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Showing 321 to 340 of 1182 Records
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2025 (2) TMI 862
Disallowance in relation to the IPO expenditure for abandoned / aborted project u/s 37 - CPC made disallowance due to variation between the value reported by the tax auditor in Form No.3CD to that of entry in ITR - HELD THAT:- As per observations of the Ld. Addl./JCIT(A) that when there is mismatch of corresponding item as per column 21(a)(2) of Form No.3CD and Schedule BP of e-filed ITR, the corresponding difference has to be necessarily added to the total income as adjustment u/s 143(1) of the Act is concerned, we find in the case of Kalpesh Synthetics (P.) Ltd. [2022 (5) TMI 461 - ITAT MUMBAI] has held that the Assessing Officer could not make disallowance based on observations made in tax audit report that payments were made after due date specified under respective Acts.
Thus direct the AO to delete the disallowance on account of IPO cost u/s 37(1).
Grant of credit of DDT u/s 115-O - assessee at the outset submitted that since no credit was given, a direction may be given to the Assessing Officer to follow the due procedure - HELD THAT:- DR has no objection. Accordingly, we restore this issue to the file of the Assessing Officer with a direction to verify the record and give appropriate credit of the DDT as per fact and law. Needless to say, the Assessing Officer shall give due opportunity of being heard to the assessee and decide the issue as per fact and law.
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2025 (2) TMI 861
Additions u/s 68 - unexplained cash credit - CIT(A) deleted addition - HELD THAT:- On perusal of the order of CIT(A), we found that there are justifiable reasons for which the additional evidence could not be furnished before the AO, whereas the same were submitted before the First Appellate Authority.
Additional evidence so furnished by the assessee are under due compliance of the prescribed procedure of the law, such submission along with evidence are duly forwarded to the AO also, but there was no response by the AO, even after a reminder issued by the Ld. CIT(A). We, therefore, are of the considered opinion that Ld. CIT(A) had rightly taken into consideration the additional evidence furnished by the assessee to adjudicate the issues. Decided against revenue.
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2025 (2) TMI 860
Disallowance of interest u/s 201(1A) - addition on account of interest paid on late deposit - HELD THAT:- Similar issue has been dealt in the case of CIT Vs. Chennai Properties & Investment Ltd. [1998 (4) TMI 89 - MADRAS HIGH COURT] wherein as held that, interest u/s 201(1A) paid by the assessee does not assume the character of business expenditure and also cannot be regarded as compensatory in nature.
Respectfully in the case of CIT Vs. Chennai Properties & Investment Ltd. [1998 (4) TMI 89 - MADRAS HIGH COURT] we hold that, the interest paid on late payment of TDS is not an expenditure wholly and exclusively incurred for the purpose of business and further it is a payment, which is in the form of tax, so it is not an allowable expenditure. Therefore, the contention of the assessee is not acceptable on this count.
Alternate argument of the assessee is that, the assessment year under consideration is an unabated year and there was no incriminating material before the AO for the year under consideration - Assessment year under consideration is an unabated year and there was no incriminating material before the AO for the year under consideration. Therefore, no addition can be made in the hands of the assessee in absence of any incriminating material.
The similar issue had been dealt with by CIT Vs. Abhisar Buildwell (P) Ltd. [2023 (4) TMI 1056 - SUPREME COURT] has held that, in case of unabated year, in search proceedings, no addition can be made in the hands of the assessee in absence of any incriminating material. Therefore as there was no incriminating material with the AO for the year under consideration, no addition can be made in the hands of the assessee by the Ld. AO. Accordingly, we delete the addition made by the Ld. AO.
Validity of issue of notice u/s. 153C - We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have also gone through the copy of warrant and Panchanama submitted by the Ld. AR and found that, the same has not been issued / made on the name of the assessee. Therefore, we are of the concerned opinion that, the case of the assessee is not covered u/s.153A of the Act and is covered u/s.153C of the Act. Accordingly, we dismiss this ground of the assessee.
Addition u/s.69C - On account of balance addition, CIT(A) found that, the assessee had cash balance as on 31.03.2015; which was available with the assessee as on 01.04.20217 also. Therefore, the Ld. CIT(A) held that, the assessee had enough cash in hand to justify the source of the said balance of Rs. 68,30,000/- also. Accordingly, the Ld. CIT(A) deleted the addition of Rs. 3,51,30,000/-.
Further, with regard to addition CIT(A) found that, those amounts were reflecting mere projection only and were not related to any actual payment. CIT(A) further stated that, the Ld. AO did not brought any material on record to prove that, the same were actual payments and made in cash.
CIT(A) hold that, the addition is liable to be deleted. Accordingly, he deleted the same. In alternate plea, the Ld. CIT(A) stated that, even if assuming that the payments were actual, the assessee was having enough cash balance as on 01.04.2017 as stated above, to justify the source of cash payment. Accordingly, the Ld. CIT(A) deleted the addition also.
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2025 (2) TMI 859
Denial of registration u/s 12A/12AA - assessee claimed deduction of ‘City Environment Expenses’ which the AO disallowed - HELD THAT:- We find that the same is already decided in assessee’s favour [2019 (11) TMI 271 - ITAT INDORE] for earlier AY 2011-12 held
AO himself in the body of the assessment order, has given a finding that the facilities on which such City Environmental Development and Preservation Expenses have been incurred are not an item of sale or revenue generating item. Thus, by giving this finding, the AO has impliedly accepted the claim of the appellant that these expenditure are in the nature of sunk cost in the hands of the Appellant. I find force in the contention of the appellant that these expenditure have been incurred by the appellant in pursuance of' its main objective of development of notified area. Further, by incurring these expenditure, the appellant authority would not be deriving any revenue in future as is the finding of the AO himself. Further, these expenditure cannot be said to be income generating apparatus of the appellant authority and in my view, by incurring these expenditure, the appellant would not be deriving any benefit of enduring nature.
Also find that these expenditure have consistently been claimed by the appellant for the last many years and even in the subsequent ears these expenditure have been claimed by the appellant. It has been claimed that the assessments of the appellant since A.Y. 2003-04 are consistently being framed u/s 143(3) and in none of the assessments, any adverse view on this issue has been taken by any of the AOs. It has further been contended that all these assessment orders were also subject matter of appeals before the appellate authorities. From the copies of the assessment orders of various other assessment years filed by the appellant before me, I found that in none of the other assessment years, any part of these expenditure have been disallowed for the reasons has brought down by the AO in the instant case. AO cannot be permitted to take a different view from that consistently taken by his predecessors.
Thus we uphold the deletion of disallowance made by CIT(A). The revenue’s grounds qua this issue are dismissed.
Deduction of ‘Contribution & Aid Expenses’ given to other bodies/institutions disallowed - HELD THAT:- As respectfully following the judgment of M/s. Indian Farm Forestry Development [2018 (12) TMI 762 - DELHI HIGH COURT] are of the considered view that the alleged amount should be allowed as business expenditure as it indirectly help to increase business of the assessee authority. Thus, disallowance stands deleted.
Deduction of ‘IMC Transfer Expenses’ - assessee debited to its P&L A/c certain expenses incurred by it for the Schemes transferred to Indore Municipal Corporation (IMC) and claimed deduction under the heading “IMC Transfer Expenses” - HELD THAT:- The expenses incurred by assessee are prima facie for its own purpose although they have been incurred after transfer of schemes to IMC. Ld. AR’s submission is also meritorious that the assessee is a wing of State Govt.; the assessee maintains every voucher/document of expenses incurred; the assessee’s accounts are duly audited by various auditors; there is a system of approval of every penny spent at all levels by authorities; every expenditure is incurred as per pre-set procedure which includes inviting bids/tenders.
Therefore, there cannot be any doubt qua the necessity and genuineness of expenses incurred by assessee. Even in assessment-order, the AO has not doubted the genuineness of expenses claimed by assessee. That apart, it is also noteworthy that the assessee has claimed such expenses consistently in earlier years and the assessing authority has allowed the same in scrutiny assessments u/s 143(3). The disallowance has been made for the first time in AY 2014-15 without any change in facts. It is an accepted principle that the tax authorities have to be consistent in approach unless there is any change in facts or law. We find that the Ld. CIT(A) has deleted AO’s disallowance by taking a judicious approach having regard to these facts. Therefore, we do not find any reason to interfere in the order of CIT(A), the same is hereby upheld.
Deduction of ‘Land acquisition and diversion Expenses’ - CIT(A) deleted addition - HELD THAT:- AO has himself noted in assessment-order that the expenses claimed by assessee are forming part of WIP/stock, therefore when it is so the claim of assessee is revenue-neutral because on one hand the assessee has debited expenditure to P&L A/c and on other hand there is a credit in P&L A/c in the form of WIP/stock. Ld. AR submitted that no disallowance is warranted in such a situation when there is effectively no claim by assessee.
We find sufficient merit in the submission of Ld. AR. We agree that once the impugned expenses are included in closing inventory, effectively there is no deduction claimed by assessee and no disallowance is warranted. Therefore, the deletion made by CIT(A) is valid.
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2025 (2) TMI 858
Evasion of duty by undervaluation - competency of DRI officials causing show cause under the Customs Act, 1962 - HELD THAT:- When the matter is taken up for hearing for consideration by this Court today, it is brought to the notice of this Court by the learned standing counsel representing the Customs Department that the Hon'ble Supreme Court has disposed of Mangli Impex [2016 (8) TMI 1181 - SC ORDER] case holding the officials of DRI are competent to issue show cause notice under the Customs Act, 1962, and also permitted the Department to adjudicate the issue on merits. Therefore, the learned standing counsel appearing for the Customs Department informs this Court that he has been instructed by the Department to withdraw the appeal with liberty to proceed with adjudication on merits as directed by the Hon'ble Supreme Court in Review Application petition No.400/21 filed by the Commissioner of Customs vs. Canon India Private Limited [2024 (11) TMI 391 - SUPREME COURT (LB)] (Mangli Impex Case). The communication from the Department dated 29.01.2025 is also placed before this Court for consideration.
The Customs Department is permitted to withdraw the appeal and proceed with the adjudication as per the Orders of the Hon'ble Supreme Court in Review Application petition No.400/21 filed by the Commissioner of Customs vs. Canon India Private Limited - appeal dismissed as withdrawn.
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2025 (2) TMI 857
Delay in adjudication of SCN - After almost 12 years since issuing the impugned SCN and about 10 years after filing of the detailed reply to the same, the respective proceedings against the Petitioners were concluded - whether the delay in adjudication was justified? - HELD THAT:- The issue raised in the petition is no longer res-integra. Section 28(9) of the Act, unamended and amended, have been considered in detail by the Coordinate Benches of this Court in Swatch Group India Pvt. Ltd. [2023 (8) TMI 864 - DELHI HIGH COURT] as also M/s Vos Technologies India Pvt. Ltd. v. The Principle Additional Director General & Anr., [2024 (12) TMI 624 - DELHI HIGH COURT] where it was held that 'The legislature in its wisdom has provided a specific period for the authority to discharge its functions. The indifference of the concerned officer to complete the adjudication within the time period as mandated, cannot be condoned to the detriment of the assessee. Such indifference is not only detrimental to the interest of the taxpayer but also to the exchequer.'
Coming to the facts of this case, the impugned SCN dates back to 20th June, 2012. The Petitioners had made several requests for providing all the RUDs with the concerned assessing authority. The personal hearing was scheduled on several dates between July, 2012 and March, 2015. Thereafter, the Petitioners are stated to have filed their respective detailed replies to the impugned SCN. Personal hearing was conducted on 17th July, 2014 and 30th March, 2015. Despite the repeated personal hearings scheduled and conducted by the concerned adjudicating officer, the impugned SCN was not adjudicated between 2012 and 2015.
It is noted that the Mangli Impex [2016 (5) TMI 225 - DELHI HIGH COURT] decision came only on 3rd May, 2016 and the matter has been placed in the Call Book only thereafter. The impugned SCN was then taken out of the Call Book sometime in 2019 pursuant to the letter dated 15th April, 2019 issued by the Chief Commissioner, Delhi Zone.
The Customs Department has argued that the Petitioners were granted repeated opportunities for personal hearing, however, the Petitioners delayed the adjudication of the present matter by requesting for additional documents. As per the Customs Department, the delay in adjudication of the present matter is not due to any inaction on part of the assessing authority. The continued insistence of the Petitioners for additional documents coupled with the fact that the matters was put in the Call Book for long period has resulted in the delay which is beyond the control of the assessing authority - The impugned SCN, which was issued way back in 2012, due to repeated placing in the call book has not been adjudicated for so long. Repeated placing and removing from the call book is not a valid justification for non-adjudication of the impugned SCN for about 15 years. Moreover, the gaps between the said periods is also inexplicable. Hearing notices have been given to the Petitioners but there is no reason for non-adjudication of the impugned SCN for long period. Further, the Co-ordinate Bench of this Court in Vos Technologies has rejected the argument of the Customs Department that the delay in adjudication occurred solely due to the repeated request from the assessee for additional documents.
Conclusion - i) The statutory timelines for adjudication are mandatory and cannot be bypassed by administrative delays or procedural lapses. ii) The impugned SCN dated 20th June 2012 and the Order-in-Original dated 26th March 2024 were quashed due to the delay in adjudication.
Petition allowed.
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2025 (2) TMI 856
Valuation of Customs duty - inclusion of royalty and technical fees paid by the Appellant to their foreign supplier, in the transaction value of imported goods under Rule 10(1)(c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (CVR) - HELD THAT:- Rule 10(1)(c) of the Valuation Rules provides for addition to the price actually paid or payable for imported goods if royalties and license fees related to the imported goods. However, the Rule 10(1)(c) also requires that such amounts are those that the buyer is required to pay, directly or indirectly as a condition of the sale of the goods. There has to be a nexus between the goods imported with the royalties or license fees. The payment of royalty and licence fees should be a condition of sale with respect to the goods imported.
The Tribunal Mumbai in the case of BASF India Pvt. Ltd. Vs. Commissioner of Customs (Imports), Mumbai [2013 (4) TMI 712 - CESTAT MUMBAI], has held that royalty charges for technical-how paid are not to be added to the assessable value of imported goods as there is no restriction for procuring the raw-materials from any source of choice of the importer.
In the case of Brembo Brake India Pvt. Ltd. Vs. Commissioner of Customs (Imports), Mumbai [2014 (11) TMI 22 - CESTAT MUMBAI], the Tribunal has held that royalty is not includable in assessable value when royalty or technical know-how was paid only for manufacture of sub-assembly of Disc Brake Systems and payment of royalty and other charges are not related for imported goods and not a condition of sale of goods.
Even in this case, the entire Agreement is only for technical assistance and a detailed analysis made by the Ld. Adjudicating Authority indicated that only 9% of the value of the final products are from the import. The entire Agreement is only for sending technical personnel whose main function is to get the approval of the products manufactured by the Appellant from M/s. Hyundai Motor India Limited. There is no relation or connection between the technical assistance taken by the Appellant to the imported goods and how the condition of sale of goods is satisfied, no evidence is forthcoming.
Conclusion - The payments for technical assistance is not includible in the transaction value of the imported raw materials to demand any differential customs duty.
Appeal allowed.
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2025 (2) TMI 855
Seeking enlargement of bail - Siphoning of public money - active and managerial role in the offences by making misrepresentation to the banks in obtaining loans and siphoning the funds using puppet companies and by writing off the stocks and inventories - offence punishable under Section 447 of the Companies Act - HELD THAT:- This court feels that the present petition being one seeking personal liberty during the trial, it would be suffice to restrict the consideration of such materials to decide the question whether the petitioner is entitled to grant of bail.
A perusal of the materials would disclose that the present petition is the fifth one and on rejection of earlier three petitions, the petitioner appears to have approached the Apex Court, however, could not succeed in obtaining bail and the subsequent bail petition moved by him before the Apex Court was withdrawn seeking liberty to move the trial Court. Such application moved by the petitioner before the Trial Court also stood dismissed and thereupon, the present petition has been filed by the petitioner.
It is not a simple case where the petitioner was charged only for nonrecovery of certain outstanding amounts from the debtors, but, the petitioner is alleged to have indulged into cheating of Banks and siphoning off the public money using puppet Companies, writing off the stocks, inventories and receivables and thereby, he is facing serious economic offences and fraud of a great magnitude.
Though investigation has been completed in the case, the presence of the petitioner is very much required at the stage of framing of charges and the evidence like statements given by witnesses to the SFIO and the communication addressed by the petitioner to the Banks would clinchingly establish the role played by the petitioner and the control he has over the witnesses and thus the petitioner has not complied with the twin conditions stipulated under Section 212(6) of the Companies Act, 2013 and in the event of grant of bail to the petitioner, there is every possibility for the evidence being tampered and the witnesses being influenced by him.
On the aspect of long incarceration and application of the decision in V. Senthil Balaji vs. The Deputy Director, Directorate of Enforcement [2024 (9) TMI 1497 - SUPREME COURT], it has been brought to the notice of this court that the Apex Court has granted bail in that case considering the long incarceration of the petitioner therein coupled with the aspect that the trial in that case could be delayed due to the fact that existence of proceeds of crime under Section 3 of PMLA can be proved only if the scheduled offence is established and even if the trial of the case under PMLA proceeds is concluded, it cannot be finally decided, unless the trial of scheduled offences concludes and the dictum laid down in Senthil Balaji's case is not applicable to the present case as the trial in the present case, being one for offences under Companies Act, is not dependent on proving offences under any other Act and thereby the concept of long incarceration alone cannot be a ground for grant of bail.
Grounds of parity - HELD THAT:- So far as the question of parity in consideration, the petitioner pleads that a co-accused viz., A30-Devarajan has been granted bail by this court. However, it has been brought to the notice of this court by the respondent that such order has been under challenge before the Apex Court in SLP (Crl.) Diary No.21112 of 2023 and the same is pending. This court has also been apprised by the respondent that other co-accused viz., A4-Dineshchand Surana and A5-Vijayraj Surana, who failed before this court in their consecutive bail applications, had moved the Apex Court and their petitions in SLP (Crl.) No.15535 of 2024 and SLP (Crl.) No.17007 of 2024 respectively are pending as on date and thus, the Apex Court has seized of the matter.
Conclusion - The petitioner is alleged to have indulged into cheating of Banks and siphoning off the public money using puppet Companies, writing off the stocks, inventories and receivables and thereby, he is facing serious economic offenses and fraud of a great magnitude. This court finds that the present petition seeking bail cannot be entertained in the circumstances of the case.
Petition dismissed.
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2025 (2) TMI 854
Challenge to action of the respondent, Union of India-Directorate General Married Accommodation Project, New Delhi, in cancelling the contract awarded on the ground of delay in its completion - petitioner raise a grievance that the termination of contract by the impugned letter is a unilateral act and is based on false, frivolous and unsubstantiated grounds, and is in complete violation of the contract executed between the parties - HELD THAT:- The Acquisition Agreement is placed on record along with the petition at Exhibit-E, and it record that Mr. Swapnil Waghchoure carrying proprietary business of electric contract in Nashik has agreed to take over the business of the Corporate Debtor under liquidation as a going concern and it extended to all assets of the debtor including but not limited to current assets, deposits, loans and advances, secured to or available with the Corporate Debtor as also all statutory and regulatory approvals, license, agreements, permissions, clearances, registration, plant and machinery, utilities, vehicles, furniture, accessories and related infrastructure as well as all intellectual property and goodwill.
In Ghanshyam Mishra [2021 (4) TMI 613 - SUPREME COURT], the dominant object of Insolvency and Bankruptcy Code, 2016 was discerned, to be the revival of the Corporate Debtor, and make it a running concern and this contemplated a preparation of resolution plan based upon the out put of the Company of Creditors (COC) - A clear position of law has emerged from the said decision to the effect that on the date of the approval of the resolution plan by the Adjudicating Authority, all such claims which are not part of the plan shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim which is not part of the resolution plan. The aforesaid decision revolves around the resolution plan and the finality attached to it under the Code and do not deal with the liquidation proceedings.
The agreement is signed between the liquidator and Mr. Swapnil Wagchoure as a proprietor of M/s Swapnil Electricals and Contractors, is accompanied with the Schedules as regards the assets and liabilities of the Corporate Debtor and it clearly record that all the contracts in favour of the Corporate Debtor were terminated by the respective Government Department prior to initiation of CIRP, and when the liquidator filed an appeal in the pending IBC proceedings, for revocation of the termination of contract and permission to execute it in favour of the Corporate Debtor, NCLT granted a stay on further action by the respective Government Departments in any of the concerned contract.
The Government Departments forwarded recovery notices of more than INR 100 Crore against the terminated contract, which was allowed to be dealt with subsequently - The tribunal directed that the liquidator with respect to the recovery of material on site on the settlement appeal various government departments have issued in favour of Pingle Builders Pvt Ltd, a demand draft of Rs. 15,00,000/-.
Conclusion - The Petitioner is no longer in existence, and had been replaced by the acquirer. All the contracts in favour of the Corporate Debtor were terminated by the respective Government Department prior to initiation of CIRP, and when the liquidator filed an appeal in the pending IBC proceedings, for revocation of the termination of contract and permission to execute it in favour of the Corporate Debtor, NCLT granted a stay on further action by the respective Government Departments in any of the concerned contract.
Petition dismissed.
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2025 (2) TMI 853
Condonation of 205 days delay in refiling of Company Appeal - sufficient cause of the delay - HELD THAT:- In the present facts of case where delay in refiling is indisputably and unduly prolonged for 205 days, it becomes incumbent on the Bench to be satisfied with the cogency and plausibility of the reasons set forth by the Applicant to explain the delay.
It is found that on each of the dates on which scrutiny was undertaken by the NCLAT Registry, the defects noticed by the Registry were intimated on the very same date to the Applicant and seven days’ time period was allowed each time to correct the defects. Most of the defects pointed out are clerical and routine in nature such as illegible/dim copies, incorrect indexation, non-pagination, non-filing of caveat clearance, non-filing of declaration and verification supporting of memorandum of appeal etc. - The very fact the Registry had to repeatedly intimate the same set of defects each time shows that the Applicant did not take proper interest in pursuing his own application in a timely manner. Neither has any explanation been given to show that the delay was on account of reasons beyond the control of the Applicant. This not only indicates the casual disposition of the Applicant but also their gross indifference towards the need of respecting timeliness in the completion of the insolvency resolution process which is one of the avowed objectives of the IBC. Such a lack-lustre, careless and negligent approach does not meet our countenance.
Under IBC, CIRP is envisaged to be a time-bound process which has to be completed in 330 days. Allowing refiling delay of 205 days without convincing reasons would tantamount to encouraging parties to play havoc with timelines and put unwarranted speed-breakers in the resolution process which does not commend. In the given circumstances, it is required to allow the Applicant the luxury of 205 days delay in refiling in IBC proceedings.
Conclusion - The Applicant failed to demonstrate sufficient cause for condonation of the 205-day delay in refiling the appeal.
There are no merit in the Application filed for seeking condonation of 205 days delay in refiling the appeal. Sufficient grounds have not been made out for condonation of delay in refiling - application dismissed.
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2025 (2) TMI 852
Money Laundering - challenge to order taking cognizance - HELD THAT:- As of today, the position is that though complaint was filed on 5th October 2024, an order taking cognizance is not in existence. The respondent has acted upon order dated 7th February, 2025 by making application dated 7th February, 2025 before the Special Court, requesting the Court to take cognizance. Now, the Special Court will have to examine the case again. As there is a sanction, the issue to be considered will be whether the sanction is valid. All this will have to be examined by the Special Court.
Appellant is in custody from 8th August, 2024. Order taking cognizance passed by the Special Court has been set aside by the High Court and by acting upon the order of the High Court, a fresh application has been moved by the respondent for taking cognizance. The said application is yet to be heard by the Special Court.
In view of these peculiar facts, custody of the appellant cannot be continued. As there are serious allegations against the appellant, appropriate stringent terms and conditions can be imposed by the Special Court - the respondent are directed to produce the appellant before the Special Court within a period of one week from today.
The appeal stands allowed.
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2025 (2) TMI 851
Challenge to order of provisional attachment of the property of the appellant - High Court has declined to entertain the writ petition under Article 226 of the Constitution of India - HELD THAT:- The High Court ought not to have rejected the petition on the ground that the statutory period provided under sub-Section (5) of Section 5 of the Prevention of Money-laundering Act, 2002 had not expired before the writ petition was filed. The High Court ought to have noticed that there was no statutory remedy available to the appellant to challenge the order of provisional attachment. Therefore, the impugned order is set aside and Civil Writ Petition restored to the file of the Punjab and Haryana High Court at Chandigarh. The restored petition shall be listed before the roster Bench of the High Court on 21st February, 2025 in the morning. The appellant and the respondents shall be under an obligation to appear before the roster Bench on that day. No further notice shall be served upon them.
The Appeal is partly allowed.
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2025 (2) TMI 850
Constitutional validity of sub-clauses (zzzzv) & (zzzzw) of clause 105 of Sec. 65 of the Finance Act 1994 - authority of Parliament to introduce levy of service tax on certain services - appellants argue that the subject matter of impugned provisions of the Act in pith & substance would fall within the precincts of State Legislative power under Entries 54 & 62 of List II, Schedule VII of the Constitution of India - HELD THAT:- By virtue of the amendment, the services enumerated in the impugned clauses were brought within the Service Tax net, so that on and from the commencement of the Amendment Act, the services enumerated therein came to be subjected to levy of said tax. Entry 97 of List I is a residuary Entry under which Parliament is empowered to make laws in respect of any matter not enumerated in List II or List III, including any tax not mentioned in either of those laws. But Entry 54 of List II specifically deals with taxes on the sale or purchase of goods other than newspapers, subject to the provisions of Entry 92A of List I, is a subject on which the State Legislature can enact laws. Entry 97 of List I derives its powers from Article 248 of the Constitution which gives power to the Parliament to make a law imposing a tax, not mentioned in either of two other lists namely List II and III and therefore Service Tax is leviable by the part.
It has been well settled by now that there can be no question of conflict solely on account of two aspects of the same transaction being utilized by two legislatures for two levels, both of which may be taxes, fees or one which may be a tax and the other a fee falling within two fields of legislation, respectively available to them, as observed by the learned Single Judge at para 25 of the impugned order. There may be more than one taxable events in a single transaction, involving different kinds of taxes and different aspects of taxation.
The Apex Court in IMAGIC CREATIVE PRIVATE LIMITED vs. COMMISSIONER OF COMMERCIAL TAXES [2008 (1) TMI 2 - SUPREME COURT] has said that the payment of service tax and remittance of VAT are mutually exclusive, the nature of levies being different. Different aspects of a single transaction can be taxed under different statutes.
Conclusion - i) There can be levy of more than one tax on a subject matter, if incidence of each of the taxes is different from the other and such taxes may be imposed under different statutes. ii) Sales Tax can be levied by the State Government and the State Legislature is competent to enact law with regard to levy of Sales Tax. When State Government imposes tax on sale of goods, it does not do so on the service aspect of the sale. iii) The constitutional validity of the impugned provisions upheld.
Appeal dismissed.
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2025 (2) TMI 849
Refund of unutilized accumulated credit - rejection of refund claim as ineligible input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004 being ‘no nexus’ with the exported output services without taking any recourse to Rule 14 ibid - HELD THAT:- An identical issue came up for consideration before this Tribunal in the matter of BNP Paribas India Solution Pvt. Ltd. vs. Commissioner of CGST, Mumbai East [2021 (12) TMI 676 - CESTAT MUMBAI] in which this Tribunal while allowing appeal of the appellant therein allowed refund claim under Rule 5 ibid by holding that since provision of Rule 14 ibid has not been invoked refund of cenvat credit, as claimed by the appellant under Rule 5, cannot be denied.
In the appellant’s own case State Street Syntel Services Pvt. Ltd. vs. Commissioner of CGST & Service Tax, Navi Mumbai [2023 (12) TMI 569 - CESTAT MUMBAI], while taking note of the decisions of this Tribunal, this Tribunal allowed the appeal of the appellant and held that denial of cenvat credit can be done by issuance of notice under Rule 14 ibid and it cannot be rejected solely under Rule 5 ibid.
It is settled principle that there cannot be two different yard sticks i.e. one for allowing the credit and other for deciding the refund and therefore the refund claim cannot be rejected on the ground of admissibility of the input service at the stage of processing of refund claim. Once credit when availed remains unchallenged, the assessee becomes entitled to the refund of the same in terms of Rule 5 ibid r/w Notification No.27/2012-CE (NT) dated 18.06.2012. The eligibility of input services to claim cenvat credit thereon cannot be questioned or examined during sanction of the refund claims, if the same was not challenged when it was availed on such input services.
Conclusion - i) Since Rule 14 was not invoked by the department, the refund of Cenvat credit claimed by the appellant under Rule 5 cannot be denied. ii) There cannot be two different yard sticks i.e. one for allowing the credit and other for deciding the refund and therefore the refund claim cannot be rejected on the ground of admissibility of the input service at the stage of processing of refund claim.
The impugned order is liable to be set aside - Appeal allowed.
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2025 (2) TMI 848
Wrongful availment of credit on GTA service - short payment of service tax under RCM on GTA - wrong utilization of higher education cess and secondary education cess of duty for payment of central excise duty - non-reversal of Cenvat Credit under the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 - penalty imposed under Section 77 of the Finance Act, 1994 - extended period of limitation.
Invocation of extended period of limitation - HELD THAT:- In the present case, demand has been confirmed by invoking the extended period of limitation, whereas the Revenue has failed to establish any of the ingredients which is required to invoke the extended period to confirm the demand - it is found that in the show cause notice as well as in impugned order, the only ground stated for invoking the extended period is that had the audit not been conducted by the department, the Cenvat Credit wrongly availed would have gone unnoticed. There is no discussion whatsoever on the allegation of suppression of material facts with intent to evade payment of duty.
CENVAT Credit on outward transportation - HELD THAT:- This issue was under litigation and there were contrary judgments of various Courts and the issue was referred to the Larger Bench in the case of M/S. THE RAMCO CEMENTS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY [2023 (12) TMI 1332 - CESTAT CHENNAI-LB] and the Larger Bench of the Tribunal after considering all the judgments of the High Courts and Supreme Court and Circular dated 08.06.2018 issued by the Board, has held that admissibility of Cenvat Credit on GTA service is to be considered by the adjudicating authority on the basis of the facts produced before the said authority. When the issue in dispute is under the consideration of the Court and there are contrary decisions, it is a settled law that extended period cannot be invoked.
Conclusion - It has been consistently held by the Courts that in revenue neutral situation, the demand invoking extended period of limitation is not invokable as held in the case of Commr vs. Ultra Tech Cement Ltd [2018 (2) TMI 117 - SUPREME COURT], wherein it was held that when the issue is under litigation, extended period is not invokable and the penalty is not imposable.
The entire demand is barred by limitation - appeal allowed only on limitation without going into the merits of the other allegations.
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2025 (2) TMI 847
Delay in conclusion of proceedings under the Finance Act, 1994 - requirement of completion of proceedings within one year - it was held by High Court that 'No steps were taken in the entire one year period, which results in the frustration of the goal of expediency as required statutorily. The proceedings cannot be continued.'
HELD THAT:- Looking at the quantum of the tax involved, it is not required to interfere with the impugned judgment; hence, the present special leave petition is dismissed.
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2025 (2) TMI 846
Cancellation of registration of the petitioner - appeal preferred by the petitioner has been dismissed by the respondent no.2 as barred by limitation as provided u/s 107(4) of the UPGST Act - applicability of doctrine of merger - HELD THAT:- Admittedly from the perusal of the order dated 06.04.2021 it transpires that no reason has been assigned for cancellation of the registration of the petitioner. The order of cancellation is in the teeth of various judgments of this Court as also referred to above. The reasons are heart and soul of any judicial and administrative order. In absence of the same the order cannot be justified in the eye of law. Further since the appeal of the petitioner was dismissed on the ground of delay, this Court finds that the doctrine of merger will have no application considering the facts and circumstances of the present case.
In M/s Chandra Sain [2022 (9) TMI 1047 - ALLAHABAD HIGH COURT] this Court has held that ' In the present case from the perusal of the order dated 13.02.2020, clearly there is no reason ascribed to take such a harsh action of cancellation of registration. In view of the order being without any application of mind, the same does not satisfy the test of Article 14 of the Constitution of India, as such, the impugned order dated 13.02.2020 (Annexure - 2) is set aside.'
The order dated 06.04.2021 passed by the Assistant Commissioner, respondent no.3 is hereby quashed - Petition allowed.
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2025 (2) TMI 845
Non-service of order - impugned order is appealable or not - petitioner came to know about the impugned Order-in-Original only through bank and notices at no point of time were served on the petitioner - Section 37C of the Central Excise Act, 1944 - HELD THAT:- A conjoint reading of Sections 142(8)(a) and 169(1)(c) of the CGST Act shows that the argument of the learned Senior Standing Counsel for CBIC has substantial force. The provision relating to service of notice provided under the CGST Act can be applied in view of Section 142(8)(a) of the CGST Act in relation to any other existing law, which includes the 1944 Act. Thus, we are unable to persuade ourselves with the line of argument of the learned counsel for the petitioner that since Section 37C of the 1944 Act is silent about the electronic mode of service through e-mail etc., the said mode is impermissible or not acceptable.
So far the order of the CESTAT, Allahabad, in M/s. Samsung India Electronics Private Limited [2019 (11) TMI 1204 - CESTAT ALLAHABAD] is concerned, the said order only gives a reference to the order of the High Court of Madras in OSA Shipping Pvt. Ltd. [2015 (10) TMI 982 - MADRAS HIGH COURT]. But, the said paragraph does not deal with the aspect of the validity of service of notice through e-mail mode. Apart from that, in the said case, the notices etc., were issued before the CGST Act came into being. Thus, that order is, even otherwise, of no assistance.
The petitioner has a statutory remedy of preferring an appeal. The petitioner can avail the said remedy.
Conclusion - The petitioner is directed to file an appeal with an application for condonation of delay, with the appellate authority considering it in accordance with the law. The time spent before the Court would not count towards the limitation period for the appeal.
Petition disposed off.
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2025 (2) TMI 844
Challenge to order u/s 73 of the G.S.T. Act - no opportunity of hearing was granted to the petitioner as is prescribed under Section 75(4) of the G.S.T. Act - violation of principles of natural justice - HELD THAT:- The copy of instructions has been produced by the learned Standing Counsel wherein notice was sent to the petitioner however in the column of date of personal hearing "N.A." was mentioned. The impugned order also does not record that any opportunity was afforded to the petitioner.
The issue with regard to non-grant of hearing was considered by the Division Bench of this Court in the case of M/S Atlas Cycles Haryana Limited Versus State of U.P. and another [2024 (2) TMI 942 - ALLAHABAD HIGH COURT] and held that the provisions of Section 75(4) of the GST Act are mandatory.
Considering the submission on the ground of non-grant of opportunity of hearing, the present petition is allowed. The impugned order is quashed and the matter is remanded to pass a fresh order in accordance with law after affording an opportunity of hearing to the petitioner.
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2025 (2) TMI 843
Legality of arrest of the petitioner under the CGST Act, 2017 - arrest of the petitioner is in violation of section 36 of the BNSS as well as the instruction dated 17th August, 2022 as amended on 13th January, 2025 or not - HELD THAT:- In the present case, the opposite party has submitted a copy of the office order dated 1st February, 2025 authorizing arrest of the petitioner, the arrest memo, grounds of arrest, arrestee’s profile, thumb impression of the arrestee, information of arrest to the nearest relative, handing over of personal belongings, documents showing medical checkup of the petitioner and the inspection memo. It is crystal clear from the arrest memo that such memo is attested by a driver who is neither a member of the petitioner’s family, nor a person of the locality from where the arrest is made. Therefore the arrest is in violation of the instruction issued by the authority as well as the mandate laid down by the Hon’ble Supreme Court in the authority in D.K. Basu [1996 (12) TMI 350 - SUPREME COURT].
Conclusion - Since the arrest of the petitioner is in violation of the instruction issued by the authority as well as the mandate of the Hon’ble Supreme Court in D.K. Basu, such lapse on the part of the opposite party cannot be termed as a mere irregularity and in fact vitiates the arrest, moreso, since no explanation has been given by the arresting officer for not complying with the said direction.
This Court of the view that since the arrest itself is bad in law, the petitioner deserves an order in his favour - the prayer for bail is allowed.
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