TIOL-DDT 1563 · 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 1563</font><br> 08.03.2011<br> Tuesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">India's Debt Position - 300 Crores Due From Pakistan for more than 60 years </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is one item consistent and uniform in all Union Budgets from 1950. If you look at the Annexure-5 to the Receipts Budget of India, 2011-12, you will find certain interesting figures.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India's debt by the end of March 2012 is expected to be nearly 44 Lakh Crores.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the Statement of the Liabilities of the Central Government [Annexure-5( i )], the Total Liabilities are Rs . 43,52,689 Crores. From this an amount of Rs . 300 Crores is deducted and the net liability is shown as Rs . 43,52,389 Crores. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What is this amount of Rs. 300 Crores?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is supposed to be “Amount due from Pakistan on account of share of Pre-partition debt (Approx)”.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This same amount had been shown consistently in all our budgets since 1950.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 1950-51, when our total liability was Rs. 2865 Crores, this 300 Crores was deducted to arrive at Rs . 2565 Crores. That is the dues from Pakistan constituted slightly more than 10 per cent of our debts. Ten per cent of the present liabilities would amount to about 4.4 Lakh Crores, about 40% of today's budget. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even at 6% interest per annum, this would amount to approximately Rs . 10,000 Crores now. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The fact is we are not able to collect this amount from Pakistan for the last 60 years. Why to keep showing it in the budget year after year. Is it to show our inability to collect from Pakistan or do we send a copy of our Budget to Pakistan to remind them gently that they owe us Rs . 300 Crores? Why can't we simply write off this 300 Crores and be done away with it instead of having this blot in all our annual budget year after year? As a good will gesture, can't we tell Pakistan that their dues are written off? May be there are diplomatic problems! </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Why are Dues from Pakistan shown in Statement of Liabilities of Central Government?</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> position of the undivided Government as on the date of <a>partition </a> was that its outstanding liabilities exceeded its assets so that ultimately it was the debt that was being divided between the two Governments. On a rough estimate the outstanding debt of the Central Government as on the 14th August, 1947, included in this is not merely the outstanding public debt but all its obligations to outside parties such as deposits in Postal Savings Banks, outstanding balances of Post Office Cash and National Savings Certificates, Provident Fund Deposits of Government servants, the amount likely to be paid to the British Government for surplus stores and other property acquired by the Defence Services and the capitalised value of the liability for pensions in payment on the date of <a>partition </a> and pensions earned by serving officers upto that date, was likely to be of the order of Rs . 3,300 crores . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In his Budget Speech of 1948, Finance minister Shanmukham Chetty said, “On a very rough estimate this debt is likely to be of <strong>the order of Rs 300 crores</strong> and the rate of interest may be near about 3 per cent. Pakistan's total debt is to be repaid in Indian rupees in fifty annual equated instalments for principal and interest. As a measure of assistance to the new Dominion in its earlier years it has been agreed that the first repayment should commence only in 1952. In addition to the Rs . 75 Crores given to her out of the cash balance of the undivided Government it has also been agreed that India would make available to <a>Pakistan </a>a further sum of Rs. 6 crores for meeting the expenditure on the setting up of Ordnance factories and similar special institutions required by her. This amount will also be added to Pakistan's debt. With this settlement, the terms of which, as the Deputy Prime Minister has already told the House, are generous and conceived in a real spirit of assistance to Pakistan, the purely financial problems arising out of the <a>partition </a>may be said to have been satisfactorily solved.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">That was in 1948, but when it came to payment, nothing came from Pakistan. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the 1952-53, budget, credit had been taken for a recovery of Rs.9 crores from <strong>Pakistan</strong> as the first instalment of its debt repayment to India, but not a paisa came. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In his 1954 Budget Speech, Finance Minister Deshmukh said, “the budget for the current year placed the revenue at Rs.439.26 crores and the expenditure at Rs.438.81 crores leaving a nominal surplus of Rs.45 lakhs. In balancing this budget, I had taken credit for a recovery of Rs.18 crores from Pakistan on account of two instalments due from that country in repayment of the partition debt. I have been having discussions on this subject with the Finance Minister of Pakistan and we both hope that it will be possible to commence the repayment of the debt in the coming year. This single factor has made for a deterioration of Rs.18 crores in the revenue budget for the current year, and converted the surplus of Rs.45 lakhs into a deficit of Rs.16 . 96 crores .” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the next year's budget speech, he said, “I am not taking any credit for repayment of <a>partition </a>debt by Pakistan in <strong>view of what has happened in the last two years</strong>.”</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the debt continues and do we hope to collect it some day? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> had covered this issue last year also and is not tired of repeating it till the arrears are collected or written off. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Babus Overstaying on deputation to face serious Consequences - DOPT </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">WHEN</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> a Government servant goes on deputation to another department, it is very difficult to get him back to the parent department. Like Central Excise officers sent on deputation to DRI for a five year deputation stay put for nearly ten years! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per DOPT OM No. 14017/30/2006- Estt (RR) dated 29 th November, 2006, the deputationist officer is deemed to have been relieved on the date of expiry of the deputation period unless the competent authority has with requisite approvals, extended the period of deputation, in writing, prior to the date of expiry. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Five years down the line DOPT finds that its instructions are not being followed. Obviously Delhi's writ does not run in the field! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT reiterates that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ It will be the responsibility of the immediate superior officer to ensure that the deputationist does not overstay. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In the event of the officer overstaying for any reason whatsoever, he/she is liable to disciplinary action and other adverse Civil/Service consequences which would include the period of unauthorised overstay not being counted for service for the purpose of pension and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Any increment due during the period of unauthorized overstay being deferred with cumulative effect, till the date on which the officer rejoins his parent cadre. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT warns that <em>“henceforth no ex-post facto approval for regularization of overstay on deputation would be allowed ”</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT has sent copies of this communication to the President's secretariat, PMO , Cab Sec, CAG, UPSC, CBI, All State Chief Secretaries. Apparently the offenders are senior and responsible officers of the Government. These are high class officers who will not tolerate a small aberration by the citizen, but when it comes to their postings, they will go to any extent to violate every provision in the rule book for they know that there will always be condonation and never punishment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the DOPT is serious about its threats, let them have the guts to implement them and haul up a few officers – the whole system will get regularized. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/deputation_dopt.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT OM No. 6/8/2009- Estt (Pay-II); Dated March 01 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Ministers urge FM to roll back 2011 Budget Levies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CIVIL</strong> Aviation Minister Vayalar Ravi urged the Finance Minister to reconsider he increase in service tax for the airline industry, while Commerce Minister Anand Sharma expressed surprise at the Budget proposal to impose Minimum Alternate Tax on SEZ developers and had written to the FM. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Punjab Chief Minister Prakash Singh Badal wrote to the PM and FM against the introduction of excise duty on hosiery and textile industry. Badal apprised the Central Government that this industry was already facing big threat from garments imported from China, Bangladesh and Sri Lanka. Due to large scale production in China and support from government, their products are much cheaper compared to our products and this industry would be slowly wiped out. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">LTU Scheme - Show Cause Notice to exclude new units from LTU ? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> LTU Scheme was started with much fanfare and assessees were actually persuaded to join the LTU . But recently there was a case where an LTU was issued a Show Cause Notice to deny entry into the LTU for three units of an LTU assessee just because of a technicality that a proper intimation was not given. The assessee had to go to the High Court to get its three three units included in the LTU scheme. The High Court observed that the Chief Commissioner/Commissioner, LTU must play a pro active role in the administration of LTU and solve the problem that arises at the initial stage. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you this case tomorrow. </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"> – Wednesday'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">LTU Scheme - Three units of the assessee started after joining the LTU should also be part of the LTU - Chief Commissioner /Commissioner, LTU must play a pro active role in the administration of LTU and requires them to solve the problem that arises at the initial stage - High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THOUGH</strong> the initial consent letter given by the petitioner related only to the six units, both the petitioner and the revenue since inception have proceeded on the footing that the petitioner had opted for the LTU facility not only for the six units but also in respect of all the other units set up subsequent to the initial consent letter. The only grievance is that specific letter of consent has not been submitted in respect of the newly established units till 9/9/2010. The lapse, if any, being only technical and the LTU policy itself provides that the Chief Commissioner/Commissioner, LTU must play a pro active role in the administration of LTU and requires them to solve the problem that arises at the initial stage; in the facts of the present case all the units must be held to be governed by the LTU scheme since inception.</font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether when Revenue grants extension of time for filing return u/s 139(1), it automatically extends due date for purpose of Sec 43B - YES, says Delhi High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the HC is - Whether when the time for filing return is extended in terms of proviso to Section 139 (1), it automatically means extension of the due date for the purpose of Section 43B of the Act. And the verdict goes in favour of the assessee. </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">Appeal against High Court's order releasing sized goods - Departmental Adjudication Ordered - Notice to Officer - High Court requested to decide expeditiously - Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INDUBITABLY</strong>, after the release of the goods on the basis of provisional assessment, there has been no final adjudication of the Bills of Entry filed for clearance of the goods for home consumption. Under the given circumstances, instead of examining the correctness of the impugned orders at this juncture it will be in the interest of the revenue as well as the importers if all the import consignments in respect of which show cause notices have been issued to the importers are finally adjudicated. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Time.</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>