No Proper Law

In an earlier letter (dated June 20, BS), I have explained that contrary to the governments advertisement, the Finance Act 1997, containing VDIS, confers no immunity under FERA. It was amazing to read the finance ministers categorical statement to reporters on June 21 that FERA defaulters will not be allowed to avail of VDIS.

But there appears to be no power in law under which the government can prevent a FERA defaulter from making a disclosure under VDIS to get immunity from defaults under the Income-tax law. The entire procedure for making a disclosure through the declaration under VDIS is automatic. No prior permission from any authority is required.

The very first step under Section 66 is that the required amount of tax should be paid and the declaration should be accompanied by proof of payment. The second step under Section 63 is that the amount disclosed should be credited in the books and the Assessing Officer informed accordingly. Thereafter under Section 68(2), the Commissioner is bound to issue the required Certificate.

Section 70 lays down that the tax paid is not refundable under any circumstances whatsoever. Once a FERA defaulter, who is eligible under the provisions of VDIS, has paid the non-refundable tax, the commissioner cannot deny the Certificate under Section 68 to him.

If there does exist any provision under any law under which a FERA defaulter can be prevented from availing of VDIS, the finance minister should bring it to the notice of the public. Otherwise he should clear the confusion by withdrawing his statement.