| | SC dismissesTVS Group firm's plea over dismissal of employees | |
GIREESH BABU
Chennai, 2 January The Supreme Court ( SC) has dismissed an appeal filed by the management of Sundaram Industries Ltd, a part of TVS Group engaged in the manufacture of rubber products for various industrial applications, in a dispute between the management and Sundaram Industries Employees Union. The court said there was no reason for it to intervene in the issue, in which the Madras High Court dismissed the companys appeal against an oder of the Industrial Tribunal, Chennai. The tribunal has earlier ordered that the punishment of dismissal is disproportionate to the the gravity of their offence and to reinstate employees who were dismissed by the company, with 50 per cent back wages. "At any rate, the labour court having exercised its discretion in setting aside the dismissal order on the ground that the same was disproportionate, the high court was justified in refusing to interfere with that order under Article 226 of the Constitution," said the SC order. The order, issued by judges TS Thakur and Vikramajit Sen, added, " There is, in any event, no compelling reason for us to invoke our extraordinary power under Article 136 of the Constitution or to interfere with what has been done by the two courts below." The company did not offer acomment on the order. Not all the workmen mentioned in the earlier cases are facing the action at present, said a source from the group. The dispute started in March 1999, when 13 out of 488 moulders working during the period, declined to abide by the instructions issued by the management to place their individual bags of production on the weighing scale at the end of their work shift. | | Tax demands on firms help govt raise cheaper funds | |
SACHIN MAMPATTA
Mumbai, 2 January The increasingly aggressive tax demands by the government is acting as a cheap source of funds for the sovereign. Companies that challenge a tax claim have to first pay at least half of the disputed amount before going for litigation. As the government is required to pay only six per cent interest if the case goes against it, any disputed claim acts as a source of funds with an interest rate that is three per cent lower than the market borrowing rate. The government pays an interest of more than nine per cent on capital if it wants to raise funds at current rates. But, it seems, the government can raise cheaper capital through its tax demands. "Whenever a tax claim is challenged, the tax authorities insist that that at least 50 per cent of the claim is paid upfront," said Nishith Desai, founder of Nishith Desai Associates. " In a number of cases, taxpayers win the case at the appellate courts, in which case the tax authorities have to refund the money with six per cent interest. Considering the scale of tax litigation and potential refunds with interest, it is quite similar to a sovereign debt offering that is not reflected in the Budget." Interestingly, experts told Business Standard that almost 80 per cent of cases in appellate courts go against the government. Some of the high- profile income tax notices include one for ₹ 5,357 crore to IBM, a ₹ 11,200crore notice to Vodafone, a demand of around ₹ 5,400 crore to Shell and a ₹ 2,100- crore notice to Nokia. "Further, it's highly unfair to offer six per cent interest on taxpayer refunds but charge 12 per cent interest on outstanding claims. Penalties in India are disproportionate and may go up to 300 per cent. Taxpayers need to bear heavy litigation costs, which are not compensated even if they win. Government litigation costs are also indirectly borne by the taxpayer," added Desai. The effective rate of borrowing for the government is even lower than the six per cent figure pointed out an expert. " The interest paid to the company is taxable, so the effective interest paid comes down to four per cent," said a senior official at a major tax firm. The amount locked up in appeals at higher levels — including the Income Tax Appellate Tribunal, the high court and the Supreme Court — was ₹ 1.63 lakh crore, according to the 2013 report of the Comptroller and Auditor General of India which had figures till March 31, 2012. Appeals at the lower level are higher and the proportion of appeals pending decision has shown a rising trend. " Appeals pending with CIT( A) [Commissioner of Income Tax (Appeals)] increased from 67.2 per cent in FY08 to 75.3 per cent in FY12. The amount locked up in appeal cases has also increased to ₹ 2.42 lakh crore ( equivalent to 61.4 per cent of the revised revenue deficit of the Government of India) in FY12 from ₹ 1.99 lakh crore in FY09," added the CAG report. NC Hegde, partner, Deloitte Haskins & Sells, said transfer pricing norms and the lack of accountability in the system have been at the root of an increase in disputed amounts. " The volume may have increased, but it is also on account of disputes over taxation related to transfer pricing. It could also be because of the lack of accountability in the system as often tax officials are not held accountable for passing orders which are clearly not in conformity with the law," he said. CHEAP FUNDS |Government meets most of its spending needs through borrowings |Market rate for government borrowing is nine per cent |Companies have to pay a significant portion of capital up front in case of tax disputes |Government only pays six per cent if appeal goes against it, three per cent cheaper than its usual borrowing rate |The six- per cent interest paid is taxable, so effective rate of interest is closer to four per cent Amount locked up in appeals is ₹ 2.42 lakh crore PROMINENT TAX DISPUTES Company- disputed amount (₹ crore) Vodafone 11,200 Shell 5,400 IBM 5,357 Nokia 2,100 Infosys 1,750 Source: News reports | | | | | Lok Pal Act flaws will help accused, says CBI | |
RUCHIKA CHITRAVANSHI
New Delhi, 2 January The Lok Pal Act is set to become a bone of contention between the government and the Central Bureau of Investigation ( CBI). The investigative agency is planning to write to the law ministry about the flaws in the Act, particularly relating to a section that requires CBI to seek the permission of the Central Vigilance Commission (CVC) for prosecuting Category- C and - D officials, comprising non- gazetted personnel. However, a chargesheet can be filed only before a magistrate. A senior CBI official said the provisions of the Lok Pal Act violated the Criminal Procedure Code ( CrPC). According to the CrPC provisions, achargesheet has to be filed before a magistrate and its content cannot be revealed to any other organisation or person. " There are major loopholes in the Act. We don't know what is in the mind of the government," the official added. CBI has to seek the Lok Pal's permission to prosecute gazetted officers under categories A and B. The official said such contradicting provisions and presence of multiple institutions would favour the accused. " Because of these reasons, so many cases cannot stand their ground in the court. Many trap cases ( where a trap is set to catch offenders) by Delhi Police have failed in court," the official pointed out. CBI had earlier welcomed the Act but said it would leave little scope for the agency to register cases on its own as cases would be referred to it by CVC, Lok Pal, courts, etc. CBI is also concerned about duplicity of cases as various government agencies would be involved, given its staff crunch. The agency's 2,500 investigation officers handle 1,0001,200 cases in a year. There is a 50 per cent manpower crunch in CBI. The Lok Pal Act was passed by the Lok Sabha in December. The Act has proposed that a directorate of prosecution be formed to ensure the independence of CBI. Appointment of the director of prosecution would be on the recommendation of the Central Vigilance Commissioner. According to the Lok Pal, the appointment of the CBI director would be on the recommendation of a high- powered committee chaired by the Prime Minister. The collegium will comprise the leader of opposition in the Lok Sabha and the Chief Justice of India or a Supreme Court judge nominated by him. As of now, the Centre appoints the CBI director. The Lok Pal would consist of a chairperson and up to eight members, of which 50 per cent would be judicial members. Fifty per cent members of the Lok Pal would be from scheduled castes, scheduled tribes, other backward classes, minorities and women. The bureau will write to law ministry about provision requiring it to seek Central Vigilance Commission's nod to prosecute certain senior officials The provisions of the Lok Pal Act violate the Criminal Procedure Code, said a senior CBI official |
ABHIJIT LELE
UCO Bank to offload bad loans worth ₹ 1,900 cr Mumbai, 2 January With growing pressure to manage bad loans, banks are rushing to offload non- performing assets ( NPAs) before the end of the financial year in March. After Oriental Bank of Commerce and Dena Bank, Kolkatabased public- sector lender UCO Bank has put 100 non- performing accounts with outstanding balance of ₹ 1,900 crore on the block. This is second time in the current financial year that UCO Bank is selling its NPAs. In June 2013, it had announced sale of 31 NPA accounts with outstanding balance of ₹ 555 crore. In per cent terms, UCO Bank's gross NPAs stood at 5.32 per cent at the end of September 2013, up from 4.88 per cent from the year- ago period. According to a notice on the UCO Bank website, these NPAs are being offered on " cash and security receipts basis". That means, the bank will use both the routes – selling on cash basis and issuing receipts to buyers. In the latter case, buyers earn as and when the recoveries happen from sale proceeds. Two senior executives with asset reconstruction companies said banks are now more inclined to take out NPAs from their books to contain pressure on balance sheets. The pace of growth in cash flows has been tepid, too. The RBI and the government are facing flak over mounting bad loans. This is one of the reasons why state- owned banks are also getting rid of some accounts, said the head of a large asset construction company. In December 2013, Dena Bank came up with plans to offload loans to 51 accounts with outstanding balance of about ₹ 596 crore. Its gross NPAs stood at ₹ 1,968 crore ( three per cent) at the end of September 2013. Gurgaon- based Oriental Bank of Commerce will sell NPAs of 27 accounts having principal outstanding of ₹ 639.67 crore. Its gross NPAs was about ₹ 4,887 crore ( 3.77 per cent) at end- September 2013, according to Capitaline data. The economic slowdown for over the past two years, stretched working capital cycles, higher interest rates have pushed many companies across sizes to the brink of default. The extent of rise in NPAs has been unprecedented. According to the Reserve Bank of India data, the gross NPAs of commercial banks swelled from ₹ 94,121 crore ( 2.36 per cent) in March 2011 to ₹ 2,36,245 crore ( 4.22 per cent) by end- September 2013, according to RBI data. As a step to revive almost moribund activity in asset reconstruction segment, RBI mooted a slew of steps including allowing banks to take excess provision ( for NPAs) to profits. It also allowed banks to spread loss over two years for assets sold below net book value. RBI plans to allow banks to reverse the excess provision on sale of NPA ( if the sale is for a value higher than the net book value) to its profit and loss account in the year the amounts are received. Second NPA sale in FY14; move aimed at containing pressure on balance sheets The bank had announced sale of ₹ 550 cr of NPAs in July 2013 as well FILE PHOTO UCO BANK Gross non- performing assets Source: Capitaline Compiled by BS Research Bureau | | | |
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SAMIR MAKWANA
Mumbai, 2 January Managing contacts spread across several platforms such as SIM card, Facebook and other services is a challenge. One also needs to regularly take backups and keep updating the address book. A good contacts app minimises the effort of searching and allows the user to quickly make a call, send a message or ping over an instant messenger. The Google Play Store is flooded with several such apps. Heres a shortlist of five such free apps to manage and organise your contacts on Android devices Contacts + This app is for those who have contacts across multiple accounts, SIM cards and social networks. The app offers to create groups of contacts and set favourites for quick access. It also syncs pictures from social networks and arranges contacts from several apps and social networks. Apart from themes, Contacts+ offers quick call, speed dial and other features ExDialer and Contacts This lightweight app to organise and manage contacts, but is available as trial for only seven days. the only issue is that it comes with a trial period of seven days. Supporting over 30 different languages, the app offers several gesturebased dialling inputs to make quick calls. It is one of the few apps that supports syncing contacts from VoIP services such as Skype or Fring. One can buy the pro version for ₹ 200 Contacts Dialer This app offers an easy interface to manage contacts and dial them directly from the panel. The app integrates the contacts picture in a way that one can see the full image and not worry about checking the number. Users can sync their friends latest photos from WhatsApp and Facebook. Contacts can be sorted by frequency of communication or in A- Z order. It tightly integrates SMS along with Facebook, WhatsApp, Hangouts and Email for quick communication right from the photo of the contact GO Contacts EX There are several versions of the app available, but the EX version is the one we recommend. This is a contacts and dialler replacement for most entry- level to budget devices. The quick drag and drop function to add contacts, merging duplicates or adding a contact to a group saves quite a lot of time. It also has a quick finder box on top acting as the search box. The app allows backing up of contacts and restoring from previous backups Super Backup: SMS & Contacts This app can take a complete backup of the contacts and SMS messages on an Android device. This backup can be stored in the SD card of the phone or on board. The app can also back up bookmarks and calendars on to the SD card, and allows automatically uploading backup files to the users Gmail account just in case the phone crashes or gets stolen. Settings allow changing the backup folder path and also tweaking properties to include in the backup, like the contacts image and group By arrangement with |
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