessee u/s 68 of the I-T Act. No is the High Court's answer.</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">No interference at Show Cause Notice Stage by High Court; At Show Cause Notice stage, Court presumes allegations to be true – AP High Court</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> practice of entertaining Writ Petitions questioning the legality of a show- cause notice, stalling the proposed enquiry and retarding the investigative process to ascertain facts with the participation and in the presence of the parties, must be deprecated. A show-cause notice does not give rise to any cause of action as it is not an adverse order which affects the rights of a party. It is quite possible that, after considering the reply to the show-cause notice, the authority concerned may drop the proceedings and/or hold that the allegations are not established.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The jurisdiction of the High Court, under Article 226 of the Constitution, should not be permitted to be invoked in order to challenge a show-cause notice unless, accepting the facts stated therein to be correct, the show-cause notice is, ex facie, without jurisdiction.</font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export - Refund - fact that service provider was registered under different category cannot be made a basis for denial of refund to the appellant: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION</strong> No.41 /2007-ST provides exemption by way of refund from specified taxable services used for export of goods. Granting refund to exports, on taxable services that he receives and uses for export do not require verification of registration certificate of supplier of service. Therefore refund should be granted in such cases, if otherwise in order. The procedural violations by the service provider need to be dealt separately, independent of the process of refund. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tomorrow is a Holiday</font></strong></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend (extended)</font></p> <p align="justify"><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"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>