Page 14 - BANKING FINANCE FEBRUARY 2016 ONLINE

LEGAL UPDATE

LEGAL

CASES

New Bill to amend Bankruptcy Laws under process Compensation must reach

The government has taken initiative to recover money in the event of cor- to land owners within 5
towards a bill to consolidate and porate default.
amend all laws relating to in- years
solvency resolution so as to The proposed revamp of the
tackle the issue of undue de- insolvency system is expected The Supreme Court declared in its
lays. The Bill has been intro- to encourage entrepreneur- judgment in
duced as a money Bill in the Lok ship, improve India's ease of Rattan Singh
Sabha by Finance Minister doing business ranking, and fa- vs Union of
Arun Jaitley. cilitate more investments. India case
that if com-
The proposed legislation - the Insol- For consolidation, the Bill seeks to pensation is
vency and Bankruptcy Code 2015 - fixes amend as many as 12 existing laws, in- not paid to land owners for a long
a time limit of 180 days, extendable by cluding the Companies Act 2013, the time the acquisition will lapse. In this
a further 90 days, for completion of Income-Tax Act, and the Payment and case, the acquisition was notified in
the corporate insolvency-resolution Settlement Systems Act 2007. 1959 and the award was given in
process. 1968. However, the land owners did
Insolvency professionals will assist in not get the compensation.
The current system is takes anywhere the resolution, liquidation and bank-
between five and 15 years for lenders ruptcy proceedings envisaged in the The government's stand was that
code. the amount was lying with the col-
lector and no one claimed it. Reject-
Excise duty to exclude pre-delivery inspection and af- ing this contention, the Supreme
Court stated that,"compensation
ter-sales charges was neither paid to them nor depos-
ited in the appropriate court. The
The Supreme Court has dismissed a large number of appeals moved by the Com- retention of it by the Land Acquisi-
missioner of Central Excise and held that pre-delivery inspec- tion Collector till such time as they
tion charges and after-sales service charges would not be in- applied for it would not amount to
cluded in the assessable value of motor vehicles for purposes compensation being paid to them."
of excise duty.
The court also noted that under the
The excise tribunals had taken contrary views on this issue and, new land acquisition law of 2013, five
therefore, the question was referred to the appellate tribunal. years is the limit to complete the
It held in favour of the revenue authorities maintaining that the definition of take-over.
'transaction value' would cover the two charges. In those cases, the manufac-
turers also came before the Supreme Court. In the common judgment, CCE vs
TVS Motors Ltd, the apex court overruled the appellate tribunal view.

14 | 2016 | FEBRUARY | BANKING FINANCE

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