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2024 (5) TMI 1328 - ALLAHABAD HIGH COURT
Scope of review jurisdiction - an error apparent on the face of the record - purchase price of purchase of plant and machinery, apparatus and equipment, to be included in the ‘Fixed Capital Investment’ or not - the amount has been allowed as MODVAT under the Central Excise Act, 1944 - HELD THAT:- In its judgment in ARIBAM TULESHWAR SHARMA VERSUS ARIBAM PISHAK SHARMA [1979 (1) TMI 228 - SUPREME COURT], the Hon’ble Supreme Court propounded that review power and appellate power are inherently distinct. While the appellate power enables the courts to rectify all manners of errors in the judgment or order under challenge, review power does not - Recently, in ARUN DEV UPADHYAYA VERSUS INTEGRATED SALES SERVICE LTD. & ANR. [2023 (7) TMI 1411 - SUPREME COURT], the Hon’ble Supreme Court reiterated that review power is to be exercised strictly within the confines of Order 47 Rule 1 of CPC, 1908.
Review jurisdiction is not a tool for the litigious or the disgruntled, it is a mechanism for safeguarding the integrity of the judicial process, for ensuring that justice remains blind to all but the merits of the case. Wielding the power of review jurisdiction carries a weighty burden – one that demands unyielding diligence and meticulousness. Courts must resist the siren call of extraneous influences or the temptation to revisit contentious issues - the review jurisdiction is not a weapon to be wielded recklessly but a shield to safeguard the sanctity of the legal process.
The review jurisdiction is a solemn duty bestowed upon the High Courts to rectify errors that may have crept into their judgments. It is not an avenue for re-argument or a platform for dissatisfied litigants to reiterate their grievances. Instead, it serves as a bulwark against miscarriage of justice, providing a mechanism for the correction of judicial fallibility. Judges, like all human beings, are liable to err. Thus, review jurisdiction stands as a sentinel against the tyranny of erroneous judgments, upholding the integrity of the judicial process.
Coming to the merits of the instant review, the ground taken by the Respondent that important judgments of the Hon’ble Supreme could not be submitted before this Court, does not merit the exercise of the power of review since the Respondent failed to establish that despite exercise of proper due diligence, the aforesaid judgments could not be brought to light. In any case, as held by the Hon’ble Supreme Court in Dokka Samuel [1997 (3) TMI 619 - SUPREME COURT], failure to produce a judgment would not tantamount to an error apparent on the face of the record.
Mere failure to cite a judgment does not, in and of itself, render the original judgment flawed. Review jurisdiction is not a panacea for addressing every perceived deficiency or oversight in the original judgment; rather it is a narrow avenue reserved for rectifying errors glaringly evident on the face of the record. Failure to cite a particular judgment does not automatically invalidate the reasoning or merit of the decision under question.
This Court finds no merit in the instant review application preferred against the order - Accordingly, the same is dismissed.
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2024 (5) TMI 1327 - KARNATAKA HIGH COURT
Constitutional validity of Section 2A (8-a) of the Karnataka Tax on Entry of Goods Act, 1979 - inclusion of the term “prevailing market price of such goods in the local area” within the definition of “value of the goods” under clause 2A (8-a) - significant lapse of time from the original assessments are valid under Section 6 (2) of KTEG Act or not - differential tax amount determined by respondent No. 5 based on mere change of opinion in contravention of Section 6 (2) of the KTEG Act - Maintainability of petition - availability of alternate remedy.
Whether the inclusion of the term “prevailing market price of such goods in the local area” within the definition of “value of the goods” under clause 2A (8-a), in instances where goods are not purchased, conflicts with the charging provision outlined in section 3 (1) of the Act? - HELD THAT:- The charging provision under Section 3 (1) of the KTEG Act serves as the foundational framework for levying entry tax. This provision mandates that the tax should be based on the value of goods entering the local area. However, the definition clause under Section 2A (8-a) introduces additional criteria, such as the 'prevailing market price,' which can potentially lead to conflicting interpretations, especially in cases involving stock transfers. In situations where there is a conflict between the charging provision and the definition clause, the Court's duty is to interpret these provisions in a manner that upholds the legislative intent behind the charging provision. The charging provision, being the substantive section imposing the tax, holds primacy over other provisions of the statute.
The definition clause under Section 2A (8-a) of the KTEG Act must be construed harmoniously with the charging provision under Section 3 (1) of the KTEG Act. The charging provision, being the substantive section imposing the tax, should hold primacy in determining the taxable value of goods, especially in cases of stock transfers. In elucidating these provisions, it becomes apparent that the crux of Section 3 (1) lies in anchoring tax assessment to the value of goods at the time of their entry. Therefore, any reference to prevailing market price in Section 2A (8-a) should be construed as pertaining to the market value of goods contemporaneous with their entry into the local area.
The term 'value of such goods' as mentioned in Section 2A (8-a) of the KTEG Act shall be interpreted to mean the value of goods at the time of their entry into the local area, consistent with the charging provision under Section 3 (1) of the KTEG Act. This interpretation ensures harmonization between the charging provision and the definition clause, eliminating any potential conflicts or inconsistencies.
Whether re-assessment notices issued by respondent No. 5 after a significant lapse of time from the original assessments are valid under Section 6 (2) of KTEG Act and assessment orders for the assessment year 2009-10 passed by respondent No. 5 in terms of the wordings “prevailing market price of such goods in local areas” under clause 2A (8-a) of KTEG Act are valid? - Whether differential tax amount determined by respondent No. 5 based on mere change of opinion are in contravention of Section 6 (2) of the KTEG Act? - HELD THAT:- The respondent No. 5 being a new Officer has conducted reassessment as opposed to the original assessing Officer who had accepted the returns submitted by the petitioner’s company indicating that there is entry tax compliance by the petitioner company strictly in terms of the charging Section 3 (1) of the KTEG Act. The power to reassess is vested with the original assessing officer. Therefore, reassessment done by respondent No. 5 merely on the ground of change of opinion does not adhere to the compliance of mandate contemplated under Section 6 (2) of the KTEG Act.
The assessment orders and reassessment notices issued by respondent No. 5 are based on change of opinion and therefore, the impugned assessment orders and reassessment notices are not sustainable and would warrant interference at the hands of this Court. Initiating reassessment purely on the grounds of change of opinion without substantive new material is impermissible under the law and therefore, liable to be quashed.
Whether petitioner/company needs to be relegated to avail remedy of appeal on the ground of alternate remedy? - HELD THAT:- In this case, the petitioner's challenge to the statutory provision goes beyond mere statutory interpretation and involves significant legal and constitutional implications, warranting this Court's intervention. Therefore, in light of the unique circumstances and the centrality of the disputed statutory provision to the petitioner's case, the writ petition represents not only the most efficacious but also the most equitable remedy available. By allowing the petitioner to directly address the substantive legal issues before this Court, justice can be served promptly and fairly, aligning with the overarching objectives of the legal system.
This Court is inclined to hold that the petitioner at this stage cannot be relegated to avail the alternative remedy of an appeal, in light of law laid down by the Apex Court in DR BAL KRISHNA AGARWAL VERSUS STATE OF U.P. [1995 (1) TMI 393 - SUPREME COURT], where the Apex Court was of the view that the Court was not right in dismissing the writ petition on the ground of alternate remedy having found that the writ petition is found pending since 1998, i.e. more than five years. In the present cases on hand, the petitions are pending for almost 14 years. The impugned assessment orders and reassessment notices issued by respondent No. 5 are one without jurisdiction. Therefore, this Court under writ jurisdiction has ample powers to examine the validity of assessment orders and also reassessment notices.
The writ petitions are allowed in part.
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2024 (5) TMI 1326 - GAUHATI HIGH COURT
Challenge to order of Reassessment - notice issued stating that the petitioner’s turnover escaped assessment for the year 2010-2011 and accordingly, proposes to assess the petitioner’s turnover for the period 2010-2011 to the best of assessing authority judgment under Section 40 of the Act.
It is the specific case of the petitioner that though the re-assessment has been completed in the purported exercise of power under Section 40 of the Act of 2003 read with Section 174 of the Assam Goods and Service Tax Act, 2017, but Section 40 of the Act of 2003 could not have been invoked inasmuch as, the said powers can be invoked only when the dealer have been assessed under Sections 34, 35, 36 and 37 of the Act of 2003.
HELD THAT:- No assessment whatsoever was completed by the assessing authority under Sections 34, 35, 36 and 37 of the Act of 2003 - there was no assessment. As such, the very initiation of proceeding under Section 40 of the Act of 2003 is absolutely illegal, without jurisdiction and not tenable in law.
The present case is covered by the decision of this Court in Assam Gas Company Ltd Vs. State of Assam & 2 Others [2024 (5) TMI 1173 - GAUHATI HIGH COURT] where it was held that 'In the present case, there was no assessment under section 35 of the Act, 2003, made during the prescribed period. Therefore, no assessment can be deemed to have been made in law - the said order of re-assessment having been completed without any assessment made under section 35 of the Act, 2003, the order of reassessment dated 17.03.2018 is absolutely illegal and without jurisdiction.'
The impugned Order of Re-assessment dated 29.03.2018 and the Notice of Demand alongwith the Recovery Notices dated 06.08.2018 and 28.09.2018 are set aside and quashed - petition allowed.
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2024 (5) TMI 1325 - PUNJAB AND HARYANA HIGH COURT
Denial of refund of excess tax paid by contractors - Haryana Alternative Tax Compliance Scheme for Contractors, 2016 - Constitutional Validity of Clause 4(2) of the scheme - HELD THAT:- The scheme has been made applicable to all contractors whether they have opted or not opted for the lump sum scheme under Rule 49 of the VAT Rules. Thus, those who had earlier opted for lump sum scheme under Rule 49 of the VAT Rules and were paying @ 4% of the aggregate amount, would be placed in a disadvantageous position vis-à-vis those who did not even deposit the amount earlier and had not opted under Rule 49 of the VAT Rules. It is also noticed that the State has modified the rate of composition @ 1% with retrospective effect for all.
In CORPORATION BANK VERSUS SARASWATI ABHARANSALA AND ANOTHER [2008 (11) TMI 387 - SUPREME COURT] Hon’ble the Supreme Court has held 'If the substantive provision of a statute provides for refund, the State ordinarily by a subordinate legislation could not have laid down that the tax paid even by mistake would not be refunded. If a tax has been paid in excess of the tax specified, save and except the cases involving the principle of 'unjust enrichment', excess tax realized must be refunded. The State, furthermore is bound to act reasonably having regard to the equality clause contained in Article 14 of the Constitution of India.'
Thus, from the reading of the aforesaid judgment, it could be concluded that the conditions laid down under Clause (4) of the 2016 Scheme seek to create unjust enrichment in favour of the Revenue and unjustifiable clause having no nexus. It seeks to create a distinction and also benefits those contractors who had not been honestly paying their taxes which is disadvantageous to those contractors who had been regularly paying @ 4% tax in terms of Rule 49 of the VAT Rules.
The orders rejecting the claim of refund dated 20.01.2017 and supplementary order dated 27.01.2017 impugned in all the four writ petitions denying the refund of the excess tax amount paid earlier by them is quashed and set aside and it is held that the petitioners are entitled for the refund of the said amount. They would also be entitled to receive interest as per rules on the said refund. The exercise of payment of refund shall be done within a period of four weeks henceforth, failing which further interest @ 9% shall be payable on the refund amount in addition to the interest required to be paid to them.
Petition allowed.
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2024 (5) TMI 1324 - SUPREME COURT
Validity of the Agreement to Sell - Purchase of land - Non-Appearance of Plaintiff as a Witness - Discretionary Relief of Specific Performance - Limitation Period for Filing the Suit - Appellant/plaintiff entered into an agreement to sell land with respondent no. 4, acting as Power of Attorney holder for respondents/defendant nos. 2 to 11 - agreement extended multiple times.
HELD THAT:- It is mentioned in the agreement that Gajay Bahadur Bakshi would be responsible for getting the sale deed executed and registered by all the coowners or co-khatedars at the time of registration. Neither the names of all the co-owners/coparceners/co-khatedars are mentioned in the agreement, thus, the High Court is right in finding that all the co-owners have not signed the agreement. The subsequent endorsement of receipt of additional amount of Rs. 40,000/- is also not signed by all the co-parceners. The same is the condition with the 3rd agreement dated 26.12.1996 and the extension endorsement dated 27.03.1997 and 23.04.1997.
Significantly, the so-called power of attorney pleaded in the plaint through which the defendant nos. 2 to 11 authorised defendant no. 1 to execute the agreement, have not been produced and proved in the Trial Court. Thus, neither in the agreement nor in course of trial the power of attorney is proved by tendering the same in evidence. Hence, in the absence of evidence, the High Court rightly held that the agreement is not signed by all the co-owners.
Undisputedly, in the present case, the plaintiff failed to appear in the witness box. Instead, his Power of Attorney Holder got himself examined as PW-1. This witness was examined on 05.09.2002 and the power of attorney was executed on 26.08.2002. It is not a case where the suit itself was filed by a Power of Attorney Holder. He appeared subsequently only for recording his evidence as the Special Power of Attorney Holder of the plaintiff. The legal position as to when the deposition of a Power of Attorney Holder can be read in evidence has been dealt with by this Court in several decisions.
In the instant case, the plaintiff/appellant has failed to enter into the witness box and subject himself to cross-examination, he has not been able to prove the prerequisites of Section 12 of the Specific Relief Act,1963 and more so, when the original agreement contained a definite time for registration of sale deed which was later on extended but the suit was filed on the last date of limitation calculated on the basis of the last extended time.
The plaintiff entered into an agreement with only one of the co-owners and thereafter sought extensions for execution of the sale deed but did not prefer any suit though he was aware of the sale deed dated 14.05.1997 executed in favour of defendant nos. 12 to 14 and sent a legal notice on 30.05.1997 and even objected to the subsequent purchasers’ application for mutation of their names in the revenue records on 20.08.1997 and refers to a meeting of the Gram Panchayat dated 06.12.1997, yet the suit was preferred, on 09.05.2000 on the last date of limitation.
Thus, the suit having been preferred after a long delay, the plaintiff is not entitled for specific performance on this ground also.
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2024 (5) TMI 1323 - DELHI HIGH COURT
Bank Loan - Proposal for declaring the company as "Fraud" - Violation of principles of natural justice - non-compliance with the agreed terms of the loan documents and various irregularities in the loan account - suspicion of fraudulent activities in the account - HELD THAT:- This Court passed various directions directing the petitioner to approach the respective banks with a list of documents that were required by the petitioner for the purpose of submitting a comprehensive reply to the said SCNs. Upon the petitioner approaching the said banks, certain documents were provided to the petitioner. However, it is the case of the petitioner that complete documents, on the basis of which SCNs have been issued to the petitioner, have not been provided.
It is settled law that fair procedure and the Principles of Natural Justice require that the requisite documents, which form the basis of a SCN, ought to be provided to the concerned party in order to enable such party to submit a proper reply to answer all the allegations raised against it. If the relevant documents are not provided to a party, then, the whole procedure of issuance of a SCN and filing a reply thereto, would be reduced to an empty formality. No party can be expected to respond to a SCN in an effective manner, in the absence of the underlying documents, which form the basis of the said SCN.
Similarly, in the case of T. TAKANO VERSUS SECURITIES AND EXCHANGE BOARD OF INDIA & ANR. [2022 (2) TMI 907 - SUPREME COURT], the Supreme Court has held in categorical terms that it would be fundamentally contrary to the Principles of Natural Justice, if the relevant materials were not disclosed to the noticee.
The relevant documents that form the basis of issuance of a SCN, ought to be provided to the concerned party in order to enable such a party to raise its defense effectively. Such fundamental right of a party cannot be taken away by denying a proper opportunity to submit an efficacious reply, which would not be feasible in the absence of requisite documents that form the core foundation of a SCN. This assumes all the more importance, as on the basis of the defense raised by such a party, proceedings thereto, against the said party, may be dropped in appropriate cases.
The petitioner and/or his authorized representative shall be allowed inspection of the records of the company, as available with the lead bank, i.e., SBI - Since, record of the company is also stated to be in the possession of the RP, it is directed that the petitioner and/or his authorized representative shall also be allowed to inspect of the record of the company, as available with the RP.
The writ petition is disposed off.
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2024 (5) TMI 1322 - HIMACHAL PRADESH HIGH COURT
Challenged the order passed u/s 482 of CrPC - Cancellation of the Non Bailable Warrants [NBW’s] - denial of bail - HELD THAT:- In peculiar facts of this case, while filing the application u/s 70(2) of the Code of Criminal Procedure, the specific stand was taken that the non appearance, was on account of the ailment of the petitioner-accused and once this fact has not been denied or controverted by the non-applicant/complainant, therefore, on this ground also, the Impugned Order dated 23.04.2024, by recording the findings that the Learned Trial Court was not satisfied with the grounds so taken, is vitiated by non-application of mind; when, the plea was not denied/or is admitted by the non-applicant - complainant also.
Thus, the impugned order dated 23.04.2024, passed by the Learned Trial Court i.e. Learned Chief Judicial Magistrate, Bilaspur, is quashed and set aside.
Since the petitioner-accused is in judicial custody , therefore, the Respondents/State Authorities are directed to release the petitioner-accused [Dipender Thakur] from custody, on furnishing a personal bond of Rs. 25,000/- with one surety in the like amount to the satisfaction of the Learned Trial Court.
Thus, the instant petition as well as the pending miscellaneous application(s), if any, shall also stand disposed of , accordingly.
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2024 (5) TMI 1321 - CALCUTTA HIGH COURT
Seeking to Quash proceedings u/s 138 of the Negotiable Instruments Act - failure to implead the company as an accused - non-maintainability of the complaint against the petitioner - compliance of the provision u/s 202 CrPC - HELD THAT:- Admittedly the accused’s only address is clearly is beyond the jurisdiction of the trial Court being the Court at District – Malda. The proceedings in this case is u/s 138 of the Negotiable Instruments Act.
Following the Five Judge Bench of the Supreme Court in expeditious trial of cases, it is clear that Section 202(2) CrPC is not applicable in the present proceedings which is u/s 138 N.I. Act.
Document annexed to the supplementary affidavit filed by the petitioner shows that the complainant served Notice dated 30.11.2016 u/s 138 N.I. Act upon the Petitioner and also the Company ‘Amrit Feeds Limited’. Copy of the cheque dated 17.08.2016 shows that the said cheque was also issued by the petitioner on behalf of the company and not from his personal account.
Thus not impleading the company in this case along with the petitioner, being the Managing Director of the complaint, makes the complaint in this case not maintainable.
In the present case:- a) The company has not been made an accused nor was any notice served upon the company, though the cheque was issued on behalf of the company.
b) The petitioner has been made an accused as the person, who signed and issued the cheque.
Therefore, in the absence of the company being arraigned as an accused, a complaint against the petitioner is not maintainable Himanshu vs. B. Shivamurthy & Anr. [2019 (3) TMI 294 - SUPREME COURT].
CRR is allowed - The proceedings in connection with Complaint Case u/s 138 of the Negotiable Instruments Act, pending before the Court of the Learned Judicial Magistrate, Malda and all orders passed therein in connection with the above mentioned complaint case, is hereby quashed in respect of the petitioner.
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2024 (5) TMI 1320 - KARNATAKA HIGH COURT
Dishonor of cheque - Challenged the acquittal of the respondent/accused u/s 138 of the Negotiable Instruments Act - cheque issued for repayment of borrowed hand loan - legal notice served, but no response received - Accused contested the case but failed to rebut the allegations - HELD THAT:-Admittedly, complainant has not produced any documents to show that the produce of previous year was kept in consignment and also it was sold immediately prior to the alleged lending of Rs.6 lakhs and complainant was in possession of the same. Thus, the complainant has failed to prove her financial capacity to lend Rs.6 lakhs to the accused.
In the complaint the complainant has not stated the date on which the hand loan was advanced to the accused. It is only stated that towards repayment of the said amount, accused issued cheque dated 10.01.2013. However, during her cross-examination complainant has stated that accused requested hand loan in the month of November 2013 and she paid the amount on 15.12.2013. As noted earlier, the subject cheque i.e., Ex.P1 is dated 10.01.2013 which creates doubt as to whether Ex.P1 cheque was issued towards alleged transaction or it was already available with the complainant.
This fact assumes importance as the accused has taken up a specific defence that complainant, Smt.Kalavathi - the wife of accused and other women were running chit fund and at that time complainant had taken a blank cheque belonging to the accused and though the wife of accused has paid the amount due under the chit transaction, the subject cheque belonging to the accused remained with the complainant and misusing the same, she has filed the complaint. Ex.D1 is the pass book of account maintained by Smt.Kalavathi in Syndicate Bank. It shows withdrawal of Rs.20,000/- on 27.08.2012 and Rs.45,000/- on 25.09.2012 by Smt.Geetha H.K i.e., the complainant. This supports the defence of the accused that there were some chit transaction between his wife Smt.Kalavathi and complainant Smt.Geetha H.K.
The contents of Ex.P1 cheque also supports the defence of the accused that except his signature, the rest of the contents are not in his handwriting. From the manner in which the accused has affixed his signature in Kannada, indicates that except the signature, rest of the contents are not in his handwriting. In fact the remaining writing in the cheque tally with the handwriting/signature of the complainant.
Thus, when the complainant has failed to prove her financial capacity, as held in APS Forex [2020 (2) TMI 629 - SUPREME COURT], the burden would not shift on the accused to rebut the presumption. Despite the same, through his oral and documentary evidence placed on record and in the light of cross - examination of PW-1, the accused has probabilised his defence.
Considering the oral and documentary evidence placed on record, the trial Court has come to a correct conclusion that allegations against accused are not proved and acquitted him. After re-appreciation of the entire material placed on record, this Court is of the considered opinion that it is not a fit case to interfere with the impugned judgment and order passed by the trial Court.
In the result, the appeal fails and accordingly - Appeal filed by the complainant u/s 378(4) of CrPC is dismissed - The impugned judgment and order dated 30.07.2015 in C.C. on the file of II Addl.Civil Judge and JMFC, is hereby confirmed.
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2024 (5) TMI 1319 - SUPREME COURT
Condonation of Delay in filing the appeal for the enhancement of compensation - Applicability of Limitation Act provisions - Discretionary Power of Courts in condoning delay - HELD THAT:- It is very elementary and well understood that courts should not adopt an injustice-oriented approach in dealing with the applications for condonation of the delay in filing appeals and rather follow a pragmatic line to advance substantial justice.
It may be important to point out that though on one hand, Section 5 of the Limitation Act is to be construed liberally, but on the other hand, Section 3 of the Limitation Act, being a substantive law of mandatory nature has to be interpreted in a strict sense.
In Bhag Mal alias Ram Bux and Ors. vs. Munshi (Dead) by LRs. and Ors [2007 (1) TMI 544 - SUPREME COURT], it has been observed that different provisions of Limitation Act may require different construction, as for example, the court exercises its power in a given case liberally in condoning the delay in filing the appeal u/s 5 of the Limitation Act, however, the same may not be true while construing Section 3 of the Limitation Act. It, therefore, follows that though liberal interpretation has to be given in construing Section 5 of the Limitation Act but not in applying Section 3 of the Limitation Act, which has to be construed strictly.
It must always be borne in mind that while construing ‘sufficient cause’ in deciding application u/s 5 of the Act, that on the expiry of the period of limitation prescribed for filing an appeal, substantive right in favour of a decree-holder accrues and this right ought not to be lightly disturbed. The decree-holder treats the decree to be binding with the lapse of time and may proceed on such assumption creating new rights.
In the absence of the facts for getting the delay condoned in the referred cases, vis-à-vis, the facts of this case, it cannot be said that the facts or the reasons of getting the delay condoned are identical or similar. Therefore, we are unable to exercise our discretionary power of condoning the delay in filing the appeal on parity with the above order(s).
Moreover, the High Court, in the facts of this case, has not found it fit to exercise its discretionary jurisdiction of condoning the delay. There is no occasion for us to interfere with the discretion so exercised by the High Court for the reasons recorded. First, the claimants were negligent in pursuing the reference and then in filing the proposed appeal. Secondly, most of the claimants have accepted the decision of the reference court. Thirdly, in the event the petitioners have not been substituted and made party to the reference before its decision, they could have applied for procedural review which they never did. Thus, there is apparently no due diligence on their part in pursuing the matter. Accordingly, in our opinion, High Court is justified in refusing to condone the delay in filing the appeal.
Thus, we do not deem it proper and necessary to interfere with the decision of the High Court refusing to condone the inordinate delay in filing the proposed appeal.
The Special Leave Petition, as such, lacks merit and is dismissed.
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2024 (5) TMI 1318 - ITAT AHMEDABAD
Foreign Exchange Fluctuation Gain - capital receipt or revenue receipt - HELD THAT:- DR fairly agreed that the issue stood covered in favour of the assessee by the order of the Hon’ble jurisdictional High Court in the case of the assessee for AY 2007-08 [2018 (4) TMI 1691 - GUJARAT HIGH COURT] and there was no distinction in the facts of the case pertaining to AY 2007-08 and the present two years i.e. AYs 2005-06 and 2006-07, and he was unable to point out any distinction on law also before us. No reason to interfere in the order of the CIT(A) treating the Foreign Exchange Fluctuation Gain in AYs 2005-06 and 2006-07 respectively as being capital in nature.
Deduction u/s 10B - export sales the sale consideration of which was admittedly not received within six months from the end of the impugned financial year, but the sales was actually returned back in the succeeding year - HELD THAT:- There is no dispute with regards to the provision of law allowing claim of deduction u/s 10B of the Act only on those goods exported whose sale consideration is received within six months from the end of the concerned financial year. The assessee admittedly having failed to fulfil this necessary prerequisite, the ld. CIT(A), we hold, has rightly held the assessee not entitled to claim deduction u/s 10B of the Act with respect to the export turnover of Rs. 1.70 crores. The alternative claim of the assessee for direction to allow deduction u/s 10B in the year of return of the impugned goods when it is duly accounted for in the books of the assessee, we find, has been adequately addressed by the ld. CIT(A) giving necessary directions in this regard to allow the assessee’s claim after due verification of the facts of the return of sale of goods.
MAT computation - Upward adjustment to be made to the book profits of the assessee on account of provision for bad and doubtful debts in terms of provision of Section 115JB r/w clause (i) of Explanation to the said section - HELD THAT:- Our attention as specifically drawn to the Schedule-9 of Current Assets revealing the debtors’ balances - as pointed out there from that the provision for doubtful debts had been reduced from the debtor’s balance. Thus assessee contended that the case of the assessee was squarely covered by the decision of Vodafone Essar Gujarat Limited [2017 (8) TMI 451 - GUJARAT HIGH COURT] according to which the provision for bad and doubtful debts having been netted/reduced from the debtor’s balance appearing in the balance-sheet, the same need not be added back to the book profit of the assessee u/s 115JB of the Act.
DR fairly agreed with the ld. Counsel for the assessee that the issue was covered in favour of the assessee by the decision of the full bench of Vodafone Essar Gujarat Limited [2017 (8) TMI 451 - GUJARAT HIGH COURT] We have no hesitation in holding that the provision for bad and doubtful debts are not to be added to be book profit of the assessee for the purposes of Section 115JB of the Act.
Provision for Leave Encashment under section 43B - HELD THAT:- Hon’ble Apex Court in the case of Union of India Vs. Exide Industries Ltd [2020 (4) TMI 792 - SUPREME COURT] has decided the issue against the assessee ruling that the leave encashment will be allowed as deduction only on payment of the same in terms of provision of Section 43B - we see no reason to interfere in the order of the ld. CIT(A) confirming the disallowance of leave encashment u/s 43B of the Act.
Disallowance of expenses u/s 14A r.w.r. 8D - investments in partnership firm to be considered in the said formula are to constitute only the fixed capital investment and not the investment reflected in the current capital account - HELD THAT:- As is evident, Section 48, clause (b), sub-clause (iii) states that on settlement of accounts between partners, the assets of the firm are to be applied in paying the debts of the firm to the third parties; thereafter paying partners what is due to them for advances other than capital and then paying the partners rateably what is due to them on account of capital. There is no distinction made by Section 48 between the amount to be paid to the partners on account of current capital account and fixed capital account. It is only any amount paid by partner to the firm as an advance as distinguished from capital which has priority of payment over the amount to be paid to partners as capital. We noted no distinction made between the two sets of capital account in section 13 of the partnership Act also.
Therefore, even as per the Partnership Act, there is no distinction between the current capital account and fixed capital account. As rightly pointed by the ld. CIT(A), the assessee has never reflected the amount in the current capital account “as receivable”. On the contrary, the same is reflected as current capital, i.e. part of capital account only, to be construed as capital contributed by the partner in the firm. In view of the same, we have no hesitation in confirming the order of the CIT(A) that the computation of disallowance of administrative expenses as per Rule 8D of the Income-Tax Rules, 1962 read with Section 14A of the Act is to be made after taking into consideration both the investment made by the assessee in the fixed capital and current capital of the firm. The disallowance, therefore, made by the Assessing Officer in accordance with the said formula is accordingly confirmed.
TP Adjustment - Addition on account of Corporate Guarantee provided to Associated Enterprise ('AE') - HELD THAT:- Before us, assessee stated that the issue has been decided against the assessee by Redington (India) Ltd [2020 (12) TMI 516 - MADRAS HIGH COURT] categorically holding the provision of guarantees to be in the nature of international transactions and adjustment being necessitated for guarantee commission therefore. In view of the same, we see no reason to interfere in the order of the ld. CIT(A) confirming the addition made to the Arm’s Length Price of Corporate Guarantee.
Disallowance of deduction u/s 10B on account of export turnover the sale consideration of which was admittedly not received within six months from the end of the financial year, but in fact the sales was returned in the subsequent years confirmed .
Weighted deduction u/s 35(2AB) - expenses incurred in in-house research and development activities - AO had disallowed the weighted deduction so claimed by the assessee of expenses which were allegedly not certified by the prescribed authority i.e. Department of Scientific and Industrial Research (DSIR) in Form No. 3CL - HELD THAT:- Assessee contended that it is now settled by various decisions of the Hon’ble jurisdictional High Court, followed by the ITAT, Ahmedabad Bench in several cases, that for the impugned year i.e. AY 2011-12, the DSIR was not required to certify the quantum of expenses incurred by the assessee in inhouse development and research expenses and, therefore, the non-approval of expenses by DSIR could not be a ground for refusing weighted deduction to the assessee on expenses so incurred for the specified purpose. Reference was made to the decision of Banco Products (India) Ltd. [2018 (7) TMI 1559 - GUJARAT HIGH COURT] and to the decision of Pharmanza Herbal (P.) Ltd [2023 (8) TMI 1468 - ITAT AHMEDABAD] - DR fairly agreed with the same.
Since the denial of weighted deduction in the present case is solely for the reason that the amount was not approved by the DSIR, the disallowance, we hold, is not sustainable in view of the decisions cited by the ld. Counsel for the assessee before us. The disallowance made u/s 35(2AB) of the Act is, therefore, directed to be deleted. The assessee, therefore, succeeds in its appeal while the Revenue’s appeal is dismissed.
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2024 (5) TMI 1317 - CALCUTTA HIGH COURT
Validity of reassessment proceedings on the basis of change of opinion - liability of the assessee u/s 115JB - HELD THAT:- While passing the original assessment order, the assessing officer has neither formed any opinion regarding tax liability of the respondent assessee under Section 115JB nor noticed the provisions of Section 115JB nor applied his mind for liability to tax of the respondent assessee under Section 115JB.
We hold that the original assessment order under Section 143(3) of the Act, 1961 is totally silent on liability of the assessee to tax under Section 115JB of the Act, 1961. He neither noticed the provisions of Section 115JB nor formed any opinion with regard to liability to tax of the assessee on book profit. The assessment order was non-speaking and cryptic. Therefore, reassessment proceedings initiated by the assessing officer under Section 147 of the Act, 1961, is not based on change of opinion. The finding of the ITAT in the impugned order to hold that the reassessment proceedings initiated by the assessing officer was based on change of opinion, is perverse and unsustainable in law.
We also find that the ITAT has not decided the appeal of the revenue on merit with regard to the income which allegedly escaped assessment to tax. Decided in favour of revenue.
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2024 (5) TMI 1316 - ALLAHABAD HIGH COURT
Fraudulent I.T.C. Claim for inward supplies - tax invoices had been issued without any actual supply of goods - review petition - Order XLVII, Rule 1 (1) C.P.C.
Fraudulent I.T.C. Claim for inward supplies - HELD THAT:- The petitioner had fulfilled the documentary requirements and the input tax credit was granted to him. Subsequently, in an enquiry conducted by the Special Investigation Branch, it came to light that the firms from which the petitioner claimed to have received inward supplies, were non-existent and bogus. Neither the firms were found on the addresses, claimed by them, nor could any godown or other premises of those firms be found and it appeared that the firms were existing on paper only. The non-existent firms could not have made any actual supplies. Merely because the firm was registered on the date of transaction, it cannot be said that the department was bound to give I.T.C. benefit to the petitioner, even though it has been revealed later on the firm was non-existent and it could not have made any actual supplies - This Court found that the appellate authority had passed the impugned order after taking into consideration the facts and circumstances of the case and the material available on record.
Review petition - HELD THAT:- The Officers of Special Investigating Branch had conducted a survey of premises of the suppliers from whom the petitioner claims to have received inward supplies and they found that the three firms from which the petitioner claims to have received supplies, namely M/s Ridhi Sidhi Enterprises, M/s Siddharth Trading Company and M/s Satvik Enterprises, were non-existent and bogus and the invoices had been issued without any actual supply of goods, upon which the petitioner had fraudulently taken benefit of Input Tax Credit. The Appellate Authority found that the petitioner had produced 04 goods receipts issued by Goyal Goods Carry Corporation, which were on different formats and the GSTIN mentioned on the receipts was found to be not valid, as per the information available on the common portal - No material was placed by the petitioner to rebut the aforesaid factual findings based on the survey of the premises of the supplier firms made by officials of Special Investigating Branch. While examining the validity of the aforesaid findings, this Court found that the findings were based on sufficient material and did not require any interference in exercise of writ jurisdiction of this Court. In these circumstances, the allegation leveled in the review petition that this Court has blindly believed the stand of the revenue, is also without any substance.
The material which the petitioner now produced before this Court, could have very well be brought by him before the Appellate Authority by exercise of due diligence, but he did not do so. Moreover, it supports the findings of the appellate authority that the GST number and the mobile number mentioned on the transporter’s receipt were fake. Therefore, the copy of the affidavit of Vishal Goyal filed by the petitioner along with the review application does not provide any good ground for review of the earlier order.
The review petition is dismissed.
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2024 (5) TMI 1315 - CALCUTTA HIGH COURT
Maintainability of petition - availability of alternative remedy - Recalling and/or cancelling and/or rescinding the penalty imposed u/s 129 (3) of the West Bengal Goods and Services Tax Act, 2017 - HELD THAT:- The E-way bill therefor, did not contain the particulars as prescribed under Rule 55 of the CGST Rules and the WBGST Rules. The delivery challan is also not in conformity with such Rules. This gave rise to a doubt in the mind of the Revenue that the E-way bill was issued by an URP without mentioning the name of M/s. B.G. Enterprise from whom such JCB was released to conceal the actual transaction of the facts. It is, therefor, apparent according to the Revenue that the JCB was used by M/s. B.G. Enterprise to supply some services to some concealed person and was released by him for taking possession of such goods directly by the writ petitioner - In Revenue jurisprudence, it is well-settled that the assessee/registered person is required to provide documents in case of any issue raised by the Revenue for necessary clarification. It was therefor, incumbent upon the petitioner to produce documents as discussed hereinabove to clarify the situation. Having not done so, the petitioner cannot fall back and say that the order impugned is bad in law or without jurisdiction. On the contrary, the bona fide of the petitioner is in doubt and the presumption of withholding relevant documents by the petitioner is also substantiated.
Jurisdiction - contention of petitioner is that the order impugned is without jurisdiction as the Revenue u/s 129 of the WBGST Act does not possess the jurisdiction to assess tax - HELD THAT:- In absence of the transaction being showed as an exempted one, the Revenue has no other option to compute the penalty. In order to compute the applicable penalty, the Revenue has taken the value of the JCB to be Rs. 27,000,00/-. The petitioner has also produced no documents to dispute such figure but only says that tax cannot be assessed which is an incorrect interception of the provisions of Section 129 of the WBGST Act - there are no infirmity in such computation.
It is also not found that the order impugned has been passed without following any direction given in the order dated 1st February, 2024. The impugned order is a reasoned one passed after affording the writ petitioner a fresh hearing.
Maintainability of writ petition - HELD THAT:- The petitioner is given the benefit as it has contended that the order impugned is without jurisdiction. It is well-settled principle of law that alternative remedy is not an absolute bar for filing a writ petition particularly when the order is assailed as one without jurisdiction.
It is also not in doubt that stricto sensu an assessee/registered person cannot shirk from his responsibility of complying with the requirement of law to produce valid documents required under the Act and the rules framed thereunder on the consignment being intercepted - The same treatment is not available to the writ petitioner in the facts of the instant case.
The writ petition is accordingly dismissed.
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2024 (5) TMI 1314 - ALLAHABAD HIGH COURT
Violation of principles of natural justice - opportunity of 'personal hearing' was not afforded to the petitioner - Section 75(4) of the Uttar Pradesh Goods and Services Tax, Act, 2017 - HELD THAT:- The inclusion of "or'' in Section 75(4) of the UPGST Act, 2017, emphasizes the dual nature of the obligation to provide a personal hearing, accommodating both proactive requests from individuals seeking to defend their interests and reactive responses to adverse orders contemplated by tax authorities. In either scenario, the statutory mandate remains clear: the individual must be afforded an opportunity for personal hearing before any final determination is made regarding tax or penalty imposition. Moreover, the statutory mandate for personal hearing reflects an acknowledgement of the complex and multifaceted nature of tax and penalty determinations, which often involve intricate legal and factual considerations. Personal hearing provides a forum for nuanced discussion and exploration of these complexities, enabling decision-makers to make well-informed and equitable decisions based on a comprehensive understanding of the circumstances at hand.
This Court in M/S SHREE SAI PALACE VERSUS STATE OF U.P. AND OTHERS [2024 (3) TMI 49 - ALLAHABAD HIGH COURT], in similar facts and circumstances has held that no orders can be allowed to pass through the legislative barriers of natural justice erected to safeguard individual rights and prevent abuse of power and that the opportunity of hearing is required to be afforded to the petitioner before passing orders.
Let there be a writ of certiorari issued against the order dated January 31, 2024 and the order dated October 6, 2021. These orders are quashed and set aside - Petition allowed.
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2024 (5) TMI 1313 - DELHI HIGH COURT
Violation of principles of natural justice - impugned order does not fully take into consideration the reply submitted by the Petitioner and has passed a cryptic order - order u/s 73 of CGST Act - HELD THAT:- The observation in the impugned order dated 29.12.2023 does not take into consideration all the points raised in the reply by the petitioner. Proper Officer had to at least examine the complete reply along with documents submitted by the petitioner and then form an opinion. He merely held that the reply filed by the petitioner is partially found non satisfactory which ex-facie shows that Proper Officer has not applied his mind to the complete reply submitted by the petitioner.
The matter is remitted for reconsideration of the issues - petition disposed off by way of remand.
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2024 (5) TMI 1312 - DELHI HIGH COURT
Violation of principles of natural justice - impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - order u/s 73 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The observation in the impugned order dated 26.04.2024 is not sustainable for the reasons that the reply dated 02.01.2024 filed by the Petitioner is a detailed reply with supporting documents. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is not properly filed/explained without any justification which ex-facie shows that the Proper Officer has not applied his mind to the reply submitted by the petitioner.
Further, if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish further documents/details.
The impugned order dated 26.04.2024 cannot be sustained and is set aside. The Show Cause Notice is remitted to the Proper Officer for re-adjudication - Petition disposed off by way of remand.
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2024 (5) TMI 1311 - DELHI HIGH COURT
Violation of principles of natural justice - impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - order u/s 73 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The impugned order, however, after recording the narration records that the reply uploaded by the taxpayer devoid of merits without any justification.
The observation in the impugned order dated 21.03.2023 is not sustainable for the reasons that the reply dated 11.01.2024 filed by the Petitioner is a detailed reply with supporting documents. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is devoid of merits without any justification which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.
The impugned order dated 21.03.2024 cannot be sustained and is set aside. The show cause notice is remitted to the Proper Officer for re-adjudication - Petition disposed off.
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2024 (5) TMI 1310 - ALLAHABAD HIGH COURT
Challenge to review application - petition filed by the petitioner did not arise from proceedings under Section 129 of the U.P. GST Act, 2017 - HELD THAT:- Once the Supreme Court had caused of effect of disposal of Writ Tax No.1635 of 2018, the consequential order passed by this Court had been forced on it, in view of deemed disposal caused by the earlier order of the Supreme Court. The main writ proceedings having been thus disposed of by the Supreme Court, the review sought of the order of this Court is misconceived. If at all, remedy lies elsewhere.
The review application is rejected.
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2024 (5) TMI 1309 - DELHI HIGH COURT
Demand including penalty u/s 73 of the CGST Act, 2017 - Petitioner was unaware of the initiation of any proceedings and accordingly could not respond to the same - Violation of principles of natural justice - HELD THAT:- Petitioner has made out a case that Petitioner has missed out the receipt of the notice as it was merely uploaded on the portal under the category of “Additional Notices” tab and accordingly could not respond to the Show Cause Notice.
The impugned order 04.12.2023 is set aside. Since the only reason for passing the impugned order is that Petitioner had not filed any reply/explanation, Petitioner needs to be granted one opportunity to respond to the Show Cause Notice and thereafter, the Show Cause Notice to be re-adjudicated - Respondent are directed to open the portal to enable the Petitioner to file a response to the said Show Cause Notice dated 23.09.2023 which shall be filed within a period of four weeks.
Petition disposed off.
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