Daily News Analysis 14 June 2023

Table of Contents

GS-2

1. Tax law in the shadow of the higher judiciary

Facts for Prelims

1. New Development Bank (NDB)
2. Gilgit Manuscripts
3. Anak Krakatau volcano

Tax law in the shadow of the higher judiciary

Context:

1. India\’s law of taxation is based on two central principles: the requirement of legislative authorization and the principle of sureness.
2. These principles are derived from a commitment to the rule of law and values of legality and certainty.

Reversal of Judgments:

1. In the past year, the Supreme Court of India has undermined these principles by reversing well-reasoned judgments of High Courts and creating taxes without legislative support.
2. Two notable examples are judgments delivered by Justice M.R. Shah, who retired from the Supreme Court on May 15.

Judgment on Section 153C:

1. The case involved the retrospective effect of an amendment to the Income Tax Act.
2. Before the amendment, Section 153C allowed the Revenue to proceed against third parties in a search if the seized material \”belongs or belong to\” them.
3. Several High Courts interpreted this provision narrowly, requiring evidence that the material actually \”belongs\” to the person.
4. To overcome these decisions, the law was amended in 2015, replacing \”belongs\” with \”pertains or pertain to.\”
5. The Supreme Court reversed a verdict stating that the amendment could not have retrospective effect as it would affect vested rights.
6. However, the Court\’s reasoning is flawed as the amended law expands the provision and does not assert what was always the position.

Judgment on Notices of Reassessment:

1. The Court revived notices of reassessment issued without legislative authority by the Revenue.
2. These notices were declared invalid by various High Courts, but the Court revived them without allowing affected parties to present their cases.
3. The Court invoked its power under Article 142 of the Constitution to justify this action, even though it should not be applied in breach of statutory law.

Conclusion:

1. The Supreme Court\’s reversal of judgments and encroachment on legislative functions undermines the principles of legislative authorization and sureness in India\’s law of taxation.
2. By assuming the role of Parliament, the Court undermines the constitutional promise of no taxation without legislation.

This situation not only creates confusion but also leads to further litigation and disregards the rights of affected parties.

New Development Bank (NDB)

Context:
The President of Honduras has recently made a formal request for the country\’s membership in the New Development Bank (NDB), an institution led by the BRICS nations.

New Development Bank (NDB): An Overview

NDB, previously known as the BRICS Development Bank, is a special bank created by a group of countries called BRICS, consisting of Brazil, Russia, India, China, and South Africa. Here are some key points about the NDB:

Objective:

NDB\’s main purpose is to provide financial support for infrastructure and sustainable development projects in the BRICS countries and other emerging economies and developing nations.

Establishment:

1. The idea for the NDB was initially proposed during the 2012 BRICS Summit held in New Delhi, India.
2. The bank became a legal entity in 2015 and began its operations.
3. Headquarters and Regional Offices:
4. NDB\’s headquarters is located in Shanghai, China.
5. The bank has established regional offices in different countries, starting with Johannesburg, South Africa, followed by São Paulo, Brazil, and Moscow, Russia.

Capital:

1. NDB has an initial authorized capital of 100 billion dollars, and the initial subscribed capital is 50 billion dollars.

Membership:

1. Any member country of the United Nations has the opportunity to become a member of the NDB.

Governance Structure:

1. The bank is governed by a Board of Governors, which comprises the finance ministers from the five BRICS countries, and a Board of Directors.
2. Voting power within the Board is based on each country\’s shares in the bank.
3. While new members can join the NDB, the five BRICS countries will collectively retain a minimum of 55% of the total shares.

The NDB\’s management includes a presidency that rotates among the BRICS members and four vice presidents selected from the remaining BRICS countries.

Gilgit Manuscripts

Context

Recently, the National Archives of India organized an exhibition which exhibited the Gilgit Manuscripts.

Gilgit Manuscripts:

• Discovery of Gilgit Manuscripts in Naupur Village, Pakistan Occupied Kashmir:
• The Gilgit manuscripts were discovered in the Naupur village, located in the Gilgit region of Pakistan Occupied Kashmir.
• The archaeologist Sir Aurel Stein made this discovery in the year [insert specific year].

Characteristics of Gilgit Manuscripts:

• These manuscripts were written between the 5th and 6th centuries CE, making them quite ancient.
• They are considered the oldest surviving manuscript collection in the Indian Subcontinent.
• The manuscripts were written on birch bark folios, which are documents written on pieces of the inner layer of bark from birch trees found in the Kashmir region.
• They contain a mixture of canonical and non-canonical Jain and Buddhist works, shedding light on the evolution of religious and philosophical literature.

National Archives of India:

Historical Background and Construction:

1. The National Archives of India\’s present building was constructed in 1926 after the capital was transferred from Calcutta to Delhi in 1911.
2. It was initially established in 1891 in Kolkata (Calcutta) as the Imperial Record Department.

Ministry, Headquarters, and Responsibilities:

1. The National Archives of India operates under the Ministry of Culture and serves as its nodal agency.
2. Its headquarters are located in New Delhi.
3. The institution is responsible for implementing the Public Records Act of 1993 and the Public Record Rules of 1997.

Collections and Repositories:

1. The National Archives of India houses a vast collection of records, including files, volumes, maps, bills assented to by the President of India, gazettes, census records, assembly and parliament debates, proscribed literature, travel accounts, and more.

A significant portion of the archives consists of Oriental records in languages such as Sanskrit, Persian, Arabic, and others.

Anak Krakatau volcano

Context

Indonesia’s Anak Krakatau volcano erupted recently.

Anak Krakatau:

Location in Sunda Strait:

1. Anak Krakatau is an island located within a caldera in the Sunda Strait, which lies between the islands of Java and Sumatra in Indonesia.
2. A caldera is a large depression formed when a volcano erupts and collapses.

Origin and Connection to Krakatau Volcano:

1. Anak Krakatau, meaning \”the child of Krakatau,\” is the offspring of the famous Krakatau volcano.
2. The monumental eruption of Krakatau in 1883 led to global cooling.
3. In 1927, Anak Krakatau emerged from the caldera formed during the destructive volcanic eruption that obliterated the original Krakatau island.

Ujung Kulon National Park:

Location and Importance:

1. Ujung Kulon National Park is situated on the island of Java, in the province of Banten, Indonesia.
2. It is renowned as the last sanctuary of the one-horned Javan rhinoceros.

Geographical Features and History:

1. The park covers a remote region of low hills, plateaus, lagoons, and coastal dunes, spanning 475 square miles (1,229 square km) on a peninsula and nearby islands.
2. It borders the Sunda Strait, which separates Java from Sumatra, and includes Panaitan Island, located about 6 miles (10 km) northwest of the peninsula.
3. Initially designated as a nature reserve in 1921, it was officially established as a national park in 1992.
4. In 1991, it was recognized as a UNESCO World Heritage site.

Biodiversity and Threats:

1. Ujung Kulon National Park hosts the last remaining low-relief forest on Java, with dominant tree species including Ficus and Barringtonia.
2. The park is home to fewer than 60 Javan rhinoceroses, an endangered species threatened by poaching and disease.
3. Other notable species in the park include bantengs (wild cattle), Javan gibbons, langurs (leaf monkeys), muntjacs (barking deer), chevrotains (mouse deer), crocodiles, green turtles, green peacocks, and jungle fowl.

Unfortunately, the Javan tigers that once inhabited the area are believed to be extinct in recent times.