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2020 (6) TMI 800
Exemption from GST - provisioning of diagnostic imaging services under the agreement/contract executed by Siemens Healthcare Pvt. Ltd. (SHPL) with its customers - eligible for exemption under Serial Number 74 of the Notification 12/2017-CT(R) dated 28/06/2017 or not - HELD THAT:- The exemption is to Services and not to Technicians or Doctors/ Medical Practitioners or Para-Medics or Ambulance Operators - Clearly, the case of Appellant M/s. Siemens Healthcare Pvt. Ltd. (SHPL) is not covered under ambulance services.
Whether the Appellant’s services meet the dual criteria of being health care services and clinical establishment? - HELD THAT:- Obviously the services under examination are not to be provided by the Appellant as Authorised Medical Practitioner’ or as ‘Para Medics’.
The appellant’s contention is that since the circular 32/6/2018-GST dated 12.02.2018 allows exemption to the technicians hired by hospitals also, the exemption is admissible to SHPL also as its technicians are to operate MRI (Magnetic Resonance Imaging) & CT (Computerized Tomography), X-Ray and Mammography machines installed in the clinical establishments (Customers of SHPL) & are to provide diagnostic images to the clinical establishments - It is observed that there are kinds of Technicians. For the exemption to be admissible, the technician’s role/ activity has to amount to Healthcare Services. Not all the technicians provide healthcare Services. It is observed that services of technicians who are ‘Emergency Medical Technicians’ or the services of technicians who are akin to Para-medics, are healthcare services. Apparently the CBIC’s circular ibid refers to such technicians only.
It is observed that SHPL is providing the input services of provision of installing/operating the MRI, CT scanners etc in the premises of its Customers (clinical establishments) and providing diagnostic images to them (clinical establishments) - providing diagnostic images is not equivalent to providing diagnosis, and the services by SHPL is not an independent establishments for providing diagnostic service.
To avail the benefit of the exemption all the limbs of the notification must be satisfied i.e., the services have to be health care services as defined in clause (Zg) of para 2 of the notification & the services have to be provided by clinical establishment as defined in clause (s) of para 2 of the said notification. Since the appellant is to provide its diagnostic imaging services to the clinical establishment which in turn makes use of these images provided by the appellant & with the advice/opinion of medical practitioner/pathologist/radiologist makes diagnosis & provides it to the patient, the appellant can’t be said to provide diagnosis services to the patient, & hence not eligible to the exemption.
It is therefore clear that the services exempt under the Notification are healthcare services and would include diagnosis where the services are in the line of aiding diagnosis. Also, from the Applicant’s ibid submission itself in the Statement of Facts, it is obvious that the ‘Diagnosis’ is not complete unless the Radiologist gives it on the basis of images prepared by the Applicant. Also the services have not been provided to the patient.
Hon’ble Supreme Court’s judgment in TATA OIL MILLS CO. LTD. VERSUS COLLECTOR OF C. EX. [1989 (8) TMI 79 - SUPREME COURT] is not applicable. In the instant case the Appellant has not pleaded that intent of the legislature is to also exempt the inputs/ input services consumed for providing the Healthcare services; nor is there any notification or clarification providing such exemption viz. to input services. Appellant’s activity remains an Input Service for providing diagnosis.
The AAR has correctly held that the nature of the Applicant’s services is of input services - Appeal dismissed.
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2020 (6) TMI 799
Oppression and mismanagement - Allegation of changing mode of account operation and committed fraud in submitting the application to the Bank - section 241 and 242 of the Companies Act, 2013 - HELD THAT:- The delay in filing like application at the instances of the petitioner, being not explained properly, that a criminal complaint was already lodged and an FIR was allegedly registered in the alleged fraud, let the investigation may bring the real truth behind it. An overall circumstances brought out in the case in hand not sufficient enough to have a prima facie finding that the petitioner came with a clean hand claiming equitable relief. R3 also asserted that respondents are not at all thought of issuance of fresh shares and induction of further directors in order to reduce the shareholding of the petitioners into a minority. So the apprehension of the petitioners that if an order of injunction is not passed as prayed for there is every chance of resorting to issuance of fresh shares and induction of further directors in order to dilute the shareholdings and rights of the petitioners is devoid of any merit.
When people feel scared and hopeless interrupting the business of R-1 under the effective management of R3, as he submitted, changing the mode of operation of the R1 bank account may work great hardship to the business operation of the R1 company. Accordingly, the balance of convenience also does not favour the petitioners.
List the matter for further consideration after lifting the lockdown, preferably on 5th August, 2020.
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2020 (6) TMI 798
Money Laundering - Provisional attachment of bank accounts - Sub-Section (1) of Section 5 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- All the writ petitions are disposed of with the direction that the impugned provisional attachment order dated 05.05.2020 being specific for the amounts attached, the respective petitioners would be at liberty to operate their bank accounts mentioned in the impugned provisional attachment order subject to keeping a balance of the amount attached and that, this would be without prejudice to the rights and contentions of the respondent nos. 1 & 2 to pass such further orders of attachment in accordance with law, as may be called for.
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2020 (6) TMI 797
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - dispute regarding quality of goods, raised prior to the receiving of the Demand Notice - defective goods supplied or not - HELD THAT:- On reading of Sections 8 & 9 of the IBC together, it is found that before filing an application under Section 9 of IBC, an Operational Creditor is required to deliver a Demand Notice under Section 8 (1) of the IBC and the Corporate Debtor is required to file a reply to the same within 10 days of receiving the Demand Notice or copy of the invoices mentioned in sub-section (1) and bring to the notice of the operational creditor (a) existence of a dispute, if any, or record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute. The Corporate Debtor is also required to produce the documents to show that the amount if any has been paid. And after the expiry of the period of 10 days, if the Operational Creditor does not receive the payment from the Corporate Debtor or notice of dispute under sub-section 2 of Section 8 of IBC then the Operational Creditor has right to file an application before the Adjudicating Authority for initiating Corporate Insolvency Resolution Process.
The Corporate Debtor shows that they made the payment or sent notice of dispute in that case the application under Section 9 of IBC is not maintainable. In other words, if “notice of dispute has been received by the operational creditor or there is record of dispute in the information utility” then the Adjudicating Authority may reject the application - in the present case, it is found that the Corporate Debtor has raised a dispute regarding the quality of goods prior to the receiving of Demand Notice.
Mere plain reading of Section 5(6) of the IBC shows that the “dispute” includes a suit or arbitration proceedings relating to the existence of the amount of debt, or the quality of goods or service or the breach of a representation or warranty - Here in the case in hand, the Corporate Debtor has raised a dispute regarding the quality of the goods, which is one of the dispute u/s5(6) of IBC and in support of that they have placed reliance upon two letters which are enclosed at page nos. 19 & 21 of the reply, in which it is specifically mentioned that Corporate Debtor has raised a question relating to quality of goods supplied by the Operational Creditor on 09.10.2015 and also sent a reminder on 16.10.2015 in which it is alleged that the Operational Creditor is not responding to their quality complaint.
The contention of the Corporate Debtor that they raised the dispute regarding the quality of goods is correct and liable to be accepted. As it is already stated that the last date of invoice is 05.10.2015 and soon thereafter, the dispute relating to quality was raised by the Corporate Debtor - the Corporate Debtor had raised a dispute regarding the quality of goods and Operational Creditor had failed to convince us that the same dispute was resolved, therefore, the Operational Creditor has falsely sworn an affidavit under Section 9 (3) (b) that no notice was given by the Corporate Debtor relating to the payment of the unpaid operational debt, therefore, in view of Section 9 (5) (ii) (d), if the notice or dispute has been raised by the Corporate Debtor or there is record of dispute in the information utility, in that case the Adjudicating Authority has no option but to reject the application of the Operational Creditor.
The present application is not maintainable and same is dismissed.
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2020 (6) TMI 796
Seeking grant of bail - applicant is seeking bail on the ground of surgery of dependent family member - HELD THAT:- In view of the status report, issue notice to Dr. Gajinder Nayyar, MBBS, MAMC DMC No. 36089, to show cause as to why the matter be not referred for further investigation into the allegations made in the status report.
List on 12.06.2020.
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2020 (6) TMI 795
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- Application is filed within the limitation period as the date of default is 19.04.2018 and the date of filing this petition under Section 9 of IBC is 05.07.2018 - It is observed that the Corporate Debtor has tried to take moonshine defence of pre-existing dispute and brought some issues in the written statement which are not relevant.
Application admitted - moratorium declared.
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2020 (6) TMI 794
CENVAT Credit - input services - GTA services for outward transportation of goods from the factory to the buyer’s premises - goods are sold on FOR (buyer’s premises) basis - HELD THAT:- Such matters required to be remanded to the lower authorities for determining what is the place of removal?
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2020 (6) TMI 793
Validity of inclusion of the entire claim of the financial creditors/ Oriental Bank of Commerce, and R3, by the RP - proposition laid down by the Hon’ble Supreme Court of India in the case of Anuj Jain [2020 (2) TMI 1259 - SUPREME COURT] - HELD THAT:- It is on the strength of the pleading and proof of default in repayment of the Loan availed by the CD from the OBC, the section 7 application was admitted vide order dated 28.9.2019. Whether the OBC invoked the corporate guarantee or whether the said portion of debt availed by the third party from the OBC falls out of the definition of financial debt was not at all an issue raised or answered by the NCLT, Kolkata Bench. So admittedly the CD has defaulted in repayment of ₹ 7,54,68,438/- out of the term loan admittedly availed by it. ₹ 19,04,12,812.21p evidently not due from the CD as the borrower but found due from the five third parties referred that they were also committed default in repayment to OBC.
In Anuj Jain case, the IRP had rejected the claims to be recognized as financial creditors of the Corporate Debtor JIL on account of the securities provided by Jaypee Infratech Limited (JIL) for the facilities granted to Jaiprakash Associates Limited (JAL). The NCLT rejected the applications filed against the decision of the IRP while concluding that on the strength of the mortgages created by the corporate debtor JIL, as collateral security of the debts of its holding company JAL, the applicants cannot be treated as financial creditors of the corporate debtor JIL - In the present case the debt due to the OBC appears to me falls under the definition of financial debt and the lender is therefore a financial creditor. Because the lender/OBC had invoked the corporate guarantee even before the CIRP (i.e. on 26.09.2018). The concepts of financial debt as discussed in the above cited judgment is different from the debt claimed by the OBC in the case in hand.
Thus, inclusion of the entire claim of the financial creditor/ Oriental Bank of Commerce, by the RP is not illegal, as their claims falls under the definition of the financial debt 5(8) (i) and not contrary to the proposition laid down by the Hon’ble Supreme Court of India in the case of Anuj Jain - the corporate Debtor herein is the Co-borrower of the loan and thus the said corporate Debtor is the Principal Borrower of R-3 and has created the mortgage to secure the said loan. Hence, the debt herein is a financial debt within the meaning of Section 5(8) of the I & B Code and therefore I do not find any illegality in admiring R3’s claim by the RP and also found that admission of the claim not at all contrary to the proposition laid down in the Anuj Jain’s case. It appears that the said judgement of the Hon'ble Supreme Court is not applicable to the present facts and circumstances highlighted on the side of R-3.
Thus, inclusion of the entire claim of Oriental Bank of Commerce and R3 and the determination of the voting percentage of the members of the CoC considering the respective admitted claims of the financial creditors are found legal and proper - application dismissed.
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2020 (6) TMI 792
Seeking grant of bail - actual owner of firms - petitioners No.1 and 2 have been alleged to be proprietors of the firms - raid was conducted at the house of accused Naveen Jain and the account books etc relating to these firms were recovered from him - HELD THAT:- It is pointed out that the petitioners were only employees of Naveen Jain and have been indicted falsely who are facing arrest at the hands of the respondent who had issued summons to them under Central Goods and Services Tax Act, 2017 and it is apprehended that as and when they appear, they would be taken into custody in terms of Section 69 of Goods and Service Act, 2017.
Attention of the Court is drawn to the order in TARUN BASSI VERSUS STATE OF PUNJAB & ORS. [2020 (6) TMI 728 - PUNJAB AND HARYANA HIGH COURT] wherein a similar provision regarding power of arrest as contained in Punjab Goods and Services Tax Act is under challenge.
Notice of motion for 18.08.2020.
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2020 (6) TMI 791
Benami Transaction - Real owners of property - Whether Govindasamy Naidu alone was having half share in the land covered under the sale deed dated 05.04.1911, Ex. A1 or Govindasamy Naidu and Chinnasamy Naidu are having equal right, interest and title in the half share of the property covered under Ex. A1 dated 05.04.1911? - HELD THAT:- No hesitation to hold that Chinnamma Naidu had adequately contributed for purchasing the half share in the suit property by his elder brother Govindasamy Naidu under Ex. A1 and that is the reason why Chinnama Naidu could independently execute Exs. A5, A6 and A7, registered mortgage deeds in favour of third parties, for availing a loan. It is also to be stated that even a mortgage cannot be permitted to be executed by a person who has no title to the property covered under the mortgage. This is more so that the mortgage deeds under Exs. A5, A6 and A7 were registered mortgage deeds. In the absence of title in favour of Chinnamma Naidu, the registering authorities would not have permitted execution of Exs. A5, A6 and A7 by Chinnamma Naidu, independently. Therefore, we answer point No. 1 framed in this appeal to the effect that it was established by the appellants/plaintiffs that their grandfather Chinnamma Naidu had adequately contributed for purchasing the property covered under Ex. A1, sale deed dated 05.04.1911 along with his elder brother Govindasamy Naidu.
Whether Govindasamy Naidu was holding the share of his brother Chinnamma Naidu in his fiduciary capacity? - Whether the suit transaction is hit by the provisions of Benami Transaction Act? - HELD THAT:- Having regard to the fact that Ex. A1 in this case emanated during the year 1911 and the custom, tradition and belief practiced in those days, we are of the view that Chinnamma Naidu reposed absolute faith and trust towards his elder brother Govindasamy Naidu and Govindasamy Naidu, true to such faith and confidence reposed on him, had held the suit property in a fiduciary capacity on behalf of his brother Chinnama Naidu. Such a relationship falls within the exception to Section 4 of the Prohibition of Benami Property Transaction Act, 1988 (now Section 2(9)(ii)(iv) of The Benami Transactions (Prohibition) Amendment Act, 2016.
It is evident from Section 4 of the Act that the provisions of the Act are not applicable, if a person, in whose name the property is held, is a coparcener in a Hindu undivided family and the property is held for the benefit of such coparcener in the family. As we have held in respect of point No. 1, Chinnamma Naidu has got a share in the property covered under Ex. A1 along with his elder brother Govindasamy Naidu. Therefore, Chinnama Naidu is a coparcener in respect of the suit property and therefore, the applicability of the Act is specifically excluded. The appellants/plaintiffs also raised the plea with respect to fiduciary capacity in their reply statement before the trial court and evidence was also let in to that effect. Therefore, we hold that Govindasamy Naidu was holding the suit property in a fiduciary capacity for and on behalf of his younger brother Chinnamma Naidu and consequently, the suit transaction is not hit by the provisions of Benami Transaction Act. Accordingly, we answer point Nos. 2 and 3 also in favour of the appellants/plaintiffs.
Whether the claim of the appellants for partition and separate possession is hit by the provisions of Limitation Act? - HELD THAT:- As evident from the fact that the name of the father of the plaintiffs Ramachandran is reflected in the revenue records in respect of the suit property, indicating that the plaintiffs, who are legal heirs of Ramachandran, continue to remain in possession of the suit property. Even otherwise, in a suit for partition, the possession of one of the co-parceners is for and on behalf of the other. The cause of action for filing a suit for partition is recurring one. As long as the relationship of co-ownership subsists, the right to seek partition continues. Even if one of the co-owners files a suit and subsequently abandon it for some reason, it will not be a ground for dismissal of the suit filed by another co-owner on the same cause of action. All that it implies is that the co-owner, who abandons a legal action initiated by him without continuing it any further, can be construed as the one who has chosen to continue his ownership in common without resorting to seek for division of the property and to allot him a separate share. We therefore hold that right to bring an action for partition is a continuing right, incidental to the right of joint ownership in the property in question. Such right subsists as long as the property remains undivided. Therefore, we hold that the claim of the appellants for partition and separate possession is not hit by the provisions of Limitation Act and we answer Point No. 4 also in favour of the appellants/plaintiffs.
Whether the present suit for partition is not maintainable without a prayer for declaration of title? - HELD THAT:- In view of our conclusion with respect to point No. 1 holding that Chinnamma Naidu has jointly contributed for purchase of half share of the property covered under Ex. A1 along with his elder brother Govindasamy Naidu, we have to necessarily answer this question also in favour of the plaintiffs. Even otherwise, under Ex. A10, Patta, the name of Govindasamy Naidu and Chinnamma Naidu were mentioned as joint owners of the property in question. That apart, Ex. A11, series of Kist receipt would indicate that Chinnamma Naidu has individually paid kist in respect of his share of the property covered under Ex. A1. As long as the revenue records stood mutated in the name of grandfather of the plaintiffs Chinnama Naidu and the plea of the plaintiffs that they were in joint possession of the suit property along with the descendants of Govindasamy Naidu, coupled with the admission of Ponnusamy, tenth defendant, in his written statement admitting the title of Chinnama Naidu in the suit property, we are of the view that the suit filed by the plaintiffs for partition, even without the relief of declaration of title, is maintainable. We accordingly answer Point No. 5 also in favour of the plaintiffs.
Whether the plaintiffs are ousted from the suit property as has been claimed by the defendants 10 to 13? - HELD THAT:- The plaintiffs, in their plaint, have asserted that they are jointly in possession of the suit property along with the other legal heirs viz., defendants. The revenue records also stand in the name of their father Ramachandran. In a suit property, it is always regarded that the possession of one of the co-parceners is for and on behalf of the other co-parcener as well and the plea of ouster cannot be considered in a suit for partition on par with the plea of ouster raised in a suit for declaration. We could also see from Ex. B16 filed before the trial court that Nandakumar, son of Ponnusamy (tenth defendant) has filed a separate suit before the District Munsif Court, Coimbatore against Rajagopal, Son of Annasamy, the third defendant in the suit, and three others. The said suit was filed for a bare injunction to restrain the defendants in the suit from in any manner alienating or encumbering the suit property. The plaintiff asserts a right to portion of the suit property on the basis of the settlement deed executed in his favour by his father Ponnusamy (tenth defendant in the present suit). In the plaint, the plaintiff in O.S. has categorically refers to the present suit filed by the appellants/plaintiffs and also states that they are also in joint possession of the suit property along with other legal heirs. In such circumstances, the plea of ouster cannot be countenanced. Therefore, we answer point No. 6 also in favour of the appellants/plaintiffs in this appeal.
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2020 (6) TMI 790
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial creditors - existence of debt and dispute or not - time limitation - HELD THAT:- The application is filed by Assistant General Manager and Principal Officer of the bank. He is authorized through General Power of Attorney issued on 27.09.2011. The General Power of Attorney is valid and in force. It is also stated by the counsel for the Applicant that the officer of the bank has been authorized to grant loan, recovery of the loan, to initiate the proceedings of CIRP against the person who has defaulted. In such case, the Corporate Debtor cannot plead that officer has power to sanction loan but such officer has no power to recover the loan amount or initiate corporate insolvency resolution process inspite of default by the Corporate Debtor - the Power of Attorney authorised Shri Shashi Bushan Prasad Singh Asst. General Manager to grant loan, recover loan and to apply for insolvency proceedings.
Time Limitation - HELD THAT:- The petition is filed on 22.10.2018 and the date of default is 01.07.2015. In this regard, it is noted that the last entry (credit) in loan A/c. is on 30-12-2015 (page No. 922of the application). Hence, the present IB Petition filed on 22.10.2018 is well within the period of limitation.
This Adjudicating Authority is satisfied that default has been committed by the Corporate Debtor in repayment of loan amount to the Bank. The petition is complete. As a consequence, the instant petition is admitted in terms of Section 7 of the IB Code and the moratorium as envisaged under the provisions of Section 14(1) of IB Code.
Application admitted - moratorium declared.
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2020 (6) TMI 789
Maintainability of Interim application - Oppression and mismanagement - seeking to stay the operation of the impugned circular resolutions Nos. SREIPL-CR-003/2019/20, SREIPL-CR-004/2019/20 and SREIP L-CR-005/2019/20 dated 10.02.2020 - HELD THAT:- In the normal course, Interim Applications are maintainable only after question of Admission of the main case is over. And separate Interim Application(s) can be filed later on, if any new developments takes place in the case, and there is any urgency in the mater. Since the case is coming for admission for the first time and the Respondents requested time for filing their replies to Main/interim reliefs sought for, separate Applications are not maintainable. Moreover, the pleadings and prayers made in the above Applications are more or less covered under the reliefs sought for in the main Company Petition.
Application are hereby disposed of by granting liberty to Applicants/Petitioners to urge the Tribunal to pass appropriate interim orders as sought for under the paragraph No. 44 of the main Company Petition, at the time of next date of hearing - Post the CP for consideration of interim reliefs on 10.07.2020.
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2020 (6) TMI 788
Refund claim - petitioner has repeatedly requested the respondent authorities to grant him refund as claimed - HELD THAT:- In opinion of this Court, interest of justice would be served if the authorities are directed to consider all pending applications filed by the petitioner and examine whether the petitioner is entitled to refund of the claim. Such decision shall be taken in accordance with law as expeditiously as possible within a period of four weeks from the date of receipt of the present order.
This Court has not expressed any opinion on such application filed by the petitioner and the same shall be considered by the authorities as directed by this Court on its own merits - Petition disposed off.
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2020 (6) TMI 787
Grant of Regular Bail - fake firms - offences under Sections 132(1)(B), (C), (D), (F), (I), (L) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- There are no reason to interfere with the impugned order. The special leave petitions are, accordingly, dismissed.
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2020 (6) TMI 786
Seeking grant of anticipatory bail - Smuggling - Heroin - contraband item - only evidence against petitioner is in the shape of disclosure statement, the admissibility and veracity of which would be tested during the course of trial - HELD THAT:- It is a case where the petitioner has been nominated solely on the basis of disclosure statement, the petition is accepted and it is ordered that the petitioner in the event of his arrest shall be released on bail subject to his furnishing personal bonds and surety bonds to the satisfaction of Arresting/Investigating Officer. However, the petitioner shall join the investigation as and when called upon to do so and cooperate with the Arresting/Investigating Officer and shall also abide by the conditions as provided under Section 438 (2) Cr.P.C.
Petition disposed off.
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2020 (6) TMI 785
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- On perusing the documents produced on record, it is understood that the corporate debtor has defaulted in repayment of debt. The corporate debtor has acknowledged the disbursement of loan and its liability to repay on several occasions. However, the corporate debtor failed to pay. Hence, owing to the inability of the corporate debtor to pay its dues, this is a fit case to be moved under section 7 of the I and B Code.
The nature of debt is a "financial debt" as defined under section 5(8) of the Code. It has also been established that there is a "default" as defined under section 3(12) of the Code on the part of the debtor. The two essential qualifications, i. e., existence of "debt" and "default", for admission of a petition under section 7 of the I and B Code, have been met in this case.
It is found that the petitioner has not received the outstanding debt from the respondent and that the formalities as prescribed under the Code have been completed by the petitioner, this petition deserves "admission" - Application admitted - moratorium declared.
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2020 (6) TMI 784
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - corporate term loans to the CD and CD has failed to pay instalments - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The FC had extended corporate term loans to the CD and CD has failed to pay instalments, overdue amount and the principal amount as stated. FC also submitted Commercial Credit Information Report dated October 11, 2019 as record of default.
Mere denial of the claim of the FC without any supporting evidence such as regular repayment of instalments, overdue amount, principal loan amount, etc., will not satisfy the submission of the managing director of the CD. Also, mere dialogues going on between the parties cannot amount to no default as claimed by the managing director in his reply - Petition filed under section 241 of the Companies Act will not have any bearing for the current proceedings initiated under the IBC.
The application made by the financial creditor is complete in all respects as required by law. It clearly shows that the corporate debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC at the relevant time. Therefore, the default stands established and there is no reason to deny the admission of the petition.
Application admitted - moratorium declared.
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2020 (6) TMI 783
Validity of order of spcial bench of NCLT - Irregularity in publishing of Cause List in the prescribed manner - Whether non-adherence to Rules 89, 150 to 153 of NCLT Rules, 2016 would vitiate the impugned order? - initiation of CIRP - the petitioner is ready and willing to clear the outstanding dues of the secured creditor / 4th respondent herein within a period of 15 days - HELD THAT:- The Special Leave Petition is dismissed.
The question of law is kept open.
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2020 (6) TMI 782
Profiteering - benefit of reduction in the CST rate w.e.f. 15.11.2017 not passed to customers but instead increased the base prices of the products by keeping the Maximum Retail Prices (MRP) unchanged - violation of provisions of Section 171 of the CGST Act, 2017 - HELD THAT:- It is revealed that Respondent is engaged in the manufacturing and marketing of Cosmetic, FMCGs and Pharma products through the network of distributors spread all over India. It is also revealed that the Central Government, on the recommendation of the GST Council, had reduced the GST rate on a number of products from 12% to 5% vide Notification No. 34/2017- Central Tax (Rate), dated 1310.2017 with effect from 14.10.2017 and from 28% to 18% vide Notification No. 41/2017-Central Tax (Rate), dated 14.11.2017 with effect from 15.11.2017. This fact has also not been contested by the Respondent. Therefore, there is no dispute that the Respondent is liable to pass on the benefit of tax reductions w.e.f. 14.10.2017 and 15.11.2017 respectively. it is further revealed that a total of 425 items were impacted by the GST rate reductions. Out of these 425 items, 52 items were impacted by the CST rate reduction from 12% to 5% w.e.f. 14.10.2017 and 373 items were impacted by the GST rate reduction from 28% to 18% w.e.f. 15.11 2017.
It is also evident from the record that the Applicant No. 1 who is also General Secretary of All India Chemists & Distributors Federation had filed an application under Rule 128 (1) of the CGST Rules, 2017 on 27.11.2017 before the Standing Committee on Anti-profiteering alleging that the Respondent had not passed on the benefit of reductions in the GST rates to his customers but had instead increased the base prices of his products by keeping the Maximum Retail Prices (MRPs) unchanged.
The profiteered amount has been computed by comparing the average pre rate reduction base prices of the impacted products with the average post rate reduction base prices in respect of both the tax reductions. The above mathematical methodology adopted by the DGAP to compute the profiteered amount is not in consonance with the methodology approved by this Authority in the cases of tax reductions decided by it as the profiteered amount has been determined by comparing the average pre rate reduction base prices with the actual post rate reduction prices - the mathematical methodology adopted by the DGAP is not correct, logical, appropriate and in consonance with the provisions of Section 171 of the CGST Act, 2017. Therefore; the Report dated 22.10.2019 furnished by the DGAP cannot be accepted.
As per the provisions of Rule 133 (1) of the CGST Rules, 2017 this order was to be passed on or before 22.04.2020 as the investigation Report was received from the DGAP on 23.10 2019 However, due to the COVID-19 pandemic prevailing in the Country the order could not be passed on or before the above date. Hence, the same is being passed today in terms of the Notification No. 35/2020-CentraI Tax dated 03.04.2020 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes & Customs under Section 168 A of the Central Goods & Services Tax Act, 2017.
Application disposed off.
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2020 (6) TMI 781
Profiteering - Paints - Varnishes - Putty - Respondent had not passed on the benefit of reduction in the rate of GST - contravention of section 171 of CGST Act - Penalty - HELD THAT:- The record reveals that the Government had reduced the GST rate from 28% to 18% w.e.f. 27.07.2018 vide its Notification No. 18/2018-Central Tax dated 26.07.2018 on “Paints, Varnishes and Putty”. This fact has also not been contested by the Respondent. Therefore, there is no dispute that the Respondent is liable to pass on the benefit of tax reductions w.e.f. 27.07.2018. It is further observed that the Respondent who supplied the above products was impacted with the Notification in the case of 331 products. Out of these 331 products, base prices only in the case of 151 products were increased from 27.07.2018 (post GST rate reduction). Therefore, the Respondent is required to pass on an amount of ₹ 3,76,360/- in respect of these 151 products.
It is also evident from the record that the Applicant No. 1 had filed an application under Rule 128 (1) of the CGST Rules, 2017 before the Standing Committee on Anti-profiteering alleging that the Respondent had not passed on the benefit of reductions in the GST rates to his customers but had instead increased the base prices of his products by keeping the Maximum Retail Prices (MRPs) unchanged. The above Applicant had also submitted invoices showing both the pre and post GST rate reduction prices claiming that the Respondent had not reduced the MRPs.
It is clear from the narration of the facts that the profiteered amount has been computed by comparing the average pre rate reduction base prices of the impacted products with the monthly average post rate reduction base prices in respect of both the tax reductions. The mathematical methodology adopted by the DGAP to compute the profiteered amount is not in line with the methodology adopted by the DGAP himself in similar cases of profiteering wherein the average pre rate reduction base prices have been compared with the actual post rate reduction prices to compute the profiteered amount. Further, in case the mathematical methodology of comparing the average to average base prices employed by the DGAP is adopted it would not be possible to compute the benefit of tax reduction which is due to each customer on each supply. The profiteered amount computed by the DGAP would also not be correct.
The DGAP is directed to compare the average pre rate reduction base prices of the products which were impacted by the tax rate reduction w.e.f. 27.07.2018 with the actual post rate reduction base prices of the impacted products - the DGAP shall reinvestigate the case and submit his Report under Rule 133 (4) of the Rules. The Respondent is directed to extend necessary assistance to the DGAP during the course of the investigation.
Penalty - HELD THAT:- As per the provisions of Rule 133 (1) of the CGST Rules, 2017 this order was required to be passed within a period of 6 months from the date of receipt of the Report from the DGAP under Rule 129 (6) of the above Rules. Since the present Report has been received by this Authority on 10.10.2019 the order was to be passed on or before 09.04.2020. However, due to the prevalent pandemic of COVID-19 in the country, this order could not be passed on or before the above date due to force majeure - this order is being passed today in terms of the Notification No. 35/2020-Central Tax dated 03.04.2020 issued by the Government of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes & Customs under Section 168 A of the CGST Act, 2017.
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