{"id":247851,"date":"2023-06-14T20:00:43","date_gmt":"2023-06-14T14:30:43","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=247851"},"modified":"2023-06-14T20:00:43","modified_gmt":"2023-06-14T14:30:43","slug":"tax-law-in-the-shadow-of-the-higher-judiciary","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/tax-law-in-the-shadow-of-the-higher-judiciary\/","title":{"rendered":"Tax law in the shadow of the higher judiciary"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cTax law in the shadow of the higher judiciary\u201d <\/strong>published in \u201cThe Hindu\u201d <\/strong>on 14th June 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS2- Polity \u2013 Functioning of judiciary<\/p>\n

Relevance<\/strong>– Issues related to taxation laws<\/p>\n

News –<\/strong> Over the course of the last 12 months, there have been instances where the Supreme Court of India has undermined the basic precepts of taxation, by reversing well-reasoned judgments of High Courts.<\/p>\n

What are the two central precepts that are the basis of India\u2019s law of taxation?<\/strong><\/h2>\n

First,<\/strong> on the idea contained in Article 265 of the Constitution<\/strong>. A tax may be imposed only with the authority of law. <\/strong><\/p>\n

Second,<\/strong> on a principle of sureness<\/strong>. Any levy ought to be clear, consistent, and predictable.<\/strong><\/p>\n

What are the recent instances where the Supreme Court of India has undermined the well-established principles of taxation?<\/strong><\/h2>\n

ITO vs Vikram Sujitkumar Bhatia case<\/strong>–<\/p>\n

The provision at stake is Section 153C of the Act<\/strong>. It stipulates the conditions under which a search made on a person\u2019s premises could result in the opening of proceedings <\/strong>against other persons and entities.<\/p>\n

Before an amendment to the law in 2015, Section 153C allowed the Revenue authorities to proceed against third parties to a search, if material seized belongs to a third party.<\/strong><\/p>\n

The law was amended in 2015. Section 153C now stipulated that assessments could be made against third parties to a search, even if the material seized pertains to the person<\/strong> or if information contained in those items relates to the person. <\/strong><\/p>\n

Gujarat High Court held that the amendment was not expressly retrospective<\/strong>. Such an application would impact the rights that had vested on persons by earlier provisions of the law.<\/p>\n

The Supreme Court reversed this verdict by finding the new law declaratory<\/strong>. SC stated that it seeks to explain an earlier provision. Hence, it is retrospective. <\/strong><\/p>\n

Union of India vs Ashish Agarwal case<\/strong>–<\/h2>\n

The Court revived notices of reassessment <\/strong>that had been issued by the Revenue without any sanction of law<\/strong>. It reversed the Allahabad High Court\u2019s judgement.<\/p>\n

The issue at stake in the case was simple. With effect from April 1, 2021, Parliament had enacted a new regime to govern reassessments<\/strong> of completed income-tax proceedings.<\/p>\n

But, despite the change in law, the Revenue continued to issue notices under a repealed provision. It derives authority from executive notifications<\/strong> that extended timelines during the COVID-19-inflicted period.<\/p>\n

The High Courts declared these notices invalid. SC revived these quashed notices. Through this, the Court was encroached in the legislative domain<\/strong>. Court also invoked its power under Article 142 of the Constitution.<\/strong><\/p>\n

Article 265 <\/strong>of the Constitution forbids taxation without legislation.<\/strong> However, the Supreme Court\u2019s willingness to encroach in Parliament\u2019s domain, goes against this provision.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cTax law in the shadow of the higher judiciary\u201d published in \u201cThe Hindu\u201d on 14th June 2023. Syllabus: GS2- Polity \u2013 Functioning of judiciary Relevance– Issues related to taxation laws News – Over the course of the last 12 months, there have been instances where the Supreme… Continue reading Tax law in the shadow of the higher judiciary<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,10498],"class_list":["post-247851","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/247851","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=247851"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/247851\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=247851"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=247851"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=247851"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}