Income of self-employed also rises with time

Written by Indu Bhan | Indu Bhan | Updated: May 2 2012, 08:03am hrs
Shifting service tax liability

The Supreme Court in the case of Rashtriya Ispat Nigam Ltd vs M/s Dewan Chand Ram Saran has held that an assessee of service tax can enter into a contract to shift its liability to another party. Setting aside the Bombay High Court which ruled otherwise in the case, the apex court said that there was nothing in law to prevent the company from entering into an agreement with the transporter that the burden of any tax arising out of obligations under the contract would be borne by the transporter. In this case, the steel manufacturer had entered into an agreement with the contractor for transportation of iron and steel materials. The contract also provided that the contractor shall bear and pay all taxes, duties and other liabilities in connection with the discharge of his obligations. Rashtriya Ispat had eventually deducted service tax at the rate of 5% from the bills of the transporter, who objected to this. However, the arbitrator had dismissed the claims of the transporter by relying on a letter from the office of Commissioner of Central Excise wherein he had held the work of the handling contractor as that of the clearing and forwarding agent liable to pay service tax. Senior Counsel KK Rai, on behalf of the transporter, argued that the PSU was the assessee for the payment of service tax, and the clause merely laid down that the contractor will have to pay all taxes, duties and other liabilities which he was otherwise required to pay if they arise in connection with discharge of his obligations under the contract.

Bouncing cheques

The Supreme Court has held that issuing a cheque, which is dishonoured by a bank, can lead to two separate criminal proceedings, one under Section 138 of the Negotiable Instruments Act (NI Act) and another for cheating or breach of trust under the Indian Penal Code (IPC). Both the cases can proceed independently of each other as the two trials do not breach double jeopardy doctrine, it stated in the case of Sangeetaben vs State of Gujarat. Under the double jeopardy doctrine, enshrined under Article 22 of the Constitution and Section 300(1) of the CrPC, a person cannot be convicted twice for the same offence. While dismissing Sangeetaben s appeal for quashing a criminal case of cheating and criminal breach of trust pending before a trial court, the apex court said that in the proceedings under the NI Act, the theory of mens rea (guilty intention) is not required whereas it is a requirement under the criminal offences registered against her. There may be some overlapping of facts in both the cases but ingredients of offences are entirely different, it added. In this case, the woman who issued the cheque for R20 lakh, which bounced in 2003, was convicted by a trial court and later acquitted in the cheque bounce case. However, the Gujarat High Court had dismissed her plea for quashing of another criminal case filed by the complainant. The Supreme Court also rejected the accuseds arguments that she cannot be tried again on the same offence as it would amount to abuse of process of law.

Damages for road accidents

Enhancing the compensation to a widow and dependents of a deceased, the Supreme Court has ruled that the self-employed and those engaged in the unorganised sector are entitled to higher damages in road accidents as their future earning capacity should also be taken into account while calculating the loss of income to the family. The judgments relating to accidents and land acquisitions should be revisited by courts in tune with the changing socio-economic conditions of the people, it said in the case of Santosh Devi vs National Insurance Company Ltd. While awarding R3.17 lakh as compensation to Santosh, the apex court said that it was not merely employed people whose income went up with years; even self-employed persons earn higher income with time. This fact should be taken into account while computing compensation. In this case, the Motor Accident Claims Tribunal and the Punjab and Haryana High Court had awarded lesser compensation to the family of the deceased, who was running a milk dairy, on the ground that the deceased was 45 years old when he died and his income was not likely to increase like employed people.