May-2015

TAXATION
OF HOLOGRAMS, FREE WARRANTY,
UNJUST ENRICHMENT, FREIGHT ET
AL: INSIGHTS FROM THE THICK OF
LITIGATION
The more the government wants of tax revenues the more
pronounced is the invasion of taxpayers’ privacy and the toughness
of enforcement. Nevertheless, citizens have to play the tax game and
disputes between the two sides are endemic to taxation in India.
Some interesting and significant recent decisions that have come out
of the litigation woodwork
Dr. Ravindran
Pranatharthy
Advocate – Indirect
Taxes & IPRs
WILL Rogers, the amiable American
humourist once said that he did
not know if he was a martyr or
a crook when he filed his income-tax returns.
The tax law was too uncertain to know which
was the case. The complex character of
the tax law does not leave any scope for a clear
judgment on the correctness of tax payment.
Interpretations galore are the order of the day
in taxation- be it a direct tax like the ubiquitous
income-tax or the indirect tax such as the central
excise, customs, Vat or the service tax. Even
a local levy imposed by a municipality bristles
with rules, forms and schedules. Reform, simplification,
rationalization are the words bandied
about from to time to reassure the suspecting
public that tax administrations are engaged in
the pursuit of making taxation better for the tax
payers. But if the history of taxation all over the
world is any guide, the tax systems have only
tended to get more and more complicated. The
more the government wants of tax revenues
the more pronounced is the invasion of taxpayers’
privacy and the toughness of enforcement.
The recent imbroglio over the new income tax
forms asking for details of foreign visits including
expenditure and bank account balances is a
pointer to the desperation of the government
to get at additional revenues even if it involved
curbing the economic and personal privacy of
the citizens. Nevertheless, citizens have to play
the tax game according to rules and ensure
proper compliance as understood by them albeit
with expert help. The disputes between the
two sides are endemic to the taxation in India.
In this Article, we will look at some interesting
and significant recent decisions that have come
out of the litigation woodwork.
Holograms – The doctrine of primary use
A Hologram is a special kind of picture that is
produced by a laser. It is a three-dimensional
image reproduced from a pattern of interference
produced by a split coherent beam of
radiation (as from a laser). Holograms are used
for identity and security purposes. In the case
of M/s HOLOSTICK INDIA LTD Vs COM-
MISSIONER OF CENTRAL EXCISE,
NOIDA - 2015-TIOL-60-SC-CX, the department
of central excise sought to classify the
product under tariff entry in chapter 3920 as an
adhesive whereas the appellants wanted the clas-
38 the MANAGEMENT ACCOUNTANT MAY 2015
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