|
Advanced Search Options
Case Laws
Showing 321 to 340 of 1346 Records
-
2021 (1) TMI 1028
Scheme of Amalgamation - seeking directions of this Tribunal to dispense with the requirement of convening meetings of Shareholders, Secured Creditors and Un-secured Creditors of the Transferor Companies No. 1 & 2 and the Transferee Company - HELD THAT:- The Board of Directors of all the Applicant Companies in the meeting held on 25th November, 2020, considered and unanimously approved the proposed Scheme of Amalgamation - The Applicant Companies have filed the Audited Financial Statements for the financial year ended 31st March, 2020 and the Unaudited Financial Statements (Provisional) for the financial period ended 30th September, 2020.
It is stated that no proceeding for inspection, inquiry or investigation under the provisions of the Companies Act, 2013, or under the provisions of the Companies Act, 1956 is pending against the Applicant Companies - t is stated by the Applicant Companies that the proposed Scheme of Amalgamation does not envisage any buy back of shares, There is no proposal for reduction of share capital except to the extent of cancellation of any cross holding of shares between Transferor Companies; and between the Transferor Companies and the Transferee Company, as the case may be - The Applicants has stated that the accounting treatment proposed in the Scheme of Amalgamation is in conformity with the accounting standards prescribed under Section 133 of the Companies Act, 2013. Certificates from the respective Statutory Auditors of all the Companies have been filed along with the Application.
This Tribunal directs that, in view of the consent affidavits given by the Shareholders of the Transferor Company No. 1 & 2 and The Transferee Company, the requirement of convening meeting of the Shareholders of the Transferor Company No. 1 & 2 and The Transferee Company, for the purpose of considering and if thought fit approving the proposed Scheme of Amalgamation, are dispensed with - there is no Secured Creditors in the Transferor Company No, 1 & 2 and the Transferee Company, accordingly, the requirement of convening meeting of the Secured Creditors of the Transferor Company No, 1 & 2 and the Transferee Company, for the purpose of considering and if thought fit approving the proposed Scheme of Amalgamation, is dispensed with - This Tribunal directs that, In view of consent affidavits given by the Un-secured Creditors of the Transferor Company No. I & 2 and The Transferee Company, the requirement of convening meetings of the Unsecured Creditors of Transferor Company No, 1 & 2 and the Transferee Company, for the purpose of considering and if thought fit approving the proposed Scheme of Amalgamation, are dispensed with.
The Applicant Companies are directed to serve the notice along with a copy of the Scheme upon; (a) the Central Government through the office of the Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi', (b) the Registrar of Companies, Uttar Pradesh, Kanpur; and (c) The Official Liquidator, Uttar Pradesh, Allahabad; and (d) the Income Tax Department, with a direction that they may submit their representation(s), if any, within a period of 30 (thirty) days from the date of receipt of such notice to the Tribunal and a copyies Of such representation(s) shall simultaneously be served upon the Applicant Companies, failing which, it shall be presumed that the authorities have no representation(s) to make on the Scheme of Amalgamation as per Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - Application disposed.
-
2021 (1) TMI 1027
Approval of Scheme of Merger by Absorption - Sections 230-232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. In view of the foregoing, upon considering the approval accorded by the members and creditors of the Petitioner Companies to the proposed Scheme, and the affidavits filed by the Regional Director, Ministry of Corporate Affairs, the reports of the official Liquidator etc., there appears to be no impediment in sanctioning the present scheme. Consequently, sanction is hereby granted to the scheme under Sections 230 to 232 of the Companies Act, 2013. The Petitioners shall however, remain bound to comply with the statutory requirements in accordance with law.
Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this Court to the scheme will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons, directors and officials of the petitioners.
The Transferor Companies stand dissolved from the date of this Order without following the process of winding-up - That all the property, rights and powers of the Transferor Companies be transferred without further act or deed, to the Transferee Company and accordingly the same shall pursuant to Section 232 of the Act, be transferred to and vest in the Transferee Company for all the estates and interests of the Transferor Companies therein but subject nevertheless to all the charges not affecting the same.
-
2021 (1) TMI 1026
Approval of scheme of Amalgamation - section 230 to 232 of the Companies Act 2013 - HELD THAT:- Upon considering the approval accorded by the members and creditors of the Petitioner Companies to the proposed Scheme, and the affidavits filed by the Regional Director, North Western Region, ROC, Chhattisgarh, the reports of the official Liquidator, Chhattisgarh etc., there appears to be no impediment in sanctioning the present scheme. Consequently, sanction is hereby granted to the scheme under Sections 230 to 232 of the Companies Act, 2013. The Petitioner shall however, remain bound to comply with the statutory requirements in accordance with law.
While approving the Scheme, it is clarified that this order should not be construed as an order in any granting exemption from payment of stamp duty, taxes including income tax, GST etc. or any other charges, if any, and payment accordance with law or in respect of any permission/compliance with any other requirement which may be specifically required under any law - Notwithstanding the above, if there is any deficiency found, or violation committed of any enactment, statutory rules or regulation, the sanction granted by this Tribunal to the scheme will not come in the way of action being taken in accordance with law, against the concerned persons, directors and official of the petitioners.
The scheme of Amalgamation be sanctioned by this National Company Law Tribunal, Cuttack Bench to be binding with effect from appointed date on the Transferee Company, the Transferor Companies, their shareholders, and all concerned - the said Transferor Companies with all their respective assets, properties, rights, powers, titles, and interest thereof be transferred to and vested without any further act or deed in the Transferee Company and accordingly the same shall pursuant to section 230 to 232 of the Companies Act 2013 be Transferred to and vested in the Transferee company for all the estates and interests of the said Transferor Companies therein but subject nevertheless to all charges, now affecting the same.
-
2021 (1) TMI 1025
Maintainability of appeal - appeal dismissed observing that appeal is premature since the order challenged is a provisional assessment - no speaking order was issued - Provisional assessment of goods - classification of goods imported - HELD THAT:- The rejection of appeal by the Commissioner (Appeals) is upheld, holding that it is an appeal against provisional assessment is against the settled positions of law. Hence the impugned order is set aside - Appeal is allowed and the matter is remanded to the adjudicating authority for finalising the assessment.
-
2021 (1) TMI 1024
Interest on ineligible modvat credit - Recovery of erroneous Refund - disallowance of credit and recovery of same - Department has not issued any SCN proposing to disallow the credit or recover the same - payment of interest to the respondent on the delayed refund amount - delay caused by the respondent in furnishing the details to the department - HELD THAT:- As admitted by both sides, the department has not issued any SCN proposing to disallow the credit or recover the same. In the case of erroneous refund, the department could have issued a show cause notice proposing to recover the amount erroneously refunded to the assessee. In a litigation arising out of a refund claim filed by the assessee, the department cannot claim any relief. The demand of interest on the ineligible modvat credit cannot therefore sustain. Further, as per Rule 57I which stood at the relevant period, it is seen that the liability to pay interest will start only after expiry of three months from the date of receipt of demand notice. Since the amount has been appropriated at the time of order of refund itself, as correctly pointed out by counsel for respondent there is no liability to pay interest - the finding rendered by the Commissioner (Appeals) in this regard is legal and proper.
Interest on the sanctioned amount - respondent has submitted that they have already received the sanctioned refund - HELD THAT:- As per Section 11BB of Central Excise Act, 1944, the assessee is eligible for interest on the amount from three months from the date of filing the refund claim. In the present case, the date of filing refund claim is on 05.11.2007. The argument of the department that there was delay on the part of the respondent to furnish details with regard to modvat credit and therefore the delay has occurred due to the negligence on the part of the respondent is not tenable. If there was undue delay on the part of respondent, the department could have rejected the refund claim for this reason - the respondent is eligible for interest under Section 11BB - there are no error in the order passed by Commissioner (Appeals) with regard to this issue also.
Appeal dismissed - decided against Revenue.
-
2021 (1) TMI 1023
CENVAT Credit - Service Tax paid for the services provided by the Insurance Corporation for insuring the deposits of public with the banks - HELD THAT:- This very same issue was referred to Larger Bench and vide order in the case of M/S. SOUTH INDIAN BANK VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX-CALICUT [2020 (6) TMI 278 - CESTAT BANGALORE], the Larger Bench of the Tribunal had held that credit is eligible on the service tax paid on such premiums.
The learned AR has relied upon the decision of CESTAT Bench at Mumbai in the case of M/S. BANK OF AMERICA VERSUS PRINCIPAL COMMISSIONER, MUMBAI EAST [2020 (11) TMI 582 - CESTAT MUMBAI]. The very same issue has again been referred to the Hon’ble President to resolve the issue by constituting a Larger Bench. The reason for such reference and doubting of the order rendered by the Larger Bench is that the decision rendered by the Hon’ble Apex Court in COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY & ORS. [2018 (7) TMI 1826 - SUPREME COURT] was not considered by the Larger Bench and therefore the Larger Bench decision is per incuriam. When the issue has been decided by Larger Bench, judicial discipline binds us to follow the same. Further, the judgement in Dilip Kumar & Co. is with regard to interpretation of exemption notifications and would not be relevant for application to the issue under consideration which is the eligibility of Cenvat Credit. Application of judicial discipline is necessary to give uniformity and certainty decisions.
The impugned order cannot sustain and requires to be set aside - Appeal allowed - decided in favor of appellant.
-
2021 (1) TMI 1022
Stay of demand - exemption u/s.11 denied - assessee has violated provisions of section 13(3) r.w.s. 13(2)(a) for the reason that return required to be filed u/s.139(1) was not filed within the due date for filing return of income, accordingly, entire income has been brought to tax - HELD THAT: - We find that assessee has not paid any amount towards outstanding demand created by Assessing Officer . As per the amended provisions of section 254 (2A) of the Act, before granting any stay, assessee is required to deposit at least 20% of disputed tax. When this provision is apprised to learned AR for the assessee , he pleaded that assessee’s financial condition is very weak and it cannot service disputed demand. We, therefore, considering fact that assessee is not willing to pay any amount towards disputed demand, reject the stay application filed by assessee. However, in order to give early hearing to assessee, appeal filed by assessee is posted for out of turn hearing on 09.02.2021.
-
2021 (1) TMI 1021
Restoration of name of Company in the Register of Companies - Section 252 (3) of the Companies Act, 2013 - HELD THAT:- Section 252 (3) of the Companies Act, 2013 confers on this Tribunal powers to order to restore the name of the Company in the Register maintained, provided such application is filed by (i) the Company or (ii) by any Member or (iii) any creditor or (iv) any workmen of the Company within 20 years from the date of publication of the notices under Section 248 (5) in Official Gazette about striking off of the name of such Company provided further that it is seen from the material on record that at the time of its name being struck off, the Company was doing its business or carrying its operation.
In this case, the applicant produced on record the copy of Audited Annual Accounts for the year ended on March 31, 2015 to March 31, 2018. Perusal of the documents available on record Prima facie, suggest that the Company was not carrying out its business during the relevant time when its name was stuck off. It has not generated any revenues from its operations since the financial year ended on March 31, 2014. Available details do not suggest that during the said period it had anybody in its employment. It has not furnished its PAN or GST details or copy of any filed copy of Income Tax Returns. Annual Accounts do not suggest any business transaction. It has not provided any bank account details of the Company - the details mentioned, indicate that during the relevant time when the Company was Struck Off, it had not been a going concern and was not having any business operations. The same has also been admitted in the Application.
Appeal dismissed.
-
2021 (1) TMI 1020
Reopening of assessment u/s 147 - Addition u/s 68 - treating the share premium money received by the assessee as unexplained cash credit - HELD THAT:- We find that assessee has filed the necessary evidences in support of its claim before the AO as well as before the Ld. CIT(A). The evidences filed comprised of copies of ITR, annual accounts, bank statements, PAN numbers, application from share applicants, copies of board resolutions etc and even in response to summons issued under section 131, these investors filed their audited statements, ITRs and bank statement before the AO.
AO has also proceeded on the basis of the statement of Shri Pravin Kumar Jain and others recorded during the course of search to doubt these transactions and has not brought on record any substantive material to prove these investments as non genuine whereas the assessee has filed all the evidences.
The director Shri Dipak Singhvi has presented himself before the AO in order to examine Shri Pravin Kumar Jain and others, however, the same did not attend before the AO and cross examination could not be performed. Besides, the amendment to section 56(2)(vii)(b) of the Act is applicable from A.Y. 2013-14 and not to the year under consideration and therefore the question of issuing shares at a premium can not be examined in this year and also addition can not be made.
We find that on the date of issue of shares, the intrinsic value of the share as on 31.03.2007 was 411.80 and therefore the observation of the AO that shares were issued at a very high price is wrong and against the facts of the case. We have also perused the decisions referred to and relied by the ld. AR of the assessee in support of his arguments and found them to be squarely applicable to the assessee's case.
In this case, the assessee has discharged the onus cast upon it by filing the necessary documents before the AO as well as CIT(A). Moreover in absence of cross examination of the persons whose statements were relied by the AO, the addition can not be made in view of the fact that specific prayers to the AO to this effect were made before the AO. In view of the above discussion and facts of the case, we are inclined to set aside the order of Ld. CIT(A) and direct the AO to delete the addition. - Decided in favour of assessee.
-
2021 (1) TMI 1019
Disallowance of proportionate interest on capital advances provided by the assessee - contentions of the Ld. AR are that, the advances does not pertains to sister concerns but the balance with government authorities - HELD THAT:- We find, out of total amount of ₹ 50,64,880/- disclosed under short term loans and advances in the note to financial accounts, the amount of ₹ 47,11,874/- pertains to VAT, service tax, TDS and income tax refund receivables. Whereas the A.O. is of the opinion that these are the advances provided to sister concerns.
Thus the advances disclosed in the financial statements are with the statutory authorities and the action of the A.O. to disallow proportionate interest considering such advances is not acceptable. Accordingly, we set aside the order of the CIT(A) and direct the Assessing officer to delete the addition and allow the grounds of appeal in favour of the assessee.
-
2021 (1) TMI 1018
Reopening of assessment u/s 147 - assessment of the assessee was reopened after the expiry of 4 years - HELD THAT:- In the instant case all the material fact has already been disclosed by assessee. Moreover, after the issuance of notice dated 30.12.2012, the assessee has furnished the reply also and after the satisfaction the matter of controversy has been decided.
Since the assessee was not failure to for the disclosure of all the material facts necessary for assessment, therefore, the reopening is also bad in view of the decision in the case of (i) Phool Chand Bajrang Lal Vs. ITO [1993 (7) TMI 1 - SUPREME COURT](ii) ALA Firm Vs. CIT [1991 (2) TMI 1 - SUPREME COURT](iii) Indian and Eastern Newspaper Society Vs. CIT [1979 (8) TMI 1 - SUPREME COURT] & ITO Vs. Lakhmani Mewal Das[1976 (3) TMI 1 - SUPREME COURT] . On appraisal of the above said finding, it is apparent that the assessment could only be reopened on account of disclosure of new matter of knowledge of fresh facts which were not present at the time of original assessment. It may constitute reason to believe that the income of escaped assessment within the meaning of Section 147
We are of the view that the notice u/s. 147/148 of the Act is wrong against law and facts, hence, is hereby ordered to be set aside. Accordingly, we decide these issues in favour of the assessee
-
2021 (1) TMI 1017
Bogus purchases - CIT-A restricted disallowance by the CIT(A) to 4% of the aggregate value of the impugned purchases HELD THAT:- CIT(A) while relying on the order passed by his predecessor for A.Y 2010-11 had lost sight of the aforesaid material fact - we are unable to persuade ourselves to subscribe to the scaling down of the disallowance of the entire value of the impugned purchases made by the A.O to 4% of the value of such purchases by the CIT(A).
We also cannot remain oblivious of the fact that the assessee had failed to prove that the impugned purchases were either accounted for in its sales or formed part of its closing stock for the year under consideration, for the reason, that the relevant documentary evidence had been impounded by the Sales tax department in the course of an action conducted on the assessee, and thus, were not available with the assessee.
Mater in all fairness requires to be revisited by the A.O with an opportunity to the assessee to demonstrate before him that the impugned purchases had either found its way as a part of the accounted sales or formed part of its closing stock for the year under consideration. In case the assessee is able to demonstrate before the A.O that the impugned purchases were either accounted for in its sales or formed part of its closing stock for the year under consideration, then, the scaling down of the disallowance by the CIT(A) to 4% of the aggregate value of the impugned purchases would be in order. Appeal filed by the revenue is allowed for statistical purposes.
-
2021 (1) TMI 1016
Reopening of assessment - HELD THAT:- The assessee has assailed the reopening before the CIT(A). No contrary material is available on record to rebut the findings of CIT(A). We find no reason to interfere with the order of CIT(A) on this issues. Accordingly, ground No.1 of the appeal is dismissed being devoid of any merit.
Estimation of income - bogus purchases - CIT-A estimating GP at 12.5% - HELD THAT:- The assessee is in the business of trading of ferrous and nonferrous metals. The estimation of GP by CIT(A) is on the higher side. The GP in the trade of ferrous and non-ferrous metals is generally around 4% to 6%. In our considered view the ends of justice would meet if the GP on bogus purchases be estimated at 6%. We hold and direct accordingly. The ground No.2 of the appeal is partly allowed in the terms aforesaid.
Disallowance on interest under section 36(1) (iii) - HELD THAT:- It is not emanating from records whether the assessee was having own sufficient funds for advancing of loans to its sister concern. The assessee has submitted that the advances have been given in connection with business. However, we find that there is no reference to the material by authorities below that have been placed on record by the assessee to substantiate that the advances were in respect of business transactions. In the absence of complete facts and reference to material brought on record by assessee, we deem it appropriate to restore this issue back to the file of Assessing Officer for fresh adjudication. While deciding this issue, the Assessing Officer shall also consider the applicability of decision rendered in the case of CIT vs. Reliance Utility Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT].
-
2021 (1) TMI 1015
Movable or Immovable property? - Temporary Structure (i.e. hall or pandal or shamiana or any other place) built up with Iron/Steel Pillars tight up with Nuts and Bolts (as shown picture enclosed) specially created for functions - Input Tax Credit - Iron/Steel Pillars tight up with Nuts and Bolt used for the creation of Temporary Structure (i.e. hall or pandal or shamiana or any other place) especially for functions - section 16 of the CGST Act, 2017 - CBEC through its Circular No. 58/1/2002-CX dated 15.01.2002 - HELD THAT:- As per the definition of goods some movable property is excluded from the category of goods whereas at the same time, some immovable properties are treated as goods. But the terms movable and immovable property have not been defined under the GST Act. In laymen terms, any goods that can moved is a movable property and which cannot be moved is immovable property.
The General Clauses Act 1897 and the Transfer of Property Act defines both these terms. Section 3 (26) of the General Clauses Act says: “immovable property” shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth”. Whereas, Section 3(36) defines movable property as “property of every description, except immovable property”. So as per this definition, any property which does not qualify to be immovable property, is a movable property. This definition of immovable property under the General Clauses Act is affirmative in nature as against the definition contained in the Transfer of the property Act 1882, which is negative in nature. As per TPA, immovable property does not include standing timber, growing crops or grass. It further says that “attached to the earth” means:
(a) rooted in the earth, as in the case of trees and shrubs;
(b) imbedded in the earth, as in the case of walls or buildings; or
(c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.
As per the definition of immovable property contained in the General Clauses Act and the Transfer of Property Act, it is clear that things attached to the earth or permanently fastened to anything attached to the earth is immovable property. Anything imbedded in the earth or attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached, qualifies to be attached to the earth. In the case of applicant, it is an admitted fact that the structure (shamiana, pandal or tent) constructed/ erected by the applicant is fixed to the foundation by nuts and bolts. But the applicant holds that this affixation of pillars and pre-fabricated shelter to the earth is not permanent. So, in essence, the question which needs to be dealt with by this Authority is whether this affixation of the structure with the earth or pillar imbedded in the earth is permanent or temporary - The THE COMMISSIONER TRADE TAX UP. LUCKNOW VERSUS TRIVENI NL. LTD. [2014 (4) TMI 842 - ALLAHABAD HIGH COURT] has observed that “permanently fastened to anything attached to the earth” has to be read in the context for the reason that nothing can be fastened to the earth permanently so that it can never be removed. If the article cannot be used without fastening or attaching it to the earth and it is not removed under ordinary circumstances, it may be considered permanently fastened to anything attached to the earth.
In this case, the applicant company is in the business of organizing wedding and other functions from its own premises at Ambience Golf Drive, Gurugram Haryana. Since, the premises where the structure has been erected is company's own premises, it suggests that the shamiana/ tent/pandal has been constructed/ erected for permanent enjoyment. It is not the case of applicant that it plans to dismantle and move the structure to some other place. The pictures attached with the application also depict that the civil work has been undertaken on a very large scale at the premises and this also indicates the permanent nature of the construction/ erected. Further, the concretionary base and the pillars used as platform and support to the structure is also of large dimensions and the platform or the structure cannot be put to beneficial use without the existence of the other. Merely because the walls and roofs have been replaced with pre-fabricated structure (an Engineering marvel), an immovable property cannot be categorized as movable property. Since, both the degree and nature of annexation/ attachment of the structure to the earth is strong and permanent, the structure in question is an immovable property.
The applicant is not entitle to the credit of input tax in view of the provisions of Section 17(5)(d) of the CGST/ HGST Act, 2017.
-
2021 (1) TMI 1014
Release of goods alongwith conveyance - Section 130 of CGST Act, 2017 - HELD THAT:- It appears from the materials on record that the matter is at the stage of MOV-GST 10 issued under the provisions of the Central Goods and Services Tax Act, 2017. Thus, the writ applicant has been issued with the showcause notice under Section 130 of the Act, 2017 calling upon him to show cause as to why the goods and conveyance should not be confiscated for the contravention of the provisions of the Act and the Rules as alleged in MOV 10.
It is expected that the writ applicant to file his reply to the showcause notice and appear before the authority in the confiscation proceedings. However, we direct the authority concerned to immediately look into the application filed by the writ application under Section 67(6) of the Act for the provisional release of the goods and the conveyance and pass an appropriate order in accordance with law, within a period of one week from the date of this order is presented before the authority.
The confiscation proceedings also should be concluded with an appropriate order latest by 28.02.2021. The writ applicant shall be given an adequate opportunity of hearing in the confiscation proceedings - Application disposed off.
-
2021 (1) TMI 1013
Provisional attachment of Bank Accounts - no notice under Sections 73 & 74 of the CGST Act has been issued to the petitioner as yet - Section 83 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- This writ petition is disposed off directing the respondents to, on or before 29th January, 2021, issue instructions to the banks aforesaid, of lapsing of the attachment earlier affected and impugned in this petition. However if there is any other order of attachment of the same bank accounts, the same be served on the petitioner, through the counsel, on or before 29th January, 2021.
It is clarified that even if the respondents, on or before 29th January, 2021 do not issue the instructions as aforesaid to the banks or do not serve on the petitioner through advocate any other order attaching the said bank accounts, the attachment effected on 9th January, 2020 of accounts shall stand quashed and the banks shall allow the petitioner to, after 29th January, 2021, operate the accounts - petition disposed off.
-
2021 (1) TMI 1012
Detention of goods alongwith conveyance - Section 129(1) of the GST Act - HELD THAT:- It appears that this writ application was filed at the stage of MOV10 and coordinate Bench of this Court thought fit to pass the order releasing the detained goods together for the conveyance. The matter is still at the stage of adjudication of the showcause notice issued in MOV-10.
It is expected that the writ applicant now to appear before the authority concerned and participate in the confiscation proceedings. It shall be open for the writ applicant to file his reply, if not yet filed, and make submissions for the purpose of getting the notice in MOV10 discharged. The authority concerned shall take appropriate decision in accordance with law bearing in mind the principle of law explained by this Court in the case of Synergy Fertichem Pvt. Ltd. Vs. State of Gujarat [2019 (12) TMI 1213 - GUJARAT HIGH COURT].
Application disposed off.
-
2021 (1) TMI 1011
Principles of Natural Justice - cancellation of registration - opportunity of personal hearing not provided - HELD THAT:- This writ application is disposed off, asking the writ applicant to prefer an application under Section 30 of the CGST Act at the earliest. Once such application is filed, the authority concerned shall pass appropriate order within 3 (three) days in accordance with the statement made by Mr. Gandhi, learned Standing Counsel for the respondents.
-
2021 (1) TMI 1010
Speaking to minutes is filed for inclusion of the captioned case - HELD THAT:- The speaking to minutes note is not required to be allowed. The captioned matter was already de-tagged at the relevant point of time.
The matter be listed in the week commencing after the regular physical Courts are resumed.
-
2021 (1) TMI 1009
Profiteering - supply of restaurant service - Applicant had alleged that the Respondent had increased the base prices of his items and did not pass on the benefit of reduction in the GST rate by way of commensurate reduction in prices - contravention of Section 171 of the CGST Act, 2017 - Penalty - HELD THAT:- It is revealed from the record that the Respondent has been operating a total of 133 multiplexes in 18 states and dealing with 1650 items while supplying restaurant services after 15.11.2017. It is also revealed from the plain reading of Section 171 (1) of the CGST Act, 2017 that it deals with two situations one relating to the passing on the benefit of reduction in the rate of tax and the second about the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the case record that there has been a reduction in the rate of tax from 18% to 5% w.e.f. 15.11.2017, on the restaurant service being supplied by the Respondent, vide Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017 without the benefit of ITC. Therefore, the Respondent is liable to pass on the benefit of tax reduction to his customers in terms of Section 171 (1) of the above Act. It is also apparent that the present investigation has been carried out w.e.f. 15.11.2017 to 30.04.2019.
It is also evident that the Respondent has been dealing with a total of 1650 items during the period from 15.11.2017 to 30.06.2019. Upon comparing the average selling prices as per the details submitted by the Respondent for the period from 01.08.2017 to 14.11.2017 and the actual selling prices post rate reduction w.e.f. 15.11.2017 to 30.06.2017 the DGAP has reported that the GST rate of 5% has been charged w.e.f. 15.11.2017. however, the base prices of 1434 products have been increased more than their commensurate prices w.e.f. 15.11.2017 which established that because of the increase in the base prices the cum-tax prices paid by the consumers were not reduced commensurately, inspite of the reduction in the GST rate - While comparing the average pre rate reduction base prices with the post rate reduction actual base prices the DGAP has duly taken in to account the impact of denial of ITC in respect of the “restaurant service” being supplied by the Respondent as a percentage of the taxable turnover from the outward supply of the products made during the pre-GST rate reduction period by taking into consideration the period from 01.07.2017 to 31.10.2017 and not up to 14.11.2017.
It is further revealed from the analysis of the details of item-wise outward taxable supplies made during the period from 15.11.2017 to 31.03.2018 that the Respondent had increased the base prices of the items supplied as a part of restaurant service to make up for the denial of ITC post GST rate reduction. The pre and post GST rate reduction prices of the items sold during the period from 01.08.2017 to 14.11.2017 (Pre-GST rate reduction) and 15.11.2017 to 31.03.2019 (Post-GST rate reduction) have been compared and it has been found that the Respondent has increased the base prices by more than what was required to offset the impact of denial of ITC in respect of 1434 items (out of a total of 1650 items) sold during the above period. Thus, it is apparent that the Respondent has resorted to profiteering as the commensurate benefit of reduction in the rate of tax from 18% to 5% has not been passed on by him. However, there was no profiteering in respect of the remaining items on which there was either no increase in the base prices or the increase in base prices was less or equal to the denial of ITC or these were new products launched post-GST rate reduction.
Based on the pre and post-reduction GST rates, the impact of denial of ITC and the details of outward supplies (other than zero-rated, nil rated, and exempted supplies) during the period from 15.11.2017 to 30.04.2019, the amount of net higher sale realization due to increase in the base prices of the products, despite the reduction in the GST rate from 18% to 5% with denial of ITC or the profiteered amount has come to 3, 85, 30, 314/- including the GST on the base profiteered amount. The details of the computation have been given by the DGAP in Annexure-22 of his Report. However, the DGAP vide his Supplementary Report dated 08.10.2020 has partially accepted the objection of the Respondent regarding under-reporting of the eligible ITC allowance - The DGAP has computed the input tax credit as a percentage of the total taxable turnover of the Respondent for the period July 2017 to October 2017 for the reasons cited in paras 26 & 27 of the DGAP report dated 31.01.2020.
Further, with effect from 15.11.2017, Respondent was not allowed to avail ITC in terms of Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017, Therefore, in terms of provisions of Section 16 (2) (a) Respondent was not eligible to take ITC w.e.f. 15.11.2017 on the strength of invoices received post 15.11.2017 when the aforesaid notification debarred the Respondent from ITC availment. As Respondent has received the taxable invoices post 15.11.2017 when he was ineligible to avail ITC in terms of Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017, therefore the same cannot be considered for computation of denial of Input Tax Credit to net turnover ratio.
The office of the DGAP has been charged with the responsibility of conducting a detailed investigation to collect the evidence necessary to determine whether both the above benefits have been passed on or not in terms of the provisions of Section 171 of the CGST Act, 2017 and the Rule 129. The above Rule has been framed by the Central Government under Section 164 of the CGST Act, 2017 read with Section 171 (3) which has the approval of the Parliament and all the State Legislatures and of the GST Council which is a constitutional body established under 101st Amendment of the Constitution and also has the approval of the Central Government and the State Governments. There is no provision in the above Act or the Rules which provides that the investigation shall be limited to the products against which complaint has been received. On the contrary, every product on which the rate of tax has been reduced is required to be investigated by the DGAP and report submitted to this Authority to determine whether the above benefits have been passed on as per the provisions of Section 171 of the above Act - The Respondent cannot get away by appropriating the benefit which he is legally bound to pass, on the ground that no complaint has been made in respect of the other products. Moreover, the benefit is not to be paid by him out of his own pocket, since it has been granted from the public exchequer to benefit the common consumers. Therefore, the above claim of the Respondent is not correct and hence the same cannot be accepted.
The Respondent is trying to deliberately mislead by claiming that he was required to carry out highly complex and exhaustive mathematical computations for passing on the benefit of tax reduction which he could not do in the absence of the procedure framed under the above Act. However, no such elaborate computation was required to be carried out as the Respondent was to maintain the base price of the product which he was charging as of 14.11.2017 and then add 10.22% of the base price on account of denial of ITC and charge GST @5% w.e.f. 15.11.2017. Instead of doing that he has raised his prices by adding more than 10.22% of the base prices as is evident from the above discussion. It is clear from the above narration of facts and the law that no procedure or elaborate mathematical calculations are required to be prescribed separately for passing on the benefit of tax reduction. The Respondent cannot deny the benefit of tax reduction to his customers on the above ground and enrich himself at the expense of his buyers as Section 171 provides a clear cut methodology and procedure to compute the benefit of tax reduction and the profiteered amount. Therefore, the above plea of the Respondent is wrong, and hence, it cannot be accepted.
The profiteered amount is determined as ₹ 3, 10, 56, 9391- as has been revised vide the DGAP’s Supplementary Report dated 08.10.2020. Accordingly, the Respondent is directed to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules. Further, since the recipients of the benefit, as determined above are not identifiable, the Respondent is directed to deposit an amount of ₹ 3, 10, 56, 939/- in two equal parts of ₹ 1, 55, 28, 470/- each in the Central Consumer Welfare Fund and the State Consumer Welfare Funds as mentioned in the Table ‘F’ Revised, as per the provisions of Rule 133 (3) (c) of the CGST Rules 2017, along with interest payable @ 18% to be calculated from the dates on which the above amount was realized by the Respondent from his recipients till the date of its deposit. The above amount of ₹ 3, 10, 56, 939/- shall be deposited, as specified above, within a period of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioner.
Penalty - HELD THAT:- The Respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and hence he has committed an offence under section 171 (3A) of the CGST Act. 2017, and therefore, he is liable to penal action under the provisions of the above Section. However, a perusal of the provisions of Section 171 (3A) under which penalty has been prescribed for the above violation shows that it has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, ’ 2019 and it was not in operation during the period from 15.11.2017 to 30.04.2019 when the Respondent had committed the above violation and hence, the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively. Accordingly, notice for the imposition of penalty is not required to be issued to the Respondent.
............
|
9911796707
