TIOL-DDT 2303 · 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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font color="#006600"><strong><strong><strong><strong><strong><strong><strong><strong><strong><img width="115" height="125" border="0" align="right" src="image/ddt/10yearsDDT.jpg" alt="" /></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font color="#006600"><strong><strong><strong><strong><strong><strong><strong><strong><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17063"><img width="175" hspace="5" height="120" border="0" align="right" src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" /></a></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong><font color="#663399" size="3">TIOL-DDT 2303 </font><br> 27.02.2014 <br> Thursday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Super Sleuths, especially of DRI should be properly trained - Fake documents and bundle of lies by investigators ensure freedom for Drug Accused</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HOW</strong> does a DRI case proceed?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They get an intelligence that somebody is carrying narcotic drugs in a vehicle. This intelligence is the only piece of truthful information in the whole story. They intercept the vehicle and find the contraband. They don't take independent witnesses with them; they don't give an authorisation to an officer to conduct the search and seizure; they don't inform the accused his right to be searched by a gazetted officer or a magistrate; they take the vehicle, the contraband and the accused to their office, where the mahazar is prepared; nearby teashop boys are made to sign as witnesses; a back dated summons is issued to the accused and his ‘voluntary' statement is recorded - before the summons is issued and by using whatever force required. AND A CASE IS MADE. When it reaches a trial court, strict compliance of every provision in the statute is demanded and our case looks like a B grade Bollywood movie, which is beyond facts, logic or law. This is not a story concocted by DDT - look at the facts of a recent case:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As stated by the Prosecution (DRI), the case is like this:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A DRI IO, let's call him DJ, received intelligence that 6th October 2007 the accused, carrying narcotic drugs, would be coming in a Bolero Jeep at HP Petrol Pump, Mahipal Pur, near Radisson Hotel, New Delhi, at around 10.00 p.m. The intelligence was reduced to writing, placed before the senior officer SB, who directed another officer ND to immediately organise a team for surveillance and interception of the person along with the contraband substance. After associating two public witnesses, the DRI officers are stated to have left their office at 8.00 p.m. and reached the petrol pump at about 9.00 p.m. At around 10.30 p.m., the Bolero jeep arrived at the petrol pump and was immediately intercepted. Notice under Section 50 of the NDPS Act was given to the Respondent at the spot and he gave a reply in writing on the said notice in his handwriting that he did not require any Magistrate or Gazetted Officer for the search proceedings and that it could be undertaken by any officer of the DRI. About 5 kgs of narcotics, Rs. 1.98 lakh in cash and a mobile phone were seized. A detailed panchnama was prepared with regard to the interception, search and seizure. Further, it was stated that in response to the summons issued to the accused under Section 67 of the NDPS Act, the accused appeared and tendered his voluntary statement. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Trial Court was not amused with this story and found that:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Section 50 of the NDPS Act was contravened in as much as the notice issued under that provision to the accused at the spot appeared to be a fake document, created and manufactured after the alleged time of interception. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Sections 41 and 42 of the NDPS Act were not complied with since the Investigating Officer (IO) did not possess a valid authorisation to effect the seizure. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The summons issued to the Respondent under Section 67 of NDPS Act appeared to be a document prepared and manipulated subsequent to the search and seizure from the accused. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. While the retraction application of the Respondent was in Punjabi, his statement was in Hindi of poor quality and this raised further doubts as to its genuineness. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The failure to associate public witnesses in the search and seizure raised sufficient doubts as to their genuineness; there were also doubts regarding the site plan; the issuance of the seal of DRI and the very constitution of the raiding team. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instead of trying to learn from experience, the DRI filed an appeal in the Delhi High Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court could not find fault with the Trial Court's order. The High Court observed that a personal search was also made of the body of the accused. A notice under Section 50 NDPS Act had therefore to be mandatorily issued. The High Court noted, "<em>What is however, disconcerting is that the details recorded in this notice were contrary to what was deposed by the prosecution witness, as to what transpired on 6th October 2007. The notice under Section 50 (Ex. PW11/B) mentions the time of occurrence as around "11.30 hrs. today” which was 6th October 2007. In the absence of any indication that it was ‘p.m.' or ‘a.m.' it could well be taken to be ‘a.m'. Even if it was taken to be p.m., it contradicted the case of the prosecution that the accused was apprehended at around 10.30 p.m. The second factor pointed out is that a typed notice could not possibly have been served at the time and place of apprehension of the accused. There was nothing to show that the raiding party took any computer with them from which a typed notice could have been prepared at the spot. These factors indicate that the notice Ex. PW11/B was a document prepared subsequently. There is no satisfactory explanation for the above glaring discrepancies concerning the notice issued to the accused under Section 50 of the NDPS Act.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">………… </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Although the summons was dated 6th October 2007, the fact of the matter is that the panchnama proceedings concluded at 10.00 a.m. only on 7th October 2007. The question of accused appearing at 7.00 a.m. on 7th October 2007, therefore, simply did not arise. The finding of the trial court that the said summons could never have been served on the accused on 6th October 2007 and that the said document was possibly prepared subsequently cannot be faulted. ” </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is the sad state of affairs in the premier investigation agency right in the Capital - this did not happen in some remote North-East village. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this case today. This story maybe a repetition of our Breaking News Story, but the idea is to highlight the fact that a drug smuggler goes out of the long arm of the Law because the enforcement authorities forget or neglect elementary legal principles. A case does not end with a seizure or arrest - that is only the starting point and if you falter there, confiscation and conviction will fail, which should be the ultimate goal. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=19877" target="_blank">Breaking News</a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Paying Tax is more important than giving it to temples </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING </strong>a two-day cultural meet organised by the Income Tax Department, Chennai, actor Kamal Hassan said, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Putting any industry under strain with tax will lead to generation of black money. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Overtaxing any industry becomes an easy route for people not to disclose their incomes. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It's not going to be easy for you. My job will be difficult too because I am a regular taxpayer. That's where we both have to equally sit and discuss and put it forward to the government. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax department was always looked at with dread. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Those who did not pay taxes regularly had forgotten that they were doing it for the betterment of their own country. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I am one actor who does not look at the department with dread or fear. My father always kept telling that it (paying tax) was more important than giving it to temples. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Request for adjournment made on ground that counsel is at Tirupati Balaji - applicant not serious in pursing matter, hence application rejected</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A </strong>miscellaneous application was filed by the applicant for restoration of their early hearing application. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, the said early hearing application was dismissed by the Bench on 10/09/2013 for non-prosecution as none represented the applicant despite notice. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench observed - </font></p> <blockquote> <p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"3. When the case was called for hearing today, a request for adjournment of the restoration of early hearing application has been made on the ground that the counsel for the applicant-respondent is at Tirupati Balaji. It appears that the applicant-respondent is not serious in pursuing the matter. Accordingly, we reject the miscellaneous application for restoration of the early hearing application.” </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps, it is applications like these that eat up the valuable time of the Bench. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTIzMjE=" target="_blank">2014-TIOL-313-CESTAT-MUM</a></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"> - Friday'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">Sales Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Daman and Diu Sales Tax - a clarificatory notification would take effect retrospectively. Such a notification merely clarifies the position and makes explicit what was implicit: SC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> explanation should only explain or clarify. If it excepts, excludes or restricts, it is not an explanation, but a proviso, and should be considered as operative only from the date of its coming into effect. Therefore, had the notification issued by the Government, instead of removing the ambiguity in the earlier notification, introduced fresh conditions bringing substantial changes in the Notification then the notification would not have been explanatory or clarificatory. The meaning to be given to an 'explanation' must depend upon its terms, and no "theory of its purpose can be entertained unless it is to be inferred from the language used." An explanation may be added to include something within or to exclude something from the ambit of the main notification or the connotation of some word occurring in it. An explanation, normally, should be so read as to harmonize with and clear up any ambiguity in the main notification and should not be so construed as to widen the ambit of the notification. </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 has responded to notice issued u/s 158BC, filed return and participated in assessment proceedings, can later challenge jurisdiction of block assessment merely because search warrant was not issued in his name - NO: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee carried on business as a proprietor in the name and style of M/s. Rekha Silk Industries. There was a search operation on 31.8.1995 in the premises of Shri. Sridhar Sarada and Shri. Ramachandran Sarada, which resulted in recovery of materials relating to several transactions in stock and shares. Incidentally, the assessee was also residing in the same, where the search was conducted. Based on the materials recovered pertaining to the assessee, notice u/s 158 BC(a) was sent to the assessee on 05.12.2005. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the Bench are - Whether the assessment made based on the materials seized in the course of the search operation of two other persons sharing the same premises with the assessee, can be considered as assessment made u/s 158BD of the Income Tax Act; Whether when the assessee has responded to the notice issued u/s 158BC, filed its return and participated in the assessment proceedings, can later challenge the jurisdiction of the block assessment merely because the search warrant u/s 132 was not issued in his name; Whether reference to Section 143(3) notice read with proceedings u/s 158BC does not make the assessment as the one not falling u/s 158BD and Whether when the AO has to proceed for block assessment, the only chapter applicable in a given set of circumstances is Chapter XIV-B. And the verdict goes against the assessee. <a></a></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">Refund - Notfn. 11/2005-ST - although no time-limit is set out in notification it is a settled legal position that reasonable time-limit has to be read into law - provisions of s.11B of CEA, 1944 which deals with refund of excise duties has been made applicable to service tax vide s.83 of FA, 1994 and which implies that time-limit of one year from date of payment of tax for filing of refund claim would apply in respect of service tax refunds also: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REFUND</strong> claims amounting to Rs.11,32,86,358/- were filed by the appellant pertaining to the period April 2007 to December 2010. The appellant filed rebate claims in terms of Notification No. 11/2005-ST in respect of services provided in India to international inbound roamers registered with the Foreign Telecom Network Operator but located in India at the time of providing of such services treating the supply of services as export of services under Export of Services Rules, 2005. The original authority rejected the refund claims on the ground that 7 of these claims were time-barred inasmuch as the claim has been filed after a lapse of more than one year. The claim was also rejected on the ground that the services rendered by the appellant to international roamers were not export of services. Another ground taken for rejection was that of unjust enrichment. </font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</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"> <strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p> </body> </html>