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Sunday,
November 11, 2001,
Chandigarh, India  
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Govt calls for fiscal reforms
VAT in Haryana from next financial year
SSI sector likely to suffer from RBI norms
Rent arrears |
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Another act of negligence
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Govt calls for fiscal reforms Chandigarh, November 10 Emphasising the need of co-ordination between the policies at the Centre and the state, he said higher accountability on the government sector and willingness of the industry to take social responsibilities like generation of employment are the need of the hour. “The challenges posed by WTO are not only a threat to the agricultural sector but the industry as well and so both need to work at it”, he said. The time had come for governments to become more accountable to the tax payers for their functioning, he said calling for tough administrative and fiscal reforms to lower establishment costs in various departments. He said their government is working closely with industry and apex organisations like CII to develop and implement appropriate and effective industrial policies for the economic development of the state. Earlier Mr S P Oswal, CII Punjab State Council Chairman outlined CIIs economic agenda for Punjab, the focus areas in the state including power and power reforms, energy management and conservation, finance and taxation, environment, pollution, agriculture and agri reforms, IT, e-governance, social development, and competitiveness of small scale industry, he said. He suggested that investment in emerging industries like software, bio technology and food processing would raise the momentum of growth. Mr Oswal also outlined CIIs recommendations in various sectors for industrial growth. In CII’s special session on Haryana, Mr Sampath Singh, Finance Minister, Haryana said that good interaction between industry and government at all levels was vital for the economic development of the state. Despite its agrarian base, Haryana was forging ahead in transforming itself into an industrial state, he said citing locational advantage, good roads, fiscal reforms, and should financial management as the keys to the success in the state. Over 60 per cent of the states budget is invested in basic infrastructure ,and in terms of power, projects like the thermal power station at Yamunanagar and the oil refinery at Panipat have been initiated, while reforms had been introduced and cross subsidies reduced. |
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VAT in Haryana from next financial year How far a period of twenty-years within which an assessee filing the periodical returns can be called upon to explain before the statutory authorities the correctness of a given return in the guise of the assessment, reassessment and revision proceedings as proposed by the Prohibition, Excise and Taxation Department, Haryana, Chandigarh in Section 16, 18 and 33 of the draft of the Haryana Value Added Tax Act, 2001, can be said to be fair and reasonable? This nowadays has come to be known as one of the most frequently asked questions in the trade circles in the context of the proposals made recently for the introduction of new system of taxation, namely, Value Added Tax from the next financial year. What precisely the State proposes in Chapter IV and VII, is that the assessing authority on being dissatisfied with the correctness of the return furnished before him shall issue a notice within a period of two years from the end of the given return period calling upon him to produce necessary evidence in support of the tax returns and no specific period has been prescribed for conclusion of such proceedings. However, if an assessee does not comply with the terms of the assessment notice, it will be open to the assessing authority to complete the assessment within a period of five years. After completion of the assessment, it has been further proposed in Section 18, the assessing authority will be competent to call upon the assessee within a period of five years from the date of final order of assessment for reassessment. Interestingly enough, there is also a proposal in the form of Section 33 in the draft of the Haryana Value Added Tax Act, 2001 that the order passed in assessment or reassessment proceedings shall be further revisable by an officer not below the rank of the Deputy Excise and Taxation Commissioner within a period of five years from the date of its communication. This process involving examination of the correctness of the returns does not stop here as Section 33 of the proposed Act further confers powers of revision upon the Commissioner (the top-ranking authority) to revise any order passed in revision by his delegate within a further period of five years from the date of its communication to the assessee. This clearly means that a person obliged to file the tax returns will statutorily remain accountable to the department upto a pretty long period of twenty years either in the name of assessment or reassessment or revision proceedings before different authorities. Having regard to these proposals, how far the claim of the State that it is bringing about tax reforms by way of introducing Value Added Tax in place of the existing enactment, the Haryana General Sales Tax Act, 1973, can be said to be fairly true? What is important is the fact that the job of assessment, reassessment or revision barely involves scrutiny of the given return with the objective to find out as to whether it has been correctly and genuinely furnished? This exercise involves hardly a job of five to six hours in a normal case. Therefore, there should be a statutory finality to the proceedings in a limited and reasonable period of time as far as the process of examination of the tax returns is concerned so that the avoidable hardships to the assesses could be avoided. From the point of view of the revenue also, the tax assessable on the basis or with reference to the tax returns should be timely determined and realised from the assesses. Another disturbing feature in the matter of assessment is that a person filing the tax returns and complying with the terms of the assessment notice has to wait for an unlimited period for the finalisation of the assessment as no specific period has been prescribed in sub-Section (2) of Section 16 in this context. On the contrary, the period prescribed for assessments of defaulting assesses where either the return has not been furnished or that the assessee has failed to comply with the terms of the assessment notice is five years. The question is why there should not be a time limit to the conclusion of the assessment proceedings in similar fashion in respect of the assesses who have law-abiding approach. |
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SSI sector likely to suffer from RBI norms SSI sector is in for a bigger trouble as may trigger from new RBI guidelines. Banks are telling consumers that any SSI unit can be treated as NPA if irregularity exceeds 180 days in a year. Earlier condition for NPA was continuous irregularity for 180 days. Although no written instructions are being shown bankers are telling borrowers verbally. This has scared the small borrowers in particular. With this stringent condition 50 per cent units in the SSI sector may go under. This condition gives unlimited powers to the officials to interpret this condition. Suppose a consumer goes in for Demand Draft purchase mode to get money instantly against an out station cheque. Due to market conditions as such some cheques are bound to bounce. Borrower gets information about this after a long time. Most consumers get their out station cheques cleared through ordinary means of collection. This takes even several months to credit the money in the borrower’s account. Under these circumstances official may interpret that the account of the borrower remained irregular from the day the outstation cheque was given to bank for clearance. What is the fault of the borrower in such a situation? On bounced cheque banks is also not at fault. The problem lies on the number of intervening days. Some branches of nationalised banks have arrangement for fast clearance of outstation cheques. But this is not available for all places in the country. Private banks have much better arrangements for fast clearance. Nationalised banks do not permit borrowers to transact through private banks. This lacuna can make or mar the borrower. On NPA RBI has issued another guideline. Every sanctioned limit has to be renewed within six months of the due date. Borrower can at best submit its data sanction lies in the hands of the bank. So here also whom of the bank can mar the unit. Moreover, when borrower submits data he can not dare to ask the bank to give receipt against this. Reason is very obvious and needs no elaboration. Punjab’s stake is very heavy on these guidelines. State’s economy is mainly dependent on small scale units. Most of the stakes are having entrepreneurs from other parts of the country. Unfortunately no outsider is ready to invest in Punjab. There are various reasons for this. If Punjab’s entrepreneurs are blunted by such bank guidelines the future of the state’s economy may look very bleak. Apex Chamber of Industry has already written to Chief Minister and Chief Secretary about this development. This matter has to be taken with the Union Finance Minister immediately. These guidelines have to be modified drastically. |
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Rent arrears Q: Is the appeal maintainable when the tenant has failed to deposit arrears of rent even though there may be dispute regarding the rent? Ans: The Andhra Pradesh H.C. was answering this question in the case of K. Venkatesh v A. Subrahmanyam (2001(2) R.C.J. 3 0). The main contention is that though U/s. 11 (1) of the A.P. Rent Act no tenant against whom an application for eviction has been made by landlord U/s. 10 of the Act shall be entitled to contest the application before the Rent Controller under that section or to prefer any appeal u/s. 20 against any order made by the controller on the application, unless he pays to the landlord or deposits with the controller or the appellate authority as the case may be, all arrears of rent due upto the date of payment or deposit and continue to pay or deposit any rent which may subsequently become due until termination of the proceedings before the Rent Controller or the Appellate Authority as the case may be. In the instant case, the respondents filed the appeal without depositing the amount. Hence, the very appeal is not maintainable. The Appellate Authority held that the Rent Controller recorded a finding that the respondents committed default in payment of rents but he had not fixed the arrears payable by the respondents and that since there is a dispute between the parties with regard to the payment of arrears of rent, the respondents were justified in filling the appeal without payment of admitted rents. The H.C. was unable to agree with the aforesaid reasoning because in its view it is far fetched one and runs counter to the spirit of the section. If there are bona fides on the part of the respondents, nothing prevented them for paying or depositing the admitted rents before filling the appeal. The HC said that since an appeal U/s. 20 being a statutory one, the H.C. cannot throw the respondents out of the Court on the technical plea. The appellate court granted stay on condition that the respondents deposits Rs 2,250. At the same time, no time was fixed. Hence, if the amount directed to be deposited is not deposited till now, the respondents shall do so within four weeks from the date of receipt of this order, failing which the stay order granted by the Appellate Authority stands vacated. In that way, the H.C. allowed the present civil revision petition.
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Another act of negligence The Air India stowaway incident has increased pressure on Shah Nawaz Hussain, who has recently been given the civil aviation portfolio. Under scrutiny of the government, the minister has not only appointed probe committees but he is also endeavouring to reduce corruption in Indian Airlines (IA) and Air India (AI). Preliminary inquiries reveal that it was security officials mistake more than commercial unit’s lapse that led to two stowaway passengers reaching Heathrow Airport without adequate travel documents. The high-powered committee, headed by the Cabinet Secretary (Security) Harishankar, would be meaningful if there is no witch-hunt. Innocent official or officials should not be penalised just because they are alleged to be supporting a high-ranking official. Two passengers boarded Air India flight in Mumbai on ‘domestic sector tickets’. They reportedly did not get off at IGIA. As only 54 passengers got off instead of 56, all transit passengers were offloaded, all agencies concerned checked and rechecked the cabin and toilets of the waiting aircraft. The mystery of two missing passengers remained unresolved. Why did then security clear the flight and why did captain take-off? There indeed was negligence but commercial departmental officials should not be subjected to harassment and humiliation. The minister, irked at several unseeming incidents, is probing into several illegal appointments, promotions and transfers in the two national carriers. When the two national carriers are passing through financial crisis, one airline has bought 18 Esteem cars for its directors. Was this expenditure necessary? The latest victim has been Sabena Balgium world airlines, which has opted for bankruptcy. The Brussels commercial court has ordered for its closure.
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PNB presents
hi-tech banking Chandigarh, November 10 With ‘meet your high-tech PNB’ theme, the bank is giving live demonstration of how-to-use the ATM, Tele banking and Tele Faxing facilities available at its branches. Coins of various denominations are being provided to the large number of visitors through coin Dispensor machine. Mini packs of coins are also available. Mr US Bhargava, General Manager told that PNB has always moved with time and in presenting modern high-tech banking facilities to its customers. |
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