TIOL-DDT 311 · the untouched capture
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<p ><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT
311</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
</font></b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>27
02 2006<br>
Monday</b></font></p>
<p align="center" ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>TOMORROW
IS BUDGET 2006</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tomorrow is the much awaited budget. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The secrecy: </b>The Finance Minister<b>
</b>Chidambaram himself believes that budget as a concept and the associated
secrecy will not last long but as of now it is a very secret exercise. Why should
it be so? After all the Income tax proposals are to be effective only from the
next financial year! Is it because the customs and excise increase or imposition
is immediately effective? Now a days there is hardly any increase or imposition
But still the secrecy remains – may be more of a tradition than need. Try to
peep into North Block – you really can’t. High-tech tapping devices, an army
of security personnel, sophisticated surveillance gadgetry, digital deterrents,
electronic sweeping devices and jammers, huge scanners – well the budget is
under the tightest possible security. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No phones, no mails, no SMS and every communication
with the outside world is blocked for the officers preparing the budget. The
IB is in total control. Nothing can come out of North Block without the IB’s
knowledge. Heading the whole operation is Dr. Adarsh Kishore, the Finance Secretary
who is in constant touch with the Financer Minister and the Prime Minister.
There used to be a tradition that the Finance Secretary’s wife should not go
shopping during budget time for the price of anything she bought was sure to
go up. The Finance Secretary and his staff hardly have any sleep for over a
fortnight to bring out that budget. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But obviously the heavy task of the budget
is light for the FM Chidambaram. He is all over the place exuberating confidence.
The FM’s Private Secretary is S. Krishnan, son in law of former Finance Secretary,
K P Geethakrishnan. With Adarsh and Krishnan in control, obviously Chidambaram
can relax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The <i>dramatis personae</i> in the Budget
2006. </b></font></p>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1) Dr. Manmohan Singh, Prime Minister in total
command as far as economics is concerned and the original finance minister.<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">2) P. Chidambaram – of course<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">3) Dr Montek Singh Ahluwalia – was the Finance Secretary
when the PM was FM and knows his budget<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">4) Dr C Rangarajan – Like the PM was a former Governor
of Reserve Bank of India and knows India’s Finance better than any one else.<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">5 ) Dr Adarsh Kishore, Finance Secretary – the man behind
the budget<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">6) K M Chandrasekhar, Revenue Secretary – he has to be
there; budget is all about revenue.<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">7) Parthasarathy Shome, Advisor to Finance Minister –
He is a regular adviser to the FM and can there be a budget without him?<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">8) M. Jayaraman, Chairman, CBEC <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">9) Mrs M H Kherawala, Chairman CBDT<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">10) S Krishnan, Private Secretary to Finance Minister</font>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And of course a host of other officers committed
to the Budget mission. And every one doing the budget is under constant IB surveillance
that they don’t dare to talk to even their spouses.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The budget papers are printed in the cellar
of the North Block and now with the computer revolution, CDs of the budget are
made available. Incidentally even the DG, Systems which runs the web site of
the CBEC has no access to the CD before any one else. But NIC gets it a little
before the actual reading of the budget. It is really unfortunate that the departmental
web site does not get the budget in advance and they will have to get it like
any body else. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Budget consists of the following and in
that order.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Key to Budget <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget Highlights <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget Speech <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget at a Glance<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Annual Financial Statement </font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finance
Bill <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Memorandum <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Receipt Budget <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Expenditure Budget</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs & Central
Excise<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Implementation of Budget Announcements <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Macro Economic Framework Statement<br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Medium Term Fiscal Policy Statement <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Fiscal Policy <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Strategy Statement <br>
<br>
</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Statement under Section 7 of the FRBM Act</font>
</p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Budget snippets </b></font></p>
<p > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. Yaswant Sinha was told by an opposition leader once that
he was the second worst finance minister he had known. Mr. Sinha asked, ‘‘and
who was the worst?’’ ‘‘you only during your first tenure’’, was the prompt reply</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">· Peter the great of Russia even made people
to pay for sporting beards.</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">· A Turkish ruler required his hosts to shell
out ‘tooth money’ for the wear and tear their meal put on his teeth</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">· Roman emperor Vespasian had placed a tax
on public urinals. When his son Titus insisted that it was an undignified act.
Vespasian took a handful of coins obtained from this source and held them to
his son’s nose saying: ‘‘see my boy, if they smell?’’</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">· Michael Faraday once happened to explain
his discovery of electro-magnetism to William Gladstone. The prime minister
just shrugged it off exclaiming: ‘‘of what use is such a discovery?’’ ‘‘why,
you will soon be able to tax it’’, Faraday shot back</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">· There were no lawyers in the highest class
while the next higher class included 58 ministers of religion, 17 legal practitioners
and no medical men. I wonder whether religion was more lucrative than law. (
a report in 1870)</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">· “There comes perhaps a time in the life
of every smoker when the concern for his own health begins to outweigh the loyalty
to an old and faithful companion. For those who cannot shake off their consuming
passion, there is at least the consolation that the more taxes they pay, the
more they serve the common cause. I am, therefore, fortified in my decision
to increase once again the taxation on cigarettes by the thought that whichever
way my smoking friends react, there would be a net gain to national welfare.”
– YB Chavan</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">· “In a situation where both the husband and
the wife are tax-payers in their own right, it would be improper for any outsider
to decide as to who is dependent on whom. At present, we avoid this ticklish
question by allowing both parties to claim a spouse allowance. This still leaves
open the question as to who brings more tax benefit to the partnership through
marriage. To eliminate this unintended strain on the relationship of marriage,
I propose to provide that where both the husband and the wife have taxable incomes,
the spouse allowance will be available to neither.” – Morarjee Desai</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">· “Housewives in India, as elsewhere, have
been complaining for some time about the rise in their expenses. As a measure
of economising on their fuel bills without affecting the nutritional and, hopefully,
the gastronomic value of what they cook, I propose to exempt totally pressure
cookers from excise duties. They would now find someone else in their kitchens
letting off steam.” – Pranab Mukherjee</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">· Voting the Congress is not only good politics
but also good economics- Dr. Man Mohan Singh</font></p>
<p align="center" ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exchange rates announced for imported goods
and export goods</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2006/cnt06_016.htm"><strong>Notification
Nos. <u>16</u></strong></a><b> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2006/cnt06_017.htm">17</a><font color="#0000FF">/2006-Cus.
(N.T.), dated 23-02-2006</font></b> fix the exchange rates for imports and
exports respectively with effect from 1<sup>st</sup> March, 2006. Notifications
05 and 06/2006-Cus. (N.T.), dated 25-01-2006 are superseded<i>.</i></font></p>
<p align="center" ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Greek
and Latin - DDT's new feature</b></font></p>
<p align="center" ><B><IMG height=62 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_txt.jpg" width=375></B></p>
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<TD height="103"><IMG height=67 hspace=5 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_word.jpg" width=67 align=absMiddle vspace=5><B><I> <font size="3" face="Verdana, Arial, Helvetica, sans-serif"><b>obiter
dictum– (oh-bee-ter deek-toom)</b></font></I></B></TD>
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<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Something a judge says in arguing a point,
but has no bearing on the final decision</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Obiter dictum is a judge’s expression of opinion
uttered in discussing a point of law or in giving judgments, but not essential
to the decision and so without binding authority, generally, an incidental remark.”
– S.B. Sarkar’s “Words and Phrases of Excise Customs & Service Tax</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In A.K. Roy and another v. Voltas Ltd., popularly
known as the Voltas case in Excise circles, Justice K.K. Mathew made an <i>obiter
dictum</i> that “Excise is a tax on the production and manufacture of goods”.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“<i>Obiter dictum</i> is an opinion on some
point which is not necessary for the decision of the case. The emphasis is not
only on the opinion, but also on the point. It is not merely an expression of
opinion unconnected with the point that arises, but it must be an opinion given
on a point which arises for determination. It would be incorrect to say that
every opinion of the Supreme Court would be binding upon the High Courts in
India. The only opinion which would be binding would be an opinion expressed
on a question that arose for the determination of the Supreme Court, and when
though ultimately it might be found that the particular question was not necessary
for the decision of the case, even so, if an opinion was expressed by the Supreme
Court on that question, then the opinion would be binding upon High Courts.
In the case of Maqbool Hussain v. State of Bombay, it is clear that no question
ever arose before the Supreme Court, or could possibly arise, with regard to
the interpretation of Section 167(8). The only order under Section 167(8) was
an order of confiscation, and in deciding whether article 20(2) applied or not
the question as to the power of the Customs authorities to impose the penalty
under Section 167(8) was entirely irrelevant. Therefore, the observation of
the Supreme Court that the penalty under Section 167(8) is limited to Rs. 1,000/-
is not an obiter dictum in the sense indicated. It was not an expression of
opinion on a point that arose before the Supreme Court. It is a casual observation
made in considering the whole scheme of the Sea Customs Act” – Bombay High Court
</font></p>
<p align="left" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#990000">“Milk
is not obtained by drying up the cow; similarly from the country, fruits are
obtained by proper tapping and not by harassment.” </font>--Chanakya</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF6666">Until tomorrow with
more DDT and the budget</font></b></font></p>
<p align="justify" ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Have a nice day. </b></font></p>
<p align="justify" ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Mail your comments to</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<a
href="mailto:vijaywrite@taxindiaonline.com"><b>vijaywrite@taxindiaonline.com</b></a></font></p>
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