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Showing 1 to 20 of 1319 Records
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2024 (3) TMI 1319 - ITAT KOLKATA
Final approval u/s 80G(5)(iii) to charitable institution - Time for final registration after grant of provisional registration under Clause (iv) to First Proviso to section 80G(5) - application rejected observing that the time limit prescribed for making an application for final approval u/s 80G was at least six months prior to the expiry of the period of the provisional approval or within six months of the commencement of its activities, whichever is earlier - HELD THAT:- Tribunal in the case of Tomorrow’s Foundation [2024 (3) TMI 941 - ITAT KOLKATA] it is held that after grant of provisional approval, the application cannot be rejected on the ground that the institution had already commenced its activities even prior to grant of provisional registration. Under such circumstances, the date of commencement of activity will be counted when an activity is undertaken after the grant of provisional registration either under Clause (i) or Clause (iv) to First Proviso to section 80G(5) of the Act.
The appeal of the assessee is allowed accordingly and the CIT(Exemption) is directed to grant provisional approval to the assessee under Clause (iii) to First Proviso to section 80G(5) of the Act, if the assessee is otherwise found eligible. CIT(A) will decide the application for final registration within three months of the receipt of copy of this order. Appeal of the assessee is treated as allowed for statistical purposes.
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2024 (3) TMI 1318 - KARNATAKA HIGH COURT
Cognizance of an offence punishable under Section 447 of the Companies Act, 2013 on a private complaint by a shareholder or a member of a Company by the Special Court constituted under Section 435 of the Companies Act, 2013 - HELD THAT:- The Division Bench of this Court upon reference by the learned Single Judge and the Division Bench has held that upon reading Section 212(6) along with 439(1), the Special Court constituted under Section 435 of the Act cannot take cognizance of an offence punishable under Section 447 of the Act upon a private complaint by a shareholder or a member of a Company, but can take cognizance only upon complaint by the Special Fraud Investigation Officer in terms of Second Proviso of Section 212(6) of the Act. Therefore, the cognizance taken on a private complaint filed by the shareholder is one without jurisdiction, and the continuation of the proceedings will be an abuse of the process of law.
The entire proceedings on the file of the Special Court (Economic Offences) at Bengaluru, insofar as it relates to petitioners/accused No.2 and 3, is hereby quashed - Petition is allowed.
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2024 (3) TMI 1317 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Doctrine of subrogation - Allowing recourse to the Financial Creditors against the Personal Guarantors of Asian Colour Coated Ispat Limited - Resolution Plan approved - whether the Financial Creditor can proceed against the Personal Guarantors in absence of any debt after extinguishment of such debts upon assignment in terms of the RBI Prudential Framework for Resolution of Stressed Assets dated 07.06.2019 and as stipulated in the approved Resolution Plan? - HELD THAT:- As a general rule, the doctrine of subrogation is an absolute right of the guarantor, however, the issue becomes different, if it falls within the domain of the Code in the context of CIRP proceedings. We note that as per notification dated 15.11.2019, the Personal Guarantors became liable under the Code and therefore, the treatment of Personal Guarantors under the Code are to be treated differently vis-à-vis under the contract of guarantees under the Indian Contract Act, 1872.
The denial of right of subrogation is no more res-judicata and has been decided in catena of the judgments by the Hon’ble Supreme Court of India.
Hon’ble Supreme Court of India in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT] noted that the Financial Creditors can pursue their claims against the Personal Guarantors to the Corporate Debtor and right of subrogation gets extinguished, although the apex Court decided not to express conclusive opinion which might have affected them pending litigations on account of invocation of such guarantees.
It is now well settled law, in light of the Essar Case that rights of subrogation that may arise against the Corporate Debtor can be extinguished under the Resolution Plan and therefore the arguments of the Appellant on issue of rights of subrogation’s are not convincing. If the rights of subrogation are allowed to continue against the Corporate Debtor under the management of the new SRA, the same would have the effect of putting the SRA and the Corporate Debtor in the same position as prior to its insolvency resolution. The allegation of the Appellant pertaining to differential treatment due to extinguishing their rights of subrogation under the approved Resolution Plan against the Corporate Debtor is unfounded, which is only to ensure that the SRA takes control of the Corporate Debtor on a clean slate without carrying any previous liability baggage.
The extinguishment of Personal Guarantors right of subrogation is unavoidable and inaccessible fact in insolvency cases and it requires to be respected by all stakeholders and any departure from such principles will have adverse impact on revival of the Corporate Debtors, interest of the Financial Creditors and overall negative impact on the national economy.
The financial creditors have reserved the rights to proceed against the personal guarantors like the Appellant herein in terms of the “Excluded Rights” in approved Resolution Plan. There is no question of transfer of a “mere right to sue” and in such circumstances, we feel that it is a structured financial deal in form of Resolution Plan exercised based on the commercial wisdom, with aim of resolution of a corporate debtor, as well as to ensure that financial creditors are able to recover their outstanding debts as guaranteed by the Personal Guarantors, the Appellants herein.
Alleged non existing of debts in the books of the Financial Creditors and regarding treatment in the books of the financial creditors with respect to such continuing rights of the financial creditors against the personal guarantors of the Corporate Debtor after the approval of the Resolution Plan - HELD THAT:- The treatment in the Books of the Financial Creditors is based on RBI Prudential norms which were issued with several purposes, including and not limited to, discouraging the Financial Creditors to resort to ever greening of loans. We feel that such RBI guidelines do not intent to give undue benefits to the Personal Guarantors of the Corporate Debtors or debar the Financial Creditors in pursuing their legal rights to recover their outstanding debts from the Personal Guarantors to the Corporate Debtor. After all, it cannot be anyone’s case to write off public money by such circuitous route or hypothetical legal assumption.
The Hon'ble Supreme Court, in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [2019 (1) TMI 1508 - SUPREME COURT], has categorically recognised the concept of preserving the corporate debtor as a going concern while ensuring maximum recovery for all creditors to be the intent of the Code.
Thus, commercial wisdom of the CoC has been given supremacy and no grounds exist for the Adjudicating Authority or Appellate Tribunal to interfere.
There are no error in the Impugned Order - appeal dismissed.
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2024 (3) TMI 1316 - BOMBAY HIGH COURT
Liability of Collect Tax at Source (TCS) - Exempt supplies - Section 52 of the Central Goods and Services Tax Act, 2017 (CGST Act) - It is contended that payment for the contract can either be settled through the Petitioner’s platform, or it can be settled directly between the buyer and seller. The Petitioner does not guarantee settlement of transactions by way of delivery of goods or payment. The Petitioner merely charges transaction fees for providing the platform to its members for the purpose of e-auction.
HELD THAT:- In the peculiar facts and circumstance of the case, when the Petitioner has raised an issue of the maintainability of the alleged demand on the ground that Section 52 of the CGST Act is not applicable, and more particularly considering the nature of the business and transaction involved, it would be appropriate that the adjudicating officer considers the same as preliminary issues and decide the same first in accordance with law.
This Petition is disposed off by permitting the Petitioner to raise such preliminary issues before the adjudicating officer and the same shall be taken into consideration and decided by him in accordance with law.
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2024 (3) TMI 1315 - PUNJAB & HARYANA HIGH COURT
Seeking grant of regular bail - irregular availment of Input Tax Credit - violation of provisions of Section 132(1) (b) and 132(1)(c) of the CGST Act - HELD THAT:- On perusal of the record, this Court has arrived at the conclusion that the petitioner deserves to be released on bail in the present case. No doubt, the respondents have levelled specific allegations against the present petitioner, yet, the criminal liability of the petitioner is yet to be decided by the trial Court during the course of trial. Still further, the petitioner was arrested in the present case on 19.04.2023 and the maximum sentence provided under the statute is five years. Still further, the case of the prosecution is based on the testimonies of official witnesses and the petitioner may not be in a position to influence the witnesses, who are to be produced by the prosecution before the trial Court. Even otherwise, the petitioner cannot be confined in jail as an under-trial for an indefinite period.
Thus, without commenting any further on the merits, the present petition is allowed and the petitioner is ordered to be released on bail on his furnishing bail bonds/surety bonds to the satisfaction of the learned trial Court/Duty Magistrate/CJM concerned subject to the conditions imposed - petition allowed.
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2024 (3) TMI 1314 - KARNATAKA HIGH COURT
Levy of GST - activity of holding equity capital by the parent Company in the Petitioner - ultravires Section 5 of the IGST Act, 2017 read with Section 7 of the CGST Act, 2017 or not - HELD THAT:- In the instant case, the parent company is M/s. Metro Cash and Carry International GmbH of which the petitioner herein i.e., M/s. Metro Cash and Carry Pvt. Ltd., is a subsidiary and merely because the parent company – M/s. Metro Cash and Carry International GmbH holds shares in its subsidiary i.e., the petitioner herein, the said circumstance cannot be classified, treated or construed as ‘supply of service’ for the purpose of GST.
Since the issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in M/S. YONEX INDIA PRIVATE LIMITED VERSUS UNION OF INDIA, STATE OF KARNATAKA, COMMISSIONER OF COMMERCIAL TAXES BANGALORE, ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT 2. 8) BANGALORE [2024 (2) TMI 59 - KARNATAKA HIGH COURT], the impugned Show Cause Notices issued are without jurisdiction or authority of law and the same deserves to be quashed.
Petition allowed.
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2024 (3) TMI 1313 - DELHI HIGH COURT
Cancellation of GST registration of petitioner - non-service of notice to the Petitioner on his address or email and was only uploaded on the common portal - violation of principles of natural justice - HELD THAT:- The petitioner was unable to access the Show Cause Notices or reply to the said Show Cause Notices.
The impugned orders dated 04.12.2023 which have been passed solely because petitioner had not file a reply cannot be sustained. The matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned orders dated 04.12.2023 are set aside. The matter is remitted to the Proper Officer for re-adjudication.
Petition disposed off.
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2024 (3) TMI 1312 - JHARKHAND HIGH COURT
Demand of GST - Validity of the order in FORM GST DRC-07 - Violation of natural justice - impugned order was passed before the period of 15 days could expire and the petitioner-Firm has therefore not been given a fair opportunity to put forth its defence to SCN - Appealable order or not - HELD THAT:- In the first place, a challenge to the show-cause notice, charge memo or charge-sheet is generally not entertained in a proceeding under Article 226 of the Constitution of India. There is a sound policy in law behind this rule of non-interference that the aggrieved person should first avail of the remedy provided under the statutory regime. The impugned order dated 28th December 2023 passed by the State of Tax Officer, Special Circle, Ranchi is appealable under section 107 of the GST Act and under section 107 of the JGST Act.
The summary of show-cause notice is dated 13th December 2023. Through this notice, the petitioner-Firm was intimated that within 15 days if it deposits the assessed amount or provides satisfactory reply the notice shall be withdrawn. Now the stand of the petitioner-Firm is that it submitted a detailed show-cause reply dated 29th December 2023 but before that the impugned order dated 28th December 2023 has been passed - The notice is dated 13th December 2023 and the petitioner-Firm itself affirms that the said notice was mailed on 16th December 2023 in FORM DRC-1.
The petitioner-Firm is required to approach the appellate authority who shall have the benefit of the records and would be in a better position to adjudicate the disputes on facts - this Court is not inclined to entertain the present writ petition which is dismissed only on the ground that no case is made out for entertaining this petition notwithstanding the statutory regime under the JGST Act.
Petition dismissed.
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2024 (3) TMI 1311 - DELHI HIGH COURT
Taxability of Personal Guarantee and Corporate Guarantee in GST - Seeking a declaration that the activity of the holding company providing a Corporate Guarantee to a subsidiary is not in the nature of supply of services taxable under Section 9 of the Central Goods & Service Tax Act, 2017 - HELD THAT:- Issue notice.
List on 08.07.2024.
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2024 (3) TMI 1310 - ORISSA HIGH COURT
Maintainability of petition - appealable order or not - non-constitution of the Appellate Tribunal - petitioner is deprived of its statutory remedy of Appeal and the corresponding benefit of sub-sections-8 & 9 of section 112 of the CGST/OGST - HELD THAT:- The petitioner is desirous of availing the statutory remedy of Appeal under the said provisions. Apparently, acknowledging the absence of constitution of Appellate Tribunal, in exercise of the power conferred under section 172 of the CGST Act, 2017, the Government of India based on the recommendation made by the G.S.T. Council, has issued Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 on 03.12.2019.
In tune with the said Removal of Difficulties Order dated 03.12.2019, the Central Board of Indirect Taxes and Customs, GST Policy Wing vide Circular No. 132/2/2020-GST Dated 18th March, 2020 has come out with the clarification in respect of appeal having regard to non-constitution of the Appellate Tribunal - Taking into account the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019 issued by the Government of India and subsequent clarification issued by the Central Board of Indirect Taxes and Customs (GST Policy Wing) vide Circular No. 132/2/2020 dated 18th March, 2020, it is deemed proper in the interest of justice to dispose of this writ petition, subject to conditions imposed.
The writ petition stands disposed of.
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2024 (3) TMI 1309 - CALCUTTA HIGH COURT
Additional tax liability for execution of subsisting Government contracts either awarded in the pre-GST regime or in the post-GST regime without updating the Schedule of Rates (SOR) - HELD THAT:- This writ petition is disposed of by giving liberty to the petitioner to file appropriate representation in the aforesaid regard as referred in preceding paragraph of this order, before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks from date. On receipt of such representation the Additional Chief Secretary, Finance Department shall take a final decision within four months from the date of receipt of such representation after consulting with all other relevant departments concerned.
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2024 (3) TMI 1308 - BOMBAY HIGH COURT
Reopening of assessment without releasing seized documents by Crime branch - as argued Crime branch has seized certain documents, computers, hard disks, etc. from the petitioner and until all this is released, the petitioner would not be in a position to effectively respond to the notices of reassessment - HELD THAT:- There is a vague and omnibus statement in the petition that the petitioner pursued the matter with the second respondent for release in terms of the JMFC's order, however, this vague and omnibus statement is not backed by any material, documents, etc.
There is no averment in the petition about furnish of any indemnity bond. Orally it was attempted to submit that the indemnity bond must have been given at some time after the JMFC made her order dated 06.02.2018. Thus, it is apparent to us that the petitioner, even after securing the order dated has not pursued the matter for the last about six years with the necessary seriousness and just because the tax authorities are proceeding with the reassessment proceedings, this petition has been instituted. This petition is nothing but an attempt to stall the reassessment proceedings without any justifiable cause.
On the ground that the seized documents have not been released the petitioner succeeded in securing a remand from the lTAT. This is evident from the order dated 30.08.2022 made by the ITAT.
ITAT, after granting an opportunity to the petitioner remanded the reassessment proceedings or the block assessment proceedings to the ITO for de novo assessment. The petitioner was also directed to comply with the notices in respect of the assessment proceeding and be diligent by avoiding to take any adjournments. This order was made on 30.08.2022.
Despite the order of there is nothing on record to indicate that the petitioner took any serious steps for obtaining the documents/material/hard disks from the second respondent. The only letter produced on record is dated when, in fact, even the IT notice was issued on 25.01.2024. Thus, it is very apparent that the petitioner simply wants to stall the reassessment proceedings or the de novo proceedings at any cost. The writ Court cannot assist the petitioner in such endeavours.
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2024 (3) TMI 1307 - MADRAS HIGH COURT
Seeking directions to remove the order of attachment over the property of the borrower, which according to the petitioner, is mortgaged and is a secured asset - petitioner is a creditor of respondents 2 and 3 and account of the borrowers was declared as a non-performing asset and notice u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was issued
HELD THAT:- It is not a matter of debate that the petitioner being a secured creditor and the security being registered with CERSAI would have a priority charge u/s 26E of the Act of 2002.
A Full Bench of this court in the case of Assistant Commissioner (CT) Anna Salai-III Assessment Circle vs Indian Overseas Bank and Another 2016 (12) TMI 373 - MADRAS HIGH COURT] answered the reference and held that the rights of the secured creditors to realise secured debts due and payable to them by sale of assets over which security interest is created, shall have priority and shall be paid in priority over all other debts and Government dues including revenues, taxes, cesses and rates due to the Central Government, State Government or Local Authority.
The Full Bench of the Bombay High Court in the case of Jalgaon Janta Sahakari Bank Ltd. and another vs Joint Commissioner of Sales Tax and another [2022 (9) TMI 163 - BOMBAY HIGH COURT] held that the secured creditor would have the priority charge, as contemplated under Section 26E of the SARFAESI Act, 2002, in case the same is registered under Section 26B of the SARFAESI Act, 2002. The secured creditor in this petition claims that its security is registered under Section 26B of the SARFAESI Act, 2002.
In view of the Full Bench judgments, as referred to above, it is held that the secured creditor has priority charge over the claims of the Sales Tax, Commercial Tax and Income Tax. In case auction is held by the secured creditor and the sale certificate is not registered, then the Registering Authority may register the same, notwithstanding the attachment of Sales Tax, Income Tax or Commercial Tax Departments.
In case the auction sale is conducted by the secured creditor and it has received excess amount than its dues, then it is liable to remit the excess amount to the Departments. However, if it has not received the amount in excess of the amount due and payable to it, then it is not required to remit any amount to the Departments and the Departments cannot sustain prosecution against the Authorised Officer or the Officer of the secured creditor for not remitting the amount.
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2024 (3) TMI 1306 - ITAT DELHI
Rectification u/s 154 - Exemption u/s 11(2) - Accumulation of income - difference in figures in computation of income in return of income and in Form 10 in respect of total amount of accumulated funds under section 11(2) - as argued that the Ld. CIT(A) did not ask for clarification from the assessee for alleged discrepancy found by him while matching the details of investment with evidence furnished, thus this is in violation of the principles of natural justice - HELD THAT:- In our view, the claim of the assessee needs verification. We, therefore, consider it judicially expedient to restore the matter back to the file of the Ld. AO to carry out necessary verification of the assessee’s claim and if on verification, the claim of the assessee is found to be correct and in accordance with law, modify the assessment. Appeal of the assessee is treated as allowed for statistical purposes.
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2024 (3) TMI 1305 - ITAT DELHI
Order passed against a non-existent entity - amalgamation/merger of the erstwhile company with the successor company - HELD THAT:- A cursory glance of the draft assessment order dated 21.12.2019 clearly reveals that against the name of the assessee, the Assessing Officer has mentioned “Boeing International Corporation India Ltd.” Whereas, in the column showing address of the assessee, the Assessing Officer has mentioned “M/s. Boeing International Corporation India Ltd. (3rd Floor) DLF Centre, Sansad Marg, New Delhi (India)”. The aforesaid facts clearly show that the assessment order has been passed in the name of Boeing International Corporation India Ltd., which as on the date of passing of the draft assessment order has become a non-existent entity. Undisputedly, against the draft assessment order, assessee raised objections before learned DRP. Interestingly, the directions of learned DRP is in the name of Boeing India Pvt. Ltd., the successor company. However, the final assessment order has again been passed by the Assessing Officer in the name of Boeing International Corporation India Ltd., the erstwhile company. More interestingly, the name of the successor company i.e. Boeing India Pvt. Ltd., nowhere appears in the body of the final assessment order.
Also further relevant to observe, the PAN appearing both in the draft and final assessment orders is of the erstwhile company, Boeing International Corporation India Ltd. and not of the successor company Boeing India Pvt. Ltd. Thus, the facts on record establish beyond doubt that both the draft as well as final assessment orders have been passed in the name of a non-existent company.
Applying the ratio laid down by the Hon'ble Supreme Court, in case of Maruti Suzuki [2019 (7) TMI 1449 - SUPREME COURT] and Sony Mobile Communications India Pvt. Ltd [2023 (2) TMI 1074 - DELHI HIGH COURT] to the factual matrix of the issue, we have no hesitation in holding that the impugned assessment order passed in the name of a non-existent entity is void ab initio. Accordingly, it is quashed.
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2024 (3) TMI 1304 - ITAT DELHI
TP Adjustment - Provision of Administrative and Agency Services - Determination of Arm's Length Price (ALP) - allocation of expenses relating to income streams between two segments - HELD THAT:- As seen that the assessee has allocated common expenses and has also given basis of apportionment. We find that the CIT(A) has put a doubt on whether segmental accounts are to be accepted and the only reason given by the authorities, as we understand from the respective orders, is that it is not audited.
Merely because segmental accounts are not audited cannot make them untrustworthy without pointing out any specific defect/error/fallacy in them. Observations of the ld. CIT(A) that non compete fee and good will has not been allocated is not accepted as the TPO himself has not allocated these expenses.
Assessee has not only provided segmental account but has also allocated expenses and has given basis of allocation. We do not find any merit in the stand taken by the TPO/AO as confirmed by the ld. CIT(A). We, accordingly, direct the AO to delete the impugned adjustment. Appeal of assessee allowed.
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2024 (3) TMI 1303 - SC ORDER
Classification of imported goods - Reformate - whether the goods to be classified under CTH 2710 12 19 or under CTH 2707 50 00? - Tribunal held that Reformate would merit classification under CTH 2707 50 00 - HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the Customs, Excise & Service Tax Appellate Tribunal.
Civil Appeal is, accordingly, dismissed.
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2024 (3) TMI 1302 - BOMBAY HIGH COURT
Suspension of operations of handling the cargo of third parties - Non-issuance of a show cause notice - Validity Of order passed by the Commissioner of Customs (G) - failure to comply with the provisions of Regulations 5 & 10(1)(m) of the SCMTR, 2018 and Section 33, 34, 39, 40 & 41 of the Customs Act, 1962 - confiscation of goods - penalty - HELD THAT:- As the petitioners are handling the cargo of third parties and if the order-in-original is not suspended, it would be a serious and an irreparable prejudice not only to the petitioners but also to third parties with whom the petitioners have contracts to handle their cargo. Thus, in our opinion, it is in the interest of justice that the proceedings are remanded to the Commissioner of Customs for a fresh order to be passed after an opportunity of hearing is granted to the petitioners after issuance of a show cause notice, so that the petitioners are made aware in regard to the allegations intended to be made against the petitioners for such action to be resorted and on which the petitioners can be heard by the Adjudicating Officer.
Thus, for such course of action to be adopted, the impugned order dated 14 March 2024 would be required to be quashed and set aside, as also the consequences emanating from the said order namely the Public Notice dated 20 March 2024 would also be required to be not acted upon. Ordered accordingly.
We, accordingly, dispose of this petition in terms of our aforesaid observations.
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2024 (3) TMI 1301 - TELANGANA HIGH COURT
Levy and collection of Cost recovery charges - Validity Of Notification No.26/2009 issued by Central Board of Excise and Customs - Duties, functions and obligations of custodian appointed under section 45 of the Customs Act, 1962 - Regulation 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009 - Regulation ultra vires to section 157 and 158 of the Customs Act, 1962 - HELD THAT:- It is submitted that even if the same are treated to be a fee, there is no justification for levy of fees as no service is being rendered to the Company. In the absence of any element of quid pro quo, it is urged that the decisions of Bombay and Delhi High Courts in Mumbai International Airport Private Limited [2014 (10) TMI 508 - BOMBAY HIGH COURT] and Allied ICD Services Limited [2018 (8) TMI 1610 - DELHI HIGH COURT] are distinguishable and the learned Single Judge of this Court has rightly held that the 2009 Regulations are ultra vires the Customs Act, 1962. In support of the aforesaid submissions, reliance has been placed on the decisions of the Supreme Court in Government of Maharashtra vs. Deokar’s Distillery [2003 (3) TMI 727 - SUPREME COURT] and Gupta Modern Breweries vs. State of Jammu and Kashmir [2007 (4) TMI 684 - SUPREME COURT].
From a perusal of Section 157 of the Customs Act, it is evident that Section 157 does not enumerate any specific provision under which cost recovery charges i.e., the amount of salary payable to the officials of the Customs Department, who are deployed at the Airport who perform their statutory duties, can be recovered. The 2009 Regulations have been framed in exercise of the powers conferred under Section 141 and Section 157 of the Customs Act. From a close scrutiny of the aforesaid provisions of Sections 141 and 157, it is evident that there is no express statutory provision conferring authority on the appellants to levy cost recovery charges. In the absence of any special authorization to levy cost recovery charges, appellants have no authority to impose cost recovery charges by means of a Regulation. The inevitable conclusion is that the 2009 Regulations are ultra vires the Customs Act, 1962.
Therefore, the officers of the Customs Department, who were employed at the Airport between the years 2008 and 2013, were deployed to perform their statutory duties. The levy of cost recovery charges, which is in fact salaries payable to the customs staff deployed at the Airport is in the nature of administrative charges and is a tax. It cannot be exacted from the respondent without any statutory provision. Therefore, the same is also violative of Article 265 of the Constitution of India. Even assuming that the said levy to be a fee, the same cannot be recovered from the respondent as no services are provided to it by deployment of additional staff at the Airport between the years 2008 and 2013.
Contention that the Company at the time of application seeking appointment as Custodian has furnished an undertaking that it shall abide by the 2009 Regulations is concerned, suffice it to say that the Company subsequently on 06.05.2007 and 22.11.2007 had submitted applications seeking to waive the condition Nos.10 to 13 of Circular No.34/2002. Therefore, the undertaking furnished by the Company does not bind it in the facts of the case.
Thus, we agree with the conclusion of the learned Single Judge that the impugned 2009 Regulations are ultra vires the Customs Act.
In the result, the Appeal fails and the same is hereby dismissed.
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2024 (3) TMI 1300 - GUJARAT HIGH COURT
Levying Container Storage Charges - ground rent - Storage of confiscated containers to treated as Goods or not - declaration of Custodian at Kandala Port Trust issued from the office of the Commissioner of Customs, the Custom House, Kandala - Section 45(1) of the Customs Act, 1962 - HELD THAT:- The contention of the learned counsel for the petitioner that the Kandala Port Trust could not have charged ground rent from the petitioner as the containers could not have been confiscated by the Customs authorities, as they did not fall within the meaning of ‘goods’, is found to be misconceived. The reference to the decision of the Apex Court in Chairman, Board of Trustees, Cochin Port Trust [2020 (8) TMI 300 - SUPREME COURT] is found to be misplaced.
No ground rent can be levied on the petitioner shipping agent, once the Kandala Port Trust became the custodian of the goods with the confiscation by the Customs department. There are inherent fallacy in the arguments of the learned counsel for the petitioner, inasmuch as, the said notification only decides the liability of the Kandala Port Trust for being custodian of the Custom department and Clause 18 of the said notification can only be interpreted to mean that the Kandala Port Trust would not charge any rent/ demurrage on the goods/containers detained from the Customs department.
There are no error in the order passed by the learned single Judge in holding that the petitioner has failed to make out a case that there was an error on the part of the Kandala Port Trust in levying container storage charges from the petitioner.
Appeal disposed off.
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