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Showing 41 to 60 of 647 Records
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2005 (9) TMI 658 - KARNATAKA HIGH COURT
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... ... ..... t order which was not based on any concession by the assessee. Concealment of income in the return filed by the assessee is a glaring fact, in the instant case. It is not possible to infer any agreement by the Revenue, either in clear terms or by necessary implication, to act on the basis of the assessee’s letter. The assessee has to thank himself that the Income tax Officer levied the minimum penalty only” 9. In view of the law declared by the Apex Court as well as this Court, in our opinion, the Tribunal was not justified in coming to the conclusion, that merely because the department had agreed not to levy penalty under Section 271(1)(c) of the Act, it would not prevent the Assessing Authority to proceed to levy penalty under Section 271(1)(c) of the Act for concealment of income made by the assessee. In that view of the matter, the question of law referred for our consideration and opinion is answered in negative and against the assessee. Ordered accordingly.
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2005 (9) TMI 657 - CESTAT NEW DELHI
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... ... ..... of service tax liability.” It was held that service tax was liable to be paid on the gross billed amount. 3. It appears from the definition of value of the taxable service under Section 67(v) that it is the gross amount which is charged by the agency from a client for the services rendered which is required to be taxed. As regards security personnel, the nature of the service is of only making provision for arranging the security personnel. It is activity of providing security personnel which would be services. Therefore, prima facie, salary payable to the security personnel would stand on a different footing than the services provided by the security agency to procure the security personnel for the client. The impugned order is, therefore, stayed during the pendency of the appeal and there shall be waiver of pre-deposit of the amount payable under the impugned order. 4. This application stands disposed of accordingly. (Dictated and pronounced in open Court)
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2005 (9) TMI 656 - SUPREME COURT
Advertisement for filling up the post of Primary School Teachers - denied awarding marks against the training qualification as they were not holders of Junior Basic Training/Primary Teachers Training Certificate (JBT/PTTC) - Recruitment and Leave of Teachers in Primary Schools in West Bengal - HELD THAT:- It is clear that the circular was issued permitting the incumbents to draw higher pay scales because they were teaching for a long time in the institution without qualification of JBT/PTTC. This argument is not tenable because it is well settled principle of law that circular cannot override the rules occupying the field. This apart, Rule 35 of the rules, as referred to above, repeals all previous rules and orders and therefore after the recruitment rules came into force in 1991 the circular of 1971 relied on by the counsel is non est.
The rules purposely laid an emphasis that all the candidates for teachers in primary schools who possessed JBT/PTTC should be appointed for the development of the child. The primary education is upto 4th standard. There is a middle education and then secondary and higher secondary education. For teaching in the primary school, therefore, one must know the child psychology and development of a child at tender age. As already noticed, the candidates like the appellants who are trained in B.Ed degree are not necessarily to be equipped to teach the students of primary class. They are not trained and equipped to understand the psychology of a child of tender age. It is in this context, Rule 2(n), Rule 6 and Rule 9 are to be read in conjunction.
Rule 2(n) defines trained candidate. The term 'trained candidate' if read and understood in the context of appointment of teachers in the primary school, would mean a candidate who possessed JBT/PTTC. Rule 6(d) as quoted above expressly put a prohibition that no extra credit shall be given to higher academic qualification for the purpose of selection of a teacher. A conjoint reading of Rule 2(n) and Rule 6(d) would make up abundantly clear that for appointment of a teacher in primary school only the candidates who possessed the academic qualification prescribed under the rules JBT/PTTC shall be considered and the candidates like the appellants who possessed higher academic qualification like BA/B.Ed shall not be given any credit.
Thus, we find no merit in this appeal. The same is accordingly dismissed with no order as to costs.
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2005 (9) TMI 655 - SUPREME COURT
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... ... ..... that Courts are not powerless or helpless. Section 38 of the Advocates Act provides that even in disciplinary matters the final Appellate Authority is the Supreme Court. Thus even if the Bar Councils do not rise to the occasion and perform their duties by taking disciplinary action on a complaint from a client against an advocate for non-appearance by reason of a call for strike or boycott, on an Appeal the Supreme Court can and will. Apart from this, as set out in Roman Services' case, every Court now should and must mulct. Advocates who hold Vakalats but still refrain from attending Courts in pursuance of a strike call with costs. Such costs would be in addition to the damages which the Advocate may have to pay for the loss suffered by his client by reason of his non-appearance." Apart from reiterating the above law, we do not propose to take any further action. The Contempt Notices stand discharged. The Contempt Petitions and I. A. stand disposed off accordingly.
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2005 (9) TMI 654 - CESTAT MUMBAI
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... ... ..... ld that the appellants in India who were recipient of technical know-how from foreign company against payment of royalty, could not be fastened with liability to pay service tax as they were not authorized representative of the foreign company. The decision in the case of Navinon Ltd. has been followed in Bajaj Auto Ltd. v. CCE 2005 (179) ELT 481 (Tri. - Mum.), we further note that in the case of Navinon Ltd. cited supra, the Tribunal has held that royalty payments in the present case for the use of technology and know-how cannot be equated with any services to be provided by the foreign company to the Indian company. The present case involved the period prior 16-8-2002 and the decisions of the Tribunal in Navinon Ltd.’s case (supra) and Bajaj Auto Ltd.’s case (supra) would therefore be applicable. Following the ratio of above orders, we hold that the duty demand and penalties cannot be sustained. Accordingly, we set aside the impugned order and allow the appeal.
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2005 (9) TMI 653 - ANDHRA PRADESH HIGH COURT
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... ... ..... onouncement of this Court in PANCHALINGALA CORBONIC GAS PRIVATE LIMITED, KURNOOL Vs. STATE OF A.P.. Following the said judgment, this writ petition shall stand dismissed without any orders as to costs.
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2005 (9) TMI 652 - CESTAT NEW DELHI
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... ... ..... the records maintained by the applicants and found that the same rooms were allotted to persons booking the halls for holding the functions like marriage, etc. which other customers were shown to have occupied. This was an attempt to conceal the income being generated by ‘mandap keeping’ services under the garb of room rent receipts. The Commissioner (Appeals) has correctly given the finding that when one books a hall for a function, couple of rooms are given as a package deal. It is never the other way round i.e. one gets hall free while booking the rooms. We are, therefore, satisfied that the applicants have not made out a prima facie case for waiver. We, therefore, direct the applicants to pre-deposit a sum of ₹ 1,81,453/- (including ₹ 25,000/- already deposited) within a period of 8 weeks and report compliance by 16-11-2005. On such deposit, the recovery of the balance amount is waived for hearing the appeal. (Dictated in open court on 20-9-2005)
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2005 (9) TMI 651 - ALLAHABAD HIGH COURT
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... ... ..... efining is lubricating oil from the used oil and the process does not amount to manufacturing. This decision is referred for limited purposes that the used lubricating oil and the refining lubricating oil both have been treated as lubricating oil which shows that the used lubricating oil had a characteristic of oil. 11. In the case of Commissioner of Sales Tax v. S/S Industrial Lubricants (supra) relied upon by the learned Standing Counsel, the item for consideration was that mobil oil which has already been used and which has outlived its utility as mobile oil. In that case, it has been held that such mobil oil which has out-lived its utility as mobil oil does not retain the character of mobil oil, but it becomes old discarded or unserviceable. Thus, the case is distinguishable on the facts and is not applicable in the present case. 12. For the reasons stated above, the order of the Tribunal is upheld. 13. In the result, revision has no merit and is, accordingly, dismissed.
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2005 (9) TMI 650 - SUPREME COURT
Constitutional validity of the amendment - Challenged the Judgment of a HC, holding that customary bonus was not payable by the State Bank of India ('Bank') after Banking Laws (Amendment) Act, 1984 ('Amendment Act') was enacted - Conflict between the provisions of General Law i.e. State Bank Act and the Industrial Act the latter Act must prevail - HELD THAT:- There is no quarrel and in fact in our opinion rightly that legislature cannot by a mere declaration, without anything more, directly overrule, reverse or override a judicial decision. However, it may, at any time in exercise of the plenary powers conferred on it by the Constitution render a judicial decision ineffective by enacting a valid law on a topic within its legislative field, fundamentally altering or changing with retrospective, curative or neutralizing effect the condition on which such decision is based.
As noted in Indira Nehru Gandhi v. Raj Narain [1975 (11) TMI 165 - SUPREME COURT] rendering ineffective of judgments or orders of competent Courts or Tribunals by changing their basis by legislative enactment is a well known pattern of all validating Acts. Such validating legislation which removes the causes for ineffectiveness or invalidity of actions or proceedings is not an encroachment on judicial power. There is a distinction between encroachment on the judicial power and nullification of the effect of a judicial decision by changing the law retrospectively. As noted by this Court in M/s. Tirath Ram Rajindra Nath [1972 (12) TMI 65 - SUPREME COURT], the former is outside the competence of the legislature but the latter is within its permissible limits.
The amendment made by the impugned enactments is to the State Bank Act and other statutes relating to some other Banks. The Bank undoubtedly has power in terms of Section 7(1) of the State Bank Act to change the conditions of service of those of its employees, who had earlier served with Imperial Bank of India. By enforcement of the Act, the undertaking of Imperial Bank of India was transferred to the Bank. Employees of erstwhile Imperial Bank of India cannot take the stand that they have an unalterable right in their terms and conditions of employment. So far as other employees are concerned, Section 43 of the Act empowers the Bank to determine terms and conditions of their service.
The Parliament has power to legislate on the topic of bonus and it is not precluded from legislating on that topic, other than the Bonus Act. The mere fact that an award has been made under the Industrial Act cannot have the effect of preventing the Parliament for all times to come from amending the law on the foundation of which the award was made. This of course is subject to same being not inconsistent with provision of Part III of the Constitution; and also being within the legislative competence of the Parliament.
As noted above, the impugned Act did not merely declare the Tribunal's award inoperative. There is nothing to show that the Parliament intended to exercise appellate powers over the Tribunal or the High Court by enacting the amending Act. The said Act in clear and unambiguous terms prohibits the grant of bonus to the employees of public Sector Banks, except in accordance with the Bonus Act, and also limits such payment only to those eligible under the Act.
The amended provision operates notwithstanding anything contained in any other law, including the Industrial Act, and similarly notwithstanding anything contained in any judgment, decree or order of any Court or Tribunal.
Thus, the conclusion is inevitable that the High Court's judgment does not suffer from any infirmity to warrant interference. The appeal is accordingly dismissed with no orders as to costs.
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2005 (9) TMI 649 - CESTAT MUMBAI
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... ... ..... e ld. Consultant based on the Trade Notice No. 7/97-ST, dated 4-7-1997 clarifying that in case services are rendered to a prime consultant, the levy of Service Tax does not fall on the sub consultant but it falls on the prime or main consulting engineer who raises a bill on his client including the charges for services rendered by the sub-consultant and in the present case, the facts on record bring out clearly that the applicant herein is admittedly a sub-consultant who is raising a bill on the prime or main consultant who in turn raises the bill upon the client. We therefore waive pre deposit of the Service Tax and penalties and stay recovery thereof pending the appeal. (Pronounced in Court)
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2005 (9) TMI 648 - ITAT DELHI
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... ... ..... stood dissolved. Thereafter, no assessment can be made upon it, under the Income-tax Act. The order of the Division Bench of the Delhi Tribunal in IMPSAT (P.) Ltd. (supra) also supports the assessee’s contention. That was a case of a Private Limited company which was dissolved under section 560 of the Companies Act and it was held that on dissolution it ceased to exist and there was no provision in the Income-tax Act to make an assessment upon a dissolved company. 9. The learned DR submitted that there would be escapement of income for the period 1-4-2001 to 31-12-2001 which would be assessed neither in the hand of the present assessee nor in the hands of the amalgamated company. This is a matter which the Income-tax authorises concerned may take note of. So far as the present appeal is concerned I have to dispose of the same in accordance with the law. It is for the Departmental authorities to take remedial action, it required and if so advised. The appeal is allowed.
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2005 (9) TMI 647 - SUPREME COURT
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... ... ..... does not arise. Since we now allow the appeals, mesne profits are due from the respondents. The appellants are at liberty to claim the mesne profits and recover the same from the respondents herein. In the result, we hold that the Will Ex.B9 is a true and genuine document and the appellants and Seetharatnam will be entitled to the properties respectively allotted to them under the said Will. We also hold that the alleged adoption is not true and, therefore, the alleged adopted son Krishna Bhagavan has no right or any interest in any of the suit properties. In view of the fact that P. Seetharatnam has been given some properties under the Will under Section 22 of the Hindu Adoption and Maintenance Act, she is not entitled to any maintenance. The appeals stand allowed. The judgments and decrees of the High Court and the lower Courts are set aside. Even though this is eminently a fit case to order costs, we refrain from ordering costs considering the relationship of the parties.
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2005 (9) TMI 646 - SUPREME COURT
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... ... ..... ent No.3 or depositing the same in the trial court. 8.We also clarify that if the suit is not disposed of within the time fixed by us and the defendants have a case that the plaintiff was deliberately delaying the disposal of the suit, the respondents before us would have the liberty to move this Court for any appropriate modification of this order. 9.This appeal is, thus, disposed of by maintaining the order of this Court dated 12.7.2003 until the disposal of the suit and with an injunction against the plaintiff as indicated above and the other directions as contained hereinabove. We once more clarify that we have not gone into or dealt with any contention on merits and leave all questions open, to be decided by the trial court and our order maintaining the order dated 12.7.2003, is only because of the fact that an educational institution is located, and is functioning in the suit property, including in the disputed portion. The parties are directed to bear their own costs.
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2005 (9) TMI 645 - CESTAT NEW DELHI
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... ... ..... l testing and analysis in relation to human beings or animal is exempted. The exempted. The contention is that they are collecting the samples and also doing initial testing also. Further, tested samples were sent to Dr. Lal Path Labs Pvt. Ltd. As the appellants are conducting testing also in respect of samples. Prima facie, appellants had a strong case in their favour. Therefore, the pre-deposit of whole of the demand on Service Tax is waived for hearing of the appeal and the recovery of the same is stayed during the pendency of the appeal. The stay petition is allowed. Order may be given DASTI.
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2005 (9) TMI 644 - SUPREME COURT
Motor Vehicle Claim - Whether the taxation authority under the Karnataka Motor Vehicles Taxation Act, 1957 was right in taxing the "tractor-trailer" as a separate and distinct vehicle, different from a tractor and denying exemption sought by the appellant u/s 16 of the said 1957 Act on the ground that the tractor-trailer was a distinct category of "goods carriage" requiring permit u/s 66 of the Motor Vehicles Act, 1988 - HELD THAT:- Section 2(28) is a comprehensive definition of the words "motor vehicle". Although, a "trailer" is separately defined u/s 2(46) to mean any vehicle drawn or intended to be drawn by motor vehicle, it is still included into the definition of the words "motor vehicle" u/s 2(28). Similarly, the word "tractor" is defined in section 2(44) to mean a motor vehicle which is not itself constructed to carry any load. Therefore, the words "motor vehicle" have been defined in the comprehensive sense by the legislature. Therefore, we have to read the words "motor vehicle" in the broadest possible sense keeping in mind that the Act has been enacted in order to keep control over motor vehicles, transport vehicles etc. A combined reading of the aforestated definitions under section 2, reproduced hereinabove, shows that the definition of "motor vehicle" includes any mechanically propelled vehicle apt for use upon roads irrespective of the source of power and it includes a trailer.
Therefore, even though a trailer is drawn by a motor vehicle, it by itself being a motor vehicle, the tractortrailer would constitute a "goods carriage" u/s 2(14) and consequently, a "transport vehicle" u/s 2(47). The test to be applied in such a case is whether the vehicle is proposed to be used for transporting goods from one place to another. When a vehicle is so altered or prepared that it becomes apt for use for transporting goods, it can be stated that it is adapted for the carriage of goods. Applying the above test, we are of the view that the tractor-trailer in the present case falls u/s 2(14) as a "goods carriage" and consequently, it falls under the definition of "transport vehicle" u/s 2(47) of the M.V. Act, 1988.
In the present matter, we were concerned with taxing of tractor-trailer unit and not with the question as to whether such a vehicle would fall under item 3 or 10 of part B of the schedule to the Taxation Act. Hence, we are not required to go into that question.
Accordingly, we find no infirmity in the impugned judgment and consequently, we dismiss this civil appeal with no order as to costs.
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2005 (9) TMI 643 - SUPREME COURT
Challenged the order of eviction passed by the Rent Controller - Whether in the Union Territory of Chandigarh a landlord can seek eviction of a tenant from a non-residential building on the ground of his own use ? - HELD THAT:- Shri Ashwani Chopra, learned senior counsel for the tenant has submitted that the Parliament enacted the Chandigarh Extension Act, 1974 and this Act made the East Punjab Urban Rent Restriction Act, 1949 applicable to the Union Territory of Chandigarh. At the time when the Parliament enacted this Chandigarh Extension Act, 1974, which was published in Gazette on 20.12.1974, factually the East Punjab Urban Rent Restriction Act, 1949 did not contain any provision whereunder a landlord could have sought eviction of a tenant from a non-residential building on the ground of his own use on account of the amendment made to it by the Amendment Act, 1956 by which the words "a non residential building or" occurring in Section 13(3)(a)(ii) of the 1949 Act had been omitted. Consequently in the Union Territory of Chandigarh a landlord has no right to seek eviction of a tenant from a non-residential building on the ground of his own use as there exists no provision to that effect in the law applicable thereto.
In our opinion, the principle of law underlying legislation by incorporation or legislation by reference has not much relevance in the present case. We do not have to examine the effect of any amendment or repeal of any enactment. Section 3 of the Chandigarh Extension Act makes the East Punjab Urban Rent Restriction Act, 1949, subject to the modification specified in the Schedule, applicable to the Union Territory of Chandigarh with effect form 4.11.1972. It is not a case where any specific section or provision of the 1949 Act may have been made applicable, but the provisions of the entire 1949 Act have been extended and made applicable to the Union Territory of Chandigarh. It is in fact a case of extension of an Act to a territory to which it was previously not applicable.
It is, therefore, not possible to accept the submission of the learned counsel for the appellant that the 1949 Act was incorporated in the Chandigarh Extension Act.
The ultimate question is what is "the Act". For ascertaining the meaning of the words "the Act" we have to refer back to Section 2, viz., the East Punjab Urban Rent Restriction Act, 1949 and the provisions of this 1949 Act have to be seen and examined as they stood on the date when the eviction petition was filed or till the continuance of the litigation culminating in the final judgment. On the date when the eviction petition was filed or at any stage subsequent thereto including the date when the matter was heard and is being decided by this Court, it is not possible to read the East Punjab Urban Rent Restriction Act, 1949 in a manner in which it was amended by the Amendment Act, 1956 but has to be read as it originally stood which contained a provision giving right to a landlord to seek eviction of a tenant from a non residential building on the ground of his own use. This is so because in Harbilas Rai Bansal [1995 (12) TMI 404 - SUPREME COURT] the provisions of the Amendment Act, 1956 were held to be violative of Article 14 of the Constitution and were struck down.
Therefore, read in any manner the inevitable consequence is that the word "the Act" occurring in Section 2 of the Chandigarh Extension Act has to be read as the East Punjab Urban Rent Restriction Act, 1949 as it stood before the Amendment Act, 1956. The result that follows is that in the Union Territory of Chandigarh it is open to a landlord to seek eviction of a tenant from a non residential building on the ground of his own use.
In the present case the Rent Controller and the Appellate Authority have recorded concurrent finding of fact that the respondent landlord bona fide needs the premises in question for his own use and this finding has been affirmed in revision by the High Court. In this view of the matter we do not find any illegality in the impugned orders. The appeal is accordingly dismissed with costs. The appellant-tenant is granted six months time to vacate the premises subject to his filing the usual undertaking within one month.
In Civil Appeal, we have held that under East Punjab Urban Rent Restriction Act, 1949, as extended to Chandigarh by East Punjab Urban Rent Restriction (Extension to Chandigarh) Act, 1974, a landlord can seek eviction of a tenant from a non-residential building on the ground of his own use. In this view of the matter, we do not consider it necessary to adjudicate the pleas raised in the writ petition as substantive relief has already been granted to the writ petitioner. The writ petition and the I.As. moved therein are disposed of.
In all these matters the Rent Controller and the Appellate Authority have recorded concurrent finding of fact that the landlord bona fide requires the premises for his own use and this finding has been affirmed in revision by the High Court. For the reasons given in Civil Appeal, there is no merit in the civil appeals and the special leave petition, which are hereby dismissed with costs. The tenants are given six months time to vacate the premises subject to their filing usual undertaking within one month.
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2005 (9) TMI 642 - SC ORDER
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... ... ..... ur, JJ. ORDER Admitted.
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2005 (9) TMI 641 - ANDHRA PRADESH HIGH COURT
Classification of goods - Payment of duty - credit on inputs - produces betel nut powder known as "supari" - classifying the product of the Appellant under Chapter subheading No. 2107.00 instead of sub-heading No.0801.00 of the schedule to the Central Excise Tariff Act, 1985, (Tariff Act) - Process of manufacture involved or not - HELD THAT:- The classification, in the present case, is required to be determined having regard to the Chapter Notes. The product of the appellant falls, within the expression "Betel nut powder known as supari", as defined in Note-4 of Chapter-21, since it is not in dispute that the product is a preparation containing Betel nut. Under note 7 of Chapter-21 adoption of any other treatment to render the product marketable to the consumer is held as amounting to manufacture. In the case on hand, since Note 4 of Chapter 21 specifically states that the process indicated amounts to manufacture, the deeming provision in Section 2(f)(ii) of the Central Excise Act would apply. The products of the appellant would consequently be deemed to have undergone a process of manufacture and would be eligible to duty under sub-heading 2107-00 of Chapter 21 of the First Schedule to the Central Excise Tariff Act. The classification, of the produce in question, as provided in Rule 1 of the Rules of Interpretation of the Central Excise tariff, is determined in terms of the Chapter Notes, and thus the other Rules of Interpretation will not come Into play.
Since betel nuts are not merely cut into pieces, but undergo an elaborate process wherein several additives are mixed thereto, it is clear that the explanatory notes to HSN have no application to the case on hand. As rightly held by the CESTAT, the end product of the process is different from the original material and a new and distinct product known as "supari powder" has emerged. We agree with the Tribunal, that on subjecting the raw material to a process of manufacture it is not necessary that there should be a transmutation since supari powder would have the character of betel nut and it cannot be said that there is no manufacture for the reason that betel nuts remain as such.
The CESTAT rightly held that, while it may remain so, when other ingredients are added to it, it cannot be said that this process did not bring into existence a new and distinct commodity, that if one asked for betel nut the shop keeper would not give supari and that, in other words, betel nut was different from supari powder. The CESTAT, while holding that note 4 in Chapter 21 could not be disregarded, relied on several judgments including those of the Madhya Pradesh High Court in S.N. Sunderson (Minerals) Ltd. v. Supted. (Preventive), C.Ex.1994 (3) TMI 111 - HIGH COURT OF MADHYA PRADESH], the Allahabad High Court in Kothari Chemicals v. Union of India [1995 (9) TMI 72 - HIGH COURT OF JUDICATURE AT ALLAHABAD], and the Karnataka High Court in Sree Ramakrishna Soapnut Works [2001 (7) TMI 153 - HIGH COURT OF KARNATAKA AT BANGALORE].
In a catena of judgments of the Supreme Court, referred to above it has been held that, goods to attract excise duty, must satisfy the test of marketability. For articles to be goods, these must be known in the market as such. As rightly held by the CESTAT, if a person asks for betel nut, the shopkeepr would not give him "supari powder". Marketability is essentially a question of fact (Hindustan Zinc Ltd. v. Commissioner of Central Excise,[2005 (2) TMI 118 - SC ORDER].
The CESTAT, as the final fact finding Tribunal, has held that betel nut known as "supari" is a marketable commodity distinct from betel nuts. We also find considerable force in the submission of the learned Asst. Solicitor General that the Appellants, themselves, had paid duty prior to 1997, treating the products manufactured by it as involving a process of manufacture, under Ch. Sub-heading No. 2107 of Chapter 21. The order of the CESTAT does not call for any interference, by this Court, even on merits.
The appeal fails and is accordingly dismissed.
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2005 (9) TMI 640 - CESTAT CHENNAI
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... ... ..... ervice tax for the first time in 2003-04. Even after addition of such centres to the list of taxable service providers, "Management Consultant" has continued to be in that list. The legislative authority did not amend the definition of "Management Consultant" while adding "commercial training and coaching centre", which, obviously, were understood as operating in mutually exclusive areas. If that be so, the ‘computer training’ provided by the appellants to trainees sponsored by their corporate clients during May, 2000 to March, 2002 must be held not taxable as ‘Management Consultancy Service.’ It is also pertinent to note that such training is exempted from payment of service tax right from the date on which it was declared to be taxable. In the circumstances, the view taken by the lower authorities cannot be sustained. 4. In the result, the impugned order is set aside and this appeal is allowed with consequential relief.
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2005 (9) TMI 639 - AUTHORITY FOR ADVANCE RULINGS
Seeking advance ruling from the authority - non-resident - liaison office is to be treated as "permanent establishment or not” - income accrues/arises or is deemed to accrue/arise in India u/s 9(1)(i) of the Act - Principal company/GVB/GTE - Nature of activities to be carried on by the “liaison office” (LO) covered under “business connection”? - Benefit of the DTAA between India and UAE - HELD THAT:- The activities of the “LO” which the applicant proposes to open in India have been enumerated in annexure II to the application. As per clauses (a) to (d), these broadly consist of holding of seminars, conferences and shows to cover information about the technology being used by the “GVB” in manufacture of reflective glasses, of different kinds. To receive trade queries from the customers and to pass it on the GTE/GVB and to transmit information as received from the Dubai office/GVB. To collect feed back from customers/consumers, trade organisations, architects, and builders, etc., about the products and pass on the same to the Dubai office/GVB. From the above narration, it is clear that “LO” will be only acting as a channel of communication between the “principal company/GVB/GTE” on one side and Indian companies, traders, customers/consumers on the other side.
So long as the “liaison office” does not enter into negotiations with the customers in India for import or purchase of goods by the Indian customers from the “principal company/GVB”, it cannot be said that an intimate relationship exists between the trading activity of the “principal company/ GVB/GTE” outside India and the activities of the “liaison office” within India. Therefore, the activities of the “liaison office” in India would not constitute a course of dealing or continuity of relationship and cannot be said to contribute directly or indirectly to the earning of income by the non-resident, i.e., GTE, in its business outside India.
Therefore, it follows that the activities of the “liaison office” as given above would not tantamount to having a “business connection” in India. However, in case the scope of the activities of the “liaison office” is enlarged and it enters into negotiations for import/purchase of goods by the Indian customers, in any manner, it would come within the expression “business connection” as used in section 9(1)(i) of the Act.
It is common ground that the issue is covered by the recent ruling of the Authority in the case of AAR in Abdul Razak A. Meman [2005 (5) TMI 12 - AUTHORITY FOR ADVANCE RULINGS]. In this decision it has been held that since there is no tax regime for individuals in UAE they are not covered by the expression “resident of a Contracting State” as contained in article 4(1) of the DTAA between India and UAE as per Notification GSR No. 710(E), dated November 18, 1983. As such the applicant is not entitled to claim the benefit of the DTAA.
Thus, we rule on : Looking to the nature of activities as proposed to be carried out by the liaison office (to be set up in India), the applicant would not be earning any income through “LO” in India.
Question No. (ii) : In view of the ruling in question No. 1 no ruling need be given on this question.
Question No. (iii) : Gutal Trading Est. (having its principal place of activities at Dubai, UAE) cannot be said to be having any “business connection” within the meaning of section 9 of the Act in India by virtue of setting up of a “liaison office”, as specified by the applicant and no tax liability would be attracted under the Indian tax laws.
Question No. (iv) : The applicant, an individual, residing in UAE is not entitled to claim the benefit of the provisions of the treaty entered into between India and UAE.
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