New Year: ensuing changes in legal scenario

The current year is about to end, and so is the voluntary moratorium period this blog has proposed. The law, meanwhile, has taken its own course and its just not much water which has flown during this period but also new dimensions have built up the ramifications of which would have to be borne by the future generations. Let us take these one after the another;

(i) Taking cue from a constitutional bench decision of the Supreme Court in M/s Ratan Melting v. CCE, Bolpur pronounced last month, the Revenue authorities (seemingly) have been granted allowance to issue circulars for themselves and argue on the face of it that they are not supposed to follow them. In this decision which is repugant to the hitherto settled law i.e. the Department is bound by the Circulars issued by them but the assessees are not required to follow them to the extent they are prejudicial to them, has has been dwindled by this decision. In terms of the law declared by this Constititional Bench, it is open to the Department to issue a circular (based upon their understanding) and later on claim that they themselves are not bound by the interpretation they have assigned. Surprising, repelling, ... yet the law of the land and thus has to be abided by.

(ii) The long stand rule of fees collected by the States requiring to be jusitied in the sense that they were required to show the matching effort on their part towards the utilization of the said fees for the purpose for which they were collected may well be under review and subjected to change in the upcoming year itself. A seven judge constitution bench of the Supreme Court in the landmark Atyabari case and its later reaffirmation by a five judge bench in Assam Tea Company case led to the formulation of the "compensatory test" principle where the government was required to show that how the fees collected were required by them to the public in terms of it being translated into infrastructure for public use etc. It was on these lines that another five judge bench of the Court in another landmark decision of Jindal Stainless declared the Entry tax levied by the Haryana Government to be ultra vires the Constitution and thus invalid as the State Government was unable to show that the fees collected by them was put to use to built up any infrastruture as meant to be the purpose behind the collected of entry tax. However, in an appraisal of other Entry tax legislations of other States, it has been argued by the former Attorney General of India, Mr. Sorabjee that the decision in Jindal Stainless requires reconsideration which in turn implies the reconsideration of the compenstatory test principle itself. The Bench of two judges after hearing this matter for over three weeks has reserved itse decision but if the things proceed as argued by Mr. Sorabjee, the compensatory test is all test to be reviewed and examined of its utility in the present day scenario. Let us keep our fingers crossed and await the outcome for any deviation from the compensatory test principle might confer unbridled powers with the State Governments to levy fees without requiring to justify the same.

(iii) In the wake of recent Mumbai attackes the Central Government has proposed a bill to create a National Investigating Agency. The idea is worthwhile and long due but the effectiveness of such an agency is yet to be tested. The Maharashtra government is seemingly all set to establish an internal State level police force on the lines of National Security Guards. In the wake of such diverse agencies, how would future instances of terror etc. (lets pray there aren't any) be handled and what coordinating postures would be assumed by these agencies is a vital question requiring answers. At our end, we can only hope that these and other issues are sorted out at a pilot basis itself and do not end up being exposed in real crisis situations.

(iv) Now that the judges are already having refesher courses (if one could say that) in the terms of their invovlement with the National Judicial Academy, a similar refresher system is being carved out for lawyers, atleast as far as Rajasthan is concerned. A press release reports that a dedicated acamedic institute would be set up to update the lawyers with the changes in the legal system and bring them to terms with the contemporary issues. (click here to for the full press release)

With this short update, let us set into motion our task for the upcoming year, which we hope to carry out without any interuptions like the current year.