the essay of 2 February 2022 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <h1 align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">FEBRUARY 02, 2022</font></strong></h1> <div align="center"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Jest Budget</font> </strong> </div> <p align="center"><u><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>By Vijay Kumar</strong></font></u></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>I</strong> have tremendous respect for anyone who can read out a written a speech standing for more than an hour and a half. While the listeners can sit and yawn, it is very difficult for a Finance Minister to stand up and read the monumental budget. And how many times she must have already read it before reading it in the Parliament! I am not using 'she' because the present Finance Minister is a <em>she.</em> Hon'ble Finance Minister in her speech in para 122 stated: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">there will be a trust reposed in the taxpayers that will enable the assessee <strong>herself </strong> to declare the income that <strong>she </strong> may have missed out earlier while filing <strong>her </strong> return. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, it is assumed that the assessee is a she, a lady; I really don't wonder why this shouldn't have been as: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">there will be a trust reposed in the taxpayers that will enable the assessee <strong>himself </strong> to declare the income that <strong>he </strong> may have missed out earlier while filing <strong>his </strong> return. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It doesn't make much of a difference whether you call an assessee a he or a she - all that the government expects from the assessee, he or she is that he or she pays her or his taxes and complies with all the simple procedural requirements, even if it requires a couple of lawyers and accountants. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While yawning may be bad manners, most often it is an honest opinion. And this year, it was difficult to find whether people shown on TV were smiling or yawning, as they all had masks; who am I to do any unmasking, especially with viral threats all around.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget is a very serious sombre affair and there is hardly any room for smiles or jokes, though some Finance Ministers do indulge in them, not always successfully. To make the country laugh is not as easy as preparing a 30-page budget speech. The very serious looking Dr. Manmohan Singh employed his skills in humour in some of his budget speeches.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When he was accused of bowing to World Bank pressures, in a Budget speech, he said, <em>"I am doing this under pressure from WB"</em>, <em>"and WB is not World Bank"</em>, continued Dr. Singh in his serious style, <em>"but West Bengal." </em>While announcing certain benefits for Mumbai, where Dr. Singh lived for a long time, he said, <em>"Voting Congress is not only good politics, but good economics."</em> Congress had won the civic elections in Mumbai just then. While giving benefits to the North Eastern states, he said, <em>"This is in gratitude to the East for providing a home to a homeless Finance Minister."</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even the stiff Morarji Desai had his quota of humour when it came to Budget speeches, <em>"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."</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Comments on the Budget come from all corners and are generally better received than the budget speech itself. A review is often better than the film. My all-time favourite would be the comments by Maharashtra Chief Minister Mr. Udhav Thackeray, two years ago while attending an awards function along with Ms. Nirmala Sitharaman. He said something like this:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before I became chief minister, I did not know too much about budgets; after becoming CM, people would come and ask me what I felt about the budget and I would be ready a day before it is presented to the public; I had to give my standard reply: the rich will get richer and the poor will get poorer."</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You can enjoy the original version here: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="https://www.youtube.com/watch?v=rHaPaObMpiU&t=24s" target="_blank">https://www.youtube.com/watch?v=rHaPaObMpiU&t=24s</a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. HM Patel took over as the Finance Minister of the country on 24th March 1977 and he presented his budget on 28th March, creating a record in presenting the shortest budget speech, which contained 779 words! The present Finance Minister holds the record for the longest speech, though her speech this year was comparatively short at an hour and a half.</font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No Canon against government</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday, a former DG of DRI telephoned me and asked me if I had any inside information about a retrospective amendment undoing the <em>Canon </em> Judgement. I told him that though I am not on talking terms with the Finance Minister or the CBIC Chief, yes, there was inside information. Everybody in the department and connected with the department knew that the retrospective amendment would come and come it did.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is the practice for DRI to book cases left right and centre, prepare bulky Show Cause Notices running into hundreds of pages and then make the Jurisdictional Customs or Central Excise officers to adjudicate them. It is an unwritten rule in the field that a Show Cause Notice issued by DRI has to be invariably confirmed.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, all this changed more than a decade ago when the Supreme Court in the case of Sayed Ali - <a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2011/2011-TIOL-20-SC-CUS.htm" target="_blank"><strong>2011-TIOL-20-SC-CUS</strong> </a>held,</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"It is only the officers of customs, who are assigned the functions of assessment, which of course, would include re-assessment, working under the jurisdictional Collectorate within whose jurisdiction the bills of entry or baggage declarations had been filed and the consignments had been cleared for home consumption, will have the jurisdiction to issue notice under Section 28 of the Act".</em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lo and behold! All the Show Cause Notices issued by DRI, suddenly became illegal.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government does not tolerate such decisions of the Supreme Court and so it got Parliament to retrospectively confer the power on DRI to issue Show Cause Notices. The Parliament amended Section 28 of the Customs Act by inserting a new clause 11 with effect from 16.09.2011.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Delhi High Court observed in what is now famously known as the 'Mangali Impex' case- <a href="https://taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTEzNDE2" target="_blank"><strong>2016-TIOL-877-HC-DEL-CUS</strong></a>;</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The mere fact that Section 28(11) has been given retrospective effect does not solve the essential problem pointed out by the Supreme Court in the <em>Sayed Ali </em> case, which is the absence of the assigning of functions to 'proper officers' under Section 2(34) of the Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Section 28(11) confers validity only on 'the proper officer'.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As expected, the Department took the matter in SLP to the Supreme Court. In one of the SLPs, the Supreme Court on 7.10.2016, stayed the Delhi High Court Order. The Supreme Court ordered, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Delay condoned. Leave granted. There shall be a stay of operation of the impugned judgment and order passed by the High Court of Delhi. - <a href="https://taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTE4OTIy" target="_blank"><strong>2016-TIOL-173-SC-CUS</strong></a></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Delhi High Court order is stayed. Does it mean that Show Cause Notices issued by DRI are valid? No. Why?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In CANON INDIA PVT LTD Vs COMMISSIONER OF CUSTOMS - <a href="https://taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTY0NjY5" target="_blank"><strong>2021-TIOL-123-SC-CUS-LB</strong></a>, on 9th March 2021, the Supreme Court held,</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">the entire proceeding in the present case initiated by the Additional Director General of the DRI by issuing show cause notices in all the matters before us are invalid without any authority of law and liable to be set-aside and the ensuing demands are also set aside.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now panic buttons are pressed. Even while Mangali Impex is pending before the Supreme Court, the Apex Court has brought in the new idea of Section 6. Many in the department feel that the Supreme Court is wrong in interpreting Section 6 as they feel it is only for conferring power on other officers, not home officers. DRI officers are born Customs officers and there is no need to specially confer upon them powers under Customs Act. Is it so?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently, the Supreme Court Chief Justice is reported to have said, <em>"Some bureaucrats might be there who will advise the government to make the legislation to nullify the judgement. They will say 'pass another legislation if they pass a judgement'. This is how bureaucracy functions, we understand."</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the good bureaucracy lived up to the expectations and the whole law is comprehensively amended - retrospectively to undo the judgement of the Supreme Court. After all we are dealing with Revenue and we can't keep quiet if the Supreme Court can't tolerate our blunders in drafting laws. We have the power to make and amend laws retrospectively. Will you go the Supreme Court again? We can amend the law again - retrospectively.</font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Remarkable progress in GST </strong>:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nirmala ji in her speech said,</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- GST has been a landmark reform of Independent India showcasing the spirit of Cooperative Federalism. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- While aspirations were high, there were huge challenges too. These challenges were overcome deftly and painstakingly under the guidance and <strong>oversight </strong> of the GST Council. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- We can now take pride in a fully IT driven and progressive GST regime that has fulfilled the cherished dream of India as one market- one tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- There are still some challenges remaining and we aspire to meet them in the coming year. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- The right balance between facilitation and enforcement has engendered significantly better compliance. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- GST revenues are buoyant despite the pandemic. Taxpayers deserve applause for this growth. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Not only did they adapt to the changes but enthusiastically contributed to the cause by paying taxes.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Oversight </em> also means <em>lapse </em>!</font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Until Next Week </strong></font></p> </body> </html>