The law is not a rational code but
this does not mean that legitimate expectations & morality need not be
considered while framing the law. The government has every right to collect
interest if the payment are delayed by the assessees but at the same time,
there is obligation to effect payment of interest in case the refunds are
delayed. However, there is no sense of legitimacy. This points to big brother
bullying the small fries.
This series pertains to rebate of
goods exported. The government is required to collect & pay interest but
just see the disparity & you will become aware of the illegitimacy, which
prevails.
Under the DOR Notification
No. 19/2002-C.E. (N.T.), dated 13-5-2002, the applicable rate of interest
for delayed payment by the assessee is fixed @ 15% per annum. However, vide DOR
Notification No. 66/2003-C.E. (N.T.), dated 12-9-2003, the department revised
the rate to read as @ 13% per annum. This rate of interest continued up to
31.3.2011. However, by way of DOR Notification No. 6/2011-C.E.
(N.T.), dated 1-3-2011, the said rate of interest has been changed
to 18% per annum. Thus you will see that the policymakers are simply bothered
to raise the revenue of the government through hiking the interest rate. There
is a hefty hike of 5% in interest rate between 2003 through 3011.
In contrast to this, please see the
notifications pertaining to the payment of interest by the department. Under the DOR Notification
No. 24/2001-C.E. (N.T.), dated 11-5-2001, the applicable rate of interest
for delayed payment by the department is fixed @ 9% per annum. However, vide
DOR Notification No. 17/2002-C.E. (N.T.), dated 13-5-2002, the department
revised the rate to read as @ 8% per annum. Further,
vide DOR Notification No. 67/2003-C.E. (N.T.), dated 12-9-2003, the
department revised the rate to read as @ 6% per annum. Therefore the department
is required to pay interest @6% per annum. Please see the inflation rate
prevailing in this country. As on date some of the banks pay more than 6%
interest in the money lying in the savings bank account. The government is well
aware that it is permitting borrowing at rates in excess of 8% per annum in
case of tax free bonds. The prime lending rates of most of the banks are in
excess of 13%. Therefore, why the government should withhold the money of the
beneficiaries beyond liberal period of refund allowed to themselves & pay
only 6% rate of interest on that amount. Is the government & the CBEC is
not ashamed of such a blatant abuse of authority. Why the government should
indulge into such cheating! Is the Chairman, CBEC obligated to explain that why
such state affairs prevails? Why there is no legitimacy & rationale
exercised in respect of delays in refunds whereas on the other hand the rate of
recoveries are increased when the assessee is in fault. The rate of interest
for the beneficiaries default has gone up but the rate of interest has not been
touched & the rate of interest for the benefit of the government is 18%
& whereas for the assessee is 6% per annum i.e. the ratio is 3:1 in the
favour of the government. Why the government should indulge into such cheating!
Is the Chairman, CBEC obligated to explain that why such state affairs
prevails? Why there is no legitimacy & rationale exercised in respect of
delays in refunds whereas on the other hand the rate of recoveries are
increased when the assessee is in fault. There are other departments such as
Income tax, which pay interest in excess of 6% therefore why the interest rate
should show disparity. Can the government not have a proper way to determine
rate of interest for all central legislations both for refund & recoveries.
Please note that the assessee is not
only paying the penal rate of interest but in most of the cases, they are
subjected to penalties & fines also. Thus the magnitude of injustice is
more glaring.
Not only the above, the biggest irony
is that even this measly interest is not paid by the department as already
stated in the earlier story. Therefore might is right & India is a banana
republic.
There is one more glaring error,
which needs to be collected. It is only in respect of the duty that the
interest is required to be paid. There are several other deposits made by the
assessees. If the assessee wins the case for the faulty & mischievous
interpretation of the official concerned then why the interest should not be
payable to the assessee & recovered from the official in fault. If this
provision is implemented then frivolous litigation & corruption would
reduce to a very large extent. The government & the department will become
clean in one shot. It is difficult to understand that why this cannot be
implemented if we are sincere about tackling corruption.
This is the sixth part of the story. However, the
story of the abuse of authority does not end here. Further lampooning of the
system & abuse by the authorities will follow in the next write up. Till
then Good bye.
rajiv.pec@gmail.com
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