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Journalism of Courage
MUMBAI, July 3: A writ petition challenging the Voluntary Disclosure of Income Scheme VDIS has been filed in the Bombay High Court by the All India Federation of Tax Practitioners and V H Patil, a practising advocate, on the grounds that it is discriminatory against honest tax payers.
The declarant under the Scheme will pay much less tax in comparison to the honest tax payer as the maximum marginal rate of tax was never less than 40 per cent, the petitioners have submitted.
The petition is likely to come up for admission on July 7.
The petition has sought a declaration that the scheme is unconstitutional, violative of Article 14, and therefore void. They have sought a stay on the scheme during the pendency of the petition, and for ad interim reliefs before admission.
Under the VDIS 1997, the declarant will be taxed between 30 and 35 per cent in the case of companies, and 30 per cent in the case of individuals. In the past, the tax rate has been much higher, and the government should therefore be directed to refund to honest tax payers the difference, the petitioners have urged.
The petitioners have also tabulated hypothetically the amounts a company or individual would save if he declared undisclosed income under the scheme after having concealed it so many years. For instance, if a the chargeable income is Rs 1,00,000 for the assessment year 1993-94 to AY 1996-97, a partnership firm would save in all Rs 2,55,972, a Company in which the public is substantially interested would save Rs 3,05,572 and an individual would save Rs 47,680.
Besides stating that several amnesty schemes in the past did not succeed, the petitioners have also claimed that none of the earlier schemes conferred immunity in respect of proceedings relating to imposition of penalty or prosecution under the Companies Act, 1956.
The immunities granted on the FERA provisions in the VDIS 1997, are also unwarranted and disproportionate, they have said.
The petitioners have also objected to the reported move of the government to spend Rs 30 crore for the publicity blitz over the scheme. The respondents are spending honest tax payers8217; money to offer undue benefit to tax evaders, they have alleged.
