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Showing 101 to 120 of 1642 Records
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2024 (7) TMI 1542
Seeking grant of regular bail - recovery of commercial quantity of contraband (Ganja) - Applicability of rigors of Section 37 of the NDPS Act - HELD THAT:- It is settled law that the Court, while considering the application for grant of bail, has to keep certain factors in mind, such as, whether there is a prima facie case or reasonable ground to believe that the accused has committed the offence; circumstances which are peculiar to the accused; likelihood of the offence being repeated; the nature and gravity of the accusation; severity of the punishment in the event of conviction; the danger of the accused absconding or fleeing if released on bail; reasonable apprehension of the witnesses being threatened; etc.
The present case is based allegedly on a chance recovery and it is possible that the Investigating Agency did not get sufficient time to prepare. However, given the crowded nature of the place from where the recovery was made, it is peculiar that no public witness has joined the search - A bald statement has been made, as stated in the chargesheet filed, that 4-5 passers-by were asked, however, they refused to join the investigation and left the spot citing legitimate compulsion related to journey. The recovery in the present case was effectuated at Exit Gate No.1 in front of Coolie Hall, Pahar Ganj Side, New Delhi Railway Station.
In the present case, while the charges have been framed against the applicant, none of the witnesses have been examined yet. As noted above, the applicant has been in custody since 25.12.2021. There is no likelihood of the trial being completed in the near future.'The Hon’ble Apex Court in Badsha SK. v. The State of West Bengal [2023 (9) TMI 1567 - SC ORDER], granted bail to the petitioner wherein who had been in custody for more than two years with the trial yet to begin.
Similarly, in Man Mandal & Anr. v. The State of West Bengal [2023 (9) TMI 1568 - SC ORDER] the petitioner therein had been in custody for almost two years and the Hon’ble Apex Court found that the trial is not likely to be completed in the immediate near future. The petitioner was, therefore, released on bail.
Thus, it is evident that despite the stringent requirements imposed on the accused under Section 37 of the NDPS Act for the grant of bail, it has been established that these requirements do not preclude the grant of bail on the grounds of undue delay in the completion of the trial. Various courts have recognized that prolonged incarceration undermines the right to life, liberty, guaranteed under Article 21 of the Constitution of India, and therefore, conditional liberty must take precedents over the statutory restrictions under Section 37 of the NDPS Act.
This Court is of the opinion that the applicant has made out a prima facie case for grant of bail on the grounds of absence of independent witnesses and prolonged delay in the trial.
The applicant is, therefore, directed to be released on bail on furnishing a personal bond for a sum of ₹50,000/- with two sureties of the like amount, subject to the satisfaction of the learned Trial Court, on the fulfilment of conditions imposed - bail application allowed.
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2024 (7) TMI 1541
Challenge to assessment orders issued in deceased mother's name - violation of the principles of natural justice - HELD THAT:- Ext. P11 order under Section 73(9) is appealable under Section 107 of the CGST/SGST Act, 2017. A challenge against the assessment order passed under Section 73(9) on the ground of violation of principles of natural justice is also maintainable before the appellate authority. Whether the 19 days’ period granted to the petitioner to reply to the show cause notice was a reasonable period to defend the show cause notice is a matter to be considered by the appellate authority in accordance with the facts of the case, as no time limit is stipulated in Section 73 for responding to the show cause notice.
Since an appeal is provided under Section 107 of the CGST/SGST Act against Ext. P11 order, it will be open to the petitioner to avail the said remedy and all contentions of the petitioner are left open to be considered by the appellate authority.
The writ petition is disposed of.
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2024 (7) TMI 1540
Seeking grant of regular bail - recovery of Ganja - commercial quantity of contraband - procedural irregularities in the investigation - delay in filing the application under Section 52A of the NDPS Act and sending samples to FSL - HELD THAT:- It is settled law that the Court, while considering the application for grant of bail, has to keep certain factors in mind, such as, whether there is a prima facie case or reasonable ground to believe that the accused has committed the offence; circumstances which are peculiar to the accused; likelihood of the offence being repeated; the nature and gravity of the accusation; severity of the punishment in the event of conviction; the danger of the accused absconding or fleeing if released on bail; reasonable apprehension of the witnesses being threatened; etc.
In the present case, no notice under Section 100 (8) of the CrPC was given to any person on the refusal to support the Investigating Agency during the search procedure. The secret information was received almost three hours prior to the accused person ('Mohd Munib') being apprehended on 05.09.2022. Subsequently, on a disclosure given by the accused ('Mohd Munib') co-accused ('Gopal Dangi') was apprehended on 12.09.2022. It is peculiar that the Investigating Agency was unable to associate even a single public witness at the time, especially since the prosecution had prior secret information and the applicants were apprehended at a public place.
Delay in trial and long period of incarceration is also an important factor which has to be kept in mind while considering the application for Bail - In the present case, the matter is at the stage of prosecution evidence. It is stated that only one witness has been partly examined out of the twenty- two listed prosecution witnesses. The applicant - Mohd. Munib has been in custody since 06.09.2022 and the applicant - Gopal Dangi has been in custody since 12.09.2022. There is no likelihood of the trial being completed in the near future.
It is evident that despite the stringent requirements imposed on the accused under Section 37 of the NDPS Act for the grant of bail, it has been established that these requirements do not preclude the grant of bail on the grounds of undue delay in the completion of the trial. Various courts have recognized that prolonged incarceration undermines the right to life, liberty, guaranteed under Article 21 of the Constitution of India, and therefore, conditional liberty must take precedents over the statutory restrictions under Section 37 of the NDPS Act - this Court is of the opinion that the applicants have made out a prima facie case for grant of bail on the grounds of absence of independent witnesses and prolonged delay in the trial.
The applicants are, therefore, directed to be released on bail on furnishing a personal bond for a sum of Rs. 50,000/- each with two sureties of the like amount, subject to the satisfaction of the conditions imposed - bail application allowed.
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2024 (7) TMI 1539
Seeking grant of regular bail - possession of 305 gms of Heroin, which is commercial quantity - applicant submits that in order to allay the apprehension of the applicant being a flight risk, the applicant volunteers to surrender his passport to the concerned I.O. - Sections 21 NDPS Act, Section 14 Foreigner Act and Sections 471/474 IPC - HELD THAT:- Considering the period of custody as well as the fact that till date only 6 witnesses have been examined and that the trial is likely to take some time, this Court is of the opinion that parameters of Section 37 stand satisfied. It is directed that the applicant be released on regular bail subject to his furnishing a personal bond in the sum of Rs.50,000/- with one surety of the like amount to the satisfaction of the concerned Jail Superintendent/ concerned Court/Duty M.M., subject to depositing the passport with the concerned I.O. and subject to fulfilment of conditions imposed - bail application allowed.
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2024 (7) TMI 1538
Seeking release on bail - Recovery of commercial quantity of Charas (contraband item) - compliance with procedural requirements for sampling under Standing Order No. 1/88 - delay in filing application under Section 52A of the NDPS Act and sending samples to FSL - Rigours of Section 37 of the NDPS Act - Delay in filing application under Section 52A of the NDPS Act & delay in sending samples to FSL - HELD THAT:- It is settled law that the Court, while considering the application for grant of bail, has to keep certain factors in mind, such as, whether there is a prima facie case or reasonable ground to believe that the accused has committed the offence; circumstances which are peculiar to the accused; likelihood of the offence being repeated; the nature and gravity of the accusation; severity of the punishment in the event of conviction; the danger of the accused absconding or fleeing if released on bail; reasonable apprehension of the witnesses being threatened; etc.
Rigours of Section 37 of the NDPS Act - HELD THAT:- The accusation in the present case is with regard to the recovery of commercial quantity of contraband. Once the rigours of Section 37 of the NDPS Act are attracted, as provided under the Section, the Court can grant bail only when the twin conditions stipulated in Section 37(1)(b) of the NDPS Act are satisfied in addition to the usual requirements for the grant of bail – (1) The court must be satisfied that there are reasonable grounds for believing that the person is not guilty of such offence; and (2) That the person is not likely to commit any offence while on bail.
Delay in filing application under Section 52A of the NDPS Act & delay in sending samples to FSL - HELD THAT:- In the present case, the applicant was arrested on 18.02.2021 and the application for sampling was filed under Section 52A of the NDPS Act before the learned Magistrate on 09.04.2021. The order for sampling was passed by the learned Magistrate on 22.04.2021. The samples drawn on spot were sent to FSL for report on 01.04.2021 and the samples drawn before the learned Magistrate were sent to FSL on 30.04.2021.
Scope of Section 52A of the NDPS Act - HELD THAT:- The purpose of incorporation of Section 52A of the NDPS Act is to mitigate the issue of the hazardous nature of the contraband, vulnerability to theft, substitution, constraint of proper storage space, etc. The same is a measure to safeguard the primary evidence even when the contraband is disposed - it is clear that the provision of Section 52A of the NDPS is mandatory and is to be duly complied with before disposal/destruction of the contraband. The same also makes it clear that it is a safeguard against unruly practices to prevent substitution of the contraband which could prejudice the accused person.
Section 52A of the NDPS Act provides the procedure as to how the prosecution is required to prepare the inventory and file an appropriate application before the Magistrate for resultant sampling and certification of the inventory without causing delay - It is provided that in such a scenario, the certificate issued by the Magistrate would be treated as the primary evidence. That necessarily means that in a case where narcotic drugs or psychotropic substances are disposed of, the factum of recovery and the nature and authenticity of the contraband which forms the subject matter of the trial can be proved as per the method and manner as laid down in Section 52A of the NDPS Act by way of producing the certificate given by the Magistrate for inventory as stated therein.
Belated filing of application under Section 52A of the NDPS Act - HELD THAT:- As long as the prosecution is able to justify the delay on its end, mere delay would not vitiate the evidence. To hold otherwise would lead to an odd situation where even a few hours post the threshold of 72 hours would nullify the evidence. The Court has to be cognizant of the ground realities where situations may arise where the sample was not sent to FSL on time or the application under Section 52A of the NDPS Act could not be preferred on time.
A Coordinate Bench of this Court in the case of Rishi Dev @ Onkar Singh v. State (Delhi Admn) [2008 (5) TMI 762 - DELHI HIGH COURT], held that the delay in sending samples to FSL is to be properly explained by the prosecution. It was also observed that the said reason should be evident from the record itself.
In the present case, evidently, the application under Section 52A of the NDPS Act was preferred almost two months after the seizure of the contraband from the applicant. It is open to the applicant to press the aforesaid defence at the time of the trial. However, at this stage, the applicant has failed to establish a prima facie case as to how he has been prejudiced on account of the delayed compliance. In the opinion of this Court, any observation as to the veracity of the recovery on account of delay to grant bail to the applicant would be premature.
Improper Sampling: Non-Compliance Of Standing Order No. 1/88 - HELD THAT:- The substantial compliance of the Standing Orders is a requirement of law and is to be insisted upon to maintain the sanctity of the samples of the seized contraband - the provision of Section 52A of the NDPS Act applies in regard to the disposal of the seized contraband. The manner of mixing the samples is provided for the purpose of filing an application under Section 52A of the NDPS Act and for the disposal of the contraband.
Section 52A of the NDPS Act prescribes the procedure for disposal of seized narcotic drugs and psychotropic substances and the same, in no manner, lays down the procedure for search of the accused and the resultant seizure of the contraband. As discussed above, the Standing Orders issued by the Government from time to time, while exercising power under Section 52A of the NDPS Act, though are a requirement of law which need to be substantially complied with, however, the intent and the provisions thereof, in the opinion of this Court, cannot be imported in the procedure for search and seizure at the time of investigation.
Effect of non-compliance at the stage of bail - HELD THAT:- It has been observed by the Courts on numerous occasions that the police officials fail to strictly adhere to the minute intricacies of the mandate of the standing instructions. Even though the same shows an abysmal state of affairs, this Court is of the opinion that accused persons cannot be allowed to go scot free on minute irregularities in procedure especially when the prosecution has the opportunity to furnish credible explanation - Prima facie, prejudice caused to the applicant due to the procedural lapse is to be seen in such a case. The lapse should be such that it leaves no conclusion other than the trial being vitiated. Noncompliance of standing orders would, at best, cast suspicion over the veracity of the samples of the seized substance. The same can be overcome by the prosecution by producing evidence to the contrary.
This Court is thus not inclined to grant bail to the applicant on the ground of improper sampling.
Non-Joinder of Independent Witnesses and No Photography/ Videography - HELD THAT:- In the present case, secret information was received at about 8:55PM on 15.02.2021. It is the case of the prosecution that the raiding team reached near the Ramlila Maidan at about 9:40 PM and asked 5-7 people along the route to join the investigation, however, all of them left stating their compulsions. It is stated that another attempt was made after reaching the spot to include passers-by in the investigation, however, they left as well. It is stated in the FIR that no notice could be served to the said individuals due to lack of time. Around 11 PM, the co-accused was spotted and subsequently apprehended. Subsequently, the applicant was apprehended at the instance of the co-accused - In the present case, no notice under Section 100 (8) of the CrPC was given to any person on the refusal to support the Investigating Agency during the search procedure. The secret information was received almost two hours prior to the co-accused being apprehended. It is peculiar that the Investigating Agency was unable to associate even a single public witness in the same time, especially since the prosecution had prior secret information and the applicant and coaccused were apprehended at a public place.
Thus, while it is true that the effort, if any, made by the prosecution to have the search conducted in the presence of the independent witnesses would be tested during the course of trial and the same may not be fatal to the case of the prosecution, however, the benefit, at this stage, cannot be denied to the accused.
Delay In Trial - HELD THAT:- It is trite law that grant of bail on account of delay in trial cannot be said to be fettered by the embargo under Section 37 of the NDPS Act - it is evident that despite the stringent requirements imposed on the accused under Section 37 of the NDPS Act for the grant of bail, it has been established that these requirements do not preclude the grant of bail on the grounds of undue delay in the completion of the trial.
In the present case, the trial is likely going to take long. Speedy trial in such circumstances does not seem to be a possibility. The applicant cannot be made to spend the entire period of trial in custody especially when the trial is likely to take considerable time.
This Court is of the opinion that the applicant has made out a prima facie case for grant of bail on the ground of absence of independent witnesses, no photography or videography of the recovery and prolonged delay in the trial - In the present case, the prosecution has been given an adequate opportunity to oppose the present application. In view of the facts of the case, prima facie, this Court is of the opinion, that at this stage, there are reasonable grounds to believe that the applicant is not guilty of the alleged offence. Moreover, it is also not disputed that the applicant has clean antecedents, and is thus not likely to commit any offence whilst on bail.
The applicant is, therefore, directed to be released on bail on furnishing a personal bond for a sum of ₹1,00,000/- with two sureties of the like amount, subject to the satisfaction of the learned Trial Court, on the fulfilment of conditions imposed - bail application allowed.
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2024 (7) TMI 1537
Seeking quashing of SCN and consequential summary of SCN - reply to SCN is yet to be considered - Violation of principles of natural justice - HELD THAT:- Considering the contentions made by the learned counsels for the parties, without going into merits of the case, the writ application is disposed of permitting the petitioner to proceed in accordance with law and file an appeal also raising the very issue of jurisdiction that has been raised in this writ petition.
This writ petition stands disposed of.
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2024 (7) TMI 1536
Seeking grant of bail - illegal trafficking of Heroin - Improper sampling and mixing of substances - Delay in filing the application under Section 52A of the NDPS Act - Delay in trial and prolonged incarceration - HELD THAT:- It is settled law that the Court, while considering the application for grant of bail, has to keep certain factors in mind, such as, whether there is a prima facie case or reasonable ground to believe that the accused has committed the offence; circumstances which are peculiar to the accused; likelihood of the offence being repeated; the nature and gravity of the accusation; severity of the punishment in the event of conviction; the danger of the accused absconding or fleeing if released on bail; reasonable apprehension of the witnesses being threatened; etc.
The bar under Section 37 of the NDPS Act is attracted against the applicant as commercial quantity of contraband is involved in the present case.
The issue in regard to improper sampling and any alleged non-compliance of the Standing Order No. 1/88 would be a matter of trial. No benefit can be given to the accused for the alleged non-compliance, at this stage, while considering the application for bail.
In the present case, the charges have been framed against the applicant for the offences under Sections 29, 21 and 23 of the NDPS Act, which are punishable with a minimum punishment of 10 years and a minimum fine of ₹1,00,000/-. Admittedly, the applicant has spent almost three and a half years in custody, however, he has not undergone a minimum of five years of incarceration in the present case to be entitled to bail solely on the ground of delay in trial. It does not seem entirely implausible at this stage that the trial will not conclude within the next one and a half years - considering that the case is pending since the year 2021, this Court considers it apposite to request the learned Trial Court to expedite the trial.
This Court is of the opinion that the applicant has not made out a prima facie case for grant of bail - the bail application is dismissed.
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2024 (7) TMI 1535
Unexplained cash credit u/s 68 - unexplained unsecured loans - disallowance of interest paid on such alleged unsecured loans - whether the asseessee has placed sufficient material to prove the identity and creditworthiness of the cash creditors and genuineness of the transactions, we need to examine each of the documents filed in relation to each of the alleged cash creditors? - HELD THAT:- We find that ld. CIT(A) has confirmed the addition u/s 68 either on account of wrong PAN or no PAN or just confirmed on the basis of analysis of AO. After going through the details, we are satisfied that the assessee has successfully explained the identity and creditworthiness of the cash creditors and genuineness of the transactions with sufficient evidences and that nature source of the alleged cash credit is explained to our satisfaction and therefore, provisions of section 68 are not attracted.
Similar type of issue had come up before this Tribunal in the case of M/s. Parwati Lakh Udyog [2023 (10) TMI 190 - ITAT KOLKATA] wherein also loans from individual/other persons were taken but since complete details regarding PAN, Bank statement, financial statement and income tax returns details were filed, addition u/s 68 of the Act was deleted.
We after thoroughly examining the details filed by the assessee are satisfied with nature and source of alleged cash credit and the same having been explained to our satisfaction and thus set aside the filing of CIT(Appeals) and delete the impugned addition made u/s 68 and also delete the disallowance of interest confirmed by the ld. CIT(Appeals), which was paid by the assessee to the alleged cash creditors. Appeal of the assessee is allowed.
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2024 (7) TMI 1534
Levy of penalty u/s 271(1)(c) - Estimation of income - bogus purchases treated as unexplained u/s 69C - disallowance to the tune of 15% of the alleged bogus purchases made by CIT(A) - HELD THAT:- As penalty is hardly sustainable on ad hoc addition, seems to be logical and tenable. It is also important to mention herein that as submitted by the Ld. Advocate that even otherwise the Hon’ble Tribunal in the last para of the order in the quantum appeal has categorically held that the Assessee was a trader and on being asking by the AO, has furnished the necessary details like bills, vouchers, payment through banking channel and the bank statements etc..
Therefore, the facts are distinguishable to the case of N.K. Industries Ltd. [2016 (6) TMI 1139 - GUJARAT HIGH COURT] decided wherein the purchases were found as bogus. We observe that the co-ordinate Bench of the Tribunal by considering the overall facts and circumstances of the case and taking a broader view for the ends of justice and litigation, restricted the addition to 20% of the disallowance in place of 15% as restricted by the then Ld. CIT (A) against 100% of the addition made by the AO, which also dents the levy of penalty. Therefore, on this reason itself, the penalty is un-sustainable.
Coming to the other aspect of the case, it is not the case of the Revenue that the Assessee in the assessment proceedings has not submitted the relevant document/details as desired by the AO and therefore we are unable to understand that how the charge of concealment of income is attracted in this case, whereas the penalty proceedings have been initiated u/s 271(1)(c) of the Act for both of the limbs i.e. concealment of income and filing of inaccurate particulars of income and resulted into imposing the penalty for both of the limbs.
Concealment refers to deliberate act on the part of the Assessee whereas mere omission or negligence would not constitute a deliberate act or suppression or suggesting falls information. The Hon’ble Apex Court in the case of T. Ashok Pai [2007 (5) TMI 199 - SUPREME COURT] has clearly held that the both the limbs i.e. concealment of income and filing of inaccurate particulars of income carries the different connotation/meaning and cannot be used as substitute to each other.
Hon’ble Apex Court in the case of CIT Vs. Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] has clearly laid down the dictum “that merely making an incorrect claim does not tantamount to furnishing of inaccurate particulars”. Hence, in our considered view, on this count as well, the penalty is un-sustainable. Appeal filed by the Assessee stands allowed.
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2024 (7) TMI 1533
Short payment of service tax - Mandap Keeper Services - Service tax on electricity charges collected on a reimbursement basis.
Short payment of service tax - Mandap Keeper Services - tax short paid on the ground that the sale of food is not a part of “Mandap Keeper Service” - benefit of N/N.12/2003-ST dated 20.06.2003 - contentions of the appellant are that as per their agreement, the sale of food and rental of banquet halls, are shown separately and the sale of food is the activity of sale, on which, no service tax is payable - HELD THAT:- As the facts of this case are similar to the facts of HYATT RESORTS P LTD. VERSUS CCE & ST- LUDHIANA [2019 (4) TMI 179 - CESTAT CHANDIGARH] wherein it has been held that the amount recovered on account of sale of food is not includible in the taxable value under the category of “Mandap Keeper Service”, therefore, we hold that in this case also, the amount realized by the appellant on account of sale of food is not includible in the taxable service provided under the Mandap Keeper Service. Therefore, the demand on account of short payment of service tax under the category of “Mandap Keeper Service”, is set aside.
Service tax on electricity charges collected on a reimbursement basis - HELD THAT:- M/s Quality Maintenance Venture Limited, who supplied the electricity to the appellant, has raised invoices at the rate of Rs. 8.00 per unit and in turn, the appellant has also raised the invoices to their tenants at the rate of Rs. 8.00 per unit - As the appellant has recovered the electricity charges on actual basis, on this count also, no service tax is payable by the appellant as the appellant has not earned any profit for providing electricity.
On taking note of the fact that in the case of M/S ICC REALITY (INDIA) PVT LTD & OTHERS VERSUS COMMISSIONER OF CENTRAL EXCISE [2013 (12) TMI 854 - CESTAT MUMBAI], this Tribunal held that no service tax is payable for providing electricity - the electricity charges are not liable to service tax.
Thus, except the admitted demand which has been paid by the appellant along with interest, no other demand is sustainable against the appellant - the impugned order qua demanding service tax on account of short payment of service tax under the category of “Mandap Keeper Service” and the service tax on electricity charges, is not sustainable and hence, set aside. In the facts and circumstances, no penalty is imposable on the appellant.
Appeal disposed of.
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2024 (7) TMI 1532
Rectification u/s 254 - Denial of TDS credit - no income accrued in respect of the credit notes, assessee is not eligible to claim refund of the corresponding TDS credit - revenue submit that as per Sec. 199 r/w Sec. 190 & 191 and Rule 37BA, TDS credit can be allowed only in the assessment year in which the corresponding income is offered to tax - HELD THAT:- Income to the extent of credit notes would never accrue to the assessee and therefore, credit thereof should be allowed in full to the assessee. The Rule 37BA would not apply to the facts of the case. The application merely suggest an alternative mechanism which is nothing but an application seeking review of the order which is impermissible. The revenue is merely contesting the adjudication of Tribunal without establishing any mistake apparent on the face of the order that would require our indulgence u/s 254(2). The pleas raised in the application, in our opinion, do not constitute mistake apparent from record. The provisions of Sec. 254(2) has limited application to rectify mistake apparent from record which is absent here.Application stand dismissed.
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2024 (7) TMI 1531
Rectification u/s 254 - Delayed payment of PF & ESI - HELD THAT:- We find no apparent error in the order of the Tribunal warranting any rectification on this ground. Merely because the tribunal has followed the decision of the same Tribunal which are already there in public domain, there is no mistake which requires rectification. The contention of the assessee is not at all acceptable that the Tribunal ought to have followed the recent decision of the Tribunal [2023 (12) TMI 1351 - ITAT BANGALORE] wherein the Tribunal has remitted the matter back to the AO to consider the payment made to ESI and PF account, i.e., 15 days from the end of the month in which the salary is paid. In the present Miscellaneous Application we are of the opinion that the Tribunal is not required to revisit its earlier order and go into the details on merits again. The ITAT has no power to re heard the entire appeal on merits again in the garb of miscellaneous application.
Now coming to the submission of assessee that the bench agreed to remit the case back to the AO cannot be a reason to allow the present Miscellaneous petition for the simple reason that the decision relied by the ld. AR are distinguishable on facts & therefore a conscious decision by the bench that no purpose could be served to the assessee by remitting the issue to the AO. In our opinion there is nothing left to the AO to verify as the Auditor had rightly pointed out the several delayed payment of PF & ESI in sl. No. 20(b) of Form 3CD & accepted by the Assessee which are contrary to the dictum laid down by the Hon’ble Supreme Court as observed in para 10.2 in the case of Manikandan Vazhukkappara Kumaran [2023 (11) TMI 1294 - ITAT BANGALORE].
Thus we are of the firm opinion that section 254(2) can be invoked only with a view to rectifying any mistake apparent from record. The assessee cannot seek a review of the order passed by the Tribunal through a miscellaneous application u/s.254(2) of the Act, as held by the Hon’ble Supreme Court in the case of Reliance Telecom Limited [2021 (12) TMI 211 - SUPREME COURT] We further clarify that if the assessee is of the opinion that the order passed by the Tribunal is erroneous either on facts or in law, in that case the only remedy available to the assessee is to prefer an appeal before the Hon’ble High Court.
Under the above mentioned facts and circumstances, we partly allow the miscellaneous application filed by the assessee.
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2024 (7) TMI 1530
Maintainability of appeal before the Commissioner (Appeals) - time barred - goods as imported under the brand name “Martech DHA” by the respondent are DHA (docosahexaenoic acid) classifiable under CTH 29161590 (respondent) or include other ingredients giving the goods the characteristic of food preparation under CTH 21069099 (revenue).
Time limitation - HELD THAT:- It is found that the revenue has averred that the passing of review order within three months of the date of communication of the OIO by the Committee of Commissioners under section 129(D)(3) is an internal procedural matter and the substantive condition is to file the appeal within one month of the passing of the review order as per section 129(D)(4) of the Customs Act and within the overall time frame of four months - the appeal filed by revenue before the Commissioner (Appeals) was not time barred and that the matter related to classification needs to be examined and disposed of on merits.
Rule 23 of the Customs Excise Service Tax Appellate Tribunal (Procedure) Rules, 1982 states that the parties to the appeal shall not be entitled to produce any additional evidence, either oral or documentary, before the Tribunal. Thus, the general principle is that the appellate court should not travel outside the record of the Original Authority, unless the Tribunal itself feels the need to do so. No application was filed and prayer made by the Appellant to produce additional evidence. Had it been done it would have given the respondent a chance to file additional grounds / evidence as a rebuttal and to test whether the evidence was of an unimpeachable character. The power to allow additional evidence at the Tribunal level, whether on fact or law, oral or documentary is discretionary in nature. The parties are not entitled, as of right, to the admission of such evidence.
The classification of goods is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Department intends to classify the imported goods under a particular category different from that claimed by the assessee, the Department has to adduce proper evidence and discharge the burden of proof.
The revenue itself has alleged that the impugned goods are used in a host of industries like food, beverage, dietary supplement, pharmaceutical and allied industries. However, it has not been shown as to why “Martech DHA” has acquired the characteristics of food preparation alone and is not for example an ingredient of the pharma or allied industry when the goods are supplied to the said industries. The problem of trying to classify goods as per their perceived end use without first examining that the other ingredients present are permissible or not as per the chapter notes and whether they alter the nature of the product, is a fatal flaw in the arguments set out by Revenue. Further the Assistant Commissioner and the Commissioner (Appeals) have held, based on customer declarations produced before them, that DHA, which contains impurities and added stabilizers, is known in trade parlance as “DHA”. Revenue has not challenged this finding or produced contrary evidence.
Thus, it has been possible to finalize the classification within the parameters of the Customs Tariff with assistance from the HSN and reference to extrinsic sources was not required. In any case all the references made by revenue deal with situations where the product in question is not pure DHA with impurities and stabilisers alone. They refer to DHA not as a standalone product that has been imported in bulk but rather to the product used, post their import, in the manufacture of infant formula, dietary supplements and various food products or manufactured and sold as dietary supplement or food ingredient/ food supplement in various food etc. The problem of end use-based classification of a multi-use product has been discussed above and found unsuitable.
While revenue has not been able to prove its case, the respondent has demonstrated that the correct classification of “Martech DHA” a derivative of linolenic acid, which is a separate chemically defined organic compound (DHA), is under Tariff Heading 2916 1590 of the Customs Tariff.
There are no hesitation in partially rejecting the appeal by upholding the impugned order with regard to classification of the impugned goods while setting aside the portion relating to time bar - appeal disposed off.
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2024 (7) TMI 1529
AO jurisdiction to go beyond the net profit shown in the Profit and Loss Account - addition made u/s 115JB deleted by ITAT - deletion of foreign exchange transaction difference accrued to the assessee per the financial statement for the relevant previous year in respect of foreign currency monetary transactions -HED THAT:- Issue answered by ITAT bearing in mind the judgment passed by the Supreme Court in Apollo Tyres Limited [2002 (5) TMI 5 - SUPREME COURT].wherein it was concluded that the AO did not have the jurisdiction to go beyond the net profit shown in the Profit and Loss Account except to the extent provided under the Explanation to Section 115JA.
Foreign exchange rate fluctuation - ITAT has relied on Sutlej Cotton Mills Ltd [1978 (9) TMI 1 - SUPREME COURT] and held that any foreign exchange gain or loss on capital asset will be adjusted with the value of such asset.
Additions u/s 14A and Section 36(1)(iii) - ITAT correctly observes that the Show Cause Notice [SCN] itself records that the assessee had not earned any exempt income during the assessment year and even investments were made in its subsidiary for commercial expediency for which no borrowings were specifically undertaken. Therefore, the question of disallowing any expenditure would not arise. The ITAT further held that the interest paid u/s 36(1)(iii) of the Act was an allowable deduction as the borrowed funds were duly utilised by the assessee for its own business.
TP Adjustment on interest earned by the assessee in connection with loans granted to its Associated Enterprise - Respondents correctly held with respect to the deletion of the Transfer Pricing Adjustment on account of interest earned by the assessee in connection with loans granted to its Associated Enterprise [AE].
Cash payments u/s 40A(3) read with Rule 6DD(k) - ITAT correctly deleted addition observing cash payments u/s 40A(3) read with Rule 6DD(k) alongwith development charges, consultancy charges payments made by the assessee and interest paid on amount advanced to various third party companies.
Disallowance on interest paid in respect of delay in payment of Indirect Taxes (Service Tax and VAT) - ITAT correctly held interest paid in respect of delay in payment of indirect taxes i.e., Service Tax and VAT is not penal in nature. The decision relied upon by Learned Counsel for the Assessee squarely apply to the facts and circumstances of the case. We, accordingly, set aside the orders of the authorities below and delete the entire addition.
Assessment Year of the Composite Scheme of Arrangement and Amalgamation Appointed Date - Attempt to revise the Appointed and Effective Date which were made part of the Scheme - It becomes pertinent to note that the appeal proceeds on the foundation that the transactions should be viewed as pertaining to Assessment Year [AY] 2012-13 which is clearly misconceived. This, since when one keeps in mind the Appointed Date as being the close of business on 31 March 2011, the relevant AY would be 2011-12. Once we come to hold that the transactions clearly do not form part of AY 2012-13, the questions which are sought to be canvassed clearly disintegrate.
Undisputedly, in terms of the Scheme of Arrangement which came to be approved by the concerned High Court on 20 January 2012, the Appointed Date as defined means the closing hours of business on 31st day of March, 2011 or such other date as may be fixed by the High Court of Judicature at Bombay”.
Insofar as questions pertaining Section 28(iv) of the Act are concerned, it was rightly observed by the ITAT that the net increase in the General Reserves of the respondent-assessee can neither be perceived as a benefit or perquisite nor can it be perceived to have arisen out of carrying on of any business or profession by the respondent-assessee.
Addition regarding Section 56(2)(viia) cannot be applied in respect of this transaction as it is a case where the transfer in the case of assessee falls under section 47 (vii) of the Income-Tax Act. We, accordingly, delete the addition under Section 56(2)(viia) also.
Thus, it is apparent that the appeal fails to raise any substantial questions of law. It shall consequently stand dismissed.
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2024 (7) TMI 1528
Disallowance u/s 14A - explanation inserted to Section 14A by Finance Act, 2022 applied Retrospectively or prospectively - HELD THAT:- As per final judgment rendered inter partes and where while dealing with an identical issue, the Court in Pr. CIT vs. Era Infrastructure (India) Ltd. [2022 (7) TMI 1093 - DELHI HIGH COURT] held that the amendment made to section 14A will take effect from 1st April, 2022 and will apply in relation to the assessment year 2022-23 and subsequent assessment years.
Also Supreme Court in SedcoForex International Drill. Inc. [2005 (11) TMI 25 - SUPREME COURT] has held that a retrospective provision in a tax Act which is "for the removal of doubts" cannot be presumed to be retrospective, even where such language is used, if it alters or changes the law as it earlier stood. Following the aforesaid judgment, we dismiss the instant appeal.
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2024 (7) TMI 1527
Challenge to demand notice u/s 73 of Odisha Goods and Services Tax Act, 2017 - date for personal hearing was not given - violation of principles of natural justice - HELD THAT:- Petitioner is relying on directions given in the show cause notice. It was in respect of a demand. Any defect in the show cause notice would cause violation of principles of natural justice. On query made, respondent in fairness submits, time be extended for petitioner to file reply and thereafter in event personal hearing is sought, it will be given.
The impugned demand is set aside and quashed. Petitioner has two weeks from date to file reply to the show cause - petition disposed off.
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2024 (7) TMI 1526
Rejection of application for rectification filed by the petitioner, not been uploaded in the portal - inability to file any appeal under Section 108 of the CGST / SGST Act against Ext.P5 order - HELD THAT:- This writ petition is will stand disposed of permitting the petitioner to file an appeal as contemplated by the proviso to sub rule (3) of Rule 108 before the Appellate Authority against Ext.P5 order or against any other similar order against which the petitioner wishes to file an appeal. The period from 20-06-2024 (date of filing of this writ petition) till 25-07-2024 shall be excluded for the purpose of limitation for filing such appeal.
Petition disposed off.
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2024 (7) TMI 1525
Seeking grant of regular bail - Money laundering - proceeds of crime - wrongful sanction of 50 loans - misappropriation of public money of bank by cheating and forgery - mandatory provisions of PMLA, 2002 not followed - HELD THAT:- On going through the provisions of law and judgment passed by Apex Court in case of Vijay Mandal Choudhary Vs. Union of India and Ors. [2022 (7) TMI 1316 - SUPREME COURT], it is clear that offence under PMLA, 2002 is a separate and distinct offence. PMLA, 2002 deals with the proceeds of crime which has been obtained by accused by committing scheduled offences. Accuse possess, conceals and acquire tainted property or money claiming it to be untainted and use the proceeds of crime. Said act of accused in dealing with ill gotten money or property constitutes separate and distinct offence from earlier offence committed to get the money.
On what basis and material, reason to believe regarding guilt of applicant was formed, is not mentioned in the order. Order is accompanied by grounds of arrest. Most of the grounds of arrest are based on investigation done by CBI and on statement of applicant and other witnesses recorded under Section 17 of PMLA 2002. It is mentioned in grounds that during recording of statement, applicant did not cooperate, gave evasive answers and suppressed facts. Director failed to mention reason to believe guilt of applicant under the Act of PMLA, 2002. Under Section 19 of the PMLA, 2002, arrest is discretionary. Discretion is to be exercised wisely and arrest is not required in all cases.
No reason has been mentioned in arrest order. Reason to believe has to be more than only a prima-facie case. In absence of reference to material on which reason to believe regarding guilt is based, arrest of applicant stands vitiated. Provision of Section 19 of the PMLA, 2002 is mandatory. Provisions of PMLA, 2002 places reverse burden on the accused to show that he is not guilty and there is presumption under law that applicant has committed the offence, therefore, provision under Prevention of Money Laundering Act, 2002 is to be strictly followed.
Now, it is to be seen that if Section 19 of the PMLA, 2002 has not been complied with, then whether Court can grant bail without satisfying itself on twin conditions mentioned in Section 45 of PMLA, 2002. Due to noncompliance of Section 19 of the Act, whether rigors of Section 45 of the PMLA, 2002 will be wiped out. Arresting Officer has to asses the material available in charge-sheet of predicate offence and also unearthed during enquiry and investigation by authorized officer. Such officer must have material on basis of which he forms opinion that accused is guilty of offence under the Act only then discretion, vested in him to arrest, is to be exercised - Rights of liberty of a person may be jeopardized, if reason of belief of guilt under Act is not in writing in arrest order, as condition for grant of bail is rigorous under PMLA, 2002. In such conditions, Court while considering the bail application has to see that arrest has been made by complying with provisions of Section 19 of the Act. In this case, provisions of Section 19 of the Act has not been complied with.
It is directed that applicant shall be released on bail on furnishing a bail bond in the sum of Rs. 5,00,000/- with two solvent sureties in the like amount to the satisfaction of the trial court for his regular appearance before Court on all such dates as may be fixed in this regard - Bail application allowed.
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2024 (7) TMI 1524
Complaint u/s 276C (2) r.w.s. 278 (b) - Petitioners evaded tax and failed to carry out self-assessment - HELD THAT:- The record clearly shows that the Petitioners were served in the year 2022 itself and the matter is still pending before the concerned Court. The Petitioners ought to have informed the concerned Court about the payment of tax in the year 2018 itself and accordingly, could have sought for discharge. Instead of that, Petitioners approached this Court and that too after a period of two years from the receipt of summons from the concerned Magistrate.
Petitioners are granted liberty to approach the concerned Magistrate to file the necessary Application for discharge along with the documents showing that the tax was already paid in the year 2018 itself and that this fact is suppressed in the complaint. If such an Application is filed, Magistrate shall decide it in accordance with law and as expeditiously as possible.
Trial Court is directed not to execute the non-bailable warrant issued against Petitioner No. 2 till the returnable date i.e. 15.07.2024.
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2024 (7) TMI 1523
Money Laundering - scheduled offence - siphoning of funds - misappropriation of funds of the KSAMB by opening bank accounts by forging the documents and thereafter transferring to different accounts in various other banks - petitioner who is not an accused in the scheduled offence can be prosecuted for the offence under Section 3 punishable under Section 4 of PMLA in the absence of knowledge that the money transferred to his account and utilised were from the proceeds of the crime - HELD THAT:- The Hon’ble Supreme Court in the case of Sh. Satish Mehra v. Delhi Administration & Anr [1996 (7) TMI 555 - SUPREME COURT] construed the provisions of Section 226 of Cr.P.C., which obliges the prosecution to describe the charge brought against the accused and to state by what evidence the guilt of the accused would be proved and Section 228 of Cr.P.C. which provides for framing of the charge upon grave suspicion of commission of offence, and opined that if a “Judge is fairly certain that there is no prospect of the case ending in conviction the valuable time of the Court should not be wasted for holding a trial only for the purpose of formally completing the procedure to the pronounce the conclusion on a future date.” It further held that if a “Judge is almost certain that the trial would be an exercise in futility or a sheer waste of time it is advisable to truncate” the proceedings the stage of discharge under Section 227 of Cr.P.C.
The petitioner is required to rebut the presumption under Section 24 of the Act, 2002, only if there is sufficient evidence or any specific allegation to establish that the petitioner knowingly assisted in concealing the proceeds of the crime or facilitated the use of such proceeds to project illicit proceeds as untainted property.
In the case at hand, the petitioner's conduct exhibits neither indirect attempt to indulge, nor active involvement in any process connected with the proceeds of crime as to launder their illicit origin into untainted property. It is apposite to add, at the risk of repetition, that no prima facie evidence has been adduced by the prosecution indicating proof of having knowingly assisted on part of the petitioner herein or having knowingly been a party, in relation to the commission of the offence of money laundering.
The continuance of the impugned proceedings on the file of the learned Principal City Civil and Sessions Judge at Bangalore (Special Judge) shall be an abuse of process of law - petition allowed.
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