Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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Government directed to ban import of all hazardous/toxic wastes, which had been identified and declared to be so under BASEL Convention and its different protocols: SC

THIS writ petition has been filed in 1995 by the Research Foundation for Science Technology and Natural Resource Policy, through its Director, Ms.Vandna Shiva, for the following reliefs:

1. direct the Union of India banning all imports of all hazardous/toxic wastes;

2. direct amendment of rules in conformity with the BASEL Convention and Article 21, 47 and 48A of the Constitution as interpreted by this Court;

3. declare that without adequate protection to the workers and public and without any provision of sound environment management of disposal of hazardous/toxic wastes, the Hazardous Wastes (Management & Handling) Rules, 1989 are violative of Fundamental Rights and, therefore, unconstitutional.

Income Tax

Interest tax - Whether mere absence of mens rea warrants cancellation of penalty under Sec 13 - NO, penalty imposed on Fortis Financial for not treating bill discounting charges as interest income upheld by Delhi High Court

THE issues before the Bench are - Whether provisions of Sec 13 of the Interest Tax Act and Sec 271(1)(c) are pari materia; Whether when Revenue imposes penalty u/s 13, in the absence of 'explanation' unlike the I-T Act, the onus does not automatically shift to assessee; Whether when two legal interpreations are available on an issue, penalty cannot be imposed merely because the Revenue's interpreation is finally upheld by the court; Whether mens rea is required to be established before penalty is imposed u/s 13; Whether establishing mens rea is not important in civil penalty cases; Whether mere absence of mens rea warrants cancellation of penalty u/s 13; Whether in view of amendment in Sec 2(7) of the Interest Tax Act in October, 1991, discounting charges are clearly an interest income and no two legal interpreations are plausible in this case and whether CBDT Circular No 647 of 1993 explaining the applicability of Sec 194A does not explain the amendment to Sec 2(7) of the Interest tax act. And the final verdict goes against the assessee.

Service Tax

If after sale service expenses collected by dealers are included in assessable value u/s 4 of CEA, 1944, the assessee is entitled for input service credit of service tax paid thereon by dealers - Revenue appeal dismissed and appeal by assessee remanded: CESTAT

THE issue is as to whether the assessee is entitled to avail input service credit on after sales service charges paid by the dealers.

One of the appeals before the CESTAT is by the Revenue against the order passed by the adjudicating authority viz. CCE, Nashik holding that the assessee is entitled to take input service credit on after sales service provided by the dealer subject to the condition that the service charges are included in the assessable value of the vehicle. The second appeal is by the assessee against the order of the CCE, Mumbai-V disallowing credit on the same service.

See our columns Tomorrow for the judgements