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Tuesday, November 16, 1999
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Amended sales tax laws in Punjab

THE recent decision of the Punjab government to do away with the enforcement agencies, in the Excise and Taxation Department, has been welcomed by traders, who were subjected to much harassment. As a measure to generate more revenue without undue harassment of traders, the state government has amended the sales tax law by making a provision for “deemed assessment” covering a large number of dealers. Among them are those who have not withheld the payment of voluntary tax, whose cases are not sub judice, whose cases have not been remanded, who are not availing themselves of sales tax incentives and also those who are not involved in the evasion of tax. Further, the facility of deemed assessment can be availed of by a dealer if he deposits a fee of Rs 100 for every Rs 1 lakh of the gross turnover.

An analysis of the deemed assessment reveals that it does not debar a dealer having a declined turnover during a year as compared with the gross turnover during the previous year. This loophole in the scheme of deemed assessment leaves ample scope for unscrupulous dealers to cook up bogus accounts so as to hoodwink the Sales Tax Department.

Not only that, such unscrupulous dealers thrive at the cost of the state exchequer as well as honest tax-payers. If the lacuna is not removed immediately, there is every likelihood of the honest tax-payers and the government revenue to suffer.

Under the deemed assessment scheme, there is a provision to dispense with the declaration in Form C covering inter-state sales. This provision is also fraught with serious consequences. The authority of the state government to dispense with the provision of furnishing a declaration form by a seller as proof of having sold goods to a dealer outside the state in order to avail himself of exemption or concessional levy is also eclipsed as the authority competent to legislate on this issue is the Central legislature and not the state legislature. Further more, the power to exempt is restricted to a certain class of dealers and goods in public interest. The identity and bona fides of both the seller and the purchaser have to be kept in view in public interest.

There are understandable reasons for the stringency of the provision. The objective of Section 8 (5) of the Central Sales Tax Act and the rules framed under it is self-evident. While they are obviously intended to allow exemption or concessional levy to a dealer in respect of sales to registered dealers of specified classes of goods, they seek to prevent fraud and collusion in an attempt to evade sales tax.

Public interest as contemplated under Section 8 (5) of the Act, by no stretch of the imagination, means the interest of the public of Punjab. A similar proposition came before the Supreme Court of India in the case of Shri Digvijay Cement Company Vs the State of Rajasthan when the court observed:

“Public interest in Section 8 (5) will have to be interpreted in the context of the Central Sales Tax Act and Articles 301 and 304 of the Constitution, though an increase in revenue and its utilisation for the public of the state can generally be regarded in public interest, in the context in which it is required to be considered, that by itself cannot be regarded as sufficient, if it has the effect going against the policy of the Central Sales Tax Act, and objective of the constitutional provisions.”

The viewpoints expressed here call for immediate withdrawal of the notification dispensing with the furnishing of a declaration in Form C and also the exclusion of dealers showing a declined turnover for the purpose of deemed assessment both in public interest and revenue interest.

Asstt Excise & Taxation Commissioner (retd)

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Dealing with Pakistan

THIS refers to Mr Kuldip Nayar’s article, “Secret dialogue: looking for truth” published on November 10. According to the writer, the secret dialogue between India and Pakistan represented a conscientious and successful effort to resolve the Kashmir issue through all means which the realities permitted.

The task of statesmanship, indeed, is to relate theory to reality. The BJP-led government is desperately trying to be such a political institution as comes as close to theoretical perfection as is consonant with its survival in the existing environment.

Orchids may be the perfect flower. But it is a waste of time to plant orchids in Gen Pervez Musharraf’s Pakistan. That is what peace planners in India are trying to do. When the military coup took place and the democratic leaders were declared corrupt through violent abusive shouts, it was realised that if such manners are generally adopted, they would be in themselves a disturbance to the peace.

The very intemperance of the words and the manners of the Army Chief and his new Foreign Minister make a striking contrast with the calm attitude of the democratic delegates who were alleged to be corrupt and lovers of violence. It is very certain that peace is not secure in the hands of those who are unable to exercise even decent self-control. Such dangerous hypocrisy needs full exposure. Their publicly exhibited zeal for peace lacks substance.

Pakistan’s self-liquidating feature and India’s truthful stand is justified in the words of Albert Camus: “Sometimes it is easier to see clearly into a liar than into the man who tells the truth. Truth, like light, blinds. Falsehood, on the contrary, is a beautiful twilight that enhances every object.” Truth may be stretched but cannot be broken, and always gets above falsehood as oil above water



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