Financial Daily from THE HINDU group of publications
Friday, Feb 11, 2005
Financial Daily from THE HINDU group of publications Friday, Feb 11, 2005 |
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Corporate
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Courts/Legal Issues Columns - Ex Parte No smoke without fire, no loot without soot D. Murali
BJP is hooting, "Loot! Loot!" and perplexed people are stopping by to find out what happened. And if you were to explain to them that the `lotus' party is not happy with Manmohan & Co for bringing forth an urgent correction to old excise laws with the sole aim of snatching about Rs 800 crore from ITC, there'd only be more questions. Such as: What's the root cause of the loot theory? ITC, as you know, sells cigarettes. The Excise Department alleged that the company sold its product at a higher price than what was marked on the packets, and that whatever tax ITC had paid was not adequate. For the shortfall of Rs 800 crore, both the company and the taxman waged protracted legal battles, at the end of which the Supreme Court decided in favour of ITC. Immediately, babus and netas worked overtime in the Government to bring forth an Ordinance within a week, to end the party that ITC was having. One more law, so what's the big fuss about? For one, this is a fast-food type of law cooked up in great hurry, without going through the parliamentary route. Two, it gives powers to issue notifications with retrospective effect, which is like changing the rules of the game after the game is over, as the Excise Law Times fumes in its latest issue. And three, it bars any suit, decree, or challenge in any court. No smoke without fire; nor loot without soot. Is there an instalment plan for ITC to pay up? No. Because, "Recovery shall be made of all amounts of duty or interest or other charges which have not been collected or, as the case may be, which have been refunded but which would have been collected or, as the case may be, which would have not been refunded if the provisions of this section had been in force at all material times, within a period of 30 days from the date of commencement of this Ordinance, and in the event of non-payment of duty or interest or other charges so recoverable, interest at the rate of 15 per cent per annum shall be payable from the date immediately after the expiry of the said period of 30 days till the date of payment." Thus, ITC has 30 days from January 25 to cough up the money. What's the moot point? The worrying point that's being debated is whether at all there is any finality in matters of tax. This is not the first time that law has been amended after the Government suffered a showdown in the courts, yet what adds salt to the sore is that bureaucrats and politicians are revving up their bulldozer in the overdrive, and also cruising blindly in the reverse without caring even to toot. A dangerous course, that can be, for those who thought that things are settled. To frighten us all, it is rumoured that somebody overheard a cheerful `How cute we gave them the boot!' and a snide `Just suits the sooty guys!' in the corridors of the North Block. I'm so angry that I want to... No, please don't shoot anybody and with your smoking gun. Instead, read the latest tragicomedy that ITC has obtained in the form of a verdict running to almost one lakh characters. Also, don't say joot (ready) when your lawyer wants to celebrate winning your tax case at the Tribunal. Any fag end comments? Even after the Government has trashed the smoky butt, experts who are still muttering in derisive disbelief, `My foot!' opine that a few more puffs are left. Hence, a legal battle challenging the move is highly probable.
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