ASSESSEE’S RIGHTS AGAINST DELAY

January 30, 2010

A tax assessee has to deal with the problem of delay almost every time it interacts with the tax authorities. This delay is sometimes due to the system of tax administration, which imposes unnecessary and unreasonable restrictions in the name of checking evasion of taxes. Sometime it is arbitrary whim of the tax administrator, employed to harass an assessee. Sometimes it is a trick to extort corrupt money from the assessee. For whatever purpose this delay is employed, it always results in cost escalation in the normal business process, which is extremely harmful to any economy in the fiercely competitive world. This paper seeks to examine the various steps taken by the state to curb this delay and various remedial measures available to an assessee in case of unreasonable and inordinate delay.

In the administration of Custom, Central Excise and Service tax; the corruption money is euphemistically called “SPEED MONEY”. This phrase refers to the fact that bribe is paid to speed up your file in the taxation department. Thus if you pay the speed money, your files will be speedly cleared and if you refuse, your files will not be cleared on one ground or the other. If the tax administrator is smart enough, he will raise some objection in your documentation, he will call for more documents to examine your case and numerous other tricks he has under his sleeve. Even when he is not smart, he can always make your file missing.

Although numerous circular has been issued by the CBEC directing its officers to work efficiently and expeditiously. There are numerous judgments of superior courts castigating inordinate delays. There are many provisions in the statute itself fixing a time limit. Nevertheless delay occurs. And every assessee knows it happens due to malafide of the departmental officers. Sometime the assessee shows the courage to bring such delay into the notice of the superior officers. But no person has ever been held responsible for any delay. This author is not aware of any instance where any action was ever taken against any officer of the department for delay. This state of affairs clearly points out to the fact that whatever remedies are available against delay, is available on paper only. This paper also seeks to examine the reasons for this state of affairs and suggest remedial measures against this malaise.

The Citizen Charter has been issued by the Central Board of Excise and Customs as its commitment to the responsive and efficient tax administration. It gives a right in the hand of the assessee to force the tax administration to comply with their duty. The text of the citizen charter reads as,

“CITIZEN’S CHARTER”

This Charter is a declaration of our mission, values and standards, and our Commitment to achieve excellence in the formulation and implementation of Customs and Central Excise policies and procedures for the benefit of the Trade and Industries, who are our partners in progress.

Our Commitment

We shall carryout our tasks with

• Integrity and Judiciousness

• Courtesy and Understanding

• Objectivity and transparency

• Promptness and efficiency

We shall encourage and assist Voluntary tax compliance by our Clients.

Our expectation

We expect you to be prompt and reasonable in fulfilling your duty and legal obligations and be true and honest in furnishing information to us.

Our Standards

We Shall

• Acknowledge declarations intimations, applications, returns and all communication on the spot and in any case within 7 days of their receipt.

• Respond to all communication within 15 working days of its receipt.

• Settle any disputes relating to declarations or assessment within 10 working days of written or oral explanation.

The importance of the charter has been explained by the Commissioner of Central Excise (Appeals), in the matter of Thanjavur Spinning Mills [2004 (163) E.L.T. 278 (Commr. Appl.)], wherein the Commissioner (Appeals) declares,

“This Citizen’s Charter is a Magna Carta reflecting the higher aspirations of the Department. It is a noble document propounding the Department’s ideals, vision and to frame and mould the thinking of the officials to the challenges of democracy, freedom, transparency and human dignity. Every official needs to act with profound conviction to dedicate his official life to the attainment of these objectives. If we have the courage to make the right decisions and if we have an abiding faith that only the right will ultimately survive, we shall know that we are helping to build a nation in which the finer values of man’s spirit may flower. The Citizen’s Charter is a vision of something great and tremendous, a call to a heroic mission, the challenge of a truly national message. It is a time of challenge and change. Let us apply ourselves to that which is presented to us, as our appropriate object, and let the sacred obligations, which have devolved on our Department sink deep into our hearts. There is opened to us a noble pursuit, to which the spirit of the times strongly invites us. Let our conceptions be enlarged to the circle of our duties. Let us convince the people that our system is the best, let us extend our ideas over the whole of the vast field in which we are called to act. In keeping with the noble ideals enshrined in the Citizen’s Charter the Appellant deserved to get a prompt reply for their petition dated 27-8-2001. However, the mystical secrets of office procedure denied them a timely reply. We have to push aside the fateful and inexorable realism of such complacency. The Appellants, seem to be asking the Department whether in this time of relentless challenge do we have those qualities of adjustment, those characteristics of a dynamic office, which are requisite to meet the accelerating rate of change, which is the overriding characteristic of our time? The highest ethical concepts is enshrined in our Citizen Charter but if we fail to perform our share of duties and responsibilities, the visions enshrined and displayed will mean no more than a name carved deeply into marble on an expensive crematory mausoleum. There is no particular inspiration in reading headstones in a graveyard.”

The Board has always emphasized the needs of an assessee friendly and responsive tax administration. In Circular No. 24/2000-Cus., dated 30th Mar. 2000, the board says, “the Hon’ble Minister of State of Finance (Revenue) has expressed his anguish over the indifferent and unresponsive approach and lack of sensitivity of our officers even to the genuine representations/complaints by general public. The field officers did not even bother to forward representation to the Government and recommend condonation at their own initiative till the matter was brought to Minister’s notice by a VIP. The Hon’ble Minister has observed that the rule and regulations should be used to the benefit of our citizens rather than applying them mechanically creating more work for everybody.”

To make the tax administration real efficient and responsive to the need of public the CBEC issued Circular No.  393/26/98-CX, dated 2-6-1998, wherein it directed that,

1.All declarations, intimations, etc. when sent by FAX, E-mail, by Post or by Courier shall be accepted by the filed formations;

2. Appointments should be given also on E-mail on request from the trade;

3. All queries by E-mail should be accepted and the answers should be sent by E-mail;

4. Any query received from the trade must be answered within a maximum of four weeks from the date of receipt.

The above directions have been reiterated by the CBEC Central Excise Manual of supplementary instructions in para 3.4.These instructions give certain very important right to the assessee.

The law has always been very clear on the exercise of powers and discretion conferred by a rule of law. The Citizen Charter re-enforces these values and give them a strong and clear legal footing. Integrity, judiciousness and reasonableness are not mere legal rhetoric but sound legal principles on which our constitution is based upon.

The Right to Information Act, 2005.

The department of Central Excise and Customs is a public authority within the meaning of the Right to Information Act, 2005 and hence, they are bound by the provisions of the Act. As per Section 4(b)(iii) of the Act, the authority has to publish the norms set by it for discharge of its functions. As per Section 4(b)(ii) of the Act it has to publish the power and duties of its officers and employees and the procedure followed by then in discharge of its functions. The citizen charter is, at the most, a skeleton of the norms set by the CBEC. Further the Central Board of Excise and Customs has not prepared any document, which specify the duties of its officers and employees. Nevertheless, certain information has been made public on the CBEC web site, which again give valuable rights to the assessee.

The Governance in India has largely been a declaration of powers of the officers and employees of the Government. This is probably a colonial legacy when the government was British and the “native public” was there to be ruled. There cannot be any declaration of rights of people or duty of the Government towards people, who are “Ghulam” of a foreign power. Unfortunately even after independence the mindset continues. Thus every Act provided for the powers of the officers but was invariably silent on the duties of the officers. Off course, the gap was filled by the judicial pronouncements, but these are neither sufficient nor expresses the will of the elected legislatures. The Central Board of Excise and Customs have not notified till now the duties of its officers and employees till now. The duty imposed by the Right to Information Act is a public duty, which must be done, sooner than later.

Section 4(d) of the Act provides that every public authority shall give reasons for its decisions, irrelevant of the fact that the decision is administrative or quasi-judicial. In UOI v/s Mohan Lal Kooper [AIR 1974 SC 87], the Supreme Court observed that reasons are the link between the materials on which certain conclusions are based and actual conclusions. They disclosed how the mind is applied to the subject-matter for a decision whether it is purely administrative or quasi-judicial and reveal a rational nexus between the facts considered and conclusions reached. Fair play in action requires that every authority should record reasons for its decisions, whether administrative or quasi-judicial. Every citizen has a right to know as to on what basis a decision has been taken which may affect his situation. Recording of reasons is an assurance of the fact that the authority has applied its mind to the facts and circumstances of the case before arriving at any decision. Further it fecilitates proper supervision on the authority concerned by higher administration or by the process of judicial review. An decision, action or order of any statutory or public authority, bereft of reasoning, would be arbitrary, unfair and unjust and violative of Article 14 of the Constitution of India, and would deemed to have been arrived at by unfair procedure offending Article 21 of the Constitution of India [Krishna Swami v/s UOI, AIR 1993 SC 1407]. The Right to Information Act, 2002 merely says what was always law of the land as per the binding judgments of the Supreme Court. However, enforcement of a statutory provision is always easier as compared to enforcement of a judge-made law. 

Unjustified delay is an act of the authority for which citizens can seek information including reasons for delay. The Right to Information Act, 2005 gives valuable rights to the citizens against delay. Any delay in violation of Citizens Charter, in violation of the statutory provided time limit or otherwise inordinate delay has to be explained with reasons as per section 4(1)(d) of the Act. The citizen has a right to seek reasons for such delays and the authorities are bound to provide reasons. Further when any such delay is brought to the notice of superior officers, he has to take appropriate action against such delay. The assessee has a right to seek information from him as to what action has been taken.

Statutory Provisions:

There are various provisions in the law under which certain particular acts have to be done within a specified time schedule. For example a demand can be raised only within the time specified in Section 11A of the Central Excise Act, 1944 or under section 28 of the Customs Act, 1962. In certain other situations, like refund under Section 11B, there are provisions for interest as a penalty for delay. Certain other situations are covered by CBEC instructions and Citizen’s Charter. For example the Board has directed that adjudication order should be issued within 7 days of personal hearing (Circular No. ). Similarly the Board has directed that drawback claim should be decided within 3 days in case of EDI shipping bills and within 5 days in case of manual shipping bills. There is no need to repeat here that these circulars are known more for their violation than for implementation.

Nevertheless, there are many situations for which there is no time limit has been specified and assessees are at the mercy of the departmental officers. Due to such delaying tactics of the officers, the assessee suffers huge losses for which there is no provision under the Customs or Central Excise law. In some cases the assessees have raised this point before higher judiciary with favourable results.

When the goods are detained in port area, it results in huge demurrage liability on the importer. In Shipping Corporation v. C L Jain Woolen Mills, [2001 (129) ELT 561(SC)], the apex court held that if seizure and consequent detention was held to be illegal, the demurrage should be paid by the Customs department. Various High Courts took the same view. For example Delhi High Court in Trishul Impex v. UOI [1992 (58) ELT 182], In R C Fabrics v. UOI [1995 (76) ELT 9], Kolkata High Court in Surabhi Leather v. CC [1992 (59) ELT 253], Andhra Pradesh High Court in Sujana Steels v. CCE [2002 (141) ELT 343], Madras High Court in Anuma Precisions Tolls v. CC [2002 (121) ELT 309], took the view that Customs department is liable to pay demurrage in cases of unjustified seizure and detention of goods.

On its part, CBEC has issued various guidelines so that harassment of the importer is not done and demurrage charges do not become payable. Instructions have been issued in Chapter 16, para 5 of the CBEC Customs Manual, 2001. The circular, 42/2001 dated 31.07.2001 says that erring officers were held liable. However, this author is not aware of any case when any erring officer was ever found accountable. In fact, this author is aware of a recent case when goods were illegally detained by a premier investigating agency of the Customs and the goods were not released despite the provisions of law were brought to the notice of senior officers.

In case of North Eastern states, there are provisions in Notification No. 32/99 and 33/99 of Central Excise that the amount of duty paid in cash shall be refunded by 15th of next month. In case of any delay in verification, the amount should be refunded provisionally by that date. Despite such clear-cut provision, this author is ware of some cases where the amount has not been refunded, even when such acts were brought to the notice of senior officers.

It is difficult to imagine that whatever is happening at the ground level is not known to the senior officers or board. And if is really not known, it speaks of their competence. And if the law is not implemented despite the facts were brought to their notice, their bonafide is in doubt.

RIGHTS OF THE ASSESSEE HAS TO BE EXCERCISED BY THE ASSESSEE:

The protection of law is available only to vigilant citizens. Law cannot protect those persons who sleep over their right. If our citizens are of the opinion that their rights against government officers will be protected by the government, their rights against junior officers will be protected by senior officers- it is merely a wishful thinking. Unjustified delay by the department and its officers are negligence and dereliction of their duties. It is a “Civil Wrong”, an actionable claim in the court of law. In cases of unjustified delay, the erring officers personally and the department vicariously is liable to compensate the assessee.

Although we have inherited our legal system from the British Common Law, unfortunately the law of torts didn’t get enough attention in our country. Claiming compensation against the government was further made difficult by the doctrine of sovereign protection, procedural protection under Section 80 of the Code of Civil Procedure and “good faith” clause protection extended to government servants under various laws.

Section 155 of the Customs Act, 1962 protects the officers and government, if the action has been taken in good faith. The action can be initiated only after giving the person one month notice. The action can be initiated within three month from the date of cause of action. Similar provision has been made under Section 40 of the Central Excise Act. These provisions are extremely loaded against the assessee and gives too much protection to the government and its officers. Therefore it is not surprising that probably no proceeding has ever been initiated against any of the officers at any point of time. These laws are primarily responsible for rampant corruption in our government, rampant human rights abuses by our government agencies, rampant redtapism, rampant ignorance of pleas of common man in the power corridors and rampant lack of accountability and sincerety in the government officers.

Nevertheless, even these laws can be made to work, if the assessee is vigilant of their rights. Ignorance of laws and sleeping over your rights can never be justified on any ground. Despite such laws, the assessee is still empowered to move the civil court to claim compensation against any unjustified delay. Mere initiation of such action by the assessee will have a salutary effect on the administration of Customs and Central Excise.

SUGGESTION:

The law should be amended to include certain sections, which protects citizens against the unlawful actions of the officers. Justice requires that in the administration of taxation laws, genuine concern of the citizens must be kept in mind. Justice is the sole purpose of any law. A law cannot be justified on the ground of existence of legislative power but it can be justified only when it furthers the ends of justice. Taxation can never be justified merely on the ground of revenue collection, but has be justified only on the basis of lager justice in the society. St. Augustine said in “The City of God”,

“JUSTICE BEING TAKEN AWAY, THEN

WHAT ARE KINGDOMS, BUT GREAT ROBBERIES?

FOR WHAT ARE ROBBERIES THEMSELVES,

BUT LITTLE KINGDOMS.”

A law devoid of justice is nothing but a tool of robbery.

Secondly, in the law there must be procedure through which citizens can enforce their rights. It will not be out of place to suggest that even Commissioner(Appeals) or CESTAT can be empowered to receive citizen’s complaints against various form of harassment and delay and may be empowered to issue directions or order compensation. Speedy adjudication of taxation issue is important, but speedy stoppage of harassment is even more important.

CONCLUSION:

Unjustified delay is violation of basic spirit of the customs and central excise law, apart from being outright violation of Citizen’s Charter and CBEC instructions. It is civil wrong and an assessee can claim compensation for that. There is a need to amend the laws to make it more assessee friendly so that he may not face undue harassment in the hand of assessee. 






By: Rajesh Kumar (Advocate)

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ASSESSEE’S RIGHTS AGAINST DELAY

January 6, 2010

A tax assessee has to deal with the problem of delay almost every time it interacts with the tax authorities. This delay is sometimes due to the system of tax administration, which imposes unnecessary and unreasonable restrictions in the name of checking evasion of taxes. Sometime it is arbitrary whim of the tax administrator, employed to harass an assessee. Sometimes it is a trick to extort corrupt money from the assessee. For whatever purpose this delay is employed, it always results in cost escalation in the normal business process, which is extremely harmful to any economy in the fiercely competitive world. This paper seeks to examine the various steps taken by the state to curb this delay and various remedial measures available to an assessee in case of unreasonable and inordinate delay.

In the administration of Custom, Central Excise and Service tax; the corruption money is euphemistically called “SPEED MONEY”. This phrase refers to the fact that bribe is paid to speed up your file in the taxation department. Thus if you pay the speed money, your files will be speedly cleared and if you refuse, your files will not be cleared on one ground or the other. If the tax administrator is smart enough, he will raise some objection in your documentation, he will call for more documents to examine your case and numerous other tricks he has under his sleeve. Even when he is not smart, he can always make your file missing.

Although numerous circular has been issued by the CBEC directing its officers to work efficiently and expeditiously. There are numerous judgments of superior courts castigating inordinate delays. There are many provisions in the statute itself fixing a time limit. Nevertheless delay occurs. And every assessee knows it happens due to malafide of the departmental officers. Sometime the assessee shows the courage to bring such delay into the notice of the superior officers. But no person has ever been held responsible for any delay. This author is not aware of any instance where any action was ever taken against any officer of the department for delay. This state of affairs clearly points out to the fact that whatever remedies are available against delay, is available on paper only. This paper also seeks to examine the reasons for this state of affairs and suggest remedial measures against this malaise.

The Citizen Charter has been issued by the Central Board of Excise and Customs as its commitment to the responsive and efficient tax administration. It gives a right in the hand of the assessee to force the tax administration to comply with their duty. The text of the citizen charter reads as,

“CITIZEN’S CHARTER”

This Charter is a declaration of our mission, values and standards, and our Commitment to achieve excellence in the formulation and implementation of Customs and Central Excise policies and procedures for the benefit of the Trade and Industries, who are our partners in progress.

Our Commitment

We shall carryout our tasks with

• Integrity and Judiciousness

• Courtesy and Understanding

• Objectivity and transparency

• Promptness and efficiency

We shall encourage and assist Voluntary tax compliance by our Clients.

Our expectation

We expect you to be prompt and reasonable in fulfilling your duty and legal obligations and be true and honest in furnishing information to us.

Our Standards

We Shall

• Acknowledge declarations intimations, applications, returns and all communication on the spot and in any case within 7 days of their receipt.

• Respond to all communication within 15 working days of its receipt.

• Settle any disputes relating to declarations or assessment within 10 working days of written or oral explanation.

The importance of the charter has been explained by the Commissioner of Central Excise (Appeals), in the matter of Thanjavur Spinning Mills [2004 (163) E.L.T. 278 (Commr. Appl.)], wherein the Commissioner (Appeals) declares,

“This Citizen’s Charter is a Magna Carta reflecting the higher aspirations of the Department. It is a noble document propounding the Department’s ideals, vision and to frame and mould the thinking of the officials to the challenges of democracy, freedom, transparency and human dignity. Every official needs to act with profound conviction to dedicate his official life to the attainment of these objectives. If we have the courage to make the right decisions and if we have an abiding faith that only the right will ultimately survive, we shall know that we are helping to build a nation in which the finer values of man’s spirit may flower. The Citizen’s Charter is a vision of something great and tremendous, a call to a heroic mission, the challenge of a truly national message. It is a time of challenge and change. Let us apply ourselves to that which is presented to us, as our appropriate object, and let the sacred obligations, which have devolved on our Department sink deep into our hearts. There is opened to us a noble pursuit, to which the spirit of the times strongly invites us. Let our conceptions be enlarged to the circle of our duties. Let us convince the people that our system is the best, let us extend our ideas over the whole of the vast field in which we are called to act. In keeping with the noble ideals enshrined in the Citizen’s Charter the Appellant deserved to get a prompt reply for their petition dated 27-8-2001. However, the mystical secrets of office procedure denied them a timely reply. We have to push aside the fateful and inexorable realism of such complacency. The Appellants, seem to be asking the Department whether in this time of relentless challenge do we have those qualities of adjustment, those characteristics of a dynamic office, which are requisite to meet the accelerating rate of change, which is the overriding characteristic of our time? The highest ethical concepts is enshrined in our Citizen Charter but if we fail to perform our share of duties and responsibilities, the visions enshrined and displayed will mean no more than a name carved deeply into marble on an expensive crematory mausoleum. There is no particular inspiration in reading headstones in a graveyard.”

The Board has always emphasized the needs of an assessee friendly and responsive tax administration. In Circular No. 24/2000-Cus., dated 30th Mar. 2000, the board says, “the Hon’ble Minister of State of Finance (Revenue) has expressed his anguish over the indifferent and unresponsive approach and lack of sensitivity of our officers even to the genuine representations/complaints by general public. The field officers did not even bother to forward representation to the Government and recommend condonation at their own initiative till the matter was brought to Minister’s notice by a VIP. The Hon’ble Minister has observed that the rule and regulations should be used to the benefit of our citizens rather than applying them mechanically creating more work for everybody.”

To make the tax administration real efficient and responsive to the need of public the CBEC issued Circular No.  393/26/98-CX, dated 2-6-1998, wherein it directed that,

1.All declarations, intimations, etc. when sent by FAX, E-mail, by Post or by Courier shall be accepted by the filed formations;

2. Appointments should be given also on E-mail on request from the trade;

3. All queries by E-mail should be accepted and the answers should be sent by E-mail;

4. Any query received from the trade must be answered within a maximum of four weeks from the date of receipt.

The above directions have been reiterated by the CBEC Central Excise Manual of supplementary instructions in para 3.4.These instructions give certain very important right to the assessee.

The law has always been very clear on the exercise of powers and discretion conferred by a rule of law. The Citizen Charter re-enforces these values and give them a strong and clear legal footing. Integrity, judiciousness and reasonableness are not mere legal rhetoric but sound legal principles on which our constitution is based upon.

The Right to Information Act, 2005.

The department of Central Excise and Customs is a public authority within the meaning of the Right to Information Act, 2005 and hence, they are bound by the provisions of the Act. As per Section 4(b)(iii) of the Act, the authority has to publish the norms set by it for discharge of its functions. As per Section 4(b)(ii) of the Act it has to publish the power and duties of its officers and employees and the procedure followed by then in discharge of its functions. The citizen charter is, at the most, a skeleton of the norms set by the CBEC. Further the Central Board of Excise and Customs has not prepared any document, which specify the duties of its officers and employees. Nevertheless, certain information has been made public on the CBEC web site, which again give valuable rights to the assessee.

The Governance in India has largely been a declaration of powers of the officers and employees of the Government. This is probably a colonial legacy when the government was British and the “native public” was there to be ruled. There cannot be any declaration of rights of people or duty of the Government towards people, who are “Ghulam” of a foreign power. Unfortunately even after independence the mindset continues. Thus every Act provided for the powers of the officers but was invariably silent on the duties of the officers. Off course, the gap was filled by the judicial pronouncements, but these are neither sufficient nor expresses the will of the elected legislatures. The Central Board of Excise and Customs have not notified till now the duties of its officers and employees till now. The duty imposed by the Right to Information Act is a public duty, which must be done, sooner than later.

Section 4(d) of the Act provides that every public authority shall give reasons for its decisions, irrelevant of the fact that the decision is administrative or quasi-judicial. In UOI v/s Mohan Lal Kooper [AIR 1974 SC 87], the Supreme Court observed that reasons are the link between the materials on which certain conclusions are based and actual conclusions. They disclosed how the mind is applied to the subject-matter for a decision whether it is purely administrative or quasi-judicial and reveal a rational nexus between the facts considered and conclusions reached. Fair play in action requires that every authority should record reasons for its decisions, whether administrative or quasi-judicial. Every citizen has a right to know as to on what basis a decision has been taken which may affect his situation. Recording of reasons is an assurance of the fact that the authority has applied its mind to the facts and circumstances of the case before arriving at any decision. Further it fecilitates proper supervision on the authority concerned by higher administration or by the process of judicial review. An decision, action or order of any statutory or public authority, bereft of reasoning, would be arbitrary, unfair and unjust and violative of Article 14 of the Constitution of India, and would deemed to have been arrived at by unfair procedure offending Article 21 of the Constitution of India [Krishna Swami v/s UOI, AIR 1993 SC 1407]. The Right to Information Act, 2002 merely says what was always law of the land as per the binding judgments of the Supreme Court. However, enforcement of a statutory provision is always easier as compared to enforcement of a judge-made law. 

Unjustified delay is an act of the authority for which citizens can seek information including reasons for delay. The Right to Information Act, 2005 gives valuable rights to the citizens against delay. Any delay in violation of Citizens Charter, in violation of the statutory provided time limit or otherwise inordinate delay has to be explained with reasons as per section 4(1)(d) of the Act. The citizen has a right to seek reasons for such delays and the authorities are bound to provide reasons. Further when any such delay is brought to the notice of superior officers, he has to take appropriate action against such delay. The assessee has a right to seek information from him as to what action has been taken.

Statutory Provisions:

There are various provisions in the law under which certain particular acts have to be done within a specified time schedule. For example a demand can be raised only within the time specified in Section 11A of the Central Excise Act, 1944 or under section 28 of the Customs Act, 1962. In certain other situations, like refund under Section 11B, there are provisions for interest as a penalty for delay. Certain other situations are covered by CBEC instructions and Citizen’s Charter. For example the Board has directed that adjudication order should be issued within 7 days of personal hearing (Circular No. ). Similarly the Board has directed that drawback claim should be decided within 3 days in case of EDI shipping bills and within 5 days in case of manual shipping bills. There is no need to repeat here that these circulars are known more for their violation than for implementation.

Nevertheless, there are many situations for which there is no time limit has been specified and assessees are at the mercy of the departmental officers. Due to such delaying tactics of the officers, the assessee suffers huge losses for which there is no provision under the Customs or Central Excise law. In some cases the assessees have raised this point before higher judiciary with favourable results.

When the goods are detained in port area, it results in huge demurrage liability on the importer. In Shipping Corporation v. C L Jain Woolen Mills, [2001 (129) ELT 561(SC)], the apex court held that if seizure and consequent detention was held to be illegal, the demurrage should be paid by the Customs department. Various High Courts took the same view. For example Delhi High Court in Trishul Impex v. UOI [1992 (58) ELT 182], In R C Fabrics v. UOI [1995 (76) ELT 9], Kolkata High Court in Surabhi Leather v. CC [1992 (59) ELT 253], Andhra Pradesh High Court in Sujana Steels v. CCE [2002 (141) ELT 343], Madras High Court in Anuma Precisions Tolls v. CC [2002 (121) ELT 309], took the view that Customs department is liable to pay demurrage in cases of unjustified seizure and detention of goods.

On its part, CBEC has issued various guidelines so that harassment of the importer is not done and demurrage charges do not become payable. Instructions have been issued in Chapter 16, para 5 of the CBEC Customs Manual, 2001. The circular, 42/2001 dated 31.07.2001 says that erring officers were held liable. However, this author is not aware of any case when any erring officer was ever found accountable. In fact, this author is aware of a recent case when goods were illegally detained by a premier investigating agency of the Customs and the goods were not released despite the provisions of law were brought to the notice of senior officers.

In case of North Eastern states, there are provisions in Notification No. 32/99 and 33/99 of Central Excise that the amount of duty paid in cash shall be refunded by 15th of next month. In case of any delay in verification, the amount should be refunded provisionally by that date. Despite such clear-cut provision, this author is ware of some cases where the amount has not been refunded, even when such acts were brought to the notice of senior officers.

It is difficult to imagine that whatever is happening at the ground level is not known to the senior officers or board. And if is really not known, it speaks of their competence. And if the law is not implemented despite the facts were brought to their notice, their bonafide is in doubt.

RIGHTS OF THE ASSESSEE HAS TO BE EXCERCISED BY THE ASSESSEE:

The protection of law is available only to vigilant citizens. Law cannot protect those persons who sleep over their right. If our citizens are of the opinion that their rights against government officers will be protected by the government, their rights against junior officers will be protected by senior officers- it is merely a wishful thinking. Unjustified delay by the department and its officers are negligence and dereliction of their duties. It is a “Civil Wrong”, an actionable claim in the court of law. In cases of unjustified delay, the erring officers personally and the department vicariously is liable to compensate the assessee.

Although we have inherited our legal system from the British Common Law, unfortunately the law of torts didn’t get enough attention in our country. Claiming compensation against the government was further made difficult by the doctrine of sovereign protection, procedural protection under Section 80 of the Code of Civil Procedure and “good faith” clause protection extended to government servants under various laws.

Section 155 of the Customs Act, 1962 protects the officers and government, if the action has been taken in good faith. The action can be initiated only after giving the person one month notice. The action can be initiated within three month from the date of cause of action. Similar provision has been made under Section 40 of the Central Excise Act. These provisions are extremely loaded against the assessee and gives too much protection to the government and its officers. Therefore it is not surprising that probably no proceeding has ever been initiated against any of the officers at any point of time. These laws are primarily responsible for rampant corruption in our government, rampant human rights abuses by our government agencies, rampant redtapism, rampant ignorance of pleas of common man in the power corridors and rampant lack of accountability and sincerety in the government officers.

Nevertheless, even these laws can be made to work, if the assessee is vigilant of their rights. Ignorance of laws and sleeping over your rights can never be justified on any ground. Despite such laws, the assessee is still empowered to move the civil court to claim compensation against any unjustified delay. Mere initiation of such action by the assessee will have a salutary effect on the administration of Customs and Central Excise.

SUGGESTION:

The law should be amended to include certain sections, which protects citizens against the unlawful actions of the officers. Justice requires that in the administration of taxation laws, genuine concern of the citizens must be kept in mind. Justice is the sole purpose of any law. A law cannot be justified on the ground of existence of legislative power but it can be justified only when it furthers the ends of justice. Taxation can never be justified merely on the ground of revenue collection, but has be justified only on the basis of lager justice in the society. St. Augustine said in “The City of God”,

“JUSTICE BEING TAKEN AWAY, THEN

WHAT ARE KINGDOMS, BUT GREAT ROBBERIES?

FOR WHAT ARE ROBBERIES THEMSELVES,

BUT LITTLE KINGDOMS.”

A law devoid of justice is nothing but a tool of robbery.

Secondly, in the law there must be procedure through which citizens can enforce their rights. It will not be out of place to suggest that even Commissioner(Appeals) or CESTAT can be empowered to receive citizen’s complaints against various form of harassment and delay and may be empowered to issue directions or order compensation. Speedy adjudication of taxation issue is important, but speedy stoppage of harassment is even more important.

CONCLUSION:

Unjustified delay is violation of basic spirit of the customs and central excise law, apart from being outright violation of Citizen’s Charter and CBEC instructions. It is civil wrong and an assessee can claim compensation for that. There is a need to amend the laws to make it more assessee friendly so that he may not face undue harassment in the hand of assessee.




By: Rajesh Kumar (Advocate)

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Sting Operations — to be or not to Be?

November 18, 2009

Sting Operation –To be or not to be?

A Sting Operation is an operation designed to catch a person committing a crime by means of deception. A complicated confidence game planned and executed with great care. The word “sting” derives its origin from American usage to mean a police undercover operation designed to ensnare criminals. The word “sting” is a synonym for the expression “set a trap to catch a crook” and this article uses the term in that sense. In more refined terms, it can be called Investigative Journalism or Undercover Journalism. Sting Operation is an information-gathering exercise; it looks for facts that are not easy to obtain by simple requests and searches, or those that are actively being concealed, suppressed or distorted.

An informed citizenry the bedrock of a democracy, holding the government accountable through voting and participation requires investigative journalism which cannot sustain itself on asymmetric dissemination of information. In many cases, the subjects of the reporting wish the matters under scrutiny to remain undisclosed. Among the most popular programmes in India, are those reporting on corruption and misdeeds of politicians and government officials. ‘Candid camera,’ reports many true stories of the day the bribe that the police inspector extracts from the victim of a crime before agreeing to investigate, the ‘fee’ that the government officer charges for his giving the order to make an electric connection, and the ‘contribution’ that a company pays a member of Parliament before bringing up a legislative concern in the Lok Sabha. Because of all these things do we really require Sting Operations? At the same time, where such investigative work involves the use of covert methods, it raises issues that tend to further blur the line between law and ethics. Is deception legitimate when the aim is to tell the truth? Is any method justifiable no matter the working conditions and the difficulties in getting information? Can television reporters use hidden cameras to get a story? Can journalists use false identities to gain access to information? The critical question that surfaces is “to what extent can the media go and to what extent should a person be informed?”

Sting Operations In India

Sting Operations are undertook with a view to look into the working of the govt. or to see whether the acts of any individual is against the public order. On the basis of the purpose Sting Operations can be classified as positive and negative. Positive Sting Operation is one which results in the interest of the society, which pierces the veils of the working of the government. It is carried out in the public interest. Due to positive sting operation society is benefited because it makes government responsible and accountable. It leads to the transparency in the government. On the other hand negative sting operations do not benefit the society, but they do harm the society and its individuals. It unnecessarily violates the privacy of the individual without any beneficial results to the society. These types of Sting operations if allowed then it will hamper the freedom of the individuals and restricts their rights. Here are some examples which we can distinguish as positive and negative sting operations.

1. Positive Sting Operations:

„« Sting operations on ultra-sound centers carried out by the Health officers in Karnataka for “serious enforcement’’ of the Pre-Natal Diagnostic Techniques Act which bans sex determination of foetuses and consequent abortion of female ones to stop female foeticide.

„« The Ministry (by the Cable Television Networks Regulation Act and Programme Code), has prohibited the transmission of Cineworld channel for 30 days for showing “objectionable content.” Because it “offended good taste and decency” and it “was obscene and likely to corrupt public morality and was not suited for unrestricted public exhibition”

„« An operation by an online news site called Tehelka to catch top politicians and army officers taking bribes from journalists posing as businessmen.

„« An operation in which a journalist posing as a struggling actress met actor Shakti Kapoor, who promised in the televised footage that his secretary would introduce her to movie producers and directors.

2. Negative Sting Operations:

Instances over the years have shown that though sting operations do expose corruption in some cases, sometimes they seriously violate the rules of journalism in the pursuit of profit and short-term sensationalism.

„« The Delhi High Court on Friday, 7th September, 2007, issued notices to the Delhi government and city police after taking suo motu cognisance of media reports alleging that a sting operation carried out by a TV channel, which claimed to have exposed a sex racket run by a government school teacher Uma Khurana, for allegedly luring her pupils into prostitution has now been revealed to be completely fabricated and was fake and distorted.

„« The Supreme Court on Wednesday, 7th February, 2007, issued notices to a private news channel and its reporter for carrying out a sting operation carried out in the year 2004, which allegedly showed a non-bailable warrant could be procured against any person by paying a hefty amount in the court.

These incidents are an example of how a sting operation can go wrong and become an exercise in trapping an innocent person. India TV’s chief editor, Rajat Sharma, said that there was no violation of privacy in exposing such matters as political corruption or the trading of jobs for sex in Bollywood, a practice known in movie and theatrical business lore as the casting couch. “If you are serious about exposing certain social evils, there is no other option but to use sting operations.”

Do We Really Need Sting Operations?

The media plays an important role in a democratic society. It acts as the fourth institute outside the Government . Sting operations are methods of uncovering information. Although, the Indian Constitution does not expressly mention the liberty of the press, it is evident that the liberty of the press is included in the freedom of speech and expression under Article 19(1) (a). Various Constitutions have guaranteed free press or media as a fundamental right . Freedom of press is a special right under art. 19(1)(a) of the Constitution of India, 1950 but it has certain restrictions. The democratic credentials are judged by the extent of freedom the media enjoys in a particular state . Further the media has a right to impart the information to the public. Freedom of speech includes freedom to communicate, advertise, publish or propagate ideas and the dissemination of information . Furthermore Art. 19(1) also incorporates within itself right to receive information about any event, happening or incident etc. “The heart of journalism has to be public interest” and Sting operations, serve public interest.

In Romesh Thappar v. State of Madras Court said, “…. The public interest of freedom of discussion (of which the freedom of press is one aspect) stems from the requirement that members of a democratic society should be sufficiently informed so that they may influence intelligently the decisions which may affect themselves. ….In some the fundamental principle involved here is the peoples’ right to know.”

This concept of peoples’ right to know, which was found to be so essential for democracy, was located by the Court in Article 19(1)(a) in Bennett Coleman and Co. v. Union of India observing thus:

“Although Article 19(1)(a) does not mention the freedom of the press, it is settled view of the Court that freedom of speech and expression includes freedom of the press and circulation.”

The Court held:

“Press has a fundamental right to express itself; the community has a right to be supplied with information; and the Government has a duty to educate the people within the limits of its resources.”

Justice Mathews ruled in the case of State of UP v. Raj Narain , “The people of this country have a right to know every public act, everything that is done in a public way by their public functionaries. Their right to know is derived from the concept of freedom of speech”.

In S.P. Gupta v. Union of India , “No democratic Government can survive without accountability and the basic postulate of accountability is that people should have the information about the working of the Government.”

In Prabha Dutt v. Union of India the Supreme Court upheld the right claimed by the press to interview prisoners that the right claimed by the Press was not the right to express any particular view or opinion but right to means of information through the medium of interview of the prisoners.

In Indian Express Newspapers (Bombay) Private Ltd. and Ors v. Union of India and Ors. , the Court emphasized that the freedom of press and information were “vital for the realization of human rights”. The court relied upon the Article 19 of the Universal Declaration of Human Rights, 1948

Why No To Sting Operations?

With great power comes great responsibility, therefore the freedom under Article 19(1)(a) is correlative with the duty not to violate any law. Every institution is liable to be abused, and every liberty, if left unbridled, may lead to disorder and anarchy. Television channels in a bid to increase their Trade Related Practices (TRP’s) ratings are resorting to sensationalized journalism. Sting operations have now become the order of the day. The carrying out of a sting operation may be an expression of the right to free press but it caries with it an indomitable duty to respect the privacy of others.

In Time v. Hill the U.S. Supreme Court said: “The constitutional guarantee of freedom of speech to press is not for the benefit of the press so much as for the benefit of all the people. The same principle was followed by Mathew, J. in Bennett Coleman and Co. v. Union of India.

Article 19(2) – An Exception to Article 19(1): It is however pertinent to mention that, freedom of speech and expression of press is not absolute but is qualified by certain clearly defined limitations under Article 19(2) in the interests of the public.

In Romesh Thappar v. State of Madras, and Brij Bhushan v. State of Delhi the Court firmly expressed its view that there could not be any kind of restriction on the freedom of speech and expression other than those mentioned in Art 19(2) and thereby made it clear that there could not be any interference with that freedom in the name of public interest even when Clause (2) of Article 19 was subsequently substituted under the Constitution (First Amendment) Act, 1951 by a new clause which permitted the imposition of reasonable restrictions on the freedom of speech and expression of media.

Against Right to Privacy: The individual who is the subject of a press or television ‘item’ has his or her personality, reputation or career dashed to the ground after the media exposure. He too has a fundamental right to live with dignity and respect and a right to privacy guaranteed to him under Article 21 of the Constitution. The Supreme Court, Kharak Singh v. State of UP held that right to privacy is inherent under Article 21. The Delhi High Court observed that right to privacy that flows from Article 21 couldn’t be invoked against private entities. It can not be denied that it is of practical importance that a precarious balance between the fundamental right to expression and the right to ones privacy be maintained. ‘Right to Privacy’ has ceased to have any pragmatic value where ‘sting operations’ define the order of the day. The right to privacy is an alleged human right, which may restrain both government and private party action that threatens the privacy of individuals. It has been recognized as a fundamental right by the Hon’ble SC under Article 21.

The Supreme Court in R. Rajagopal and Another v. State of Tamil Nadu and Others are true reminiscence of the limits of freedom of press with respect to the right to privacy:

“A citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, child bearing and education among other matters. No one can publish anything concerning the above matters without his consent – whether truthful or otherwise and whether laudatory or critical. If he does so, he would be violating the right to privacy of the person concerned and would be liable in an action for damages. Position may, however, be different, if a person voluntarily thrusts himself into controversy or voluntarily invites or raises a controversy.”

In another landmark judgment which addressed the issue of privacy was the telephone tapping case- People’s Union for Civil Liberties v. Union of India the Court observed:

“The right to privacy by itself has not been identified under the Constitution. As a concept it may be too wide and moralistic to define it judicially. Whether right to privacy can be claimed or has been infringed in a given case would depend on the facts of the said case….”

Against Public Morality: There is the classic ethical problem that haunts all sting operations: can you hold somebody responsible for a crime that he would not have committed if you hadn’t encouraged him? The essence of all entrapment is that you promise a man a reward for breaking the law and then, apprehend him when he takes the bait. All sting operations involve making people commit crimes that they would not otherwise have committed and are therefore immoral. It is against the public morality and decency and hence falls within the purview of Article 19 (2).

The 17th Law Commission in its 200th report has made recommendations to the Centre to enact a law to prevent the media from interfering with the privacy rights of the individuals.

Problems With Sting Operations

The classic ethical problem that haunts all sting operations: – can you hold somebody responsible for a crime that he would not have committed if you hadn’t encouraged him? The essence of all entrapment is that you promise a man a reward for breaking the law and then, apprehend him when he takes the bait. A defence that can be taken by the accused that the act had been committed as a result of inducement, and which he (the accused) did not intend himself to commit, or, in cases where lack of consent constitutes the offence, such as rape, that the consent had been implied by the inducement, where because of the ‘trap’ laid down for the accused, the impression given was that an offence had not been committed.

Fundamental rights can’t be enforced against the individual or private entity: When Maneka Gandhi sued Khushwant Singh over certain references to her in his autobiography “Truth, Love and a Little Malice” saying that it was a violation of her privacy, she lost the case. It is precisely because of this lack of legislation that we have numerous Sing Operations taking place almost daily thereby obtruding upon individual privacy. However, despite the growing invasion of privacy, there is no Indian legislation that directly protects the privacy rights of individuals against individuals.

Conflict of Laws: Although on one hand, the Constitution confers the fundamental right of freedom of the press, Article 105 (2) provides certain restrictions on the publications of the proceedings in Parliament. In the famous Searchlight Case , the Supreme Court held that, the publication by a newspaper of certain parts of the speech of members in the House, which were ordered to be expunged by the Speaker constituted a breach of privilege.

Another major problem which we face today is against whom the sting operation is allowed? Some are of the opinion that it must be allowed against the public servants. The definition of “Public Servant” is given in 2(c) of The Prevention of Corruption Act. Again a problem comes that can we have sting operation against the public servants when they are not in their course of duty? There are so many problems which arise because we do not have proper legislation. We can say the root of all these problems is the lack of legislation first and any thing after.

Position Of Sting Operation In India

In India we have no specific law which governs such operation and also we have no judicial pronouncements till today which guides such operations or the acts of the media. But a person can go to the court under different laws to protect his rights and freedom. We have wiretapping which is a part of sting operation is regulated under the Telegraph Act of 1885. In 1996 decision by the Supreme Court which ruled that wiretaps are a “serious invasion of an individual’s privacy” The Court also laid out guidelines for wiretapping by the government, which define who can tap phones and under what circumstances. Only the Union Home Secretary, or his counterpart in the states, can issue an order for a tap. The government is also required to show that the information sought cannot to be obtained through any other means. The Court mandated the development of a high-level committee to review the legality of each wiretap. Tapped phone calls are not accepted as primary evidence in Indian courts.

Apart from the common law, the Supreme Court has recognized a constitutional origin as well. So, firstly, a private action for damages may lie for an unlawful invasion of privacy under The Law of Torts. These sting operations also violates right to privacy which according to the Supreme Court is guaranteed under Article 21- right to life and personal liberty. As we are provide that the freedom of expression guarantee in Article 19(1)(a) is not absolute therefore the constitution provides with Article 19(2) which protects the public interest morality and decency. A person who welcomes media interest in his life will not be able to claim a right to privacy as easily as a ‘private individual’. There is vast room for interpretation, especially with terms such as ‘private affairs’ and ‘public interest’; and interpretation will be made by the regulatory authority even though the onus on proving that a particular publication was in public interest lies with the media house. Undoubtedly, the jurisprudence of the Supreme Court will certainly influence interpretation The Apex Court has always upheld the importance of an informed citizenry. A ‘sting operation’ with a genuine motive to create awareness of wrongdoing, cannot be proscribed or prohibited.

Final Remarks:

The Union Information and Broadcasting Ministry must favour the introduction of a clause to address “Sting Operations” in the Broadcasting Bill. The Ministry must make a clear distinction between stories that amount to an “invasion of privacy” and those which expose corruption or have political implications. However, “Sting Operations” which expose corruption and tell stories with political implications will be allowed, as any attempt to proceed against them would be seen as an effort to stifle the media.

What journalists and editors need to determine is who will benefit as a result of the reporting. If journalism is committed to democratic accountability, then the question that needs to be asked is whether the public benefits as a result of specific investigative reports. Does the press fulfill its social responsibility in revealing wrongdoing? Whose interests are being affected? Whose rights are being invaded? Is the issue at stake a matter of legitimate public interest? What the regulatory body will need to determine is who will benefit as a result of the reporting. Is the issue at stake a matter of legitimate public interest? These are some questions which need to be answered when going for a sting operation or going for making legislation on it.

The legislation must govern the conduct of the media and must define the extent media can sting a person’s life and whom they can sting? In the US for example, it is only the federal government and the FBI alone has the right to use a hidden camera and go for sting operation. In India too some body like CBI or any other body must only be legalized to perform sting and their conduct must be regulated through the legislations. This body must not be immune to any legal proceedings. There must be a proper authority like court or Attorney General, whose permission must be sought on proper proof against the subject of the sting. The subject of the sting must have the evidence of criminality

Today the sting operations is taking place for commercial gains therefore the Supreme Court should take observations about it. Problem with the media is that it only campaigns for cases which appeal to its market and its imagination, which may result in its good reputation in front of the society.

To avoid falling into that trap, the sting operations need a code of conduct. Laws too, should be strengthened in this regard. Sting operations are completely justified if they are carried out with the protocol that has been talked about.




By: anand kumar

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