TIOL-DDT 2203 · 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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17063"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><font color="#663399" size="3">TIOL-DDT 2203</font><br> 04.10.2013 <br> Friday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Prior Sanction mandatory to prosecute Government Servant - SC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a judgement delivered by the Supreme Court on 1st October 2013, the question before the Court was, <em>whether the Special Judge/Magistrate is justified in referring a private complaint made under Section 200 Cr. P.C. for investigation by the Deputy Superintendent of Police Karnataka Lokayukta, in exercise of powers conferred under Section 156(3) Cr. P.C. without the production of a valid sanction order under Section 19 of the Prevention of Corruption Act, 1988. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was submitted that the question of sanction is of paramount importance for protecting a public servant who has acted in good faith while performing his duties. The purpose of obtaining sanction is to see that the public servant be not unnecessarily harassed on a complaint, failing which it would not be possible for a public servant to discharge his duties without fear and favour. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Counsel for the appellants raised the contention that the requirement of sanction is only procedural in nature and hence, directory. The Supreme Court did not agree and observed that once it is noticed that there was no previous sanction, the Magistrate cannot order investigation against a public servant while invoking powers under Section 156(3) Cr.P.C. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The law on the issue of sanction can be summarized to the effect that the question of sanction is of paramount importance for protecting a public servant who has acted in good faith while performing his duty. In order that the public servant may not be unnecessarily harassed on a complaint of an unscrupulous person, it is obligatory on the part of the executive authority to protect him... If the law requires sanction, and the court proceeds against a public servant without sanction, the public servant has a right to raise the issue of jurisdiction as the entire action may be rendered void <em>ab-initio</em>. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTAxMTc=" target="_blank">2013-TIOL-50-SC-SERVICE</a></font></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - New Exchange Rates from Today </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified new exchange rates for Imported Goods and for Export Goods with effect from 4th October 2013. The US Dollar is 62.55 rupees for imports and 61.55 for exports. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_103.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 103/2013-Cus (NT), Dated: October 03, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CHA Licence revocation and suspension cases before Single Member Bench of CESTAT - ITBA Request </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Indirect Taxes Bar Association, Chennai has brought to the notice of the President, CESTAT that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">√ the present practice is to list appeals relating to suspension and revocation of CHA licence before Division Bench. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">√ This is often resulting in delay in disposal of such appeals, due to the huge pendency of appeals before the Division bench and consequent hardship to the appellants as the matter involves loss of livelihood to such appellants. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">√ The solution to this problem may be to permit Single Member Bench to decide such appeals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">√ The Customs Act, 1962 does not bar the jurisdiction of the Single Member to hear appeals relating to revocation and suspension of CHA licence. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">√ Further, the monetary jurisdiction of the Single Member Bench has also been enhanced in the last budget. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">√ The Division Bench of the various Benches of this Hon'ble Tribunal are currently taking up final hearing of appeals of the year 2005-06 and the pendency of appeals which fall under the jurisdiction of Single Member Bench is not high. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, the Association has requested the President of CESTAT that the practice of listing such matters before the Division bench may be reconsidered and the Single Member benches may be allowed to hear such appeals involving suspension / revocation of CHA licences. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This, according to the Association, is essential to ensure speedy justice where livelihoods are at stake. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Do we have Customs House Agents or Brokers or None Now? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per the Finance Act 2013, after 10th May 2013, there are no Customs House Agents - there will be only Customs Brokers. The Customs Brokers Licensing Regulations, 2013 have just been notified and there is no Customs Broker licenced yet under the new Regulations. It is not clarified as to what would happen to the old Custom House Agents. Do they automatically become Customs Brokers or should they get new licences? But as of now, we have neither Custom House Agents nor Customs Brokers. The transactions by CHAs from 21.6.2013 seem to be illegal! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They could have simply amended the Customs Act and the CHALR instead of creating all this confusion and possible litigation. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IRS Closed - Income Tax Still Payable </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is with reference to the dreaded Internal Revenue Service - the Income Tax department of the US of A. The US Congress did not approve a budget appropriation for Fiscal Year 2014 by October 1, 2013. Consequently, most IRS operations are closed. Though IRS operations are limited, the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal. Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law. The IRS will accept and process all tax returns with payments, but will be unable to issue refunds during this time. No live telephone customer service assistance will be available, however most automated toll-free telephone applications will remain operational. IRS walk-in taxpayer assistance centres will be closed. While the government is closed, people with appointments related to examinations (audits), collection, Appeals or Taxpayer Advocate cases should assume their meetings are cancelled. IRS personnel will reschedule those meetings at a later date. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IRS has advised that it will not be working any paper correspondence during this period; taxpayers should continue to file and pay taxes as normal. Individuals who requested an extension of time to file should file their returns by Oct. 15, 2013. All other tax deadlines remain in effect, including those covering individuals, corporations, partnerships and employers. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Even though we don't have a problem like the one in US, maybe we should experiment with closure of most of our tax offices for a few months, especially during the year-end and during the period when VCES is on. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IRS is Hundred Years Old </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INCIDENTALLY</strong>, yesterday, the American Income Tax celebrated its centenary. (of course the Government was closed and there was really no celebration). Income Tax was actually introduced sometime in the 1790s by Alexander Hamilton. Thomas Jefferson called it as an assault on liberty, and when elected in 1800 he abolished it. He said that taxes <em>covered our land with officers and opened our doors to their intrusions</em>. In 1862 Abraham Lincoln enacted an income tax to pay war expenses. This was repealed after 10 years. Another income tax was imposed in 1894, but it was struck down by the Supreme Court as unconstitutional. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The modern Income Tax legislation was signed into law by President Woodrow Wilson 100 years ago, October 03, 1913. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian Tax system is supposed to be much older - Manu said of taxes, "<em>As the calf and the bee take their food little by little, even so must the king draw from his realm moderate, annual taxes.” </em>In Raghuvansa, Kalidas said of king Dileepa<em>, "It was only for the good of his subjects that he collected taxes from them, just as the Sun draws moisture from the Earth to give it back a thousand fold</em>”. Arthasastra is perhaps the oldest treatise on taxation. The Vijayanagar King Krishnadevaraya had a system of progressive taxation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Modern Income Tax came to India in 1860. The First Modern comprehensive Act was the Income Tax Act 1886. The most comprehensive Income Tax law was brought about through the Income Tax Act of 1922. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI arrests Income Tax Inspector and others for Tampering with selection examination</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HAD</strong> they passed the examination they could have become Inspectors in Customs/Excise/Income Tax or sub-inspector in CBI, but now they are in jail - their offence? They did not prepare well for the examination but used high-tech methods to cheat in the TIER-II of Combined Graduate Level Examination conducted by Staff Selection Commission on 29/09/2013 (Sunday). The gang included an Income Tax Inspector posted at ITAT, Mumbai; a Sub Inspector of Delhi Police posted at Police Station Sarai Rohilla, Delhi; three other public servants including a Translator; three private persons and five candidates/students who were allegedly tampering with the examination process. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They adopted a unique modus operandi and got question paper leaked in criminal conspiracy with unknown officials. Thereafter, the accused got the same solved with the assistance of experts. Further, when the examination was being held, they communicated the answer keys to the aspiring candidates in the examination hall through their mobile phones and other such devices in exchange of money. The aspiring candidates while working in close nexus with the group had carried the mobile sets and other such devices in the examination hall while concealing the same in their clothing. The aspirants were allegedly charged Rs.10 to 20 lakhs for providing the answer keys during examination via mobile phone. These candidates were also equipped with mobile and Bluetooth devices etc. while they were appearing in the examination. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Imagine the future when hard-core criminals become inspectors in our Customs, Central Excise, Income Tax and CBI and how fast are they going to make money if they start with an initial investment of Rs. 20 lakhs? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They used <em>WhatsApp</em> for this purpose and now their time is UP. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Cartoon </font></strong></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Cartoon_2203.jpg" alt="" width="400" height="451" hspace="5" border="0" align="center"></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"> – 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">Customs</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Valuation of Batteries - Enhancement of value based on NIDB data - Demand Upheld: CESTAT by majority </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> respect of batteries the country of origin was declared by the importer as 'Made in China' whereas on examination the batteries were found to be made in Japan and as such there was a mis-declaration in respect of country of origin of the batteries. It is submission of the appellant that the batteries were purchased in stock lot. No evidence has been submitted by the importer in support of his contention that the transaction in respect of the batteries was a stock lot transaction. On the basis of NIDB data available with the department in respect of batteries of Japan origin, the department loaded its value to Rs.4 per piece. The lower authorities have applied the NIDB data after taking the lowest value of identical or similar goods found during the relevant period - There is no infirmity in respect of applying NIDB data to the batteries imported by the appellant - The appeal in respect of batteries needs to be rejected. </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 assessee is engaged in business of Tissue Culture, 'Green House' can be treated as machinery for purpose of depreciation - YES: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is a company engaged in the business of Tissue Culture Activities. Assessee had incurred expenditure of Rs.10,71,565/- for preliminary survey and other related technical matters of Aqua & Agro Project. The Assessee was asked to justify its claim. The Assessee inter alia submitted that Management had taken a decision to defer the implementation of this project and was exploring the possibility of undertaking the same under separately constituted company. The issue before the Bench is - Whether expenditure incurred by the assessee for preliminary survey and other related technical matters of a Project which was not implemented is capital expenditure and Whether the "green houses” can be classified as "building" or "machinery” for the purpose of allowing depreciation. And the verdict partly goes in favour of the assessee.</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">No tax payable on services provided to SEZ Unit: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issue involved in this case is whether service of man-power supply provided by the appellant to M/s. Reliance Petroleum Ltd., Jamnagar, a unit situated in SEZ, was exempted from payment service tax for the period from 03/03/2009 to 20/05/2009, as a result of amendment carried on in the Notification No.15/2009-ST dated 20/05/2009 to Notification No.9/2009-ST dated 03/03/2009. It is the case of Revenue that during the period from 03/03/2009 to 20/05/2009, the appellant was required to discharge service tax liability and follow refund procedure prescribed under Notification No.09/2009-ST. </font></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><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend. </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"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>