Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Section 50 - The accused must be individually informed that under Section 50(1) of NDPS Act, he has right to be searched before nearest gazetted officer or before nearest Magistrate: SC

SEVERAL judgements of the Supreme Court have loudly and clearly held that Section 50 of the NDPS Act requires the searching officer to inform the searched person his right of being taken to the nearest gazetted officer or the nearest Magistrate for making the search. The officers normally don't follow this and end up losing the cases.

Most of the offences under the NDPS Act carry stringent punishment and, therefore, the prescribed procedure has to be meticulously followed. These are minimum safeguards available to an accused against the possibility of false involvement. The communication of this right has to be clear, unambiguous and individual. The accused must be made aware of the existence of such a right. This right would be of little significance if the beneficiary thereof is not able to exercise it for want of knowledge about its existence.

Income Tax

Whether assessment can be reopened when issue of non-receipt of forex within period of 6 months from end of AY was not subject matter of original assessment - YES: HC

THE assessee is established as a 100% Export Oriented Unit (EOU) in Special Economic Zone (SEZ) and engaged in the business of manufacture and export of gold and diamonds jewellery. The assessee is entitled to a deduction u/s 10AA in respect of its income. The assessment was completed and the deduction u/s 10AA was granted to the extent of Rs.28.74crores. However, in March 2013, the AO issued a notice u/s 148 for reopening the assessment. The reason given in the notice was that the assessee had relied on the RBI circular No.91 dated 1.04.2003 for removing the stipulation of time limit for bringing in convertible foreign exchange and although its exports proceeds in convertible foreign exchange amounting to Rs.100,74,49,184/- it claimed deduction against the export turnover of Rs.114,10,82,258. This lead to excess deduction and thus escapement of income.

The issues before the Bench are - Whether the assessment can be reopened when the issue of non receipt of convertible foreign exchange within a period of 6 months from the end of the assessment year was not the subject matter of original assessment; Whether when the issue whether the assessee has declared its book profits after reducing the amount of deductions u/s 10AA was not considered during the original proceedings, the assessment can be reopened and Whether there is any bar on reopening of an assessment even if there has been no failure to make full and true disclosure necessary for assessment within the period of 4 years from the end of the relevant AY. And the verdict goes against the assessee.

Central Excise

CE - Rule 8(3A) of CER, 2002 - default in payment of duty beyond thirty days from due date - duty for each consignment to be paid by debit in account current but appellant paying by utilizing CENVAT - although what is required to be paid is to be construed as arrears of revenue the same have to be paid in cash - any other interpretation will make the restriction meaningless - what is not allowed directly cannot be allowed/claimed indirectly - appellant to pay Rs.8 crores in cash and is free to take CENVAT of equivalent amount and utilize for future clearances: CESTAT

THE appellants are the manufacturers of printed and laminated plastic films which attracts Central Excise duty.

During the month of October, 2010, they cleared excisable goods, on which duty of Rs.1,51,21,904/- was payable by them by 5.11.2010.

See our Columns Tomorrow for the judgements