On way to GST regime

"A march to the Goods and Services Tax Regime"
Shri Mrinal Kanti Chakrabartty, a retired tax officer of the Government of Assam, is now on the heels to publish his 15th book, namely; ‘On way to GST regime’. This book contains a chronological history on the tax measures in Assam since 1939, that is, during the British era. The present taxation laws operative in Assam also got berth in this book. The original Assam sales tax laws were dismantled from time to time and the VAT Law is now operative in Assam since 1st May, 2005. While appreciating the VAT measures in the country, Shri Chakrbartty maintained that the VAT regime has forced the consumers to shoulder a heavy burden of multiplicity tax element in each stage of sale and there had been an unprecedented price hike of the commodities, which tortured them economically. Out of his prolonged experience, he also pointed out some set-backs, faulty ways of action, in legal, practical and technical aspects in the VAT Law, operative in Assam.
According to Shri Chakrabartty, the proposed GST regime will provide fiscal relief to the consumers to a great extent, as there will be no consecutive charge of tax in each sales deal, but only the difference will be reckoned.
This Act will be a conglomeration of Central and State tax measures. A drastic change of the Constitution of India will naturally be necessary for introduction of the consolidated Central and State taxation law.
The new tax law, as Shri Chakrabartty felt, is likely to be enacted by Parliament and the Government of India (Central Government) will be the chief architect of such tax measures. The State Governments are likely to administer the State tax measures under the direction and guidance of the Central Government. He apprehends that, if it practically happens so, the economic sovereignty of the States will likely to be seized. The role of the State Governments in that case will be cipher and the States will be dependable on the Central Government in different aspects.

PROSPECTIVE IMPACT ON THE PROPOSED GST REGIME IN INDIAN SUB-CONTINENT

Sub-clause (3) of clause 100 read with entry 48 of the Government India Act, 1935 empowered the Provincial Legislatures of the British ruled India to make laws on the specified subjects. In Assam, the first tax laws were enacted 1939 on the sales of petroleum, on agricultural income and on amusement and betting. With the evaluation of time, a series of taxation laws were introduced in the post independent era. At present, as many as eight State tax laws and one Central tax laws are operative in Assam. These tax laws are- (i) on the sales and purchases of goods, the Value Added Tax or VAT, (ii) entry of goods, (iii) professions, trades, callings and employments, (iv) amusement and betting, (v) specified lands, (vi) Luxuries provided in Hotels and Lodging Houses,(vii) agricultural income, (viii) electricity and central sales. The VAT law has been operative in Assam since 1st May, 2005. It is a broad -based tax. The perimeter of the VAT is wide and each State has its own law on VAT.

The Government of India, since some couple of years has been contemplating to introduce a new tax measure in the States of the Indian sub-continent. An ardent exercise is going on to materialize the venture by introducing the Goods & Services Tax (GST). It seems to be a refined form of VAT, but it is intended to make the base more wide multifarious designed. A part from the tax on sales and purchases of goods, a number of tax measures on State and the Union tax are proposed to be merged to give birth to a unified tax law.

GST is not simply VAT plus Service tax, but it seeks a recast and renovation on VAT. GST is a tax on the goods and services with the comprehensive and continuous chain of set-off benefits from producers’ as well as service providers’ level upto the retail sellers, so as to say, the consumers’ level. It is essentially a tax on the value addition at each stage and a supplier at each stage will be eligible for set-off, through a tax credit mechanism. The GST purchased goods and services are available for set-off on the GST to be paid on the supply of the goods and services. The consumers will bear the burden of last tax (GST), charged in the supply chain only. The multiplicity of tax component is not to be occurred, which will have the consequential effect that the price hike burden to the consumers will be lesser. The illustration, given below, will make the position clear-

GST at the manufacturers’ level- (i) purchase value say, Rs. 100.00, (ii) value addition Rs. 30.00,(iii) sale value of the goods and services Rs. 130.00, (iv) tax rate 10 paise in the rupee,(v) GST(out put tax) Rs. 13.00, (vi) input tax credit Rs. 10.00, (vii) net GST (out put tax) Rs. 13.00- (input tax credit) Rs. 10.00= Rs.3.00. Unlike Rs. 13.00 in VAT, out put tax is to be charged at Rs.3.00.
GST at the whole selles’ level -(i) purchase value say, Rs. 130.00, (ii) value addition Rs. 20.00 (iii) sale value of goods and services Rs. 150.00 (iv) tax rate 10 paise in the rupee, (v) GST (out put tax) Rs. 15.00 (vi) input tax credit Rs. 13.00, (vii) net GST (out put tax) Rs. 15.00 –(input tax credit) Rs. 13.00= Rs. 2.00. Unlike Rs. 15.00in VAT, out put tax is to be charged at Rs. 2.00.
GST at the retail sellers’ level- (i) purchase value say, Rs. 150.00, (ii) value addition Rs. 10.00 (iii) sale value of goods and services Rs.10.00, (iii) sale value of goods and services at Rs. 160.00 (iv) tax rate 10 paise in the rupee, (v) GST (out put tax) Rs. 16.00 (vi) input tax credit Rs. 15.00), (vii) Net GST (out put tax) Rs. 16.00 – (input tax credit) Rs. 15.00= e. 1.00. Unlike Rs. 16.00 in VAT, out put tax is to be charged at Re.1.00.

So, unlike VAT regime, the price level is likely to go down and the consumers will be benefitted. The distinction between VAT and GST is that : (a)VAT provides multiplicity of tax at each stage of sale; (b) Payment of sale price on inclusion of the value added tax;
The GST provides that:(a)The difference of tax is payable; (b) A transparent and complete chain of set-off is maintained.

It is likely to widen the coverage of tax base and improve tax compliance. The higher generation of revenue with the lower burden of tax element to the consumers seems to be the moto of the proposed GST regime.

The Central Excise Duty is in fact, leviable at manufacturing point before removal of the goods from the manufacturing spot and such Excise Duty is to be collected and deposited, when the goods are removed from the business premises. The Service Tax is charged on the date of handing over of service or on the date of receipt of payment, whichever is earlier. The VAT, on the other hand, is to be charged at the time of sale of the goods, whether the payment is readily made or there is deferred payment. The GST will ease out such matters. The GST is to be charged on each transact.

The items of taxability in the GST system will be, as below:
(a)on the sale of goods; (b)incorporation of goods in an individual contract; (c)hiring a taxi;(d) hiring equipment; (e)lease of a premises; (f)consultation by a chartered accountant; (g)import & export of the goods; (h)) rendering of any service; an (i)) a transfer of immovable properties etc”. So, its perimeter will be wider.

The GST being chargeable on each transaction, it may also be called as the’ transaction tax’. It is likely to abolish the interpretational problems whether a particular transaction is goods or services; applicability of State or Central levy or applicability of a particular rate, as may arise. So, the GST will have a separate characteristic and its impact will be large and wide.

Unlike the tax laws on the sales or purchases of goods, the levy of tax will not be confined to the moveable properties only. It will extend to the immovable properties as well. For instance-

(i)The lease of premise is nothing but a lease of immovable goods. Actually, the dictionary meaning of the term ‘lease’ is ‘a contract by which one party lets land, property, services etc. to another for a specific time, in return for money. (ii)Levy of duty on premises, that is, on the immovable properties is presently a subject matter of the State revenue department;

Consequently, with the introduction of the GST, any such laws will naturally be irrelevant and will turn to be redundant. The salient features are discussed below:
(i)India is a federal structure of country. The State Governments and the Central Government, apart from other essential ingredients, have been empowered to undertake the economic administration within the frame work of the Constitution, subject to the conditions, restrictions and limitations imposed therein. The GST will have, therefore, mainly two components;
(a) one levied by the Centre; (b) the other levied by the States.
This dual GST model will be implemented through multiple statutes –
(a)CGST for Centre; and (b) SGST for every States.

The basic issues ,like; chargeability, definitions, taxable persons, measure of levy of tax including the voluntary provisions, basis of classification and other allied matters, will be governed by the uniform statutes, as far as practicable.
(ii) Both CGST and SGST would be applicable to all transactions of goods and services except the exempted goods and services, goods, which are to be kept outside the purview of GST. Similar will be the case in respect of the transaction, which is below the quantum limit.
(iii) The taxes paid against the CGST and the SGST are to be credited in two separate accounts. The input credit derived from the CGST is to be utilized for the Central, while likewise the SGST input derived, is to be utilized for the respective States.
(v)Cross utilization of the ITC (Input Tax Credit) between CGST and SGST is not generally permissible.
(vi) The feasible uniform procedure for collection of both CGST and SGST would be prescribed in the respective legislation for the Central and the States.
(vii)The power of administration of the CGST will rest with the Centre, while that of SGST administration with the States.
(viii)Tax return for the relevant period is to be submitted by the tax payers both to the CGST and SGST authorities.
(ix) The tax payers would be allotted a PAN Card, as a tax payer’s identification number. The GST Pan-linked system with a total 13/15 digits to be worked out in consultation with the Income Tax department, will mainly be linked with the Income tax PAN system, facilitating exchange of data and tax payer’s compliance.
(x)Assessment, enforcement, scrutiny and audit would be undertaken by the authorities, which will be engaged for collecting the tax with information sharing between the Centre and the States.

In addition to the above, the deals at the inter-State level will be termed as the Inter-State GST (IGST). The utilization of the inter-State supply of goods and services will be made under the IGST model. The ITC will be from the respective inter-State level.
‘Dual’ means - ‘two fold.’ India is a federal structured country. The Central and the State Governments have been provided with power to rule the country with the division of powers enunciated in the Constitution. In the economic scenario, particularly in relation to the levy and collection of tax, appropriate legislation is to be worked out by Parliament and the State Legislatures, as envisaged in clause (1) of Article 246 read with List I (Union List) and clause (3) of Article 246 read with List II (State List). In addition to the above clause (2) of Article 246 read with List- III (Concurrent List), the power can be exercised by the Union and the States concurrently. The Central and the State Governments are to be empowered to perform their distinctive duties in making enactments in the matter of raising revenue resources vis-a-vis guarding any possible leakage or drainage of revenue. A dual GST is a product of fiscal federalism, keeping in view, the Constitutional requirement.
The basic architecture for subsumation designed in the GST system and l the principle formulated thereof, are-
(i)Taxes or levies to be subsumed should primarily in the nature of indirect taxes, either on the supply of the goods or on the supply of services; (ii) Taxes on levies to be subsumed, should be part of the transaction chain, which commences with the import/manufacture/production of goods or provision of services at one end and the consumption of goods and services on the other; (iii)The subsumation should result in free flow of tax credit in intra-State and inter-State levels; (iv)The taxes levied and the fees, those are specially related to the supply of the goods and services, should not be subsumed under GST; (v)Revenue fairness for both Union and States individually would need to be attempted.
The basic principle of the GST being as such, the Empowered Committee recommended that the following Central Taxes, administered by the Government of India, ab-initio, are to be subsumed under the Goods and Services Tax net;
(a)Central Excise Duty; (b) Additional Excise Duty;(c) The Central Duty levied under the Medicinal and Toiletries; (d) Preparation Act;(e) Service Tax;Additional Customs Duty, commonly known as Countervailng Duty (CVD) (f) Special Additional Duty of Customs- 4% (SAD); (g)Surcharges; and (h)Cesses
Likewise, the following State taxes have been proposed to be incorporated in the GST net:
(a)VAT/Sales tax;(b) Entertainment tax (unless it is levied by the local bodies);(c) Luxury tax; (d)Taxes on lottery, betting and gambling (e) State Cesses and Surcharges in so far as they relate to supply of goods and services; and (f)Entry tax not in lieu of Octroi.
The movement of goods, occurring from one State to another, not by way of sale, but by way of stock transfer for the purpose of sale out side the State or for any manufacturing activities or for other purposes, is restricted from levy of any tax, as laid down in sub-clause (a) of clause (1) of Article 286 of the Constitution. Any levy of tax is, therefore, beyond the ambit and competence of the State Legislatures. The Central Act has exempted tax on the said stock transfer of goods subject to some conditions and restrictions with production of satisfactory evidences. The GST literature has not reflected properly as to the question taxability or otherwise of the goods to be moved from one State to another on stock transfer. However, time will say as to the modus operandi of this tax measure.
The following will be excluded in the GST tax net :
(a) Direct Taxes; (b) Property Taxes; (c) Stamp Duties; (d) Toll Tax; (e) Passenger Tax; (f)Road Tax; (g)Telecom(h) Licence Fee; and 9i)Tax on Electricity.
The Central Government constituted the State Empowered Committee to work out the ways and means, to examine and to prepare a road map on the proposed system of the GST, as done in the case of VAT. T is on the heels to carry out such a heavy responsibility. The Empowered Committee with the concurrence of the Central Government like wise constituted a Joint Working Committee Group with a view to study the models of the GST in the global sphere, if necessary, to provide alternative suggestions, keeping in view India’s fiscal position. The suggestions of the Joint Working Group will include as well the following :
(i)The GST is to be a revenue- fair with sufficient growth of revenue to the Centre and the States. Interest of Special Category, North East States and the Union Territories have to receive due consideration. (II)A study by the group will be necessary in which power of levy, collection and appropriation of revenue by the Centre and State should be categorically mentioned besides providing the manner with the pros and cons of the various identical models. (III)There should not be any double taxation. (IV)The problems faced in the matter of inter-State transactions and revenue loss should have a suitable end. (V)A suitable solution over the question of exempted, non-VAT items, petroleum products and alcohol might be well treated by exclusion from the GST regime. (VI)The trade, industry, agriculture and the consumers’ interest are well guarded and the Central-State relationship is maintained cordially.
. The present multifarious system of tax has practically crippled the economy of the country. A commodity has to suffer various incidence of tax right from the production to reach the consumers’ hands by this way or that. The tax levied in different aspect is approximately about 27.5%. In GST regime, such total incidence of tax is likely to be reduced and to come down within approximate perimeter of 20%. Obviously, a reduction of the quantum of tax levy is expected.

High rate of tax generally paves the way for mounting evasion of taxes. A trader develops the mentality to escape from heavy burden of tax and adopts various fraudulent means to evade taxes. This is long grown phenomenon of the traders if reduced considerably, the trend and tendency of evasion of tax, is likely to be minimised to a considerable extent. However, it can not be said categorically that such a modus- operandi will take a final good-bye. It can, however, be well expected that the revenue generation will be accelerated to a considerable extent.

Globalization of economy is now one of the min themes of the world nations. Any good tax policy aims at social and cultural up-liftment, global economic realities, administrative efficiency, technological development, economic growth, stability, equity, to ensure welfare of the economically weaker and the vulnerable sections of population. GST will cut the cascading effect and thus can benefit not only to the consumers but also to the industry at large.The intentions of the global nations are as well to make out an all round competition at the global levels and it is not necessarily on the regional or country basis. All are eager to adopt common tax system, uniforms and simple, as well a common marketing platform. There is a common thought that the lower rate of tax will yield higher revenue, as the tax dodging episode is likely to be reduced, when there is lesser burden of tax.

The GST law will be an amalgamation of the measure of tax by the State, the Centre and also at the inter-State level. The powers and functions will as well be divisible amongst the three. The respective provisions of law and the power exercise, it is believed, will maintain their own entity. A question naturally crops up whether Parliament will be vested with the power to make enactment of the GST law or the State Legislature will be responsible for enactment of the portion of law relating to the respective States. That is a policy matter and no comment at this stage seems necessary. However, apprehension is there that the States may lose their autonomy and will be forced to be dependent on the centre in all spheres.
The literature on the GST provided an idea that there will be a drastic change in the Central and State tax structure. Such change will only be possible, when bases are prepared in the Constitution. At present the power scenario of the Centre and States are divisible in the Seventh Schedule of the Constitution. If any unified law is enacted, the Constitutional set up will require amendment. An amendment of the Constitution will thus be imperative and the Seventh Schedule of the Constitution (Union List, State List and Concurrent List) will require renovation.

(Mrinal Kanti Chakrabartty)
“Rudra Bhawan”, Radha Govinda Barua Road, 10 Lakhimipth,Guwahati-781-024

The Asam Sahitya Sabha : Bahumukhi Achani Grahan Prahashan Swarup

‘The Asam Sahitya Sabha : Bahumukhi Achani Grahan Prahashan Swarup’, the article published
in the Janasadhran Newspaper on 17th September 2010 , written by Shri Mrinal Kanti Chakrabartty, is a part-projection of the inner happenings of the Asam Sahitya Sabha, a linguistic, literary and cultural Organization, the largest forum of the North Eastern Region of the Indian sub-continent. Actually, it has been a den of politics and no proper importance has been
given towards the desired aim and object of the Sabha. The lobby system has been getting the
momentum in this linguistic, literary and cultural Organization. The system of election of
the office bearers has gradually become a farce. The actual idealistic literary persons are
not getting berth in this secret forum. The money hunting- activities for personal gain
plays a pivotal role in this august platform and the scandalous activities are coming to the
light from time to time. There is no proper respect to the Sabha Constitution, as has been
projected. The self-designed highhandedness is getting priority, instead of following up
democratic tradition in this great reputed organization.

Here the link http://www.janasadharan.in/1/images/4.jpg

MYSTERIOUS WAY TO EXTRACT TAX ON GREEN TEA LEAVES

The tea garden lands of Assam have been playing a prominent role in the agricultural, industrial and commercial aspects in the State scenario. The State is blessed with the flow of incoming revenue derived out of tax on sales, tax on agricultural income, tax on specified land, apart from the land revenue, revenue on electricity duty, revenue on professions, trades, employments etc. tax. Though the Assam tea has been facing an acute competition in the global commercial market, the good name of the Assam tea is still being maintained, as a whole.
Some pertinent question in relation to the measures of tax, adopted in Assam has apparently been visible and it is necessary to make an analysis on the same.
Exemption of tax on Green tea leaves
The First Schedule of the VAT Act has specified series of goods, exempted from tax under Section 9 of the VAT Act and hence no tax is leviable on the sales of such goods made within the State of Assam. The sales of such goods made in the course of inter-State trade or commerce are as well to be treated as tax free. Entry 41 of the said Schedule laid -down that ‘Unprocessed green leaves of tea’ is exempted from tax. The ‘Tentative Commodity List of Vatable Goods’, finalized by the Empowered Committee, contained also that ‘Unprocessed green leaves of tea’ is exempted from tax under the VAT Act.
.Concept of Specified Land Act
Clause (3) of Article 246 read with entry 49 of List-II (State List) in the Constitution vested powers to the State Legislature to make law in respect of ‘Tax on Land and Building’. In exercise of the said powers, the Legislatures of Assam enacted the “Assam Taxation (On Specified Lands) Act, 1990” (Lands Act), which came into effect from the 1st January, 1990.
The preamble of the Lands Act laid down that it is a tax imposed on certain categories of land. The levy of such tax is to be made on the annual productivity of such specified lands. The specified lands includes, inter-alia, the tea garden lands and the annual productivity of the green tea leaves on weight (in Kilogram) basis is the measuring scale for the purpose of levy of tax on such tea garden lands.
In the original Act effective from the 1st January, 1990, the rate of tax was fixed at 50 paise per Kilogram. The validity of the Lands Act was challenged by a number of tea gardens and tea organizations before the Gauhati High Court and the Supreme Court of India. During the pendency of the cases, however, a Memorandum of Understanding (MOU) was signed between the Government of Assam and the various tea organizations and the rate of tax was reduced from 50 paise to 18 paise with a retrospective effect from the 1st January, 1990. The Lands Act was amended from time to time and with effect from 31st March, 1997, the tea garden lands, the aggregate area of which did not exceed four hectares, were exempted from payment of such land tax.
The numbers of tea estate in Assam and the production of green tea leaves in such tea estates, as were projected in the Statistical Hand Book of Assam, 2007 are, as below:
Year Nos. Quantity produced (in weight)
2002- 43272 43,33,27,000 Kg.
2003- 43293 43,47,59,000 Kg.
2004- 43296 43,56,49,000 Kg.
2005 - 47,41,37,000 Kg.
The numbers of tea gardens and the productivity of tea thereof must have gone to a much higher side during these long five or six years, which particular is, however, not available readily. The collection of tax under the Lands Act was ascertained from the tax department sources, which is as below :
2002-2003 – Rs. 52.93 crore
2003-2004 - Rs. 56.17 “
2004-2005- Rs. 45.29 “
2005-2006 - Rs. 52.18 “
2006-2007- Rs. 53.68 “
The revenue yield from the green tea leaves under the Lands Act seems to be not upto the mark and due taxes were not likely to have been paid by a number of tea gardens.
Some of the tea estates, the numbers of which are exhibited above, do not have any tea manufacturing units (industrial units). Those tea garden units use to make sale of the green tea leaves to the tea industrial units for manufacture and sales of black tea. The numbers of tea manufacturing units in Assam are roughly in between 750 and 800. Some tea gardens, as it could be learnt, made bifurcation or trifurcation of the original units and made the same smaller ones so as to enjoy the benefit of exemption of taxes, as provided in the amended Lands Act of 1997 effective from 31st March, 1997. A huge loss of revenue is thus being incurred annually since 1997-98.
Proposal to levy Cess on the bought- tea leaves in Assam
While presenting the Budget for the 2008-2009 in the House of Legislature of Assam on the 10th March, 2008, the Chief Minister of Assam submitted as proposal before the House for levy of Cess on the green tea leaves. The portion of the speech is reproduced hereunder:
“A large number of bought-leaf factories have come up in Assam. These bought –leaf factories purchase green leaf and manufacture tea. However, unlike established tea companies, these bought-leaf factories do not contribute any revenue to the State Exchequer. They are unable to maintain quality of tea. At present, these bought-tea factories and some established companies who manufacture tea from bought-leaf do not pay any Cess on green tea leaf purchased by them. I propose to levy Cess at therate of 20 paise per kilogram of green tea leaf purchased by them. This rate is much lower than the rate at which the established tea companies pay Cess. The established tea companies pay Cess at the rate of 32 paise per kilogram of green tea leaf in Brahmaputra Valley and 29 paise per kilogram of green tea in Barak Valley. I propose to raise a Development Fund from the revenue collected for development of small and marginal tea growers, welfare of the tea labourers in organized sector and improvement of quality of Assam tea.”
‘Cess’ means a tax or duty. A cess or duty is not generally levied on the sale or purchase of goods for which separate enactment, namely; the VAT Act is there. It is generally levied other than on the sale or purchase of goods. The Budget proposal of the Chief Minister of Assam contained that a Cess would be levied on the sale of green tea leaves at the rate of 20 paise in the rupee. The proposal did not indicate specifically the Act under which such Cess was proposed to be levied.
Tax measures under Lands Act
The Legislatures of Assam by an amendment of the Lands Act ( Assam Act IV of 2009) incorporated some provisions in the Lands Act and the same was given effect from the 12th day of February, 2009. The amendment reads as:
Section 6A-“ Every person engaged in manufacture of tea and responsible for making any payment or discharging any liability on account of any amount purported to be the full or part payment of sale price or consideration for purchase of green tea leaf, shall, at the time of credit to the account of or payment to the seller of such amount in cash, by cheque, by adjustment or in any manner, whatsoever, deduct tax calculated at the rate 20 paise per kilogram and deposit the same in the State Exchequer in such manner as may be prescribed.”
(The rate of such tax was enhanced to 25 paise per kilogram with effect from 29.04.2010.)
The said amendment provided also : (i) the ways and means for deduction of tax at source and deposit thereof and to issue a tax deduction certificate to the sellers of the green tea leaves by the purchasers; (ii) submission of return and statement of deduction of tax by the purchasers; (iii) interest for non-deduction and non deposit of the deducted tax at the rate of 1.5 paise per month; (iv) imposition of penalty for any violation of the provisions of the Lands Act and (v) institution of case in the court of law for any offence.
Levy of tax on the sales of green tea leaves- controversial
In the amendment of Lands Act, the authority of law under which such amendment was made has not been quoted. It also maintained silence as to the authority under which the tax was levied on the sale or purchase of such green tea leaves in the said Lands Act, contrary to the basic principle of levy of tax on the tea gardens lands on the productivity of green tea leaves as the measuring scale.
The question of law as has been cropped up in such exercise are discussed below :
(1) The item green tea leaf is exempted from tax, as exhibited in the First Schedule of the VAT Act. Hence, no tax is leviable on the sale or purchase of such green tea leaves under the VAT Act, which was enacted under the authority of clause (3) of Article 246 read with entry 54 of List II (State List) in the Seventh Schedule of the Constitution;
(2) No other Constitutional authority was provided to levy tax on the sale of such green tea leaves, sold by the producing tea garden to the manufacturing tea gardens;
(3) The main theme and ideology of the Lands Act is that, a tax is leviable under the Act, on the annual productivity of the green tea leaves, produced. The said Act provided no scope to levy of tax on the sale or purchase of green tea leaves, which ,in fact, are exempted from the sales tax under the VAT Act, governing the principle of levy of tax on the sale or purchase of goods in Assam ;
(4) When the aggregate area of the tea garden lands held by a person does not exceed four hectares, no tax is leviable on such lands, implying thereby that the annual productivity of green tea leaves in respect such tea garden lands, are not to be reckoned for the purpose of taxability under the said Lands Act;
(5) The new measure of tax on the sales of green tea leaves incorporated in the Lands Act from 12.02.2009 obviously created a clash and conflict with the provisions VAT Act as well as a portion of the Lands Act;
(6) The tax deduction on the weight of the green tea leaves (on the basis of kilogram) has a direct clash with the principle of levy of tax on the sale or purchase of goods, where value consideration gains the momentum;
(7) The new measure of levy of tax seems to be something unforeseen and extra-ordinary, as the newly inserted Section 6A was a measure to deduct tax at source, while liability to pay tax on such sales of green tea leaves was not given berth in the amended Lands Act;
(8) The term ‘sale’ has not been defined in the Lands Act and the basic principle of levy of tax on the sales of green tea leaves also not accommodated in the Lands Act and it seems to some extent as extra-ordinary exercise of territorial jurisdiction;
(9) The basic ingredients required for the levy of tax on the sales of green tea leaves has not been incorporated in the Lands Act;
(10) The amended Act incorporated the levy of ‘tax’ on green tea leaves is contrary to proposal of levy of ‘Cess’, as reflected in the Budget speech of the Chief Minister of Assam.
The entire matter relating to levy of tax on green tea leaves seems to be controversial and review is necessary by the Government.
Solution suggested
This zig-zag process of levy of tax may have a far-reaching ill consequence to the revenue generation of the State. Since the intention of the Legislature of the State to safe guard the revenue of the State by way of levy of tax on the green tea leaves sold to the bought-leaf factories for manufacture black tea and to make sale, therefore, the Government may consider the following suggestions for the greater interest of the revenue of the State:
(i) That, the exemption tax in respect of the aggregate area of the specified lands held by a person a person not exceeding four hectares of land, as occurred in clause (a) of Section 5 of the Lands Act, may be revoked or withdrawn;
(ii) The lands, held by a person not exceeding four hectares of land, are also to be brought under the purview of tax- net of the lands Act and the provision of the said Act has to be applied in all cases;
(iii) The liability to make payment of tax, submission of returns will rest with such tea garden land owners, as envisaged in the Lands Act and the rules, framed thereunder.
However, in order to ensure that proper payment of tax has been made by such land owners, it may made as a condition that the green tea leaves handed over to the tea manufacturing factories, such land owners are to adduce proof that the tax due to State Exchequer has been paid. In alternative, such manufacturing factories may be authorized to deduct the requisite tax, while making payment green tea leaves for manufacturing or other allied purposes. The appropriate wordings will be’ the green tea leaves placed with the tea factories for manufacture or other allied purposes instead of the words ‘sale or purchase of green tea leaves’.

(Mrinal Kanti Chakrabartty)
“ Rudra Bhawan”
R.G. Barua Road, 10- Lakhimipath, Guwahati-781024

China is eager to introduce trade relation with India

China is very much keen to establish trade relation with India, where there is acute business potentiality. The construction of the Steel Well Road from the eastern sector of the North East India, a project undertaken by the Government of India to connect Mynmar in the year 2004 has not yet been materialized, though the media report reflected that a sum of Rs. 48 crore was sanctioned for the purpose. The Govern of India, it is learn, is in a dilemma to make a thoroughfare through the dense Patkai Hilly region, which make convenience for easy movement of the ultras. It is also not a denial of fact that the any trade relation with China will accelerate the economic activities in India. A decision will probably be taken after study of the political and environmental spares.
An article on “Steel Well Road topic vis-à-vis the trade relation between India and China published in the Assam daily “ Janasadharan” on 16th June, 2010 will throw some light in the matter.

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A brief of the Article on Basistha Temple.

The Article “AOITIHASHIK BASISTHA MANDIR” (TRADITIONAL BASISTHA TEMPLE), written by me in Assamese published in the Janasadhran- Sunday Magazine “Ityadi” on 6th June, 2010, reflected the present picture of the holy shrine, where Maharshi Basistha of the Ramayana era made an end of his life. The grave inside the temple, where the body of the great sage is taking eternal rest , attracts many pilgrims not only of Guwahati or Assam, but the people from different places of India use to come to offer worship to the renowned sage, who is also well known for his miraculous ‘Kamdhenu giving milk, whenever necessary. The Bashistha river, rolled by the side of the Samadhi, had three channels, namely; Sandhya, Lalita and Kanta, where the great sage used to make “Trisandhya’ (meditation & worship) in the morning, evening and noon.
The Article presented a picture of the miserable environmental scenario of the temple side including the approaching roads, which is intended to attract the attention of the Guwahati Development Authority as well as the Government of Assam.

Journey never ends

‘A journey from the grass root level towards the sky’. Though it is an absurd thought to reach the sky there is an endeavour to go higher and higher to reach the mount of glory. I keep it in my mind to go ahead with some constructive ways of life, but certain factors are responsible to discourage me on the way. First, is my ill health due loss of the glamour and energy of youth at this age of seventy three; second, is inadequate time, as I have to remain very busy with some important self-imposed assignments. Still then, I work hard daily leaving a portion specially reserved for sound sleep in the night hours. I will make all efforts to go ahead so as to serve the society on way to make services to the nation with an acute trust in God.”

TAX ADMINISTRATION IN ASSAM

Tax is a contribution, extracted by the Government in the form of revenue to the State Coffer. No Government can exist without taxation. This money, in fact, is to be levied to the people and the grand art consists of levying so as not to oppress.

AIM AND OBJECT
The aim and object of the tax administration is to make generation as well to cause mobiliza¬tion of revenue resources for the purpose of augmentation to the State Coffer within the frame work of law, enacted by the Legislatures of the State in a systematical and methodical way.

TAXING AUTHORITIES
The Commissioner of Taxes (Commissioner) is the supreme authority in the field of administration for carrying out the purposes of the taxation laws of the State. He is to be assisted by a set of officers, namely; the Additional Commissioners of Taxes, Joint Commissioners of Taxes, Deputy Commis¬sioners of Taxes, Assistant Commissioners of Taxes, Superintendents of Taxes and the Inspectors of Taxes, appointed by the Government, specifying its territorial jurisdiction. The Agricultural Income Tax Officer is assigned to carry out the administration of the Assam Agricultural Income Tax Act, 1939. The post is manned by the cadre of the Superintendents.

COMMISSIONER OF TAXES
The Commissioner is an Ex-cadre post and the member of the lndian Administrative Service cadre ornaments this post He is entrusted to govern the tax administration with the help of the seasoned and veteran officers of the cadre posts. Primarily, he is not supposed to know the inner visions and techni¬calities and the taxing authorities, appointed to assist him, are to guide him in a right and proper way with unbiased briefs, clean and crystal projection of the facts. The notes are to be law, fact and docu¬ment based and are to be processed chronologically from the grass root level and onwards so as to adopt a constructive and judicious decision, implying thereby that, such a process is knowledge and experience oriented. Unless there is righteous advice and guidance, there may derailment or disrup¬tion in the walk on the main orbit smoothly and efficiently.

BIRTH OF THE TAXATION DEPARTMENT
Taxation department is a post child after the independence of India. In pre-independence period, the taxation laws, namely, the Assam Agricultural Income Tax Act, 1939, the Assam Sales of Motor Spirit and Lubricants Taxation Act, 1939 and the Assam Amusement and Betting Tax Act, 1939 (operative since 1.4.1939,1.4.1939and 1.8.193 9 respectively), enacted under the Government of India Act, 1935, were administered by the Excise Department of the Government of Assam. After the enactment of the Sales Tax Law (the Assam Sales Tax Act, 1947) from 24.12.1947 under the Government of India Act, the taxation department took its birth. All the above taxation Laws including the Assam Professions Trades, Callings and Employments Taxation Act, 1947 (operative from 1.4.1947), enacted also under the Government of India Act, 1935, received proper safe guards under saving provisions, as envisaged in Article 277 of the Constitution of India (Constitution) adopted and effected from 26.1.1950. There are as many as nine taxation laws operative in Assam.

Two taxation laws, namely; the Assam Taxation) on Goods carried by Roads and Waterways) Act, 1954 and the Assam Tax on Luxuries Act, 1997 were nullified by the Hon'ble Supreme Court of India. A portion of the taxation law, namely; the Assam Entry Tax Act, 2001 was also declared to be null and void by the Hon'ble Gauhati High Court, but the State Legislature repealed the earlier Act and made re-enactment of the same in 2008, which became effective from 1.6.2008. The new Act is to give safe guard of the erstwhile incomplete proceeding and tax recovery of the old Act and the tax already collected, but all proceedings under the 2008 Act are to be taken up denovo for the purpose of admin¬istration of the new Act. Two other Acts, namely; the Assam Passengers and Goods Taxation Act, 1962 and the Assam Urban and Immoveable Properties Act, 1963 administered by the taxation department, were transferred to the Transport and Municipal Department in 1989 and 1971 respectively.

POWERS AND FUCTIONS OF THE TAXING AUTHORITIES
The power and functions of the taxing authorities are of three folds : (i) Executive, (iii) Quasi-judicial and (iii) Administrative. The former two are in relation to the administration of the taxation laws and the last one is for general administration.
The bifurcation of executive and quasi-judicial powers in the process of administration of the taxa¬tion Laws was essential, keeping in view, the mandatory provision of Article 50 of the Constitution, that is, the doctrine of Separation of Powers. The encroachment of powers by the executive exercising the quasi-judicial power at the same time may be counted to be pre-judicious, as will be evident from the verdicts of the Hon' ble Courts of law. An investing officer or any team of officers is not to exercise the quasi-judicial powers for the same issue.

APPOINTMENT AND DELEGATION POWERS
The taxing authorities of the State are appointed by the State Government by notification in the Official Gazette with specification of the territorial jurisdiction. Only the Government can modify, extend or curtail such jurisdiction and none else. The Commissioner is to delegate his powers to the category-wise of officers subject to the conditions and restrictions imposed in the Act and the rules keeping in view the territorial jurisdiction, specified by the State Government. There should not be any overlapping or encroachments in the power delegation and power exercise scenario.

SHORTFALLS IN DELEGATION OF POWERS
The Assam Value Added Tax Act, 2003 (VAT Act) came into operation from 1.5.2005. In the power delegation scenario, some shortfalls became obvious and reconciliation seems to be incumbent for proper and smooth administration of the VAT Act. For instance, the scope of power delegation has been restricted in rule 6 of the rules, framed under the VAT Act. This seems to have not been rightly observed. In the said rule, there is no scope for delegation of powers to the Assistant Commissioners of Taxes, but the Commissioner by Notifications dated 28.4.2005 delegated his powers to the said set of officers without any base. Unless rule 6 is amended and the words Assistant Commissioner is accom¬modated, some complications might be there in near future. The, Commissioner has not delegated his powers to the appropriate category of the officers to exercise the powers of registration, provisional assessment, best- judgment, assessment to the unregistered dealers, escapement of assessment, power of forfeiture, calling of returns, levy of interest and in many other aspects. Moreover, delegation of powers to compound offences to all categories of officers seems to be in contravention of the provi¬sions of rule 6. The definition of Assistant Commissioner and Superintendent has special significance in the matter of administration of the VAT Law, as such authorities are one and same in respect of a dealer in a particular area and there can not be any overlapping of territorial jurisdiction.

The department will have no measure of defence, if the exercise of powers without delegation or the powers delegated beyond the scope of rule is challenged.

TAX MACHINERIES
The services of each category of official as well the taxing authorities are counted as indispensable for proper administration of the taxation laws of the State. None is inseparable from others and none is less important.

GRASS ROOT LEVEL
The grass root level officials are the members of the ministerial cadre. Unless the files are designed properly and systematically and moved with action, there may be dislocation in the system. In taxation department, the system of maintenance of records is very unique and very much methodical. The case records are to be maintained in double cover. The outer cover in side is meant for preservation of return at the first inside and preservation of the order of assessment in the last side. In between the first cover the correspondences and Miscellaneous or sheets are to be maintained period wise, year-wise, as the case may be. It is felt incumbent that a summery of the position of the files is maintained in side each case record. The Index Register and the Assessment, Demand and Collection Registers are like the mirror of a dealer and maintains the complete dossier. These records must have the parity with one another so that cross checking may yield a positive result.
The dealing assistants should make it a habit to make scrutiny of the case records from bottom to the top and to put up with action, wherever necessary. Where there is no action the portion is to be closed and tagged. Such scrutiny may ensure proper realization of tax,' if necessary by taking coercive measures. The records are to be maintained in such a way that no sort of entry is lost under any circumstances. }
The maintenance’ of case diary and put up diary are two basic requirements of the concerned deal¬ing assistants. The other records, like maintenance of Bakijai Registers, Register in relation to institu¬tion of court cases, composition of offences, imposition of penalty Register has a dire necessity. The summery at the end of each month is to be drawn up in the index Register, Assessment Demand and collection Register. The Assistant Commissioner or the Superintendents are to check the registers and records and ensure follow up action.

FIELD STAFF
The field staff mainly connotes the Inspectors of Taxes. There main duty is to make survey of the area at least three times in a year. The survey should be made in respect of all the business of the dealers/assesses of the area. None is to be left out. Even a Pan shop or a Saloon should not be omitted. The detailed particulars are to be recorded in the survey register. Such survey register will present the complete picture of business position in the area. The survey should not be confined to the urban areas only, but it should be extended to the rural or semi urban areas, where there is flow of business. Survey Register should be maintained for each Act separately, so that complete picture of the assessees re¬mains visible. Such survey is subject to inspection by the superior authority at least twice in a year.
Enquiry in respect of any assessee and inspection of the business premises, godowns, loaded/un¬loaded trucks form the other parts of duties of the field officers. Such exercise is to be made with a sober approach but with firm stand.
The collection of particulars from different sources with verification of such collected particulars is another vital part of duty of the field officer.

The work of inspection, if necessary under the authority of search warrant and the preparation of the seizure list requires due prudence and proper application of mind. Likewise, the seizure of goods should follow the same footstep. It is to be made imperative that all inspection be recorded in the Register with the outturn thereof.

QUASI-JUDICIAL PROCEEDINGS
The powers and function of the Assistant Commissioners and the Superintendents of Taxes are quasi-judicial,. Registration, requirement to furnish security, administration of assessment proceed¬ings and penal proceedings, all are quasi-judicial ones. The power of the Civil Court has been vested upon the said authorities, who can enforce attendance of any person, administer oath or affirmation in connection with any proceedings, require production of documents and evidences for such purpose, as may be warranted.
The orders in each case must be law, facts and materials based with a self-speaking exposure There should not be any biasness in the contents of the orders, but with a judicious approach and out look. While administering the quasi-judicial proceedings, all facts are to be recorded properly. Though the Act has provided that the orders, instructions and direction of the Commissioner is binding to the officers subordinate to him, but a reservation is maintained, whether such imposition will ensure fair and judicious delivery of judgment. There is possibility of being influenced by any order, direction or instruction in the lawful administration of any quasi-judicial proceedings under the Act.

APPELLATE PROCEEDINGS
The Appellate Authority is a quasi-judicial authority, but it maintains its independent entity. The Commissioner is neither to delegate his powers nor to issue any instruction in administering the quasi-judicial appellate functions under the Act. The Appellate Authority is to dispose of the appeal petition after providing opportunity to the person appealed and the authority against whose order appeal peti¬tion has been filed. The order of the Appellate Authority is not be interfered, by the Commissioner but the Board of Revenue, Assam can entertain an appeal, if filed by the aggrieved party or the Commis¬sioner. The scope for filing writ petition before the High Court on the question of law and justice, however, remains open.

REVISIONAL AUTHORITY
The power of revision of the orders of the Assessing Officer rests with the Commissioner or by the officers not below the rank of the Deputy Commissioner to whom such power is delegated by the Commissioner

SUO MOTO REVISION
The power of suo moto rests with the Commissioner or the persons appointed to assist the Commis¬sioner upto the level of the Deputy Commissioners. Three ingredients are necessary to invoke the powers of suo moto revision, (i) There must be an order (ii) the order must be erroneous and (iii) The order must be prejudicial to the interest of the revenue. Unless, these three ingredients exist, the invo¬cation of power of suo moto revisions is likely to be questioned. The order of suo-moto revision must reflect this vital requirement. When such ingredients are absent in the order, the order is likely to suffer from deficiency.

INVESTIGATING WING
There had been an investigating wing in the taxation department, which was withdrawn in 1983 December without being re-designed or revived so far. Though the Sales Tax Laws of the State em¬powered the State Government to constitute such a wing for investigation and detection of taxes, the same has not been materialized. This has a dire necessity to check, detect and prevent evasion of taxes. An Audit Team has been constituted, which does not have any legal base and such functioning of the Audit team may invite controversy in the long run. That can be regularized by creating an investing wing with assignment of powers, inter-alia, for investigation, audit etc. Audit is a part of investigation and its limitation need not be confined to the case records only.

POWER OF ASSESSMENT TO THE INVESTIGATING TEAM
A discussion has already made that following the doctrine of Separation of Powers, the quasi-judicial powers of assessment and other allied matters are not to be exercised by the investing wing and the said power rests with the assessing wing in the units. This aspect requires a fresh consideration with proper review.

OPERATION OF CHECK POSTS
The operational aspects of the check post suffer from various shortfalls and lacunae. First, there is no Weigh Bridge; second, there is no proper platform to unload the goods with adequate man- power; third, there is no godown to store the goods, when seized. The misuse of Delivery Notes has become a regular phenomenon. It is believed that the check posts maintains the complete dossier of each dealer with registration numbers, commodities dealt in and other allied requisite information. How they can make it possible to evade payment of tax by furnishing false information in respecct of the goods carried by misrepresentation of facts? The particulars transmitted through inter-net may help to adopt follow up action and to apprehend such unscrupulous traders. It is however imperative that for the purpose of administration of the quasi-judicial proceedings or to bring criminal liabilities, the Deliv¬ery Notes must be physically available to the concerned Assessing Officers. Actually, the Check Posts are the competent authorities to arrest such foul play at source and to do away with the odds by initiating coercive measures like detention of vehicle, seizing of goods and forfeiture or disposal thereof.



FIELD INSPECTION
There has been a good deal of deficiency in the matter of field inspectio, namely; at the business premises of the dealers, godowns, ware houses and carriers. The carriers place the pivotal role in indulging the evasion of taxes in collusion with the buyers and the sellers of the goods. Each officer is responsible for proper levy and collection of tax, checking, preventing and arresting evasion of taxes including collection of evaded and realization of outstanding dues in his area. In the past era, the good performances of the officer was a measuring scale to wards counting his efficiency and consideration for posting in suitable commercil areas. The inspection of cinema halls irrespective of any show was a regular phenomenon and it was made compulsory to maintain Register, to submit monthly statements in addition to submission of fornightly diaries.

OFFICE INSPECTION BY THE HIGHER AUTHORITIES
In sixties and earlier, office inspection by the Commissioner at least three times in a year was regular phenomenon. Such inspections were marathon and very tough, but constructive. The inspec¬tion reports were to be typed half margin and preliminary following action reports were to be submit ted within a specified time. With the increase of volumnous works and strengthening the man power, such task was carried out by his juniors in an identical manner. This improved the work culture and accelerated the work efficiency.

AUDIT
The aim and object of audit are to detect the irregularities and to regularise thereof. When there is major lapses, the officers were answeable to that. The existing provisions of law were rectified to cure the defects. Now, the said culture has been changed. The audit encroaches its jurisdiction and makes excess.

ADMINISTRATION OF THE ASSAM VALUE ADDED TAX ACT, 2003
Though the Assam Value Added Tax is a tax on the sales and purchase of the goods, but its aim and object is not identical to the previous ones. It is somewhat unique and technical and designed with a self-wheel-steering drive. The Act has, however, been designed identical to the previous sales tax law, whereby ample ambiguity and misconception prevail. For example, the spirit and intention of the Act was to levy tax on every stage of sales subject to credit of input tax. In the Act, contrary to the aim and object and the preamble, a tax measure for levy at the point of first point sales in respect of 23 items has been incorporated, though the Act has not specifically recorded anything about such departure from the main theme.
The VAT Law is for levy of tax on the sales or purchase of goods, but in the Act some measures of taxes were adopted to levy tax on exempted goods, production, total value of works contract, import of goods, which is beyond the spirit and intention of the Act. This type of payment of composition of tax obviously disrupted the levy of taxes at subsequent sales or inter-State sales making the whole process in the VAT system is anomalous and the process is likely to be foiled and frustrated.
The issue of Tax Invoice andivRetail Invoice are compulsory in the VAT regime to ensure proper accounting for and proper payment of tax thereof, but this has neither been complied with or not enforced for which trie leakage of revenue has become obvious.
The acceleration of activities in the field may discourage any such odds.

ENTRY TAX LAW AND THE LUXURY TAX LAW
The administration of these two Laws are to be carried on under the VAT Law of Assam, but the aim and object of levy of tax under these Act are not identical tq VAT Law. It will be in the fitness of things to make provisions in the Act for independent process of administration to avoid any complications.

TAX LAW ON SPECIFIED LANDS
With a view to ensure correct and accurate levy of tax, the following important aspects requires to be looked into:
(i) There should be a survey in all tea gardens irrespective of big and smalls.
(ii) The accuracy of production of green tea leaves is to be verified with the volume of production of black tea, keeping in view the ratio 4.5 :1.
(iii) There should be cross verification of green tea production statement, furnished in the sales tax department with the statement furnished in the Central Excise Department.

ELECTRICITY DUTY
The Central Sales Tax Act, 1956 has restricted the levy of tax in respect of the energy supplied outside the State, but contrary to this, the provisions for levy of tax on such supply, has been incorpo¬rated in the Assam Electricity Duty Act, 1963 in October, 1984.

AMUSEMENT AND BETTING TAX ACT
The Assam Amusement and Betting Tax Act, 1939 is to be renovated and re-designed to make way for assessment, specification of violation of the provisions of the Act including evasion of taxes and penal measures thereof.

TAX ON PRODESSIONS,TRADES. CALLINGS AND EMPLOYMENTS
Actually, the above measure of tax is hot a tax on income, but it is a tax on Professions, trades, callings and employments. The income derived out of the same is counted as a measuring scale for the purpose of levy of tax. But with the amendment of the Act, 1992, there was a crack in the system and this required to be restored.

WORKS CONTRACT AND LEASE:: WHETHER VAT COMMODITIES ?

VAT is a multiple system of tax leviable at every stage of sales of goods made by a dealer, subject to credit of input tax paid at the time of previous purchase of the goods. 'Input tax' and 'Output tax' are one and the same thing. The tax paid by the purchaser to the seller is input tax, while the tax realised by the seller from the purchaser and paid to the Govt. is output tax. A controversy is prevalent as to whether 'Works Contract and Lease' are VAT Commodities and the taxability on such item come under the purview of VAT tax-net.
Following a number of litigations and the Apex Court decisions against levy
of the tax on Works Contract and Lease, the Constitution of India was amended in 1982 and 'the transfer of property in goods involved in 'Works Contract' and 'the transfer of right to use any good without transfer of ownership' have been brought under the purview of the definition of 'Sales of goods'. The problem thus got a halt and tax on such transfer of property in goods and transfer of right of goods was well being levied under the Assam General Sales Tax Act, 1993. With the introduction of the Assam Value Added Tax Act, 2003, the basic principle of levy of tax, which has been discussed above, the levy of tax 'Works Contract' and 'Lease' has become irrelevant in as much as the 'Works Contract and Lease' maintain their independent entity and separate bearing. The multiple system of sales clockwise or stage wise in such deal become irrelevant. The VAT Act mainly dwelt in the basic principle of levy of tax on every goods at every stage of sale. It has not accommodated the principle of levy of tax on 'the transfer of property in goods' involved in 'Works Contract' and the 'transfer of right to use any goods involved in Lease. There ought to have a provision dispensing with the main theme of VAT so as to accommodate this extra-ingredients in the tax-net of Assam. The scope for levy of tax under the VAT Act has been specified in the Schedule attached to the Act along with the category of taxable goods not specified in other Schedules of the Act with the broad term 'Works Contract' and 'Lease'. The basic principle of levy of tax has not been accommodated. 'Works Contract' and 'Lease' are not the goods and the concept of levy of tax on 'Works Contract' and 'Lease' seem to be a deviation from the main spirit and intention of levy of tax on the sales of goods in the VAT ideology.
Assuming, but not admitting that the legislatures, while incorporating such measure of tax on 'Works Contract' and 'Lease', intending to levy tax on the transfer of property in goods involved in Works Contract and on the transfer of right to use such goods involved in lease, the rates of tax specified in Schedule at 12.5 paise in the rupee, is not at par with the rate of commodity-wise tax, specified in the other Schedules of the Act. For instance, the rate of tax on the sales of declared goods is always 4 paise in the rupee and it can not exceed the rate declared by the Govt. of India by enactment of the Central Sales Act, 1996 under the authority of the Constitution of India. Pipes of all varieties, pumps, tractors, ships vessels and many other allied articles, pertaining to 'Works Contracts' and 'Lease' do not have the rate of tax beyond 4 paise in the rupee. Naturally, there has been strong clash between the rate of the tax specified at 12.5 paise involved in 'Works Contract' and 'Lease' and the rate of tax of goods specified in the Schedules of the same VAT Act. There can not be double rate of tax on the same commodity for the purpose of 'Plain Sale' or 'Sale in the course of Works Contract' as well as the alleged sales on 'Lease'. Obviously, discrimination has been well maintained in tax-net scenario under the VAT Act of Assam.
The VAT law in Assam provided the measure of Composition of tax on works contract to be exercised by the works contractors at their own option in dispensing with the requirements of making payment of tax on the sales element under the VAT Act. The rate of tax payable as Composition of tax under such Scheme has been specified at 4 paise in the rupee on the gross value of 'Works Contract'. Apparently, this is abusive of the principle of levy of tax, as enumerated in the Constitution read with the definition of VAT Act.
A transfer of property in goods involved hi 'Works Contract' is liable to be taxed. A tax is leviable on the taxable commodities and not on the exempted ones. Moreover, labour charges, transport charges and other allied charges involved on the works contract can not be brought under the purview of taxability.

Transfer of right to use any goods in connection with lease is not a permanent sale of good. It is casual deal without maintaining any continuity. A lease deal on the same commodity may be frequent on the expiry of the specified period of time, but it may not be on chain system. This has provided scope for levy of tax on the same item leased without any scope for any credit of input tax. The legislatures have not specified the items to be taxed on lease and the levy of tax on lease has been made wide and open. It may naturally have an adverse effect to the lessesors and lessee when to be taxed on small deals of lease. No 'taxable quantum' has also been specified on lease deals. A confusion always prevail over the question of 'Hire' and 'Lease', as it has not been well analysed in the system. In absence of that creation of confusion to the dealer and exercise of powers by the taxing authority arbitrarily can not be ruled out in the matter.
Our above projection explaining the propriety of taxability in 'Works Contract' and 'Lease' ought not to have incorporated in the VAT Act of Assam, which maintain a separate aim and object with separate way of functioning. On the other hand, the levy of tax on transfer of property in goods involved Works Contract and transfer of right to use good on lease can not be given a good bye, as a substantial amount of tax revenue pours into the state coffer annually.
A separate enactment of law is considered to be imperative for the sake of better tax administration vis-a-vis proper augmentation of revenue of the State without any scope of disputes or controversy.

TERRORISM BY MAOIST

The main theme of the Constitution of India is that it is a Sovereign, Socialistic, Secular, Democratic Republic. It provided each citizen of India the right to form association, to ensure freedom of speech and expression. So, every citizen can exercise such right. The Constitutional guarantee, however, did not encourage any citizen to be violation and to go ahead with terrorism. It will be an obvious act of abuse of fundamental right, if the path of violation or terrorism is adopted by any association or organization.
The birth of Maoist in the South Eastern part of India is not very old, but their activities in the path of terrorism are gaining the momentum since recent times. The Maoist moves are with the ideology of Mao-Tse- Tung, the revolutionary Communist leader of China, who by his ideology of Socialism brought a drastic change in the Republic of China during the period after his birth in 1889 to his end in 1976.
Though Indian Constitution ensured a Socialist pattern in the Country’s Democratic set-up, in actual practice, the trend of Capitalism is getting priority. In the areas, where the Maoists are fed up with the trend of capitalism, they have raised their heads against such odds. Actually, terrorism is not the proper way for any of such solution, but the meaningful and peaceful dialogue may make end of the burning or chronic problems.
Maoists, who are moving with the ideology of Mao Tse Tung, must not forget that they are out and out Indians and fully under the shadow of Indian Democracy vis-avis the Indian Constitution. They should not forget that China’s attitude is not very much friendly with India since last 48 years. The trend hostility is reflected in everyway of their activities.
So, they must keep in mind that they are Indians first and in following any ideology of others they should equally be up and doing in maintaining the unity and integrity of the Indian Sub-Continent.

NEW DIMENSION IN TRADE ERA

The Asean Car Rally from Guwahati of Assam to Myanmar and onwards of the South East Asian countries in November, 2004 was the land mark maiden venture to initiate and to mobilize the ties of fraternity between India and the South Eastern Countries, namely; Myanmar, Thailand, Malaysia, Indonesia, Laos, Combodia, Vietnam, Philippines aiming at to go ahead in creating international understanding and prospective commitments. It was a prelude to establish a good and constructive gesture for acceleration of the potential trade activities between the two regions, on the fast symbolic globalization era. The abandoned road, was improved and made convenient for the car rally mission. The road, as is known as ‘Steelwell Road’, had its base structure in the Second World War period. The construction of the portion of the road from Mynamar and onwards is said to have already been completed. China of East Asia also constructed and expanded the portion of the road to link up with the Steelwell road with the aims and object to associate itself in extending its trade perimeter to India. A horn of dilemma, however, prevails in the Indian counterpart over the question of security of the eastern sector of the sub-continent, as road is penetrated through the dense and arduous Patkai Hill range, the extended base of Himalayas, making an easy access by the ultras. The Government of India, however, accorded budgetary sanction of Rs. 48 crore of rupees two years aback and it is learnt that the road is nearing completion.

Steelwell, the great hero
‘Steelwell Road’ has a historic significance, which was baptized after the name of Steelwell. A question naturally crop up ‘who was Steelwell?’ The history marks Steelwell as a prominent military officer in the Brigadier rank of the Second World War, whose untired efforts and immense costly sacrifices had the consequential effect of achieving the victory of England and its alliances in the war front against Japan and the alliance components. The rival nations got vanquished in the terrific battle.
‘Joseph Warren Steelwell’, popularly known as ‘Zo’ was born in 1883 A.D at Florida, but he passed his early days at New York. After acquiring the degree in the West Point Military Academy, the 5 feet 8 inches 1.7 meter tall, Steelwell got appointment in service at Philippine. 14 months later, he came back to West point, where he was engaged to learn different languages. After wedding Winfred Smith, he again backed to Philippines. At the late hours of the First World War, he was sent to China as the teacher to provide education in military languages and he simultaneously availed of the opportunity to learn the Chinese language as well. He became the father of five children, while he was in China. Steelwell was elevated to the rank of Brigadier and soon after that the Second World War broke out spreading over Europe, North Africa and South East Asia. Steelwell rushed by air to Chungking to meet Chiangkoi Shwek immediately after he assumed the war charge in South East Asia. He found that the only way of supplying food-stuff and war materials was by air from Ledo to Kunming, but that, too, was hardly possible in the 1000 kilometer long hazardous air flight. On 7th March, 1942 Rangoon, the capital of Burma, was captured by the Japan-alliance militants. Steelwell came by air from Chunking to Mandalaya, where the British Lieutenant General Sir Herald Alexander took shelter after the crack down of Rangoon. Incidentally, this Alexander jas withdrew the British army from Dandrik of Europe, when failed to face the sharp German aggression in 1940 and this has been a repetition to the earlier event. Both Steelwell and Alexander tried their best to save the middle part of Burma, but all efforts proved to be the futile exercise. Japanese army caused dislocation of rail and air communication in North Burma. Steelwell had no other way, but to retreat. After a strenuous and hazardous journey on foot and partly by boat, his troops reached Imphal without there being, however, any loss of life. Steelwell rushed to Delhi and furnished a detailed report on the catastrophe. The unbecoming circumstances forced Steelwell to remain away from Burma since June, 1942 to October, 1943. Japanese army captured the eastern coast of China and created havoc in its Southern border by frequent air raids. A profound necessity, therefore, cropped up for construction of a new road connecting Burma to get it hostile free. The Manipur- Pelel Road, was an alternative road, but it was not possible to be utilized for carrying the food-stuff and war equipments during the summer. Steelwell was restless and held marathon discussions in Delhi and Chunking to chalk out plan and programme. In 1942, the prospect of construction of an alternative road from Ledo-Pangchao pass-Hukang valley-via Misina to Burma was in sight. The practical aspects were examined, but it revealed that standing hills, dense forests, loose and muddy soil, deep-unsmooth ditches, heavy rainfall and unhygienic climate posed to be a hindrance to materialize such plan. This 768 kilometer road is to be constructed through three high ranges of hills, over three rivers beds with hundreds of bridges. Steelwell and Chiangkain shwek paid great importance for construction of the road at any cost, but the British Prime Minister Winstone Churchill was against such venture. The Americans were, however, adamant and gave high stress towards construction of the road linking Ledo – Burma at any cost in order to frustrate the territorial expansion of Japan to Burma. The American sent 330 skilled engineers and road construction materials and heavy machineries and equipments from 18,000 kilometer distance, by ocean, sea and road and this was routed through the western corridor of Assam. The military convoy congregated by Indian, African, American militants rushed enthusiastically to face the combat. The war mission, as we enjoyed in our early days, was really very much thrilling. The construction work was started in December, 1942 and 187 kilometer was completed on 27th December, 1943. The war footing construction made an end in the last part of 1944 connecting Ledo - Burma within a period of two years.
The posiion of the road is as below :
In Burma (Myanmar portion) In China
Pangchao Pass - 61 K.M. Mangyung – 740 K.M.
Tagap Ga - 127 “ Banting - 811 “
Sind Bowang - 165 “ Baochan -1043 “
Jambubam - 287 “ Yungpin - 1208 “
Barajup - 304 “ Chuyung - 1543 “
Michchhina - 403 “ Kunming - 1726 “
Bhamo - 595 “
Namkham - 707 “

Steelwell was the pioneer architect in the road construction project as well as the tactful management of the war front. The Japan and its alliances were kept busy otherwise and they could hardly imagine the far sighted diplomatic way of the road construction mission. The counter attacks on the showering attacks by the rival army continued. Japan had ultimately to surrender after Atom Bomb blast at Nagachaki and Hirosema. German also got vanquished. Thus the Second World War thus came to an end with the victory of England and alliances.
The untired, sincere and diplomatic services of Steelwell were profoundly recognized and the newly constructed road was named after him. It is unfortunate that the said road, constructed at high coast with deployment American, African, Chinese, Kacin, Oria, Nepali, Bengalee, Naga, Bodo and tea garden labourers, lost its importance and remained abandoned soon after the World War was over. This rather became a thoroughfare of a section of anti-socials and ultras. Steelwell became old; the incessant hard labour with deep sense of anxiety ruined his health. He was laid down by liver cancer. The Distiguished Service Medal, Legion Merit, Distinguished Service Cross was awarded to him. On the previous day of his sad demise on October, 12th, 1946, he was ornamented with the rare award ‘Combat Infantryman Badge’.

Trade scenario
The South East Asian countries are rich in precious resources like agricultural, forestry, fishery and mineral ores. The development of modern technology upgraded as well the industrial platform. India has immense potential resources including raw materials of different types, which are still to be mobilized. The aim and object of Asean Car Rally, as stated earlier was a token of good gesture towards reciprocation of trade venture. The road beyond the Indian portion has already been completed. China is also eager to expand its trade base to India. News
projected by the media reveals that India has to think twice in adhering to the proposed scheme of trade activities. China, in fact, is maintaining hostility with India since about last five decades. With provocative words, it is demanding Tawang of Arunachal Pradesh of India as a part of Chinese territory, though, in fact, it is a part State of India. Their modus operandi seems to be hostile and aggressive. Any accommodation of China in the field of trade activities through the eastern corridor, it is feared, may not be congenial to the security of the country.

It is recalled that for this blunder, the British Raj overthrew the Ahom Kings by expanding the trade base through the East India Company. The inner fall out was main factor. There is strong apprehension of repetition of such event, as Assam is confronted with many ghastly odds. Myanmar is also not playing a cordial role with India. It will be evident that it accommodated the United Liberation Front of Assam (ULFA) and other hostile ultras and afforded armed training at Kachin. Of late, the news media published that the Maoist of the north east India are importing Chinese arms from Myanmar and stored at Nagaland to spread terrorism and unrest in the sub-continent. The ulterior motive of such international folks can be easily guessed. Such ultras entered Assam through this road oft and on with destructive arms and ammunitions and applied for brutal killings of the brethren citizens of the soil . ‘Look before you leap’- this doctrine is now the main theme of consideration by the Government of India.

(Mrinal Kanti Chakrabartty)
“ Rudra Bhawan”,R.G.Barua Road, 10-Lakhimi path, Guwahati-781-024

CENTRE SEIZING STATES’ ECONOMICAL POWERS

The Constitution of India, a symbolic ideal of Sovereignty, Socialism, Secularism, Democracy and Republicanism in the global scenario, was enforced since the 26th day of January, 1950. It is like the holy Geeta in the Hindu Philosophy in socio-economic and political-administrative spheres of the country in as much as the national activities are carried on and are governed by its formulated principles and guide lines. While it laid down the divergent powers and functions of the Centre and the States, any clash or conflict in the field of power exercise is not generally visible.

Introduction of sales tax measures in Assam

Article 246 of the Constitution empowered Parliament and the States Legislatures to make laws on the subject, specified in the Seventh Schedule:
246(1)- The powers to make law in respect of the matters, enumerated in List-1 (Union List) of the Seventh Schedule of the Constitution has been vested upon Parliament.
246(3)- The powers to make law in respect of the matters, enumerated in List-II (State List) of th Seventh Schedule, of the Constitution, has been vested upon the States Legislatures.
246(2)- The powers to make law in respect of the matters, enumerated in List-III (Concurrent List) the Seventh Schedule of the Constitution, has been vested upon Parliament and subject to clause (1) of Article 246 of the Constitution to the State Legislatures.
The tax on the Sales and purchases of goods within the State, as enunciated in entry 54 of List II of the Seventh Schedule, is a State subject, while the tax on the sales and purchase of goods in the course of inter-State trade or commerce, as envisaged in entry 92A of List I of the Seventh Schedule
of the Constitution, is a Union subject.
The Assam Sales of Motor Spirit and Lubricants Taxation Act, 1939, a measure of tax on the sales of petroleum and lubricants was introduced from 1.4.1939 under the authority of Section 100(3) read with entry 48 of the
Government of India Act, 1935 This act was repealed and replaced by ‘ The Assam (Sales of Petroleum and Petroleum Product including Motor Spirit and Lubricants) Taxation Act, 1955 on 1.5.1956 under the authority
conferred in List II entry 54 of the Seventh Schedule of the Constitution. After the independence of India, but before
the adoption of the Constitution of India, a new measure tax on the sales or purchases of goods was introduced and ‘ the Assam Sales Tax Act, 1947’ came into effect from 24.12. 1947. Thereafter, a measure of tax on the sales or
purchases of some specified goods, imported from out side the Assam or such identical goods manufactured, made or processed in State was introduced with effect from 1.7.1956 by enactment of the Assam Finance (Sales Tax) Act, 1956. With the said authority a tax measure was as well adopted on the last point purchase of some specified goods by way of enactment of ‘the Assam Purchase Tax Act, 1967 from 3.7.1971. All these taxation Laws were amalgamated consolidated and amended to give birth to the unified ‘ Assam General Sales Tax Act, 1993 on
1.7.1993’.

Central Sales Tax measures
Parliament enacted ‘the Central Sales Act, 1956’ for the purpose of levy of tax on the sales made in the course of inter-States sales-purchases by virtue of the aforesaid powers and the same was effective from 5.1.1957. This tax
measure obviously provided a strong guard In respect of inter-State deals made between one State and another and it ensured proper levy and collection of taxes at the State level as well.

General Sales Tax

The traditional and chronological exercise of levy of tax on the sales or purchases of goods in the States since 1939 made way for acceleration of revenue trend and it played a pivotal role in the healthy growth of economy of
Assam. The Assam General Sales Tax Act, 1993 plugged some persistent lacunae and upgraded the power exercise scenario by the taxing Authorities for smooth and efficient administration.

Value Added Tax
The prolonged tax measures got a halt and a changed system of tax measure came into effect from 1.5.2005 by enforcing ‘the Assam Value Added Tax Act, 1993’ (VAT). VAT is a multifarious system of tax to be levied and
collected at every stage of sale subject to, however, the refund of the tax paid (in put) on the previous purchase of goods. In fact, following heavy pressures from the international fiscal agencies, like World Bank, Asian Bank,
International Monetary Fund etc., the Government of India made an imposition to the State Governments to introduce the VAT Regime in the States without allowing thm to judge and opine on the propriety of dispensing with the prolonged heritage. The heavy pressure from the Govt. of India alerting against the providing monetary support etc. compelled the States to agree. Assam was the first State to welcome the proposal. The neighbouring territories like Bangladesh, Nepal, Pakisthan and Sree Lanka already introduced this system of VAT. These small countries found no difficulty to proceed on.
There is no denial of fact that VAT is a unique and methodical system of tax. It is self-designed and moved by self-driven wheels. That means, the success of VAT regime is entirely dependable on the honesty, sincerity and good will of all sections of people, traders and the tax machinery. India is a Federal structure of country with the conglomeration of as many as 28 part-States and 7 Union Territories. The Constitution provided power to the States to frame the sales tax law for levy, collection and augmentation of revenue vis-à-vis ensuring the growth of economy. The centre’s imposition to make uniform rates of tax of different commodities could not be rigidly maintained by the States, as the safe guard of public interest was equally imperative.It is pertinent to say a large section of people of Assam are illiterate or half literate. They are not capable enough to abide by the requirements, conditions and restrictions of the VAT law. The issue of ‘Tax Invoice’ and ‘Retail Invoice’ are not properly and rigidly enforced, which resulted in improper and inaccurate maintenance of accounts. So, this amounted to be a farce. The
claims of Input tax credit lack proper discipline. There is acute collusion and collaboration between the traders, customers and the tax machinery in the tax dodging episode on which no proper and adequate preventing, arresting and detecting measures have been enforced.
The main theme of the VAT is to levy tax at every stage of sales, but to the utter deviation of the said principle, the Govt. of Assam adopted the measure of tax at the stage of first sales on some commodities, like crude oil, petrol, diesel, petroleum products, tea, liquor, bitumen etc. in the VAT Law Assam. The incorporation of tax free sales of oil products between Oil Companies seem be detrimental to the ideology, norms and procedure of either the VAT regime or first point tax scenario. The system of payment of composition of tax on the production of brick (not on sale) , import of marble (not on sale) and on the total value of works contract (instead of transfer of property of goods) seems to abusive of the constitutional footing, as envisaged in Article 366 (29A) of the Constitution. The composition of tax levied and collected at source obviously created a systematic fracture in the process of realization of tax on subsequent sales and inter-State sales. The VAT regime was thus on the way of crack down the clock-wise deals. It is believed that the system of VAT regime did not yield the expected revenue generation scheme. The States like Assam is maintaining the revenue equilibrium on the first point sales of taxable goods. Assam is an industrially backward State. The major industries like oil sectors, tea sectors have been isolated in the VAT net of Assam. Any short supply of crude oil has the consequential effect of deficiency in collection of sales tax.
Goods and services tax
It has been learnt from the news media that the Government of India has proposed to introduce ‘the Goods and Services tax’ in the country in replacement of the present VAT regime from 1.4.2010. It may not, however, be done immediately, as the States are not central exercise duty and for that purpose, the Constitution will be amended. That means, the States are likely to lose matter of traditional sales tax revenue administration.
We expressed our apprehension before the VAT regime was proposed to be introduced projecting some ill consequences in the measure. Such apprehension, we believe partly accomplished. We also endorse our similar anxiety and apprehension on the proposed measure of ‘Goods and Services tax.’
We hope, the Government of India will not unilaterally take such a decision by the seizing the power of the State and consider it to be incumbent to hold marathon discussions with the States’ economists, intellectuals in a phase manner on this grave and austere thought provoking issue.

(Mrinal Kanti Chakrabartty)

HASTY DECISIONS MAY INVITE MORE COMPLICATION

The Indian sub-continent is on the point of a multifaceted volcano having possibility of eruption at any moment, which may result in unforeseen and unhealthy situation. The chronic burning problems of the country are already on the heels to create unrest and instability. An eruption may take place at any time, if the continued chronic problems are not handled with prudence and farsightedness. A trend of eventuality seems to be insight and the volcano in partial slumber, may awake up and erupt at any time. Immature but hasty decision may, no doubt, add fuels to the inner blazed flames of volcano to create catastrophe. The problems of the sub-continent at this stage are of manifolds. The unrest activities of the multifarious groups of ultras in different parts of the country are at present gaining the momentum. The trend of international threat of aggression by the nations, hostile to India, namely; Pakisthan and China already posed to be a cause of great agony and tension. The silent aggression by a section of illegal immigrants from the adjoining territory of Bangladesh and spread over the eastern sector of the Indian Territory more particularly in Assam with some obvious critical and vested aim in mind, has naturally posed to be a great threat to the indigenous people of the area. The said section of people are politically so alert and to whom the shower of blessings from the political level pour so heavily with the theme ‘safe guard the interest of the minority community’ that, it can be construed that it is intended to protect the ‘Vote Banks’. These immigrants use to roam in a separate world with some distinctive aims and objects. Though presently, Bangladesh maintains a good relationship with India under the dynamic stewardship of Shiekh Hasina with the ideology of her late lamented father Banga Bandhu Shiekh Mujibar Rahman, the mischief already caused can not be mended or repaired at this stage. The Bangladesh Government seems not keen to adopt the go back policy of such illegal immigrants from India; the counter part nation (India) also thinks twice to give a good bye and to evacuate the precious vote bank areas. These immigrants are eager to create an atmosphere detrimental to the existence and stability of the indigenous people of Northern States The regional indigenous people irrespective of any caste and creed are gradually forced to be made cipher on account of their deplorable pecuniary condition lack of diplomacy. None can say what their planned strategy is. Whether it is a prelude to expand the territorial base or to gain supremacy in the region. The problems, as cropped up, could have been averted, if the Government of India would have deported the unauthorized and illegal entrants, taking temporary shelter in the Indian soil to get rid of the violent Pakisthan militants, immediately after the liberation of Bangladesh. The people of the eastern sector of the sub-continent are now in doldrums for such imprudent act of the centre. A section of the indigenous people is after the power mongering exercises. The greed of power has the consequential aim to amass the black money. This is either for autonomy of the region or for separate statehood. The expenditure incurred is nominal, compared to the fund provision and the balance is normally pocketed. A section of the people is very much adamant over the question of independence and sovereignty. Presently, the ultra forces, like United Liberation Front of Assam ( ULFA) are adamant to acquire the independence of Assam with the banner of sovereignty. A section of Naga and Bodo militants are maintaining the same moto. There is dearth of knowledge on the concept of independence or sovereignty, as it is believed. The sentiment of cessation from the national net work may crop up, when the mass people of any region feel neglected by the apex Government, the prosperity of the same is legging behind or the political justice is not awarded to the people in representation and share of power in the apex Government. The people of Bangladesh experienced such odds and they initiated revolution within the soil, which ultimately succeeded. Of course India played a pivotal role in such exercise. Such an odd is not visible in Assam. Though initially, there was a sloth in the process of developmental activities, priority has been given after the Chinese aggression more particularly after six years of foreigners’ drive movement. The developmental works are being carried on in a phase manner on priority basis. This played a notable role to do away with the profound grievances of the people. The question of independence is not designed with any logical, legal and practical approaches and is, in fact, superfluous. The independence of Assam is not a matter of joke, as it is surrounded by other eight adjoining States and the buffer State Bhutan between India and China. Moreover, the ability and skillfulness of the independent seekers are to be reckoned. The screen of the Television and the circulated news media well ventilate what the role of 14 elected members in the Lok Sabha and 7 elected members in the Rajya Sabha. They are mostly the silent spectator within the four walls of the Houses of Parliament in the national and international debates. What sorts of qualitative outturn can be expected, if Assam is awarded independence? The ultras know how to kill innocent people, extract money by way of kidnapping and threatening. They lack proper diplomacy and ideology; otherwise they would not have taken shelter in Bangladesh against whom their primary modus-operandi was there. They have no idea or capability to run the administration. A chaos and conflict will naturally take place and the foreign power will take full advantage to over throw the Government and capture power. One must recall the eventuality at the end of weak administration in the Ahom regime of early 18th century, which helped the British traders to expand the trade base and to install power. The main leadership of ULFA have been apprehended and put behind the bar, but they are still vociferous over the question of independence of Assam. They are advocating for dialogue on the vital question of sovereignty or to arrange referendum to seek mass mandate over the question of liberation of Assam. Such referendum can not be expected to be free and fair. The mandate at gun point will get upper hand. The people of Assam irrespective of any class, creed and cadre are already the worst victims in the reign of terror for last 30 years. None has the moral support for the so called independence and sovereignty. The most tough question of this day is creation of more Statehood to provide political berth and economic soundness to a section of the aspirants. The Indian sub-continent already have twenty eight numbers of part States and seven numbers of Union territories. The part States have been provided with adequate power of autonomy in the State within the frame work of the Constitution of India. The Constitution vested some reserved -indispensible power to the Centre to ensure unity and integrity of the country. It has, of late, been noticed that there have been tremendous moves at different states for bifurcation of the existing States and creation of separate States. Telengana, Gokhaland, Bidarva,Harit Pradesh, Bunderkhand etc. are raising their demands for creation of new States. In Assam Bodo, Karbi, Dimacha, Garo are making agitation over the question of creation of new States. The Koch Rajbangshi people of undivided Goalpara district and five or six districts of West Bengal are demanding separate State under the banner of Kamatapur. As published in the news media, there is a base of such demand following an agreement of merger of Coochbehar territory with India, signed by the then King Jagadipendra Narayan Bhup Bahadur and the Government of India, which has been placed before the Hon’ble Supreme Court of India. It is not unlikely that the people of muslim majority areas may sometime come up with such demands in future. The last bifurcation vis-à-vis creation of new States took place on 15.11.2000. Ignoring all other instant claims, the Government of India recently decided to create a new State ‘Telengana’ in bifurcation of the State ‘Andhra Pradesh’. This apparently raised furor amongst the people of Andhra Pradesh and in protest against such a decision of the Government of India, numbers of cabinet ministers, elected representatives resigned by creating a political crisis. Not only that, voices of protests Bundhs episode etc. has already evoked from other parts by the aspirant for statehood. An unrest situation may as well crop over the question of haphazard decision. The creation of new State is a theoretical aspect. The practical aspect must be looked into. The resource potentiality, resource generation and resource mobility are the primary factor for creation of new Statehood. When a State is created, all sorts of requisite infrastructure must be available. In no case, such new State should be a burden to the centre, but a self dependent. In our view, when there were numbers of demands, Centre’s decision to create unilaterally the State of Telengana can not be termed as an act of maturity and prudence.