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By Vijay Kumar

Income Tax

TDS - Failure to deduct or pay- vires of Sec 40a (ia) challenged- High court grants interim stay.

What are the consequences of not deducting the TDS or after deducting not paying the deducted tax to the Government?

As per section 201 of Income Tax Act 1961,

1. Without prejudice to any other consequences, the defaulter will be deemed to be an assessee in default.

2. He is liable to pay an interest at 12% P.A. from the date on which the tax was deductible till the date of actual payment.

3. The TDS along with the interest will be a charge on all the assets of the defaulter.

4. He is liable to rigorous imprisonment for a term which shall not be less than 3 months, but which can extend up to 7 years and fine.

He is liable to a penalty equal to the tax not deducted.

Central Excise

In absence of proof that assessee collected any amount in excess of what is shown in invoice, demand cannot be sustained - Supreme Court

IT started in 1995 when the Central Excise department charged the TELCO with evading excise duty.

The assessee-appellant is, inter alia, engaged in the manufacture of chassis for various models and parts thereof falling under Chapter 87, at its factory at Jamshedpur. The appellant manufactures motor vehicles of various models. For each model the parts are according to its configuration and technical specifications and the price is also declared accordingly to the department. In other words, the value of the chassis depends upon its fitments. All the chassis in question had been actually fitted with Engine No. 697 NA and Gear Box GBS 40. There is no dispute on this factual position between the parties.

The Department issued Show cause Notices assuming that the appellant has collected Rs.15,290/- per chassis over and above the value declared in the price lists. This demand was confirmed by the Commissioner.

Vicco vajradanti ayurvedic medicine not cosmetics - High Court was right in quashing the fourth Show cause Notice on the issue - Supreme Court

NORMALLY a High Court would not interfere at the Show Cause Notice stage, but when the Revenue is bent on breaking every rule in the book, the High Court had to act and the Supreme Court did not find anything wrong with it! It is frightening to even imagine what would have been our position if we did not have the Courts!

The respondent is a manufacturer of various products including Vicco Vajradanti and Vicco Turmeric which are stated to be ayurvedic medicines. A show cause notice dated 8th November, 1976 was issued requiring the respondent to satisfy as to why the said products should not be classified as "cosmetics" and not "ayurvedic medicines".

The case has a chequered history.

See our columns tomorrow for the judgements