ENGENDERING LAW -- TO RENDER GENDER JUSTICE

IN THE WAKE OF SURYANELLI VERDICT BY KERALA HIGH COURT

 

(By Manjeri Sunder Raj, Advocate, High Court of Kerala)

 

The recent judgment of the High Court of Kerala in Suryanelli case has invited criticism from several quarters, political and feminine. Some Activist Women leaders have even threatened direct action in front of the High Court. One women's lib leader declares "the judgment is Anti women". Lawyer Politicians have jumped in to the fray with crisp comments against the judgment. All these are for the simple reason that all accused except one are set free in this much publicized sex scandal case.

 

Protecting the woman was the concern of all time Society. Protection was not to be used by man as a means for establishing supremacy over the woman. The woman is quiet, perseverant, tolerant and all the same time capable of severe pain bearing. "Protection of the woman means protection of culture". Just like you say, "when you teach a woman, you are not teaching her alone but teaching a whole family"; when the woman is protected not only she but the prevalent culture also is protected.

 

Amidst these much ado about nothing, these loud mouths have forgotten to give heed to the call of the learned Judges rendering the verdict for the need for law reform, essential amendments to the Penal provisions at present available. In these calls one should not omit to hear the wail of helplessness. When provisions of law fall short of social requirements of contemporary times Judges are constrained to perform their duty within the ambit of presently operative law. Instead of wasting time on raising voice against this judgment these forces especially Women's organizations have to take the cue from the judgment to fight and get the provisions of law updated to suit the occasion and to protect the hapless women in the society.

 

We all talk too much of Human Rights these days. More often they are mostly concerning Man's Rights. While taking about the rights of women it is our bounden duty to discern how humane are the laws to the rights of women. Are not then the laws remaining a dead letter when it comes to the question of their implementation:

 

Sri Upendra Baxi, currently Professor of Law, University of Warwick writes in his book "Engendering Law"—

 

"The lived reality of sex trafficking, sweat labour, argotic serfdom, workplace discrimination, sexual harassment, dowry murders, rape in peace time as well as war as a means of doing 'polities', torture of women and experimental medicalization of their bodies indecent representation in the media print and visual all these and related devices of State and society present problems of routinisation of terror. While feminist scholarship has demonstrated the power of story telling, the social theory of human rights has yet to conceive of ways and means of investing individuals biographies of the violated with the powers of social texts".

 

He is critic even about the CEDAW -- Convention for Elimination of all forms of Discrimination Against Women 1979, he wrote:

 

"Unsurprisingly the more severe the violation of human rights, the more the orders of power declares their loyalty to the regime of human rights. The near universality of ratification of CEDAW for example betokens no human liberation of women; it only endows the State with the power to tell more Nietzschein lies". Nietzschein had said, "State is the name of the coldest of all cold monsters. Coldly it tells lies too, and this lie grows out of its mouth. I, the State, am the people".

 

In another work entitled "The reason for Human Rights: the unreason for Globalization" (First AR Desai Memorial Lecture) he writes:

 

"The Current campaign based on the Motto "Women's rights are Human Rights" is inspired by a massive history of local struggles all around. The historic birthplaces of all Human Rights are the Hearth and the Home, the church and the castle, the prison and the police precinct, the factory and the farm".

 

It is well known that the Government can pass special provisions of law favouring women. Thus, the courts upheld reservation of seats for women in an election to the municipality. A rule enabling women to be released from jail on bail, but not men in the same circumstances, was also held valid. Punishment for outraging the modesty of a woman was held valid though there is no such law for men. Where admission to a mixed college was restricted not merely to the ground of sex but also to develop a women's college in that own, the restriction was held valid. The rule that service of Court summons can be served only on an adult male member of the family was also held valid as it favoured women. Therefore, it is well established that the Government can discriminate in favour of women, but it cannot discriminate against women.

 

In considering the rights of women, including their right to protection as a unique section (not weaker section) we have to separately approach various spheres of her action. The home, the workplace and in public.

 

Gone are the days of Manu, who declared that woman requires no freedom because during infant hood she is protected by parents, during youth by her husband and in old age by her offspring. In present day society such type of protection is less and less given and wanted. Domestic violence, work place harassment and public outrage are even on the increase. These are caused not by one section of society alone it is the combined result of deterioration of our cultural values and personal relationships. In a cosmetic rich society even feminism becomes a cosmetic rhetoric.

 

Age of 16 is no more the protective barrier for women against wrongful force on her, when even woman aged 54 gets raped in public. When social barriers have broken legal bars are of no use. Women folk individually and collectively have to awake to these realities and not anymore languish in the hope of getting protection from some quarter.

 

But social exposure, cordial interaction, bold expression of ideas and the like by the woman lead to better understanding. Social security of woman is a growing necessity. The present laws are insufficient, even the recent Act against Domestic Violence is only a cry in the wilderness. Even after several years of Vaisaka case and the Hon'ble Supreme Court's mandatory directives the Centre and the State Governments continue to fail in their onerous duty to promulgate statutes for protecting working women against sexual and other harassments.

 

Right to privacy, right to equal pay, right to special leave and privileges during maternity though guaranteed in the letter, in practice they are always flouted. Recent alteration in the labour policy of the Central Government has opened floodgates of confusion over women's security. She can now be asked to work overtime and also to do night shifts as a matter of compulsory obligation and without any protective measures. In the matter of right to property, certain communities still manage to keep women at bay by denying them rights on par with their male folk.

 

Noble laureate in Economics Sri Amartya Sen in his famous work 'Development of freedom' while writing on gender inequality refers to the phenomenon of 'missing women'. He has referred to excess morality and artificially lower survival rates of women in many parts of the world. The artificially higher female morality rates reflect a very important capability deprivation of women. Despite the statutory ban on pre natal diagnostic scan of the gender of the foetus, the female child is found out and eliminated, even today. Sati deaths still occur by forcing the widow to jump into her husband's pyre. And the pushers go unpunished by Courts of law. The demand for one-child-family can lead to the neglect of infants thereby increasing the infant morality rate. A policy of allowing only one child per family is particularly detrimental for girls.

 

In a society ridden with not only gender inequalities but also more with social and economic disparities, women's freedom and clamor for her rights are sheer wild goose chases.

 

As William Cowper says "Freedom has a thousand chances to show, that slaves, however contended, never know ". Whatever freedom and rights we may speak of women and however contended they are, women shall never know or see any one of the thousand chances of true freedom, unless they open their own eyes and see.

 

So my dear sisters come ye all around, gather all your strength and fight with all your might and stop not till the goal is reached; the goal being the passing of "The Women's (Protection of Rights) Act". If not Suryanellis would go on repeating themselves.

 

A WHITE PAPER ON STATE-LEVEL VALUE ADDED TAX*

 

(By The Empowered Committee of State Finance Ministers, Constituted by the

Ministry of Finance, Government of India on the basis of Resolution Adopted in the

Conference of the Chief Ministers on November 16, 1999)

 

New Delhi

January 17,2005

 

PREFACE

 

This White Paper is a result of collective efforts of all the States in formulating the basic design of the State-level Value Added Tax (VAT) through repeated and candid discussions in the Empowered Committee of State Finance Ministers.

 

The State-level VAT, as elaborated in this White Paper, has certain distinct advantages over the existing sales tax structure. The VAT will not only provide full set-off for input tax as well as tax on previous purchases, but it will also abolish the burden of several of the existing taxes, such as turnover tax, surcharge on sales tax, additional surcharge, special additional tax, etc. In addition, Central Sales Tax is also going to be phased out. As a result, the overall tax burden will be rationalised, and prices, in general, will fall. Moreover, VAT will replace the existing system of inspection by a system of built-in self-assessment by traders and manufacturers. The tax structure will become simple and more transparent. This will significantly improve tax compliance and will also help increase relevant growth.

 

While this State-level VAT has all these advantages, it is a State subject derived from entry 54 of the State List, for which the States are sovereign in taking decisions. In arriving at these decisions on VAT, the States, through discussions in the Empowered Committee, have found it in their interests, to avoid unhealthy competition and have certain features of VAT to be common for all the States. These features will constitute the basic design of VAT. At the same time, the States will have freedom for appropriate variations consistent with this basic design. This White Paper is a collective attempt of the States to strike a balance between this needed commonality and the desired federal flexibility in the VAT structure.

 

The White Paper also strikes a balance between what is possible in the VAT design to begin with and what can be improved upon in subsequent years as we gather more experience.

 

The White Paper further mentions how after working out a consensus on this VAT design, nearly all the States either have finalised their VAT Bills by now and are in the process of obtaining Presidential Assent, or will reach that stage very soon. Even for one major State where there are some ground-level problems, a positive interaction with the Empowered Committee has recently opened up the possibility of resolving most of these problems.

 

These efforts of the States towards formulation of VAT design and its implementation have received full co-operation of the Finance Ministry, Government of India. At the same time, the Finance Ministry has never imposed their views on us. We, therefore, remain thankful to the former Union Finance Ministers — Dr. Manmohan Singh, Shri Yashwant Sinha and Shri Jaswant Singh. We are specially grateful to Shri P. Chidambaram, the present Union Finance Minister, for his active support over the last eight months, when he not only helped formulate the modality of Central financial support to the States for possible loss or revenue in the transitional year of implementation of VAT, but also took time off his busy schedule to participate with us in the campaign for VAT in the States.

 

It has always been fruitful to have interaction with Dr. Parthasarathi Shome, Adviser to the Union Finance Minister, for his insightful observations on the analytical structure of VAT as well as his reference to vast experience in the implementation of VAT. The Secretary, Revenue, Additional Secretary, Revenue and all the concerned officials of the Revenue Department of the Finance Ministry have helped us by participating in the discussions whenever we requested them. Interaction with Dr. Govinda Rao, the Chairman of Technical Experts Committee on VAT and other members of the Committee has also been useful. We take this opportunity to thank all of them.

 

Discussions with the representatives of trade organisations and chambers of commerce and industry at the national level as well as in the States have been relevant in assessing the ground level difficulties. Together with them, we are determined to overcome these difficulties in implementing VAT in the States. We remain thankful to them, and our mutual interaction will take place regularly.

 

Finally, this White Paper could be written only on the basis of lively support of the Finance Ministers of the States, and with constant help from the Finance Secretaries and the Commissioners of Commercial Taxes of the States. The Commissioners of Commercial Taxes have often burnt their midnight oil, and their contribution should be particularly recorded. Shri Ramesh Chandra, Member-Secretary of the Empowered Committee had to carry on the difficult administrative task in the functioning of the Empowered Committee. We appreciate the efforts of S hri Chandra and the staff of the Empowered Committee.

 

Even after all these efforts, there may be some unavoidable shortcomings in this White Paper, which we will try to overcome as we learn more from the actual experience of implementation of VAT. With this background and the attitude, this White Paper is an expression of the genuine commitment of the States to the implementation of VAT from April 1,2005, which we are all looking forward to.

 

Asim Kumar Dasgupta,

Convenor,

Empowered Committee

of State Finance Ministers

and

Finance Minister,

Government of West Bengal.

 

January

17,2005. New Delhi

 

*.Source : WWW.wbcomtax.nic.in

 

A WHITE PAPER ON STATE-LEVEL VALUE ADDED TAX

 

This White Paper on State-level Value Added Tax (VAT) is presented in three parts. To begin with, the justification of VAT and its background have been mentioned (Part 1). In Part 2, the main design of VAT, as evolved on the basis of a consensus among the States through repeated discussions in the Empowered Committee, has been elaborated. While doing so, it is recognised that this VAT is a State subject and therefore the States will have freedom for appropriate variations consistent with the basic design as agreed upon at the Empowered Committee. Finally, in Part 3, the other related issues have been discussed for effective implementation of VAT.

 

1. Justification of VAT and Background

 

1.1 In the existing sales tax structure, there are problems of double taxation of commodities and multiplicity of taxes, resulting in a cascading tax burden. For instance, in the existing structure, before a commodity is produced, inputs are first taxed, and then after the commodity is produced with input tax load, output is taxed again. This causes an unfair double taxation with cascading effects. In the VAT, a set-off is given for input tax as well as tax paid on previous purchases. In the prevailing sales tax structure, there is in several States also a multiplicity of taxes, such as turnover tax, surcharge on sales tax, additional surcharge, etc. With introduction of VAT, these other taxes will be abolished. In addition, Central Sales tax is also going to be phased out. As a result, overall tax burden will be rationalised, and prices in general will also fall. Moreover, VAT will replace the existing system of inspection by a system of built-in self-assessment by the dealers and auditing. The tax structure will become simple and more transparent. That will improve tax compliance and also augment revenue growth. Thus, to repeat, with the introduction of VAT, benefits will be as follows:

 

* a set off will be given for input tax as well as tax paid on previous purchases

 

* other taxes, such as turnover tax, surcharge, additional surcharge, etc.,

 

* overall tax burden will be rationalized

 

* prices will in general fall.

 

* there will be self-assessment by dealers

 

* transparency will increase

 

* there will be higher revenue growth

 

The VAT will therefore help common people, traders, industrialists and also the Government. It is indeed a move towards more efficiency, equal competition and fairness in the taxation system.

 

1.2 For these beneficial effects, a full-fledged VAT was initiated first in Brazil in mid 1960's, then in European countries in 1970's and subsequently introduced in about 130 countries, including several federal countries. In Asia, it has been introduced by a large number of countries from China to Sri Lanka. Even in India, there has been a VAT system introduced by the Government of India for about last ten years in respect of Central excise duties. At the State-level, the VAT system as decided by the State Governments, would now be introduced in terms of entry 54 of the State List of the Constitution.

 

1.3 The first preliminary discussion on State-level VAT took place in a meeting of Chief Ministers convened by Dr.Manmohan Singh, the then Union Finance Minister in 1995. In this meeting, the basic issues on VAT were discussed in general terms and this was followed up by periodic interactions of State Finance Ministers. Thereafter, in a significant meeting of all Chief Ministers, convened on November, 16,1999 by Shri Yashwant Sinha, the then Union Finance Minister, three important decisions were taken. First, before the introduction of State-level VAT, the unhealthy sales tax rate "war" among the States would have to end and sales tax rates would need to be harmonised by implementing uniform floor rates of sales tax for different

categories of commodities with effect from January 1, 2000. Second, in the interest again of harmonisation of incidence of sales tax, the sales tax-related industrial incentive schemes would also have to be discontinued with effect from January 1, 2000. Third, on the basis of achievement of the first two objectives, steps would be taken by the States for introduction of State-level VAT after adequate preparation. For implementing these decisions, an Empowered Committee of State Finance Ministers was set-up.

 

1.4 Thereafter, this Empowered Committee has met regularly, attended by the State Finance Ministers, and also by the Finance Secretaries and the Commissioners of Commercial Taxes of the State Governments as well as senior officials of the Revenue Department of the Ministry of Finance, Government of India. Though repeated discussions and collective efforts in the Empowered Committee, it was possible within a period of about a year and a half to achieve nearly 98 per cent success in the first two objectives on harmonisation of sales tax structure through implementation of uniform floor rates of sales tax and discontinuation of sales tax-related incentive schemes. As a part of regular monitoring, whenever any deviation is reported from the uniform floor rates of sales tax, or from decision on incentives, the Empowered Committee takes up the matter with the concerned State and also the Government of India for necessary rectification.

 

1.5 After reaching this stage, steps were initiated for systematic preparation for the introduction of State-level VAT. In order again to avoid any unhealthy competition among the States which may lead to distortions in manufacturing and trade, attempts have been made from the very beginning to harmonise the VAT design in the States, keeping also in view the distinctive features of each State and the need for federal flexibility. This has been done by the States collectively agreeing, through repeated discussions in the Empowering Committee, to certain common points of convergence regarding VAT, and allowing at the same time certain flexibility for the local characteristics of the States.

 

1.6 Along with these measures at ensuring convergence on the basic issues on VAT, steps have also been taken for necessary training, computerisation and interaction with trade and industry, particularly at the State levels. This interaction with trade and industry is being specially emphasised.

 

1.7 It may be noted that while such preparation was going on, the Chief Ministers of all the States in an important meeting on State-level VAT convened by the Prime Minister on October 18, 2002, when Shri Jaswant Singh, the then Union Finance Minister was present, clearly stated their intention of introducing VAT from April 1,2003. About 29 States and Union Territories had expeditiously sent their Bills to the Ministry of Finance, Government of India for prior vetting. The Union Ministry of Finance had considered these Bills of States and Union Territories, and sent their comments/suggestions to the States and Union Territories in line with the decisions of the Empowered Committee of the State Finance Ministers for incorporating the same in VAT Bills to be placed in the State Legislatures and subsequent transmission to the Government of India for Presidential Assent. At this stage, there were certain developments which delayed the introduction of VAT. Despite these developments, most of the States remained positively interested in implementation of VAT. Madhya Pradesh VAT Bill had already been accorded Presidential Assent in November 2002. One State, namely, Haryana, has already introduced VAT on its own with good results on revenue growth. It is important to note that in the meeting of Empowered Committee on June 18,2004 when Shri P. Chidambaram, the Union Finance Minister, was invited and was kindly present, all the States, excepting one, once again categorically renewed their commitment to the introduction of VAT from April 1,2005. Even for this particular State with certain problems, a positive interaction has recently been organised with that State to resolve certain genuine ground-level problems. Now nearly all the States have either finalised their VAT Bills and are in the process of obtaining Presidential Assent, or will reach that stage very soon.

 

2. Design of State-Level VAT

 

2.1 As already mentioned, the design of State-Level VAT has been worked out by the Empowered Committee through several rounds of discussion and striking a federal balance between the common points of convergence regarding VAT and flexibility for the local characteristics of the States. Since the State-level VAT is centered around the basic concept of "set-off for the tax paid earlier, the needed common points of convergence also relate to this concept of set-off/input tax credit, its coverage and related issues as elaborated below:

 

Concept of VAT and Set-off/Input Tax Credit:

 

2.2 The essence of VAT is in providing set-off for the tax paid earlier, and this is given effect through the concept of input tax credit/rebate. This input tax credit in relation to the period means setting off the amount of input tax by a registered dealer against the amount of his output tax. The Value Added Tax (VAT) is based on the value addition to the goods, and the related VAT liability of the dealer is calculated by deducting input tax credit from tax collected on sales during the payment period (say, a month).

 

If, for example, input worth Rs. 1,00,000 is purchased and sales are worth Rs.2,00,000/- in a month, and input tax rate and output tax rate are 4% and 10% respectively, then input tax credit/ set-off and calculation of VAT will be as shown below:

 

   (a)          Input purchased within a month               :     Rs.1,00,000

   (b)          Output sold in the month                           :     Rs.2,00,000

   (c)           Input tax paid                                             :     Rs. 4,000

   (d)          Output tax payable                                     :     Rs. 20,000

   (e)          VAT payable during the month after

                  set-off/input tax credit [(d)-(c)]                   :     Rs. 16,000

 

Coverage of Set-off/Input Tax Credit:

 

2.3 This input tax credit will be given for both manufacturers and traders for purchase of inputs/supplies meant for both sale within the State as well as to other States, irrespective of when these will be utilised/sold. This also reduces immediate tax liability.

 

Even for stock transfer/consignment sale of goods out of the State, input tax paid in excess of 4% will be eligible for tax credit.

 

Carrying over of tax credit:

 

2.4 If the tax credit exceeds the tax payable on sales in a month, the excess credit will be carried over to the end of next financial year. If there is any excess unadjusted input tax credit at the end of second year, then the same will be eligible for refund.

 

Input tax credit on capital goods will also be available for traders and manufacturers. Tax credit on capital goods may be adjusted over a maximum of 36 equal monthly instalments. The States may at their option reduce this number of instalments.

 

There will be a negative list for capital goods (on the basis of principles already decided by the Empowered Committee) not eligible for input tax credit.

 

Treatment of export, etc:

 

2.5 For all exports made out of the country, tax paid within the State will be refunded in full, and this refund will be made within three months. Units located in SEZ and EOU will be granted either exemption from payment of input tax or refund of the input tax paid within three months.

 

Inputs procured from other States:

 

2.6 Tax paid on inputs procured from other States through inter-State sale and stock transfer will not be eligible for credit. However, a decision has been taken for duly phasing out of inter-State sales tax or Central Sales Tax. As a preparation for that, a comprehensive inter-State tax information exchange system is also being set up.

 

Treatment of opening stock:

 

2.7 All tax-paid goods purchased on or after April 1,2004 and still in stock as on April 1, 2005 will be eligible to receive input tax credit, subject to submission of requisite documents. Resellers holding tax-paid goods on April 1,2005 will also be eligible. VAT will be levied on the goods when sold on and after April 1, 2005 and input tax credit will be given for the sales tax already paid in the previous year. This tax credit will be available over a period of 6 months after an interval of 3 months needed for verification.

 

Compulsory issue of tax invoice, cash memo or bill:

 

2.8 This entire design of VAT with input tax credit is crucially based on documentation of tax invoice, cash memo or bill. Every registered dealer, having turnover of sales above an amount specified, shall issue to the purchaser serially numbered tax invoice with the prescribed particulars. This tax invoice will be signed and dated by the dealer or his regular employee, showing the required particulars. The dealer shall keep a counterfoil or duplicate of such tax invoice duly signed and dated. Failure to comply with the above will attract penalty.

 

Registration, small dealers and composition scheme:

 

2.9 Registration of dealers with gross annual turnover above Rs.5 lakh will be compulsory. There will be provision for voluntary registration. All existing dealers will be automatically registered under the VAT Act. A new dealer will be allowed 30 days time from the date of liability to get registered.

 

Small dealers with gross annual turnover not exceeding Rs.5 lakh will not be liable to pay VAT. States will have flexibility to fix this threshold limit within Rs.5 lakh.

 

Small dealers with annual gross turnover not exceeding Rs.50 lakh who are otherwise liable to pay VAT, shall however have the option for a composition scheme with payment of tax at a small percentage of gross turnover. The dealers opting for this composition scheme will not be entitled to input tax credit.

 

Tax Payer's Identification Number (TIN):

 

2.10 The Tax Payer's Identification Number will consist of 11 digit numerals throughout the country. First two characters will represent the State Code as used by the Union Ministry of Home Affairs. The set-up of the next nine characters may, however, be different in different States.

 

Return:

 

2.11 Under VAT, simplified form of returns will be notified. Returns are to be filed monthly/ quarterly as specified in the State Acts/Rules, and will be accompanied with payment challans. Every return furnished by dealers will be scrutinised expeditiously within prescribed time-limit from the date of filing the return. If any technical mistake is detected on scrutiny, the dealer will be required to pay the deficit appropriately.

 

Procedure of self-assessment of VAT liability:

 

2.12 The basic simplification in VAT is that VAT liability will self-assessed by the dealers themselves in terms of submission of returns upon setting off the tax credit. Return forms as well as other procedures will be simple in all States. There will no longer be compulsory assessment at the end of such year as is existing now. If no specific notice is issued proposing departmental audit of the books of accounts of the dealer within the time-limit specified in the Act, the dealer will be deemed to have been self-assessed on the basis of returns submitted by him.

 

Because of the importance of the concept of self-assessment in VAT, provision for "self-assessment" will be stated in the VAT Bills of the States.

 

Audit:

 

2.13 Correctness of self-assessment will be checked through a system of Departmental Audit. A certain percentage of the dealers will be taken up for audit every year on a scientific basis. If, however, evasion is detected on audit, the concerned dealer may be taken up for audit for previous periods. This Audit Wing will remain delinked from tax collection wing to remove any bias. The audit team will conduct its work in a time bound manner and audit will be completed within six months. The audit report will be transparently sent to the dealer also.

 

Simultaneously, a cross-checking, computerised system is being worked out on the basis of co-ordination between the tax authorities of the State Governments and the authorities of Central Excise and Income-tax to compare constantly the tax returns and set-off documents of VAT system of the States and those of Central Excise and Income-tax. This comprehensive cross-checking system will help reduce tax evasion and also lead to significant growth of tax revenue. At the same time, by protecting transparently the interests of tax-complying dealers against the unfair practices of tax evaders, the system will also bring in more equal competition in the sphere of trade and industry.

 

Declaration form:

 

2.14 There will be no need for any provision for concessional sale under the VAT Act since the provision for set-off makes the input zero-rated. Hence, there will be no need for declaration form, which will be a further relief for dealers.

 

Incentives:

 

2.15 Under the VAT system, the existing incentive schemes may be continued in the manner deemed appropriate by the States after ensuring that VAT chain is not affected.

 

Other taxes:

 

2.16 As mentioned earlier, all other existing taxes such as turnover tax, surcharge, additional surcharge and Special Additional Tax (SAT) would be abolished. There will not be any reference to these taxes in the VAT Bills. The States that have already introduced entry tax and intend to continue with this tax should make it vatable. If not made vatable, entry tax will need to be abolished. However, this will not apply to entry tax that may be levied in lieu of octroi.

 

Penal provisions:

 

2.17 Penal provisions in the VAT Bills should not be more stringent than in the existing Sales Tax Act.

 

Coverage of goods under VAT:

 

2.18 In general, all the goods, including declared goods will be covered under VAT and will get the benefit of input tax credit.\

 

The only few goods which will be outside VAT will be liquor, lottery tickets, petrol, diesel, aviation turbine fuel and other motor spirit since their prices are not fully market determined. These will continue to be taxed under the Sales Tax Act or any other State Act or even by making special provisions in the VAT Act itself, and with uniform floor rates decided by the Empowered Committee.

 

VAT rates and classification of commodities:

 

2.19 Under the VAT system covering about 550 goods, there will be only two basic VAT rates of 4% and 12.5%, plus a specific category of tax-exempted goods and a special VAT rate of 1% only for gold and silver ornaments, etc. Thus the multiplicity of rates in the existing structure will be done away with' under the VAT System.

 

Under exempted category, there will be about 46 commodities comprising of natural and unprocessed products in unorganised sector, items which are legally barred from taxation and items which have social implications. Included in this exempted category is a set of maximum of 10 commodities flexibly chosen by individual States from a list of goods (finalised by the Empowered Committee) which are of local social importance for the individual States without having any inter-State implication. The rest of the commodities in the list will be common for all the States. Under 4% VAT rate category, there will be the largest number of goods (about 270), common for all the States, comprising of items of basic necessities such as medicines and drugs, all agricultural and industrial inputs, capital goods and declared goods. The schedule of commodities will be attached to the VAT Bill of every State. The remaining commodities, common for all the States, will fall under the general VAT rate of 12.5%.

 

In terms of decision of the Empowered Committee, VAT on Additional Excise Duty items (namely, sugar, textiles and tobacco), because of initial organizational difficulties, will not be imposed for one year after the introduction of VAT, and till then the existing arrangement will continue. The position will be reviewed after one year.

 

Effects of the VAT system:

 

2.20 This design of the State-level VAT has been carefully worked out by the Empowered Committee after repeated interactions with the States and others concerned and striking a balance between the needed convergence and federal flexibility as well as ground-level reality. If now all the components of the VAT design are taken together, then it will be seen that the total effect of this VAT system will be to rationalise the tax burden and bring down, in general, the price level. This will also stop unhealthy tax-rate "war" and trade diversion among the States, which had adversely affected interests of all the States in the past. Moreover, this VAT design will also significantly bring in simplicity and transparency in the tax structure, thereby improving tax-compliance and eventually also the revenue growth, as mentioned in the beginning.

 

3. Steps taken by the States:

 

3.1 It is now of significance to note that most of the States, after collective interaction in the Empowered Committee, have either already modified or agreed to modify their VAT Bills by incorporating these common points to convergence including flexibility as mentioned in the VAT design above, and are also taking other preparatory steps towards introduction of VAT from April 1,2005.

 

3.2 As a part of the preparatory steps, the States have started the process of preparing the draft of VAT Rules, including books of accounts to be maintained. The objective will be to keep these as simple as possible so that it becomes easy for a small trader to comply with the requirements.

 

3.3 Moreover, the States have initiated, and in many cases also completed, steps for computerisation upto the levels of assessing officers and also at the check-posts. This process will continue since this is extremely important for document-based verification and integration with Taxation Information Exchange System as well as with information of the Central Excise and income-tax systems as indicated earlier.

 

3.4 It may be mentioned here that appropriate Central funds for VAT-related computerisation in the North-Eastern States are also being released by the Government of India.

 

4. Related issues

 

4.1 While the States have thus taken several steps towards introduction of VAT, certain supporting decisions were critically needed at the national level for more effective implementation of VAT from April 1,2005.

 

4.2 It needs to be carefully noted that although introduction of VAT may, after a few years, lead to revenue growth, there may be a loss of revenue in some States in the initial years of transition. It is with this in view that the Government of India had agreed to compensate for 100 per cent of the loss in the first year, 75 per cent of the loss in the second year and 50 per cent of the loss in the third year of introduction of VAT, and the loss would be computed on the basis of an agreed formula. This position has not only been reaffirmed by the Union Finance Minister in his Budget Speech of 2004-05, but a concrete formula for this compensation has also now been worked out after interaction between the Union Finance Minister and the Empowered Committee.

 

4.3 As mentioned earlier, there is also a need, after introduction of VAT, for phasing out of Central Sales Tax (CST). However, the States are now collecting nearly Rs. 15 thousand crore every year from CST. There is accordingly a need of compensation from the Government of India for this loss of revenue as CST is phased out. Moreover, while CST is phased out, there is also a critical need for putting in place a regulatory frame-work in terms of Taxation Information Exchange System to give a comprehensive picture of inter-State trade of all commodities. As already mentioned, this process of setting up of Taxation Information Exchange System has already been started by the Empowered Committee, and is expected to be completed within one year. The position regarding CST will be reviewed by the Empowered Committee during 2005-06, and suitable decision on the phasing out of CST will be taken.

 

4.4 It is also essential to bring imports into the VAT chain. Because of the set-off, this will not result in any tax cascading effect, but will only improve tax compliance. A proposal for VAT on imports, including the collection mechanism with adequate safeguards for the protection of interest of land-locked States, is being discussed with the Government of India.

 

4.5 Similarly, discussion between the Empowered Committee and the Government of India is going on for the early decision on the question of collection and appropriation of service tax by the Centre and the States.

 

If decisions on VAT on imports and service tax are taken expeditiously at the national level, then these two important spheres of taxation can be integrated, along with the AED items as mentioned earlier, into the VAT system of the States from the second year of introduction of VAT.

 

4.6 It may be noted that this VAT design has been worked out carefully by the Empowered Committee to strike a balance not only between the common points of convergence and federal flexibility, but also a balance between what can be done to begin with and what should be incorporated subsequently for further perfection of the VAT system.

 

4.7 For successful implementation of State-level VAT, close interaction with trade and industry is specially important. The Empowered Committee has therefor also set up a Consultative Committee with one representative from each of the national level trade organisations and national level chambers of commerce and industry. This Committee has already started interacting with the Empowered Committee. This process of interaction will continue regularly to discuss issues and sort out problems of implementation of VAT. Such Consultative Committees will also be set up at the level of each State, and interaction with the State Government will take place in a similarly regular manner.

 

4.8 In course of discussion with representatives of trade and industry, reference has often been made to the earlier VAT Bills of some of the States. It should be clearly noted, as already mentioned before, that all the States have agreed to amend their earlier VAT Bills so as to conform broadly to the common design as elaborated in this White Paper. This process of amendment has also already started. The point of reference on VAT should therefore be this design of VAT as explained in this White Paper. It should also be mentioned that there are some important points on the ground-level implementation of VAT which have been raised by the representatives of trade and industry. Many of the points will be taken care of the VAT Rules of the States, with changes where necessary.

 

4.9 Finally, a comprehensive campaign on State-level will be launched to communicate in simple and transparent manner the benefit of VAT for common people, traders, industrialists and also the State Governments. This campaign will then be launched first at the national level on the basis of necessary co-ordination between the States and the Centre. This will then be simultaneously followed up at the level of every State and also in districts of the States. This campaign will be based on written materials as well as publicity through all media. The purpose of this campaign will be a two-way interaction between the Government and the trade and industry as well as the common people.

 

There is now only looking forward to the introduction of State-level VAT by all the States and Union Territories from April 1,2005. We seek co-operation of all sections of people in the country.

 

APEX COURT ON SECTION 50 OF THE N.D.P.S. ACT, 1985

 

(By A.K.Radhakrishnan, Dy.Secretary, A.G's Office, Kochi)

 

The Narcotic Drugs and Psychotropic Substances Act, 1985 came into force on 14.11.1985. Since then it had undergone two major amendments -- Amendment Act, 1988 and Amendment Act, 2001 (Amendment Act No.2 of 1989 and Amendment Act No.9 of 2001 respectively). These amendment Acts came into effect from 29.5.1989 and 2.10.2001 respectively.

 

S.50 of the N.D.P.S. Act enjoins upon the officer who is about to search any person, if such person so requires to take him without unnecessary delay to the nearest Gazetted Officer of any of the departments mentioned in S.42 or to the nearest Magistrate. It further stipulates that the suspect may be detained until he was brought before the Magistrate/Officer and that the Magistrate/Officer shall forthwith discharge the suspect, if he sees no reasonable ground for search, otherwise he should direct to make search. It is also in S.50 that female shall be searched by female only.

 

Sub-s.(5) & (6) to S.50 were inserted by Act No.9 of 2001. It reads as follows:

 

"(5) When an officer duly authorised under S.42 has reason to believe that it is not possible to take the person to be searched to the nearest Gazetted Officer or Magistrate without the possibility of the person to be searched parting with possession of any narcotic drug or psychotropic substance, or controlled substance or article or document, he may, instead of taking such person to the nearest Gazetted Officer or Magistrate, proceed to search the person as provided under S. 100 of Cr.P.C. 3 973.

 

(6) After a search is conducted under sub-s.(5) the officer shall record the reasons for such belief which necessitated such search and within 72 hours send a copy thereof to his immediate official superior."

 

Except in the situation enumerated in sub-s.(5), search of person for contraband is to be made by following the procedure prescribed in sub-ss.(l) to (4) of S.50.

 

Very severe punishment have been prescribed for many of the offences under the Act. So, the procedure for search and seizure of the contraband is to be complied with strictly. In order to safeguard the interest of the accused, the Parliament has deliberately incorporated the provisions in S.50 in respect of search of the person and seizure of contraband.

 

Perhaps S.50 of the N.D.P.S. Act may be one of the Sections of an Act in which Supreme Court had occasion to consider and interpret its provisions in a large number of cases. Another provision that comes to our mind is S.138 of the Negotiable Instruments Act.

 

Way back in 1994, Supreme Court had held that S.50 is mandatory. It held that accused is to be informed by searching officer that if he so requires he shall be produced before a Gazetted Officer or Magistrate, (1994) 3 SCC 299. The said position was reiterated in the decisions reported in JT 1998 (7) SC 396, (1998) 8 SCC 534 etc. At the same time relying up on the judgment of Apex Court in Pooram Mai v. Director of Inspection (Investigation), New Delhi, AIR 1974 SC 348, it was held in (1996) 2 SCC 37 and (1996) 5 SCC 520 that the evidence collected in a search conducted in violation of S.50 does not become inadmissible in evidence under the Evidence Act. Where as in 1994 (6) SCC 569 and some other cases it was laid down that failure to observe the safeguards while conducing search and seizure under S.50 would render the conviction and sentence of an accused illegal. It was also held by a 3 Judge Bench of the Apex Court in (1995) 3 SCC 610 that S.50 is mandatory and that non compliance of the provision of S.50 would affect the prosecution case and vitiate the trial. It distinguished the decision in AIR 1974 SC 348.

 

In view of the divergent opinion among different Benches of the Supreme Court regarding the admissibility of evidence collected by an investigating officer during search and seizure conducted in violation of S.50, the matter was considered by a Constitution Bench of 5 Judges in AIR 1999 SC 2378 (State of Punjab v. Baldev Singh etc.). This Constitution Bench held that the person to be searched is to be informed of his right under S.50 and that such information need not necessarily be in writing, failure in this regard will cause prejudice to the accused, failure on this score may not vitiate the trial but would render the recovery of illicit article suspect and vitiate the conviction and sentence if it was based only on the possession of the illicit article recovered during a search in violation of S.50; breach of the safeguards of S.50 would render the trial unfair, prosecution should be given opportunity to establish that they had complied with the provisions of S.50. The Apex Court further held that S.50 embodied reasonable, fair and just procedure and that its provision are to be honoured. It also held that if the empowered officer without any prior information makes a search of the person, requirements of S.50 are not attracted. The Bench concluded that it is not expressing any opinion on whether the provisions of S.50 are mandatory or directory but held that failure to inform the concerned his rights under S.50 may render the recovery of the contraband suspect and the conviction and sentence of an accused bad and unsustainable in law and that the illicit article seized in violation of S.50 cannot be used as evidence of proof of unlawful possession of the contraband but any other material recovered during such search may be relied upon by the prosecution and that there cannot be any presumption under S.54 based on illegal search under S.50. It also upheld the view on AIR 1974 SC 348 rendered in AIR 1995 SC 244.

 

Though the Constitution Bench of the Supreme Court had not stated categorically that the provisions of S.50 are mandatory, in effect the provisions are mandatory. This is what we can presume from the discussion in the judgment.

 

Even after the decision of the Constitution Bench on S.50, the controversy on it did not abate.

 

It is now not in dispute that non-observance of the procedures under S.50 while conducting the search of the person of accused will vitiate conviction and can result in acquittal of the accused (1999 (3) KLT122 (SC), (2002) 4 SCC 229, JT 2002 (5) SC 1,387 etc.). It was also held in (2002) 8 SCC 351 that non-compliance of S.50 for the reason that no prejudice has been caused to the accused is not correct.

 

Supreme Court had also considered in a number of cases, how the right of the accused under S.50 is to be conveyed. Courts should see that the accused has been informed by the concerned officer that he has the right to choose to be searched by a Magistrate or Gazetted Officer. Accused must be made aware of that. No specific form has been prescribed for that. Prosecution should adduce cogent evidence to show that he was made aware of such protection. There cannot be any presumption that the requirements under S.50 were complied with. Burden in this respect lies on the prosecution. It is also mandatory to prove. Non-compliance will vitiate conviction. It has to be remembered that S.50 gives a valuable right to the accused. In State of Punjab v. Baldev Singh, JT 1999 (4) SC 595, it was held that the suspect has a right to be informed of his rights under S.50, though not in writing. It is sufficient, if such information is communicated to the person concerned orally and as far as possible in the presence of some independent and respectable persons witnessing the arrest and search. It was further held in 2000 SCC (Crl.) 1228 that mere asking the accused whether he was required to be produced before Gazetted Officer or Magistrate for search is not sufficient, He must be informed about his right in this regard. The Apex Court emphasised the point that it is a valuable right guaranted to the person concerned. What is stated in 2001 (1) Supreme 625 is to the effect that accused need not be informed of his right to be searched before Magistrate/Gazetted Officer in writing. In 2003 (8) Supreme 565. Supreme Court opined that no specific words are necessarily to be used to convey the right of the accused under S.50. Apex Court held that there is sufficient compliance of S.50 when notice served that if accused desired, he can be taken to a Magistrate or Gazetted Officer. It was further held that there is no prescribed form or straight jacket formula for compliance of S.50 (See JT 2003 (10) SC 50). Thus it is clear from various decisions of Apex Court that there is no specific form prescribed for complying with the provisions in S.50 regarding the conveyance of the right of the accused. What is required is that accused must be made aware of his rights under S.50.

 

It has to be remembered that the choice between Magistrate and Gazetted Officer is to be made by the Searching Officer, 1996 SCC (Crl.) 226. The said view was reiterated in the decision reported in 2004 (2) KLT 1022 (SC) by stating that the option to be searched in the presence of Magistrate or Gazetted Officer is to the Officer who conducts search and not the accused, under S.50. However, in JT 2002 (5) SC 387, Supreme Court set aside conviction as the accused has not given the option with regard to the search of the person for the contraband. In this case, the accused was arrested and searched in the presence of the Gazetted Officer, present at the spot.

 

When can the plea of non-compliance of S.50 be raised by accused? It was held in 1999 (6) SCC 172 that the same can be raised for first time in Appeal.

 

It was held in AIR 2000 SC 2790 that S.50 is to be complied with even if the searching officer is a Gazetted Officer. In 2001 (1) KLT 86 (SC) the Apex Court further held that search etc., by an officer other than empowered officer under the N.D.P.S. Act is illegal and that prosecution proceedings in such case can be quashed under S.482 Crl.P.C. It was also held in (2002) 4 SCC 380 that standing instructions regarding preparation of Seizure Mahazar under the Act have no statutory force and that its violation would not vitiate conviction. Apex Court also held that if the police had no prior knowledge about the possession of contraband while searching the accused, the mandatory provisions of S.50 need not be followed (See JT 2002 (8) SC 490). In JT 2004 (3) SC 360 it was held that S.50 is not attracted when narcotics is recovered during search in normal course of investigation. If there is a chance recovery of narcotic drug during search in exercise of powers under Crl.P.C, compliance of S.50 does not arise (2004 (6) Supreme 93). It was also held in (2004) 5 SCC 230 that in the absence of prejudice Caused to accused, conviction under NDPS Act should not be disturbed for the reason that investigation was done by the same officer who conducted search etc.

 

It is now not in dispute that the provisions of S.50 are applicable only when search of the person concerned. So, S.50 need not be complied with for search other than person of accused (See JT 1999 (8) SC 293 etc.). In JT 2002 (3) SC 208 Apex Court held that S.50 is not applicable when one is found travelling with opium while search and checking being conducted of vehicle. It also held that procedural illegality in conducting search will not result in inadmissibility of evidence collected thereby.

 

The latest controversy under S.50 is whether the search of the bag carried by accused person is to be treated as search of the person of accused within the meaning of S.50. There can be no doubt that search of a person does not include building, conveyance or place. But, whether search of a person includes the search of article carried by him?

 

The points in favour of the inclusion theory can be summarised as follows:

 

When a person is found with his bag or baggage and the like where from any narcotic drug or any other contraband is kept or concealed it is only when such a person is required to be searched a duty is cast on the empowered officer to comply with the provisions of S.50. It would be impossible to search a bag carried by a person without touching his body especially when he resists it. In the normal course such resistance can be expected from him. In effect, a bag carried by a person is extension of his body even if a narrow view is taken of the word "a person" in S.50(l). When a person is carrying a bag and empowered officer is about to make a search of contraband, it cannot be said that the person of the accused would not be searched. It cannot be predicted that the suspect is hiding the contraband on his possession. Therefore, the empowered officer cannot take the risk of not informing the suspect about his right under S.50.

 

S.50 cannot be construed in such a narrow and legalistic manner. Proper view should be that search of a person must be deemed to be search of any article whether it is bag or any other material in his possession. Search of a person must include search of his belongings in immediate physical possession. The object in physical possession must be inextricably connected with the person of the accused to attract S.50.

 

Inclusion of S.42 or 43 under S.50(l) of the Act shall be redundant, if a narrow view of "person" is allowed to prevail.

 

Very recently, a Division Bench of the Apex Court comprising Y.K. Sabharwal (J) & Arijit Pasayat (J) differed on the above point. Sabharvval (J) held that the provisions of S.50 are to be complied with while searching the bag carried on the shoulder or back of the person concerned for the contraband. Arijit Pasayat (J) on the other hand held that the provisions of S.50 need not be complied with and stated that there is no basis for making a distinction between search of a bag found near a person and the bag carried by him. Therefore, the matter has been referred to a larger bench for decision on this point. (See JT 2004 (8) SC 190 - 2004 (3) KLT 660 (SC)).

 

The decisions cited by the Hon'ble Justice Arijit Pasayat in support of his Lordship's view point are (1) (2000) 10 SCC 380, (2) (2001) 3 SCC 28, (3) (2004) 2 SCC186, (4) (1999) 6 SCC 172, (5) (2000) 9 SCC 541 and (6) (2003) 7 SCC 465. But, it has to be stated that in none of these decisions the issue whether the bag or any other article in immediate possession of the person of the accused is to be included in the term "person" as far as S.50 is concerned, is seen specifically argued, discussed and considered.

 

What the Constitution Bench stated in (1999) 6 SCC 172 in paragraph 12 of the judgment on this score is that "on its plain reading, S.50 would come into play only in the case of a search of a person as distinguished from search of any premises etc.". It is clear from the judgment that the above point was not considered in that decision. The two Judge Bench in (2000) 10 SCC 380 without any discussion on this aspect merely said that where contraband was recovered from a bag carried by the accused, compliance of S.50 is not necessary. In (2001) 3 SCC 28 though the recovery of the contraband was from a gunny bag held by the accused, there is no discussion regarding the above point. In (2004) 2 SCC 186, the contraband was hidden in the blue suitcase of the accused and the same was also not in his physical possession. Whereas in (2000) 9 SCC 541, recovery was from a plastic bag in one of the Railway compartments on which the accused was found lying. The accused was not physically carrying the same. He was just lying on the plastic bag. We can see from the decision in 2003 (7) SCC 465, that the recovery was from a black coloured bag which contained a steel doloo kept in a plastic bag while conducting search of car.

 

On the other hand a three Judge Bench of the Apex Court in the decision reported in (1998) 8 SCC 534 clearly observed that if a person is carrying a handbag or the like and the incriminating article is found there from it would still be a search of the person of the accused requiring compliance with S.50 of the Act. The Court further observed that when the article is lying elsewhere and is not on the person of the accused and is brought to a place where the accused is found, and on search, incriminating articles are found there from it cannot attract the requirements of S.50 of the Act for the simple reason that it was not found on the accused person. Thus we could see that the observation in the above three Judge Bench decision goes against the views expressed by Arijit Pasayat (J) on the above point. Be that as it may. Now, let us await the final verdict of the larger Bench on this score.

 

WHETHER THE AMOUNT PAYABLE UNDER S.23 (l-A) OF

THE LAND ACQUISITION ACT IS 'INTEREST'?

 

(K.J. Kurian, Advocate, Kottayam)

 

In 2005 (1) KLT 173, State of Kerala v. Mariyamma, it is ruled that there is no question of accruing any interest on the amount of interest calculated under S.23(l-A) of the Land Acquisition Act.

 

The first question that is to be considered in the above matter is whether the additional benefit provided under S.23(1-A) of the Act is interest or not. In the said provision the word 'interest' is not used. The relevant portion of S.23(l-A) reads as follows, "In addition to the market value of the land, as above provided, the Court shall in every case award an amount calculated at the rate of 12 per centum per annum on such market value for the period commencing on and from the date of publication of notice under S.4 sub-s.(l) in respect of such land to the date of the award of the Collector or the date of taking possession of such land, whichever is earlier". How this amount of additional benefit can be termed as interest? This benefit is provided as consideration for the increase in the value of land from the date of S .4( 1) notification to the date of award or taking possession of the land as the case may be. The amount is not interest on the market value of the land, otherwise what prevented the legislature from using the term 'interest' in the provision. The Chamber's Twentieth Century Dictionary gives the meaning of the word 'interest' as premium paid for the use of money. That means premium for money lent or retained after it has become due. The award amount became payable on passing of the award or the date of taking possession of the land. The amount of 12% is to be paid for the period prior to the date of passing of the award or the date of taking possession of the land whichever is earlier. In this way also it can be seen that "the amount of 12% per annum on the market value of land" as provided in S.23(l-A) cannot be termed as 'interest' under any circumstance.

 

The Supreme Court in Sunder v. Union of India, 2001 (3) KLT 489 (SC), held that a person is entitled to the award of compensation, is also entitled to get interest on the aggregate amount including solatium. Though the main question involved in the above said Sunder's case is whether the claimant is entitled to interest on solatium, the following observation of the Supreme Court is very apposite in settling the question, "We make it clear that the compensation awarded would include not only the total sum arrived at as per sub-s.( 1) but the remaining subsections thereof as well". The "remaining sub-sections' of S.23 are 23(1-A) and 23(2) and 23(1-A) provides for the amount calculated at the rate of 12% per annum on such market value for a period commencing on and from the date of publication of the notification under S.4(l) to the date of the award or the date of taking possession of land, whichever is earlier. This will clearly show that the amount provided under S.23(l-A) is not interest and it is a component of the compensation.

 

Then the further question is whether the claimant is entitled to interest on the amount calculated under S.23(1-A)? The answer to the question can be found in the following observation of the Supreme Court in the above cited Sunder's case, "What the legislature intended was to make the aggregate amount under S.23 of the Act to reach the hands of the person as and when the award is passed, at any rate as soon as he is deprived of the possession of his land. Any delay in making the payment of the said sum should enable the party to have interest on the said sum until he receives the payment". The above dictum unequivocally declares that the claimant is entitled to interest on the market value of land, amount of 12% increase underS.23(l-A) and the solatium underS.23(2).

 

On the basis of the above position of law the ruling in 2005 (1) KLT 173 that the amount calculated under S.23(l-A) of the Land Acquisition Act is interest, is not based on sound principles of law and requires reconsideration.

GLORIOUS RIGHT TO SILENCE

 

(By P.R. Balachandran, Retd. District Judge)

 

"Can a system afford to concede to an indictee the right not to actively assist the adjudicator in the attempt to discover truth", asks R. Basant, J. in Abdul Nazar v. Dileepkumar, 2004 (3) KLT 264 at 267, and provides the answer too but in the form of a few more questions. It is a thought provoking question. All those who had occasion to try criminal cases would have felt at sometime or other the "disappointment about the inadequate tools in the truth discovery process". We must certainly be able to evolve a better system to suit the realities of the situation in India today. What is surprising is that our law makers do not seem to have, even after half a century of becoming a sovereign democratic republic, made a genuine attempt in that direction.

 

Is it not time for a change? In this context, I think, we can consider borrowing the French system of criminal Justice and adopt with suitable changes. In that system, the procureor (public prosecutor), brings a crime to the notice of the 'enquete', which is a Court of a Magistrate meant for investigating and finding out evidence against the accused in collaboration with the police. All evidence is scrutinized and assessed under some kind of inquisitional system and witnesses are also questioned. The Judge combines the functions of a prosecutor and Magistrate to discover the truth with the aid of the police and other connected agencies. He may call witnesses and ask them to give whatever information they have about the offence in question. The 'enquete' may open mail and tap telephone wires. If there is any divergence between the testimony of two witnesses, the Judge d'instruction as he is called, may call them for a confrontation and after a detailed examination try to arrive at the truth. After the Judge d'instruction is satisfied that there exists a clear case against the accused and the accused is the real offender, he sends the case to the Court. In case he finds otherwise the accused goes free.

 

In Court, the trial proceeds on the assumption that the accused is guilty till he is found innocent. This may be a little shocking to us but this presumption need not disturb our sense of justice since a thorough trial or investigation has been done by an independent body, unlike the unilateral investigation of the police and mechanical transmission by the Committal Court prevalent now. At the trial, the accused gets enough opportunity to prove his innocence but he cannot afford to keep silent and must necessarily explain his conduct or reveal his version of the incident and other relevant circumstances. S. 106 of the Indian Evidence Act recognizes this responsibility to prove the fact within his knowledge.

 

The advantage of this system is that it provides a more independent and reliable method of investigation and the Trial Court need not be confined to the evidence adduced before it. The Judge may not have to feel helpless as now, when the witnesses are won over or turn hostile for other reasons. The result, invariably is the acquittal of the accused even in sensational cases. Rarely it is realized by the press or the public that it is not the fault of the Judge.

 

We have brilliant and experienced lawyers and Judges and if this provokes a meaningful debate on the subject, the purpose of this note is served.