Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Indo-German DTAA: Limited Partnership firm, paying Trade Tax, a tax on income from business, in Germany is entitled to lower tax rate on royalty and fees for technical services: ITAT

THE issue in this case involving a German resident is not the taxability but the lower tax rate under the DTAA. The assessee on its own filed the return of income and claimed 10% rate of tax on royalty and fees for technical services. AO disallowd the same on the ground that the assessee is a 'Limited Partnership' firm which cannot be treated as a 'person' as per the DTAA. He further noted that the assessee cannot be said to be a resident of Germany. The AO also raised the objection that the assessee pays 'Trade Tax' on turnover in Germany which cannot be allowed under the DTAA. The CIT(A) however allowed the appeal.

Central Excise

Interest on refunded amount – assessee approached High Court bypassing the regular appellate channel – High Court's Order set aside and assessee given four weeks time to appeal to Commissioner (Appeals) – Supreme Court

The Appellate Authority will decide the matter uninfluenced by the observations contained in the impugned judgment of the High Court as also those contained in its judgment dated 12th August, 2005 in Special Civil Application No.12251/2005. Subject to above, C.A. is dismissed as withdrawn.

Gold Control

Release of seized gold – Redemption Fine – based on market price at the time of seizure, not at the time of release – alternate remedy no bar for High Court to interfere to prevent injustice - High Court

296 GRAMS of primary gold was seized by the Central Excise officers from a house on 12.09.1975. After 30 years, in 2005, the High Court ordered the gold to be released on payment of redemption fine.

The Commissioner 1.12.2005, promptly fixed the redemption fine at Rs. 2,23,480/- that is Rs. 755/- per gram. The maximum price of gold in 2005 was Rs. 616/-. So it would have been cheaper for the party to buy the gold in the market than redeem it from the Central Excise Department.

“The impugned order is legally not sustainable as law permits the redemption fine at the rate prevalent when the goods were seized.”

Was the Commissioner not aware of this Law? Who pays for the Department's ignorance? The assessee, of course.

So the High Court allowed the writ with a direction to the Department to refix the Redemption fine.

Incidentally gold price was Rs.54/- per gm in 1975 – so the RF cannot be more than Rs. 15,984/-.

See our columns Tomorrow for the judgements