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    SBS Wiki E Journal March 2022

    In this edition, we bring you, the second part of the article on the understanding of the depth of the most litigative entry in the indirect taxation sphere, which is agreeing to the obligation to refrain from an act or tolerate an act or to do an act.

    The next article is on the changes to the existing faceless assessment scheme thereby clearing ambiguities and providing more clarity.

    We hope that you will have good time reading this edition and please do share your feedback. I will also urge clients to mail us topics or issues on which you want us to deliberate in our future editions, so that we can contribute to the same.

    Key Topics

    GST

    • AMBIT OF ‘AGREEING TO OBLIGATION TO REFRAIN FROM ACT OR TOLERATE AN ACT OR TO DO AN ACT’ - PART II

    DIRECT TAXES

    • REPLACEMENT OF FACELESS ASSESSMENT SCHEME
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    Updates in Labour Laws

    Jurisdiction in ‘Work From Home’ Situations:

     

    • In Mangala A G vs. HIL (India) Limited [Kerala HC WP(C) No. 2342/2021 26.11.2021], the question that has arisen for consideration is, what would be the jurisdiction of court in the case of employee who is working from home. The court stated that the question that now boils down to whether mere permission to work from home is sufficient to confer jurisdiction on the court, within whose jurisdiction the employee was working.
    • The Court further stated that, if each person who works from home is permitted to raise their objection from his territorial jurisdiction, definitely, it may confer jurisdiction on umpteen number of Courts and may call upon the employer to face litigation in different jurisdictions.
    • However, as the situation changes and telecommuting or work from home becomes a permanent feature, unlike the temporary phase that has arisen at present, wherein, as a part of contract of employment, persons who are freshly recruited are permitted to remain in different stations and work from there, with facilities being provided by the employer or where the employer pro-actively encourage the employee to improve the business there and/or provides facilities, in that jurisdiction, the situation may be different. The employer, in such cases will be free to include appropriate clause relating to jurisdiction in the contract of employment.
    • In the above circumstances, the legal position seems to be very clear that, when a person is permitted to work from home merely as a concession or a convenience, place from where the person so work is not sufficient to confer any jurisdiction.

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    The Story of Most Favored Interpretation of MFN Clause in Treaties

    Introduction

    This article aims at understanding the concept of Most Favored Nation (‘MFN’) clause in the Double Taxation Avoidance Agreement (‘DTAA’ or ‘Treaty’) between India and other countries, issues and controversies therein.

    A country enters into treaty with other country for various purposes, the main object of which is for elimination of double taxation by way of sharing/forgiving taxation rights in respect of income earned by assessee.

    As there is a requirement to share/forgive taxation rights by two countries, treaty may be concluded on different terms with different countries. In order to protect the interest of the countries for sharing taxation right, some countries may insert MFN clause in the treaty between them.

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    Succession by Female – Prior to Hindu Succession Act – SC answers in Aurnachala Gounder

    The recent decision of Honourable Supreme Court in matter of Aurnachala Gounder v. Ponnusamy[1] has reiterated the rights of a female for succeeding to the property in absence of a male issue, though the succession happened prior to the enactment of Hindu Succession Act, 1956. The matter revolves around, who would be the successor to the self-acquired of the father who has only a daughter or brother’s son. The trail court and high court have held that the property would devolve by survivorship instead of succession. Since the father does not have any male issue and the daughter has deceased without any issue, the property would devolve by survivorship on the son of deceased brother. The next question that has come up is, if the property is to be devolved by succession to the daughter, how would the succession happen post her demise. The Supreme Court after referring to the various commentaries and judicial precedents has held that the self-acquired property would devolve on the daughter through succession and not to brother’s son by survivorship, despite of the fact that the succession happened prior to the enactment of Hindu Succession Act. In this article, we shall analyse the fact, the observations of trail and high court and the ultimate ruling by the Supreme Court.    

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    Ambit of ‘Agreeing to Obligation to Refrain from Act or Tolerate an Act or To Do an Act’ – Part I

    When the positive list of taxation under service tax laws was done away with the introduction of negative list, a new concept of ‘declared services’ was introduced with effective from 01 July 12. Declared services are list of activities or transactions, which were specifically covered under the definition of ‘service’ under the pre-GST[1] laws to clear away the ambiguity, if any, and to drive home the point that such activities or transactions are also services. When the negative list was phased out with the advent of GST laws, majority of the entries of declared services were carried and incorporated into GST laws vide Schedule II of CT Act[2].  

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