From our Legal Corner

By Vijay Kumar

No works contract tax on own buildings – Raheja judgement distinguished.

to be a works contract under the Act, the activities mentioned therein ought to have been undertaken by means of an agreement, either implied or written, for cash, deferred payment, or other valuable consideration. If the activity is being undertaken by a person for himself, then it would not be a works contract under the Act and consequently, there will be no liability for payment of tax.

The Allahabad High Court has delivered a landmark judgement on works contract. We will bring you this works case tomorrow.

Make that spot payment and be damned!

When officers ‘raid’ your factory, normally they coerce and threaten you to make a spot deposit of the duty allegedly evaded. Most assessees succumb to these pressures and make a decent deposit. Later this very spot payment is used as evidence against them. Recently the Supreme Court asked one such assessee why he paid the duty when no duty was payable. The reply was that it was made under pressure, but the court was not really impressed, because the courts cannot believe that high profile assessees will succumb to threats from small time officers and simply pay up huge amounts of money to buy peace. That, as we all know, is unfortunately the stark reality! A leading company like Pepsi paid up money like this and told the Supreme Court – pressure!

We will bring you this interesting case tomorrow.