ITC weighing legal options on ordinance

ITC Ltd is looking into legal options in the wake of the government’s move to demand Rs 450 crore from the company in connection with e...

ITC Ltd is looking into legal options in the wake of the government’s move to demand Rs 450 crore from the company in connection with excise evasion after arming itself through an ordinance with power to modify past excise rules.

‘‘Our legal department is studying the ordinance. There is no other update from our end,’’ ITC spokesman S.H. Venkatramani told The Indian Express.

The ordinance, overriding a Supreme Court order of September 2003, requires ITC Ltd to pay Rs 450 crore, the dues left over from a Rs 803 crore excise claim.

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Interestingly, while ITC Ltd did not react to the Ordinance, the Indian Chamber of Commerce (ICC) Kolkata President Anup Singh, who is a director on the ITC board, said in a strongly-worded statement that the government should revisit the ordinance.

Singh said, ‘‘The industry is shocked at the way excise rules are being changed with retrospective effect through an Ordinance to negate the ruling of the highest court in India.’’

According to Harvansh Chawla, managing partner, K.R. Chawla and Company, the Union government has a right to issue Ordinances with retrospective effect.

‘‘This can be done to collect revenues as taxes. Way back in 1963, in Rai Ramakrishna versus State of Bihar case, a full bench of the Supreme Court held that the government can pass such a retrospective Ordinance,’’ Chawla added.

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