List of Current Affairs

Source: Delhi High Court   

Why in News?  

A bench of Justices Prathiba M. Singh and Dharmesh Sharma has held that the Baggage Rules, 2016 should be revised based on the amount of gold or gold jewellery that can be carried by a person travelling to India by air to prevent the harassment of the genuine air Travellers. 

• The Delhi High Court held this in the case of Qamar Jahan v. Union of India, Represented by Secretary, Ministry of Finance & Ors. (2025). 

What was the Background of Qamar Jahan v. Union of India, Represented by Secretary, Ministry of Finance & Ors. Case?   

• The case is titled Qamar Jahan vs. Union of India and was filed as Writ Petition in the Delhi High Court. 
• The petitioner challenged two orders: 
  • Order-in-Original issued by the Joint Commissioner of Customs. 
  • Order-in-Appeal issued by the Commissioner of Customs (Appeals). 
• The Joint Commissioner of Customs, in the Order-in-Original: 
  • Ordered the confiscation of two gold kadas and one gold chain belonging to the petitioner. 
  • Imposed a redemption fine of Rs. 75,000/- 
  • Levied a personal penalty of Rs. 1,10,000/- under the Customs Act, 1962 (CA). 
• The petitioner appealed against the Order-in-Original to the Commissioner of Customs (Appeals). 
• On 24^th September 2024, the Commissioner of Customs (Appeals) dismissed the petitioner's appeal. 
• The case involves the interpretation and application of the Baggage Rules, 2016, which: 
  • Came into force on 1st April 2016. 
  • Were passed under Section 79 of the CA. 
  • Define permissible limits for bringing jewelry into India. 
  • Set different weight and value caps for male and female passengers. 
  • The matter involves questions regarding the declaration and carrying of personal jewelry by travelers entering India. 

What were the Court’s Observations?  

• The Delhi High Court made the following observations:  
  • Regarding Declaration Requirements: 
    • The Court noted that when travelers carry jewelry exceeding prescribed limits, they must declare it. 
    • Upon declaration, no duty payment is required, but travelers must provide an undertaking stating they intend to carry the declared jewelry back. 
    • However, the court observed that this declaration requirement is not clearly explained in either the Baggage Rules or the Declaration Form. 
  • Issues with Current Rules: 
    • The Court found that even small quantities of jewelry are sometimes seized from passengers using the green channel (meant for non-dutiable goods). 
    • The value caps in the Baggage Rules were observed to be outdated considering current gold prices. 
    • The Court specifically noted that with the Rs. 1,00,000/- limit, only about 15 grams of gold could be purchased, far below the 40-gram weight limit. 
  • Concerns about Implementation: 
    • The Court expressed concern about Customs officials having too much arbitrary power and discretion. 
    • This discretion could potentially lead to harassment of genuine passengers. 
    • The Court acknowledged the Customs Department's concern about frequent travelers potentially smuggling gold. 
  • Balance Needed: 
    • While recognizing the need to curb illegal gold smuggling, the court emphasized that genuine tourists/travelers shouldn't face harassment. 
    • Special mention was made of Indian Origin travelers (OCI Cardholders, PIOs) who might visit for social events like marriages. 
    • The court felt that requiring detailed declarations could make the airport entry/exit process unfriendly and burdensome.  
  • Need for Rule Revision: 
    • The Court observed that the Baggage Rules need to be reconsidered by the CBIC. 
    • Current gold value limits were found to be out of sync with market prices. 
    • The rules need updating to balance preventing smuggling while not harassing genuine travelers. 
• The court's observations led to a direction for reconsideration of the Baggage Rules 2016 by the Chairman, CBIC, in coordination with other relevant departments and ministries. 

What are the Baggage Duty Exemptions and Regulatory Framework under Section 79 of CA? 

Duty-free Allowances  

• Personal Use Articles: 
  • For Passengers and Crew Members: 
    • Articles demonstrating prior use for specified minimum period. 
    • Subject to customs officer's satisfaction regarding duration of use. 
• Personal and Gift Items: 
  • Permitted Categories: 
    • Articles for passenger's personal use. 
    • Articles for passenger's family use. 
    • Bona fide gifts. 
    • Souvenirs. 
• Value Restrictions: 
  • Individual article value must not exceed prescribed limits. 
  • Aggregate value must comply with specified total limits. 

Rule-Making Authority 

• Central Government Powers: 
  • Authority to formulate rules for: 
    • Implementation of section provisions. 
    • Specification of detailed requirements. 
    • Establishment of procedural framework. 
  • Specific Areas of Rule-Making: 
    • Authority to specify minimum period of use. 
    • Applicable to passenger and crew baggage. 
    • Power to set maximum value per article. 
    • Authority to establish aggregate value limits. 
    • Applicable to duty-free allowances. 
    • Pre-clearance requirements. 
    • Post-clearance obligations. 
    • Procedural compliance measures. 

Differential Treatment 

• Classification Authority: 
  • Power to establish different rules for: 
    • Various categories of persons. 
    • Different classes of travelers. 
• Implementation Flexibility: 
  • Authority to: 
    • Create distinct regulatory frameworks. 
    • Apply varying standards. 
    • Establish class-specific requirements. 

Discretionary Powers 

• Customs Officer Authority: 
  • Powers include: 
    • Evaluation of usage duration. 
    • Assessment of intended use. 
    • Verification of gift/souvenir status. 
    • Determination of value compliance. 
• Satisfaction Requirement: 
  • Officer must be satisfied regarding: 
    • Authenticity of claims. 
    • Compliance with prescribed conditions. 
    • Adherence to value limitations. 

What Are Customs Duty Regulations for Personal Imports As per the Baggage Rules 2016? 

• These regulations cover the limits and restrictions provided under Rules 3, 4 and 6 of the Baggage Rules provided under Annexure 1: 
  • Rule 3: Passenger arriving from countries other than Nepal, Bhutan or Myanmar 
  • Rule 4: Passenger arriving from Nepal, Bhutan or Myanmar 
  • Rule 6: Transfer of residence 

General Duty Structure for Excess Baggage  

• Standard Duty Rate: 
  • Basic customs duty shall be levied at 35%. 
  • Additional education cess shall be imposed at 3%. 
  • Effective cumulative duty rate shall be 36.05%. 
• Calculation Methodology: 
  • For items exceeding duty-free allowance: 
    • Duty shall be calculated only on the excess value. 
    • Base value shall be the amount exceeding free allowance. 
• Special Categories: 
  • Alcoholic Beverages 
    • Basic customs duty: 150%. 
    • Additional customs duty: 4%. 
    • Duty calculation as per Commercial Import Rules under Customs Tariff Act, 1975. 
  • Tobacco Products: 
    • Basic customs duty: 100%. 
    • Additional cess: 3%. 
    • Tariff calculation under Customs Tariff Heading 98.03. 

Gold And Silver Import Regulations  

• Eligibility Criteria: 
  • The following persons may import:  
    • Passengers of Indian origin. 
    • Holders of valid passports issued under the Passports Act, 1967. 
  • Residency Requirements 
    • Mandatory foreign stay: 
      • Minimum period of six months abroad. 
      • Short visits allowance:  
        • Total duration not exceeding 30 days. 
        • Such visits shall not affect eligibility. 
  • Import Conditions: 
    • Duty Payment: 
      • Must be paid in convertible foreign currency. 
      • Current rate: 10% plus 3% additional duty. 
    • Quantity Restrictions:  
      • Gold (including ornaments): Maximum limit is one kilogram per passenger. 
      • Silver: Maximum limit is ten kilograms per passenger. 
• Import Procedures: 
  • Time Limitations:  
    • At time of arrival, or 
    • Within fifteen days of arrival. 
  • Alternative Import Method: 
    • May take delivery from authorized customs bonded warehouses:  
      • State Bank of India. 
      • Minerals and Metals Trading Corporation Ltd. 
• Declaration Requirements: 
  • Mandatory filing of prescribed declaration form. 
  • Declaration must be made before proper customs officer. 
  • Intent to take delivery from bonded warehouse must be declared. 
  • Duty payment required prior to customs clearance. 
• Valuation Methodology: 
  • Based on U.S. Dollar valuation. 
  • Conversion rates as per M.F. (D.R.) notifications. 
  • Bi-monthly revision of tariff values and conversion rates. 

Rule 5: Jewlery 

• This rule states that a passenger residing abroad for more than one year, on return to India, shall be allowed clearance free of duty in his bona fide baggage of jewellery upto a weight, of twenty grams with a value cap of fifty thousand rupees if brought by a gentleman passenger, or forty grams with a value cap of one lakh rupees if brought by a lady passenger. 

Source: Delhi High Court 

Why in News? 

A bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela set aside the order passed by Income Tax Appellate Tribunal which decided grounds that did not arise from the order passed by Commissioner of Income Tax (Appeals)     

• The Delhi High Court held this in the case of Divine Infracon Pvt. Ltd v. PR Commissioner of Income Tax 3 (2025). 

What was the Background of Divine Infracon Pvt Ltd v. PR Commissioner of Income Tax 3 Case?  

• The Assessee in this case was engaged in real estate development and hotel operations. 
• Search and seizure operations under Sections 132 and 133A of the Income Tax Act, 1961 (IT Act) were conducted in connection with the Jagat Group of cases, including the Assessee's business premises in Dwarka, New Delhi. 
• The Assessee's case was centralized with the Assessing Officer (AO), Central Circle-09, New Delhi, under Section 127 of the Act. 
• The AO issued a notice under Section 153A of the Act, requiring the Assessee to file returns, including for Assessment Year (AY) 2009-10. 
• The Assessee responded by stating that its original return filed under Section 139(1) on 28th October 2009 should be considered for AY 2009-10. The Assessee also objected to the Section 153A proceedings, claiming no incriminating material was found during the search. 
• The AO rejected the Assessee’s objections, determining an income of ₹4,30,00,000 for AY 2009-10 due to unsecured loans from three entities: 
  • Index Securities & Research Pvt. Ltd.: ₹1,00,00,000 
  • Attractive Finlease Ltd.: ₹30,00,000 
  • Trans National Growth Fluid Ltd.: ₹3,00,00,000 
• The AO added ₹4,30,00,000 as unexplained cash credits under Section 68 of the Act, concluding these were accommodation entries managed by Jain Brothers. 
• The Assessee appealed to Commissioner of Income Tax (Appeals) (CIT(A)), challenging the assessment on several grounds. The appeal was decided on a single ground, stating Section 153A was inapplicable as no incriminating material was found during the search. 
• The Revenue appealed to the Income Tax Appellate Tribunal (ITAT) against the CIT(A)'s order. The ITAT allowed the Revenue’s appeal, reinstating the AO's assessment order. 
• The Assessee has now challenged the ITAT's order dated 07.02.2024 in the present appeal. 

What were the Court’s Observations?  

• The Court observed that the CIT(A) decided the Assessee's appeal solely on the inapplicability of Section 153A of the Income Tax Act due to no incriminating material being found during the search and did not address the merits of the addition of ₹4,30,00,000 under Section 68. 
• The Court held that ITAT decided on the addition under Section 68, which did not arise from the CIT(A)’s order and was not argued before it. 
• The Court made the following observations: 
  • The Court held that ITAT erred in addressing the addition under Section 68 without the CIT(A) ruling on it. 
  • It was further held that the CIT(A) did not adjudicate whether the addition of ₹4,30,00,000 as unexplained credit was valid. 
• Finally, the following ruling was rendered by the Delhi High Court: 
  • The Delhi High Court Set aside the ITAT’s order concerning the addition of ₹4,30,00,000. 
  • The Court restored the Assessee’s appeal to the CIT(A) for adjudication on grounds not decided earlier. 

What are the Types of Taxes in India? 

• There are two types of taxes: direct tax and indirect tax.  
• Direct Taxes: Direct taxes are levied directly on an individual's or organization's income or wealth. These are paid directly to the government by the taxpayer. These are as follows:  
  • Income Tax: Imposed on individuals, Hindu Undivided Families (HUFs), and businesses based on their income.  
  • Corporate Tax: Levied on the net income or profits of companies.  
  • Capital Gains Tax: Charged on profits earned from the sale of capital assets like property, stocks, or bonds. It can be:  
    • Short-term capital gains tax (STCG)  
    • Long-term capital gains tax (LTCG)  
  • Securities Transaction Tax (STT): Tax on transactions in the stock market, like the sale or purchase of equity shares.  
  • Dividend Distribution Tax (DDT): Paid by companies distributing dividends (abolished in 2020 and shifted to shareholders).  
  • Wealth Tax: (Abolished in 2015) Previously levied on an individual's net wealth exceeding a certain threshold.  
• Indirect Taxes: Indirect taxes are levied on goods and services and are included in the price of goods and services, paid indirectly by the consumer. Following are the types of indirect taxes:  
  • Goods and Services Tax (GST): A comprehensive tax on the supply of goods and services, subsuming several other indirect taxes. It includes:  
    • CGST: Central Goods and Services Tax  
    • SGST: State Goods and Services Tax  
    • IGST: Integrated Goods and Services Tax  
    • UTGST: Union Territory Goods and Services Tax  
  • Customs Duty: Levied on goods imported into or exported from India.  
  • Stamp Duty: Charged on legal documents such as property sale deeds.  
  • Entertainment Tax: (Subsumed under GST in most cases) Previously levied on movie tickets, events, etc.

What is Income Tax Act, 1961?

• Taxation in India is based on two precepts: 
  • Firstly, based on the mandate of COI that no tax shall be levied or collected except by authority of law. 
  • Secondly, it is based on the principle of sureness, that any tax levied ought not to be vague, must be consistent and predictable. 
• The Income Tax Act 1961 is a comprehensive legislation in India that governs the taxation of income for individuals and businesses.  
• It came into effect on April 1, 1962, and provides the framework for calculating, levying, and collecting income tax and super-tax in the country.  
• The Act defines important concepts like the previous year (when income is earned) and assessment year (when income is taxed) and establishes the structure for tax authorities, assessments, and appeals to higher courts.

What is Section 68 of the Income Tax Act, 1961?

• Any sum credited in the assessee's books for a previous year, without a satisfactory explanation regarding its nature and source, can be taxed as the assessee's income for that year. 
• For companies (excluding those substantially owned by the public), share application money, share capital, share premium, or similar amounts will be deemed unexplained unless: 
  • The resident in whose name the credit is recorded also provides an explanation about the nature and source of the credited sum. 
  • The explanation provided is found satisfactory by the Assessing Officer. 
• The above rule does not apply if the credited person is a venture capital fund or venture capital company as defined under Section 10(23FB) of the Act.

Source: Punjab & Haryana High Court 

Why in News? 

Justice N.S Shekhawat held that a company cannot invoke Article 20(3) of the Constitution of India,1950 (COI) to refuse to produce summoned documents unless it satisfies the provision's conditions. Article 20(3) protects individuals from self-incrimination when accused of an offense under compulsion.  

• The Punjab & Haryana High Court held this in the case of LSE Securities Ltd v. Jaswinder Singh Kapoor (2025). 
• The court clarified that this protection applies only when there is an accusation, compulsion, and self-incriminating evidence. 

What was the Background of LSE Securities Ltd v. Jaswinder Singh Kapoor Case? 

• LSE Securities Ltd, incorporated on 07th January 2000 and registered with the Registrar of Companies, is a subsidiary of Ludhiana Stock Exchange Limited engaged in stock broking business. 
• During the company's AGM held on 15th January 2012, K.K. Puri and Naresh Sareen were appointed as Directors through majority voting. 
• Subsequently, on 25th January 2013, Jaswinder Singh Kapoor filed a complaint against LSE Securities, K.K. Puri, Naresh Sareen, and other company officers. 
• The complaint alleged that Jaspal Singh and Sanjay Anand, in connivance with co-accused, had forged signatures of various members to obtain proxies and vote in favor of K.K. Puri and Naresh Sareen. 
• The complainant filed an application seeking summons for the concerned clerk of LSE Securities Limited to produce records including proxies, resolutions, voter lists, and polling records from the election. 
• On 27th February 2013, the trial Court allowed the application for summoning the clerk along with the requested records. 
• The petitioner/accused filed an application claiming privilege over the records, arguing they were confidential in nature. 
• After the trial Court dismissed their privilege claim on 13th September 2013, the petitioner filed a revision petition before the Sessions Judge, Ludhiana. 
• The Sessions Court declined to exercise revisional powers, ruling the trial Court's order was interlocutory in nature. 

What were the Court’s Observations? 

• The Court found no merit in the petitioner's claim that the summoned records were of a sensitive nature, containing signatures of company members holding substantial bank deposits. 
• The Court noted that the trial Court had only directed the clerk concerned, who was not an accused, to appear as a witness with the relevant election records. 
• The Court observed that Article 20(3) protection against self-incrimination applies only when three conditions are met:  
  • Accusation of an offense 
  • Compulsion to provide evidence 
  • Self-incriminating material relating to accusations 
• The Court observed that none of the accused were compelled to produce documents or make incriminating statements - only the record keeper was required to produce documents. 
• The Court determined that privilege can only be claimed where State interest is involved or there is a threat to national security, which was not applicable in this case. 
• The Court concluded that the documents requested were necessary to throw light on the controversy and aid the trial Court in adjudicating the issues involved in the complaint. 
• The Court found that the trial Court and Additional Sessions Judge's orders were based on correct appreciation of facts and law. 

What is Article 20(3) of the Constitution of India? 

• Article 20(3) embodies the fundamental principle that an accused person cannot be compelled to give testimony or produce evidence that could potentially incriminate them, protecting against forced self-incrimination during criminal proceedings. 
• For Article 20(3) protection to apply, three essential conditions must be met simultaneously:  
  • (i) The person must be accused of an offense. 
  • (ii) There must be an element of compulsion to provide evidence. 
  • (iii) Such evidence must be of a self-incriminatory nature relating to the accusations against them. 
• As clarified by the Supreme Court in State of Bombay v. Kathi Kalu (1961), mere mechanical production of documents that may shed light on the controversy does not amount to self-incrimination unless they contain personal knowledge or statements of the accused - thus distinguishing between testimonial and non-testimonial evidence under Article 20(3)'s protection. 
• It works on the legal maxim nemo teneteur prodre accussare seipsum – It states that a man cannot be compelled to state any self-incriminating statement. 

Can Companies Claim Protection Under Article 20(3) of the Constitution? 

• Scope and Basic Protection: 
  • Article 20(3) provides fundamental protection against self-incrimination to both individuals and companies accused of offenses. 
  • The protection extends to persons and entities from being compelled to be witnesses against themselves in criminal proceedings. 
• Essential Requirements: 
  • For Article 20(3) to apply to companies, three conditions must be met:  
    • The company must be formally accused of an offense. 
    • There must be a compulsion to provide evidence. 
    • The evidence must be self-incriminatory in nature. 
• Documentary Evidence: 
  • Mere mechanical production of business documents or records by a company does not amount to self-incrimination. 
  • Only documents containing personal knowledge or testimonial statements from company officials that could incriminate the company fall under Article 20(3)'s protection. 
• Employee Protection: 
  • Company employees who are not accused cannot claim Article 20(3) protection when asked to produce company documents. 
  • Record keepers or clerks of the company can be compelled to produce documents as they are not personally accused. 
• Limitations: 
  • Companies cannot claim privilege over routine business records or documents that don't contain incriminating personal knowledge. 
  • The protection does not extend to documents that merely throw light on points of controversy but don't contain self-incriminatory statements. 
• Compulsion Aspect: 
  • The protection applies only against compelled testimony or evidence. 
  • Voluntary production of documents or statements by company officials is not protected under Article 20(3).