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ITC Limited
Schedules to the Consolidated Accounts
19. Notes to the Accounts (Contd.)
a petition dated 14th August, 2005 for administrative review with the Director General, Inland Revenue Department.
The Director General vide his Order dated 17th January, 2006 rejected the said petition. SNPL thereafter filed an
appeal to the Revenue Tribunal, which refused to entertain the appeal in the absence of a pre-deposit of the entire
sum. Immediately thereafter, SNPL filed a petition to the Tribunal praying that its appeal may be heard by accepting
a bank guarantee for the said amount. This petition was dismissed by the Tribunal on 11th August, 2006. SNPL has
challenged the demand in the Supreme Court of Nepal which has admitted the petition on 21st September, 2006 and
issued notices to the respondents on 16th October, 2006. The next date of hearing on the matter is on 3rd July, 2008.
(b) (i) A demand letter dated 7th August, 2006 in respect of Value Added Tax for INR 4.72 Crores (NRs. 7.55 Crores) was
issued to SNPL by the Large Taxpayers' Office, Kathmandu for the period 2001-02. The basis of the demand is on the
same lines as the Excise Demand. An administrative review petition on the Value Added Tax matter has been filed
before the Director General on 1st September, 2006. The Director General's order on the matter is awaited.
(ii) A demand letter dated 8th August, 2007 in respect of Value Added Tax for INR 3.58 Crores (NRs. 5.72 Crores) was
issued to SNPL by the Large Taxpayers' Office, Lalitpur for the period 2002-03. The Company has filed a writ petition
in the Supreme Court of Nepal on 11th September, 2007 requesting that the said demand order be quashed and orders
ssued such that the tax demand not be collected. The Supreme Court of Nepal admitted the petition on 12th September,
2007 and directed issue of Show Cause Notices to the respondents. The date of appearance at the court on the matter
is 11th June, 2008. A date of hearing will be fixed subsequently.
(c) (i) A demand letter dated 13th October, 2006 in respect of Income Tax for INR 10.54 Crores (NRs. 16.86 Crores) was
issued to SNPL by the Large Taxpayers' Office, Kathmandu for the period 2001-02. Of the total demand, the basis of
a demand for INR 10.05 Crores (NRs. 16.08 Crores) is on the same lines as the Excise Demand. SNPL has filed a
petition on 7th November, 2006 before the Supreme Court of Nepal requesting it to direct the authorities not to proceed
on the matter as it is pending before the same court in respect of the excise matter. The Supreme Court has admitted
the matter and issued notices to the respondents on 9th November, 2006. The date of hearing on the matter is 3rd
July, 2008.
(ii) A demand letter dated 12th August, 2007 in respect of Income Tax for INR 12.25 Crores (NRs. 19.61 Crores) was issued
to SNPL by the Large Taxpayers' Office, Lalitpur for the period 2002-03. The basis of the demand is on the same lines
as the Excise Demand. SNPL has filed a writ petition in the Supreme Court of Nepal on 11th September, 2007 requesting
that the said demand order be quashed and orders issued such that the tax demanded not be collected. The Supreme
Court admitted the petition on 12th September, 2007. The next date of appearance on the matter is 11th June, 2008.
The company considers that all the above demands have no legal or factual basis. This position is re-inforced by opinion
received from eminent counsel. Accordingly, the company is of the view that there is no liability that is likely to arise.
(d) A demand letter dated 22nd February, 2008 in respect of Excise Duty on similar lines issued by the Inland Revenue Office,
Simra was received on 29th February, 2008. The total demand of INR 9.34 Crores (NRis. 14.95 Crores) related to the years
2003-04 to 2005-06. The company had filed a writ petition in the Supreme Court of Nepal on 1st April, 2008 requesting
that the said demand order be quashed and tax demanded not be collected. The Supreme Court admitted the petition on
2nd April, 2008 and directed issue of Show Cause Notices to the respondents. The next date of appearance at the Supreme
Court is 2nd June, 2008.
For the years 1993-94 and 1994-95, revenue authorities raised a demand for INR 8.49 Crores (NRs. 13.59 Crores) on
theoretical production which was quashed by a division bench of the Supreme Court of Nepal (2 Judges) on 8th April,
1998. Government filed a review petition on 8th October, 1998 which was finally admitted by a full bench (3 Judges) on
22nd July, 2007. The matter is slated for a hearing on 12th June, 2008
. Other matters Rs. 47.63 Crores (2007 - Rs. 26.02 Crores).
(b) Guarantees and Counter Guarantees outstanding
Excise Rs. 5.77 Crores (2007 - Rs. 24.76 Crores)
. Others Rs. 9.67 Crores (2007 - Ps. 10.19 Crores)
(c) Uncalled liability on shares partly paid Rs. 3.13 Crores (2007 - Rs. 3.13 Crores).
(iii) The status on excise matters which is treated as an annexure to these accounts are as outlined in this year's Report of the Directors
of ITC Limited under the Excise section. In the opinion of the Directors, the Company does not accept any further liability.
150 ITC Report and Accounts 2008
Source: https://www.industrydocuments.ucsf.edu/docs/nnbx0223

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