The momentous judgment that the country awaited with abated breadth has been pronounced. It’s the hangman’s noose for Kasab, the perpetrator of terrorism on Indian soil. The death punishment is quite symbolic – it seems to say – we shall not tolerate any wrongdoing on our land. But alas! Wish that same emotions surface when we see the wrongdoings all around us. What could be a more glaring example of corruption than the IPL. One wonders how many more times each and every Indian has to bow his head in shame.

Speaking of judgments, no tax journal would be complete without the mention of the judgment of the Hon’ble Supreme Court in the Entry Tax matter in the case of Jaiprakash Associates Ltd. & Others vs. State of M.P. & Others delivered on 16.04.2010 where the Hon’ble Court of Five Judges Bench observed as under :

"….. When question, therefore, which we need to answer, in the first instance, before going into the validity of each of the State Laws impugned before us is whether after 49 years, this Court should revisit the tests propounded in the earlier decisions in the case of Atiabari Tea Co. Ltd. (1961) 1 SCR 809 (5 Judge Bench decision) and Automobile Transport (Rajasthan) Ltd. 1963) 1 SCR 491 (7 Judge Bench decision)? At this stage, it may be mentioned that the States whose Entry Tax Laws have been challenged have contended before us that the tests propounded in Atiabari Tea Co. Ltd. and Automobile Transport (Rajasthan) Ltd. have failed to strike a balance between the "freedom of trade and commerce" under Article 301 of the Constitution and the States’ authority to levy taxes under Articles 245 and 246 of the Constitution read with the appropriate Legislative Entries in the Seventh Schedule to the Constitution of India. The states, therefore, sought revisiting of the aforestated two decisions in Atiabari Tea Co. Ltd. and Automobile Transport (Rajasthan) Ltd. by a larger Bench."

That it was necessary to examine the interpretation of Part XIII of the Constitution including the various tests propounded in the earlier judgments of the Constitutional Bench and was thus referred to "put up this batch of cases before Hon’ble Chief Justice of India for constituting a suitable larger Bench for reconsideration of the judgments of this Court in Atiabari Tea Co. and Automobile Transport (Rajasthan) Limited". One wonders that while the wheels of justice slowly churn, what happens to the interest meter that is continuously ticking.

I also wish to draw your kind attention to the Hon’ble Supreme Court’s decision in the case of CIT vs. Reliance Petroproducts (Pvt.) Ltd. delivered on 17th March, 2010 reported in 322 ITR 158 (SC) wherein it was held that where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false, there is no question of imposing the penalty u/s. 271(1)(c). A mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. I’m sure this pronouncement shall bring relief to assessees.

The Finance Bill, 2010 has received the President’s assent on 8th May, 2010. It has now become an Act. There is no more scope for relief / rollbacks. I guess it is time for us all to focus on GST and Direct Tax Code and pitch in our efforts to make both these impending legislations successful.

M.L. Patodi
National President