Jurisprudentiol – Monday's cases

By Vijay Kumar

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

If main contractor pays Service Tax, should sub-contractor pay - Matter remanded - 'oppressive' circular should be given only prospective effect: CESTAT

THE learned Commissioner, without considering those circulars laid his hands on the circular dated 23.8.2007, which clarified that the sub-contractor was also liable to pay service tax irrespective of any payment of such tax by the main contractor. It appears, the learned Commissioner considered the circular dated 23.8.2007 to be of retrospective operation to cover the period of dispute in this case. One of the contentions which apparently escaped the attention of the learned Commissioner was that an "oppressive" circular should be given only prospective effect and that the benefit of a previous beneficial circular must be given to the assessee.

Income Tax

Income tax - Whether tips paid by Customers to employees in restaurants of assessee-hotel constitute salary within meaning of Ss 15 and 17 - Whether assessees are liable to deduct tax at source on such payments u/s 192 - YES, rules HC

THE issues before the High Court are - Whether tips paid by the customers to the employees in the restaurants of the assessee-hotel constitute salary within the meaning of Section 15 and Section 17 of the Act and whether assessees are liable to deduct tax at source on such payments under Section 192 of the Act. And the verdict goes against the assessees.

Customs

suspension of CHA licence - Suspension is not a punishment. No need of Notice – Suspension upheld: CESTAT

THE Commissioner is empowered to invoke powers in cases like this under Regulation 20 (2) of CHALR. Tribunal found that there is no necessity of putting the party on notice of such action proposed and the material relied on. Suspension is not a punishment. The CHA gets adequate opportunity to present its case before the Commissioner at the post decisional hearing which the CHA is yet to attend pending these proceedings initiated by it. The order is competently and justifiably made. The civil consequences of such an order cannot be avoided.

See our columns Monday for the judgements