Jurisprudentiol– Monday's cases

By Vijay Kumar

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

Even High Courts are required to pass speaking reasoned orders – The "inscrutable face of a sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance. Supreme Court

Right to reason is an indispensable part of a sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before the Court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking out. The "inscrutable face of a sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance.

If this is so for the High Court, it is more so for the Quasi Judicial Authorities.

Customs

Warehousing of goods - “Warehoused goods” means goods physically deposited in a warehouse – When part quantity of imported goods is warehoused time of filing Bill of Entry relevant to determine quantum of warehoused goods – Ex-bond Bill of Entry not applicable for goods not “Warehoused” – Only in respect of goods which have been physically warehoused and for which Ex-bond Bill of Entry is filed, Section 15 (1) (b) would be applicable – CESTAT

WHEN an importer files an into-bond bill of entry on the eve of budget presentation and the cargo arrives on the budget day, there will be apprehension that duty rates would either go up or come down. This apprehension leads the importer to gamble with the options available to him. What if the discharge of cargo extends into the next day and the imported cargo is subjected to a higher levy of duty in the budget. Panic grips the appellant and he would file an ex-bond bill of entry for the entire quantity of goods imported even before the warehousing of goods is complete, hoping that he could get away with lower rate of duty prevailing on the eve of budget. But Customs authorities are smart enough to check the timing of warehousing, quantum of warehoused goods and then levy the prevailing rate of duty rather than accept the ex-bond bill of entry for the entire quantity at the old rates. This is precisely the story in the instant case and even Tribunal agreed with the lower authority's prudence in applying the prevailing rates.

Service Tax

Valiant efforts of Counsel for Revenue does not convince Bench - Rs Seven crore demand of Service Tax goes out of harbour - Ship Repair service is not Port Service: Tribunal

THE appellants are engaged in the activity of Ship Repairing at the dry dock built by them in an area specified by the Board of Trustees of the Mormugoa Port Trust, at Mormugao Harbour, under an Agreement entered into between them and the Board of Trustees of the Mormugoa Port Trust. The Service tax was imposed on “Port Services” (Major Ports) with effect from 16.7.2001. M/s Mormugoa Port Trust falls in the category of “Major Ports”.

“Port services” means any service rendered by a port or other port or any person authorized by such port or other port, in any manner, in relation to a vessel or goods.

The issue is whether the ship repair services rendered by the appellants would come under the purview of “Port Services” as defined under section 65(82) of Chapter V of Finance Act, 1994.

Income Tax

Regular assessment and block assessment cannot stand simultaneously in view of the specific provision in Explanation to sub s.(2) of s.158BA of the IT Act - Revenue's plea that this was done to protect the interests of revenue as the block assessment orders were under challenge not acceptable in view of strict provision of law in s. 158BA: High Court

IN an interesting case before the Karnataka High Court, Revenue filed two appeals seeking redressal from two orders passed by the Tribunal in favour of Wipro Finance Limited wherein the assessee claimed a substantial loss running into crores of rupees in two assessment years, by claiming depreciation, making provisions for bad and doubtful debts and finally claiming certain deductions from taxable income.

See our columns Monday for the judgements