AMIT BAJAJ ADVOCATE

Under section 8(1) of the Central Sales Tax Act 1956 an Interstate sale to a registered dealer can be made at the concessional rate of Central sales tax i.e @2% existing at this time. But for claiming concessional rate of CST the seller needs to produce a declaration in the prescribed form duly filed and signed by the registered dealer in a prescribed form obtained from a prescibed authority.

Any Income derived from a Capital asset movable or immovable is taxable under the head Capital Gains under Income Tax Act 1961. The Capital Gains have been divided in two parts under Income Tax Act 1961. One is short term capital gain and other is long term capital gain.

1.Short Term Capital Gains : If any taxpayer has sold a Capital asset within 36 months and Shares or securities within 12 months of its purchase then the gain arising out of its sales after deducting therefrom the expenses of sale(Commission etc) and the cost of acquistion and improvement is treated as short term capital gain and is included in the income of the taxpayer.

Declared goods are the goods of special importance on which there are certain restrictions placed under CST Act 1956 on imposition of sales tax or VAT by the states. Article286(3)(a) of the Constitution of india authorises parliament to declare some goods as of special importance and to impose restrictions and conditions in regard to power of the states in regard to levy, rates and other incidence of tax on such goods. Exercising this power the Parliament vide section 14 of the Central Sales Tax Act 1956 has declared some goods as of special importance and has placed restrictions u/s 15 of CST Act on the imposition of sales tax or VAT on such goods by the state Governments.

The Government of Punjab,Department of Excise & Taxation has levied Entry tax on 12 new items Punjab Tax on Entry of Goods into Local Areas Act, 2000 (Punjab Act No.9 of 2000) with effect from 05-02-2010 vide notifications dated 01-02-2010. The new goods on which entry tax has been imposed along with the tax rate applicable are summarized hereinafter

Name of Goods Rate Applicable

The Government of Punjab has levied Surcharge/Additional Tax @10% on all the goods under Punjab VAT Act 2005 other than those seecified as declared goods under section 14 of Central sales Tax Act 1956 with effect from 05-02-2010. However this surcharge or additional tax will be levied on Liquor with effect from 01-04-2010.

The VAT rate on goods as mentioned in schedule B has been changed from 4% to 5% with effect from 29-01-2010. As per a Notification issued by the EXCISE AND TAXATION DEPARTMENT, PUNJAB NoS.O. /P.A.8/2005/S.8/2010. dated 29-01-2010 the VAT rate on schedule B goods other than declared goods under PVAT Act 2005 has been enhanced from 4% to 5%. The above notification can be found at the following link of the official website of the Excise and Taxation Department, Punjab

Rules of natural justice are important part of fundamental rights as enshirined in our constitution. Rules of natural justice means fair play in action i.e. to save the citizens from arbitrariness in administrative or quasi judicial action. Rules of natural justice are part of Rule of law as ensured under article 14 of our constitution. Violation of rules of natural justice result in arbitrariness and violation of fundamental rights as provided by our constitution to the citizens of India. The rules of natural justice ensures that any person is not subjected to arbitrariness and justice not only appear to have been done with him but manifestly have been done.

A new rule 51A has been introduced under the Punjab VAT Act 2005 authorizing the commissioner or designated officer under the Act to lock the TIN No of the person registered under the Act. Locking the TIN no means the temporary stoppage of interstate movement of goods of the concerned person for the purpose of verification or further legal action. Temporary stoppage is done by locking the TIN No of the concerned person in the server of the software used by the VAT Department all over the state including at barriers set up at the various borders of the state.

Assesements under Income Tax Act 1961 are made U/S 143, 144, 147, 153. The criterias for selection of cases for scrutiny has been increased. While making the assessement the assessing officer has to appericiate all the facts properly. If there is any misiterprtation of facts it may result in injustice to the assesee. Some times when there is confusion regarding interpretation of facts as appearing in a particular case or confusion regarding any law point the assessing officer tends to consult their senior officials like Additional Commissioners or else. The instructions the senior officials give to the assessing officer orally in such case, the assessing officer is guided by such directions while making assessement or sometimes the assessee also tend to explain their case to the Additional commissioner or joint commissioner especialy when the asssessing officer is guided by the directions of the Additional or Joint commissioner while making the assessement.

ASSESSEMENT NOTICES U/S 29 OF PVAT ACT RECENTLY ISSUED FOR YEAR 2005-2006-LEGALITY OF-

The VAT Department in Punjab has started issuing the notices for assessements for the year 2005-2006 under section 29 of Punjab Value Added Tax Act 2005 to the dealers across the state. The notices u/s 29 of PVAT Act 2005 can be issued within 3 years from the last date for filling of Annual statement i.e VAT 20 of the year concerned or the date on which the return is actually filled whichever is later.

The power of assessement or reassessement of any income chargable to tax that have escaped assessement has been provided under secton 147 r w s 148 of Income Tax Act of 1961.If the assessing officer has the reason to believe that any income chargabale to tax has escaped assessement then the assessing officer may subject to the provisions of section 147 to 153 assesse or reassess such income.

What is reason to believe: Before issuing any notice U/S 148 the assessing officer must have reason to believe that any income chargable to tax has escaped assessement. Reason to believe can not be a reason to suspect merely. There must be a direct nexus between the material coming to the notice of the assessing officer and the formation of the belief that there has been escapement of income of the assessee from assessment in a particular year. The material for formation of belief must be relevent and not vague. The assessing officer must record reasons in writting before issuing notice u/s 148. Mere a reason recorded that "there is a huge concealment of income' or 'For further investigation' without any specific instance of entries or material relevent to the assessee will not constitute a valid reason as it is vague and general in nature.

The Delhi High Court has declared the service tax on renting of immovable property as ultra vires of the finance act. in case of Home Solution Retail India Ltd & ors vs union of India & ors. Evan Though the matter is pending before the SC by special leave petition filed by the central Govt seeking relief against the said order but the said judgement will havefar reaching effects.

GST i.e. Goods and Service Tax will be applicable in India from 01-04-2010 onwards replacing existing system of VAT, service tax, excise and other indirect taxes. There was a debate whether a single GST or a dual GST will be more feasible and doable in India in the present taxation scenario. But In this regard, the announcement that was made sometime ago by the Empowered Committee of State Finance Ministers was that it had accepted the recommendation of the Working Group that there should be a dual GST applicable.