Act/Law wise: Judgment of Supreme Court of Bangladesh (AD & HCD)



Income Tax Rules, 1984
Section/Order/ Article/Rule/ Regulation Head Note Parties Name Reference/Citation
Rule 16

Income Tax Ordinance, 1984
Section 52
Income Tax Rules, 1984
Rule 16
Bank guarantee— FDRs are equivalent to cash margin— Charging commission at the rate of 0.50% on the entire amount of bank guarantees— Bank guarantee means a comfort, which is being given by issuing bank, to a party (beneficiary in whose favour the guarantee is issued) of losses or damages if the client (on whose behalf the guarantee is being used) fails to complete or comfort to the terms of agreement. By issuing a bank guarantee, the issuing bank is assuring payment of the certain amount of money (as specified in the bank guarantee) to the beneficiary in case of non-performance of a certain contract according to the terms and conditions contained in the same. Issuance of bank guarantee is a secured transaction as the client needs to mortgage the properties or cash in the form of FDR for issuing of same. The bank will not give guarantee without securing itself. Again, when the borrower provides equal amount of bank guarantee in the form of fixed deposit/call deposit, it is known as 100% cash margin since the fixed deposit can be closed immediately and the default if any can be set right without any delay and the bank need not provide any fund based loan for this purpose and for this characteristics the FDR must be treated as equivalent to 100% cash margin.
It appears from the record that the entire twenty five bank guarantees have been secured by the lien of those FDRs. Though Circular No.1750 dated 23.05.1992, which re-affirmed the Circular No.1667 dated 04.12.1990, stated that Janata Bank can issue a bank guarantee on the basis of commission @ প্রতি তিনমাস অথবা উহার ভগ্নাংশের জন্য $ ০.৭৫% হারে। সর্বনিম্ন $ ২০০/-, ১০০% গ্যারান্টি মার্জিন প্রদান করিলে শুধুমাত্র সার্ভিস চার্জ $ ২০০/- আদায়যোগ্য but the rate of commission was reduced at 0.50% as incorporated in the sanction letter. In the instant case, since entire twenty five bank guarantees have been secured by the FDRs as such the bank guarantees are secured by 100% cash margin. Again, since the bank guarantees are secured by the lien of those FDRs which can be encashed at any time as such the FDRs are equivalent to cash margin. So, the Janata bank is entitled to get Tk.200/- as service charge as per the chart attached with the Circular No.1750 dated 23.05.1992.
Appellate Division is of the view that the letter issued by the writ respondent no.10 claiming deduction of commission @ 0.50% on the entire secured amount cannot be treated as lawful deduction as such the judgment and orders dated 09.02.2014 and 10.02.2014 passed by the High Court Division in Writ Petition No.4715 of 2013 do not calls for any interference by this Division. .....Janata Bank Limited =VS= Sampriti Chakma, (Civil), 2024(1) [16 LM (AD) 50] ....View Full Judgment

Janata Bank Limited =VS= Sampriti Chakma 16 LM (AD) 50
Rule 59A (2)

The Income Tax Ordinance, 1984
Section 46A(2)(f)
The Income Tax Rules, 1984
Rule 59A (2)
The finance Act, 1995
The gazette notification was not operated by giving retrospective effect as such applications seeking exemption by the company were rejected justly and correctly by the NBR– From the SRO 354 dated 02.12.1999 it appears that the gazette notification was not operated by giving retrospective effect as such applications seeking exemption by the petitioner company were rejected justly and correctly by the NBR inasmuch as the ‘container terminal’ of the petitioner company was not entitled to get tax exemption before publication of gazette notification dated 02.12.1999. As the ‘container terminal’ in question was not within the purview of physical infrastructure facility when the petitioner company filed application seeking tax exemption and thus the NBR justly and legally rejected the application for exemption and also correctly rejected the review application dated 31.01.2000 seeking review of earlier order dated 18.10.1999 since there left no scope to review of that application by the NBR. Appellate Division holds that the SRO No.354-Ain/99 dated 02.12.1999 having effect from the date of its publication left no scope to allow tax exemption to the ‘Unit-2’ of the respondent company and the NBR justly and legally rejected the applications filed by the respondent company. The appeal is allowed. .....Ministry of Finance, Bangladesh =VS= Ocean Containers Ltd, Dhaka, (Civil), 2022(1) [12 LM (AD) 97] ....View Full Judgment

Ministry of Finance, Bangladesh =VS= Ocean Containers Ltd., Dhaka 12 LM (AD) 97