Dear Members,

It is really a testing time for the citizens of India; more specifically, the tax-payers in India. It is as if the patience, the tolerance and the will power of the tax-payers are really put to test by the present regime. In my past couple of communication, I had voiced serious concerns, and lamented, over the way in which the present regime has adopted almost tyrannical approach towards the tax-payers. Unfortunately, however, the tyranny continues unabated. Following are some of the illustrations in this regard:

The Apex Court in the – now famous – case of ITC Ltd., after detailed analysis, had held that there was no case of tax evasion by the company and also that the levy of excise duty by the Government on the price at which the retailers sold loose cigarettes was illegal and the duty was required to be levied only on the M.R.P. price, as per the law as existing during the material period, that is, 1-4-1983 to 28-2-1987. Instead of accepting the decision gracefully, the Government has shown its utter disrespect and disregard to the judiciary and the judicial process by amending the definition of ‘sale price’, specifically for this particular period, retrospectively, so as to levy excise duty on the actual sale price. It is not even denied that this action is taken specifically to overrule the decision of Apex Court. In other words, the amendment, that too retrospective, is wholly and exclusively targeted to a particular case involving only one assessee. This is in spite of the fact that the review petition by the Government against this judgment is still pending.

The second instance is the issuance of the Notification No. 1/2005 – Service Tax, dated 14-1-2005, amending the service tax rule, to provide that the service tax on the value of taxable services received during the month of March or the quarter ending March, shall be paid to the credit of the Central Government by the 31st day of March of the calendar year. In other words, even if one collects service tax on 31st March, he will have to pay the service tax on very same day.

The third instance is the famous issue on sec. 80HHC vis-a-vis DEPB. We have come across many cases where not only old assessments are reopened/revised but also coercive actions are vigorously pursued by the Department. This is in spite of the fact that, undisputedly, the issue is highly debatable, where two views are possible, and the matter has yet to reach finality.

The obvious reason for these retrograde steps is that the Government is in severe financial crunch and wants to squeeze as much money as possible from the citizen, by any means. While no one can question the authority of the Government to recover legitimate tax dues from the citizen and also to plug tax evasion – in fact, we deeply endorse such power – but, at the same time, such power cannot be abused or used with mala fide intent. Apart from the issue of legality of such actions, the larger issue is about the morality, the ethics as well as the entire mind frame and the approach of the bureaucrats against the tax-payer. It also shakes the confidence of not only the citizen but also of outsiders who want to have some business connection in India. What is really the need of the day is to enforce the existing tax laws sincerely, strictly and honestly; without any fear or favour. If this is done, it alone will fetch more than any money that the Government wants to recover through the above or such other questionable means.

Our Chamber along with four eminent organizations namely AIFTP (WZ), BCAS, STPAM & WIRC of ICAI had organized a Public Meeting on ‘Consumer Protection Act 1986’ as a mark of our respect to and in the fond memory of Shri N. A. Palkhivala on 17th January, 2005 for the benefit of professionals and public at large. The meeting was addressed by Shri Nana Chudasama, Hon’ble Justice Mr. S. Radhakrishnan, Hon’ble Justice Mr. D. P. Wadhwa (Retd) and Shri Shirish Deshpande, Advocate. I am thankful to each one of them. Shri Kishor Vanjara and Shri Vipul Joshi, members of the committee deserve our congratulations for arranging and
co-ordinating the meeting.

A one-day picnic was arranged by the Membership & Public Relations Committee on 23rd January, 2005 at Nishiland Water Park & Resort for members and their families to develop fellowship amongst the members in an informal atmosphere. I express my sincere thanks to Shri Bhavesh Vora, Chairman and other members of the committee for taking all the pains to see that each one of the person enjoyed.

This Special Story on Penalties will be of immense help to the tax practitioners. The subject has been thoroughly dealt with from all possible angles by various eminent professionals and I am sure the members will be benefited by going through this Special Story.

As mentioned in my last communication tsunami has caused large scale devastation to property and many citizens have lost their lives. Hence our organization along with three professional organizations AIFTP, BCAS & STPAM have joined together for collecting donations and carrying out the work of rehabilitation after rescue and relief work is over. I request all of you to donate generously for this cause.

I conclude with the following saying, which I read recently,

With warm regards.

Ajit N. Rohira
President