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Insights Daily Current Events, 12 October 2015

Insights Daily Current Events, 12 October 2015

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Paper 2 Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Anti-Defacement Bill hanging fire

Anti-Defacement Bill, mooted by the Kerala State Election Commission, has not yet been passed by the Kerala state government.

About the Anti-Defacement Bill:

The draft Anti-Defacement Bill was initiated by the state election commission in 2013. It was modelled on the laws that were already in force in West Bengal, Haryana and Goa to check defacement by indiscreetly putting up posters, bills and painting graffiti in government buildings, heritage structures and other public places during campaigning and also for commercial purposes.

  • The bill was armed with provisions to prevent despoiling of heritage zones, public places, walls of government and educational institutions and also the thoughtless erection of huge arches as part of campaigning, be it during an election or for propaganda for commercial purposes.
  • The Bill seeks to impose curbs on sticking posters and pictures on signboards, inconveniencing the public and also tourists.
  • It also mandates prior clearance of the local government concerned for publicity at public places.
  • As per the draft, if a representative of a candidate or an institution tends to violate the provisions of the Bill, the onus for the breach of law would be on the beneficiary and not on the representative who executes it.
  • The Bill also ensured due protection for enforcing officers so that no one could initiate legal action against them for acting against those violating the law.

The election commission had furnished a number of suggestions to add teeth to the Bill and make it an effective tool to check such practices. But the draft reportedly got entangled in bureaucratic wrangles and continues to remain in cold storage.

sources: the hindu.

 

Paper 2 Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Lok Adalats held Across the Country

Lok Adalats were recently held across the country for cases relating to Traffic, Petty matters, Municipal Matters, etc. that are at pre-litigation stage and also those pending in courts for their settlement.

  • The aim was to reduce pendency as well as prevent additional litigation swathing the courts, by resolving litigation, wherever settlements are possible.

What is Lok Adalat?

Lok Adalat is a system of alternative dispute resolution developed in India. It roughly means “People’s court”.

Background:

  • The idea of Lok Adalat was mainly advocated by Justice P.N. Bhagwati, a former Chief Justice of India.
  • The first Lok Adalat was held on March 14, 1982 in Gujarat.

How they operate?

Lok Adalat is a non-adversarial system, whereby mock courts (called Lok Adalats) are held by the State Authority, District Authority, Supreme Court Legal Services Committee, High Court Legal Services Committee, or Taluk Legal Services Committee.

  • They are held periodically for exercising such jurisdiction as they determine.
  • These are usually presided over by retired judges, social activists, or other members of the legal profession.

Their Ambit:

  • The Lok Adalats can deal with all Civil Cases, Matrimonial Disputes, Land Disputes, Partition/Property Disputes, Labour Disputes etc., and compoundable criminal Cases.

How are these different from regular courts?

  • These are less expensive and relations between litigants do not get strained.
  • The focus in Lok Adalats is on compromise. When no compromise is reached, the matter goes back to the court. However, if a compromise is reached, an award is made and is binding on the parties.
  • The disputing parties plead their case themselves in Lok Adalats. No advocate or pleader is allowed, even witnesses are not examined.
  • No court fee is levied. Speedy justice is given to the people of all classes of society.
  • Award has same effect as of a Civil Court decree.

It was the LEGAL SERVICES AUTHORITY ACT 1987, which gave statutory status to Lok Adalat.

sources: pib.

 

Paper 3 Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Vodafone wins transfer pricing tax dispute case

The Bombay High Court has ruled in favour of Vodafone in one of a series of tax cases involving the British telecom company in India. This decision is being seen as positive for several other firms fighting similar disputes.

  • The court backed Vodafone’s efforts to oppose a move by tax authorities to add Rs 8,500 crore ($1.3 billion) to the taxable income of a unit, Vodafone India Services Pvt Ltd, which provided call centre services to some group companies.

Background:

  • The case dates back to financial year 2007-8 involving the sale of Vodafone India Services Private Ltd., the call centre business of Vodafone, to Hutchison, and the tax authorities demanded capital gain tax for this transaction. The Income Tax department had demanded that Rs.8,500 crore be added to the company’s taxable income.
  • Vodafone acquired the telecom business of Hutchison in India to enter the Indian market.
  • In 2013, the Income Tax Department issued a tax demand of Rs. 3,700 crore to Vodafone India.
  • However, Vodafone argued that the sale of the call centre business was between two domestic companies and the transfer pricing officer had no jurisdiction over the deal. It argued that the Income Tax Department had no jurisdiction in this case because the transaction was not an international one and did not attract any tax.

What is transfer pricing?

Transfer pricing is the practice of setting prices (for goods and services sold) in transactions between group companies (divisions of a big company) based in different countries, on an arm’s length (fair value) basis. 

Investopedia definition:

“The price at which divisions of a company transact with each other. Transactions may include the trade of supplies or labor between departments. Transfer prices are used when individual entities of a larger multi-entity firm are treated and measured as separately run entities.” (For more: Source)

What is arm’s length?

A transaction is generally described as being on an arm’s length basis when a buyer and a seller act independently and have no relationship with each other. The concept is used to ensure both parties in the deal are acting in their own interest and are not subject to any pressure from the other party.

sources: the hindu, wiki.