TIOL-DDT 2891
19 07 2016
Tuesday

DDT 2887 13 07 2016 reported about CBEC Member Ram Tirath's statement in Hyderabad on 11.7.2016 that assessees under the GST will have to deal with only one single authority.  Board has neither confirmed, reiterated or denied this. They have gone into a silent mode. The silence is broken with a thud by the Revenue Secretary loudly and emphatically proclaiming that it will be dual control and it's good for you according to him.

In an article published in the edit page of the Hindu today, Revenue Secretary Hasmukh Adhia and Chief Economic Advisor Arvind Subramanian glorify the dual control as:

GST would improve - even substantially - tax governance in two ways. The first relates to the self-policing incentive inherent to a valued-added tax.

The second relates to the dual monitoring structure of the GST - one by the States and one by the Centre. Critics and taxpayers have viewed the dual structure with some anxiety, fearing two sources of interface with the tax department and hence two potential sources of harassment. But dual monitoring should also be viewed as creating desirable tax competition and coope ration between State and Central authorities. Even if one set of tax authorities overlooks and/or fails to detect evasion, there is the possibility that the other overseeing authority may not.

There seems to be no clarity even within the Revenue Department with the CBEC Member and the Revenue Secretary, not on the same page on single or dual control. It is this kind of dual confusion, which makes GST look like a monstrousdevil.

Special Leave Petition Before Supreme Court - CBEC Instructions

BOARD has been receiving various proposals from field formations for filing of SLP before the Apex Court against the judgment passed by the various High Courts in

Indirect Tax matters. The Law Officers in a number of cases have opined against filing of SLP, as there was no substantial question of law involved. It has been seen that many a times (many a is singular; I wish they get that English Teacher) field formations send proposals for filing a SLP, which are purely within the realm of appreciation of evidence or where no substantial question of law is involved.

SLP: Article 136 of the Constitution of India, which provides for Special leave to appeal by the Supreme Court, reads as under:

"(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.

(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order passed or made by any court or tribunal constituted by or under any law relating to the Armed Forces."

The Supreme Court in Indian Oil Corporation Ltd. vs. State of Bihar and Others 2002-TIOL-399-SC-LMT observed, "It is not the policy of this Court to entertain special leave petitions and grant leave under Article 136 of the Constitution save in those cases where some substantial question of law of general or public importance is involved or there is manifest injustice resulting from the impugned order or judgment."

Substantial Question of Law

The Apex Court in its judgment dated 08.02.2001 in Santosh Hazari vs. Purushottam Tiwari has dwelt upon what is meant by a substantial question of law. It was observed

"The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest Court or the general principles to be applied in determining the question are well settled and there is a mere question of applying those principles or that the plea raised is palpably absurd the question would not be a substantial question of law."

It was further observed:

"A point of law which admits of no two opinions may be a proposition of law but cannot be a substantial question of law. To be substantial, a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, in so far as the rights of the parties before it are concerned. To be a question of law involving in the case there must be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case."

Board reiterates that SLP before the Apex Court can be filed only when a substantial question of law arises. Matters purely relating to the realm of appreciation of evidence, unless there is a gross perversity or illegality in the appreciation of evidence by the High Court, or on settled issues do not fall within the purview of special leave jurisdiction of the Apex Court. SLP should not be proposed in a routine manner, just because some High Court decision is not in Department's favour.

The field formations are, therefore, requested by Board to keep in mind the above, before sending SLP proposal to Board against the judgment of High Courts.

CBEC Instruction in F.No.276 /72/ 2016- Cx.8A., Dated July 18, 2016

SEZ - Check List Regarding Documents

THE department of Commerce has noted that in number of instances the documents forwarded by the office of DCs for

1. full notification

2. additional area notification

3. partial de-notification

4. full de-notification

5. change of name of developer or co-developer and

6. shifting of unit from one SEZ to another SEZ

are not complete in all respect thereby leading to avoidable delay.

A checklist for each of the above items of work is circulated to ensure that complete documents are forwarded along with DCs recommendation to the Department.

CHECKLIST FOR FULL AREA NOTIFICATION

(i) State Government's Recommendation.

(ii) Inspection Report in prescribed format (copy enclosed).

(iii) Developer's Certificate countersigned by DC.

(iv) Legal Possession Certificate from revenue authorities.

(v) Non-encumbrance Certificate from revenue authorities.

(vi) Land details of area to be notified duly certified by revenue authorities.

(vii) Colored Map clearly indicating survey numbers and duly certified by revenue authorities.

(viii) Copy of Registered Lease /sale Deed.

CHECKLIST FOR CHANGE OF NAME OF DEVELOPER/CO-DEVELOPER

(i) Copy of Fresh Certificate of Incorporation, consequent on change of name issued by Registrar of Companies.

(ii) The details of Board of Directors and their shareholding pattern before and after name change duly certified by Chartered Accountant.

(iii) 'No Objection Certificate' from the developer, in case proposal is for change in name of co-developer.

CHECKLIST FOR SHIFTING OF UNIT FROM ONE SEZ TO ANOTHER

(i) 'No Dues Certificate' from the existing developer/co-developer.

(ii) Consent Letter/Offer of space from the developer/co-developer where unit wants to shift.

Dept. of Commerce Office Memorandum., Dated July 14, 2016

When does a Notification Come into effect?

WHEN does a notification issued under Section 5A of the Central Excise Act or Section 25 of the Customs Act come into effect?

This was a question I asked in the very first DDT on 01.12.2004.

The Notifications are supposed to come into effect on the date of its issue for publication. The CBEC normally issues notifications in the evening and they are available late in the evening or the next day, but they have come into effect from 0000 hours of the date shown in the notification irrespective of when the public or for that matter the Government officers responsible for implementing them come to know about it.

In many cases, the Customs officers are not aware of the increase in duty when they allow clearance. They would subsequently recover the enhanced duty, if the assessee is an established Industry. What would happen if the assessee cannot be traced easily? For example, the increase/decrease in tariff value of gold. The notification comes sometime in the evening and the Customs officer in the airport is not aware of it. What do they do when they assess the duty at a lower tariff value and realise that the value has been increased? They don't face this problem, because gold is generally not assessed in the airports!

It would be convenient to everybody if the notification itself specifies an effective date two or three days after issue of the notification. Heavens are not going to fall and coffers are not going to be emptied if the effect of the notification is postponed for a couple of days. Another archaic relic we are not able to get rid of!

The Telangana and AP High Court recently held that the Tariff Value Notification No. 36/2001-Cus(NT), dated 03.08.2001 was not effective from 03.08.2001, but a date on or after 06.08.2001. The Notification was held inapplicable for the imports made on 3.8.2001.

For more details of the case, please see Breaking News

Judicial Discipline

IN the above order, the High Court made some interesting observations on Judicial Discipline:

- A Division Bench is bound by the judgment of another Division Bench and a Full Bench of the same High Court. They cannot differ from the earlier judgment of co-ordinate jurisdiction merely because they hold a different view as certainty and uniformity in the administration of justice are of paramount importance.

- An earlier decision may seem to be incorrect to a bench of coordinate jurisdiction considering the question later, on the ground that a possible aspect of the matter was not considered or not raised before the Court or more aspects should have been gone into by the Court deciding the matter earlier, but it would not be a reason to say that the decision was rendered per incuriam and is liable to be ignored. The earlier judgment may seem to be incorrect, yet it will have binding effect on the latter bench of co-ordinate jurisdiction. The easy course of saying that the earlier decision was rendered per incuriam is not permissible and the matter can be resolved only in two ways either for the earlier decision to be followed or to refer the matter to a larger Bench.

- When a Division Bench disagrees with another bench of co-ordinate jurisdiction, whether on the basis of different arguments or otherwise, it is appropriate that the matter be referred to a larger Bench for resolution of the issue rather than leave two conflicting judgments to operate, creating confusion. It is not proper to sacrifice certainty of law. Judicial decorum, no less than legal propriety, forms the basis of judicial procedure and it must be respected at all costs.

- it must be borne in mind that there is no constitutional or statutory prescription on the effect of the law pronounced by a Division Bench, in relation to a case raising the same point subsequently before a Division Bench of the same or smaller number of Judges, and the point is governed entirely by the practice of Courts in India, sanctified by repeated affirmation for over a century. It is in order to guard against the possibility of inconsistent decisions on points of law by different Division Benches that this Rule has been evolved, in order to promote consistency and certainty in the development of the law, and its contemporary status that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges.

- Article 141 of the Constitution stipulates that the law declared by the Supreme Court shall be binding on all courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law. The law which is binding under Article 141 would, therefore, extend to all observations on the points raised and decided by the Court in a given case. The decision, in a judgment of the Supreme Court, cannot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court.

- The decisions of the Supreme Court are of significance not merely because they constitute an adjudication of the rights of the parties and resolve the disputes between them, but also because, in doing so, they embody a declaration of law operating as a binding principle in future cases. The law declared by the Supreme Court binds all Courts in India. On the law having been declared by the Supreme Court, it is the duty of the High Court, whatever be its view, to act in accordance with Article 141 of the Constitution of India and to apply the law laid down by the Supreme Court. Judicial discipline to abide by the declaration of law, of the Supreme Court, cannot be forsaken by any Court, be it even the highest Court in a State, oblivious of Article 141 of the Constitution of India.

- A Decision is not necessarily synonymous with opinion. A decision of the Court is its judgment; the opinion is the reasons given for that judgment, or the expression of the views of the Judge. In the case of a decision, the appellate structure is exhausted after a pronouncement by the Supreme Court. The only option left to the parties is of review or curative jurisdiction.

- Judicial discipline requires, and decorum known to law warrants, that appellate directions should be followed. In the hierarchical system of courts which exists in this country it is necessary for each lower tier to accept loyally the decisions of the higher tiers.

- The judicial system only works if someone is allowed to have the last word and if that last word, once spoken, is loyally accepted. A judgment of the High Court which refuses to follow the decision and directions of the Supreme Court or seeks to revive a decision of the High Court which had been set aside by the Supreme Court is a nullity.

- The singular Constitutional role of the Supreme Court under the Constitution, and correspondingly of the assisting role of all authorities - civil or judicial in the territory of India - towards it, mandates the High Court, which is one such judicial authority covered under Article 144 of the Constitution, to act in aid of the Supreme Court. The order of the Supreme Court is a judicial order, and is otherwise enforceable throughout the territory of India under Article 142 of the Constitution. The High Court is bound to come in aid of the Supreme Court in having its order worked out.

- While the High Court is independent, and is a co-equal institution, the Constitutional scheme and judicial discipline requires that the High Court should give due regard to the orders of the Supreme Court which are binding on all Courts within the territory of India.

Bar Council Leaders Sentenced in Bribery Case

SIX years ago DDT 1512 22.12.2010, reported CBI Arrests Bar Council of India Member in Bribery case.

Yesterday, the CBI Court, Delhi sentenced the Bar Council office bearers and a Professor in a case of bribery for granting recognition to a Law School.

A charge sheet was filed on 29.06.2012 against four accused persons in the Court of Special Judge for CBI cases, Patiala House Courts, New Delhi for demanding  Rs. 3 lakhs from the Chairman of a private School of Law Studies of Bullandshehar (UP)  for expediting the procedure of recognition of the School of Law Studies.

The Court yesterday awarded the following sentence:

1. Rajinder Singh Rana, then Member, BCI:- five years Rigorous Imprisonment with fine of Rs. Three lakh.

2. Milan Kumar Dey, then Member, BCI:- five years Rigorous Imprisonment with fine of Rs. Three lakh.

3. R. Dhanpal Raj, then Vice-Chairman BCI-: five years RI with fine of Rs. One lakh

4. Yashpal Singh, then Assistant Professor, NREC College:- five years RI with fine of Rs. Two lakh

Until Tomorrow with more DDT

Have a nice Day.

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