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Showing 241 to 260 of 1642 Records
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2024 (7) TMI 1402
Levy of service tax - Tour Operator Services on charges received for outbound tours - Business Auxiliary Services on incentives received for use of Amadeus software - extended period of limitation.
Whether the appellant is liable to pay service tax under Tour Operator Services on charges received for outbound tours? - HELD THAT:- The Division Bench of the Tribunal, in the case of M/s Weldon Tours & Travels Pvt. Ltd. [2024 (5) TMI 371 - CESTAT NEW DELHI] had occasion to consider the demand of service tax raised on outbound tours for the period prior to 01.07.2012. After considering the observations made by the Hon’ble Apex Court, in the case of All India Federation of Tax Practitioners [2007 (8) TMI 1 - SUPREME COURT] and also the decision of the Larger Bench dated 19.10.2023. It was observed that since the tour is happening outside India, the charges received for operating and arranging outbound tours is not subject to levy and collection of service tax. The Coordinate Bench of the Tribunal set aside the demand raised on outbound tours. By judicial discipline, following the decision in the case of M/s Weldon Tours & Travels Pvt. Ltd. [2024 (5) TMI 371 - CESTAT NEW DELHI], the demand of service tax for the disputed period on outbound tours cannot sustain and requires to be set aside.
Whether the appellant is liable to pay service tax under Business Auxiliary Services on incentives received for use of Amadeus software? - HELD THAT:- The said issue is settled by the Lager Bench in the case of M/s. Kafila, Hospitality & Travels Pvt. Ltd. [2021 (3) TMI 773 - CESTAT NEW DELHI (LB)] where it was held that 'Consideration, which is taxable under Section 67 of the Finance Act, should be transaction specific. Incentives, on the other hand, are based on general performance of the service provider and are not to be related to any particular transaction of service. It needs to be noted that commission, on the other hand, is dependent on each booking and not on the target. If the air travel agent does not achieve the predetermined target, incentives will not be paid to the travel agents.'
The decision in the case of M/s. Kafila, Hospitality & Travels Pvt. Ltd., was followed by the Tribunal in the case of Asveen Air Travel (P) Ltd., versus Commissioner of GST & CE, Chennai [2022 (4) TMI 1035 - CESTAT CHENNAI]. After appreciating the facts and following the decision of the Larger Bench in the case of M/s. Kafila, Hospitality & Travels Pvt. Ltd., it is opined that the demand of service tax on incentives/charges for use of Amadeus Software for booking air tickets cannot sustain under Business Auxiliary Services, and requires to be set aside.
The impugned orders are set aside - appeal allowed.
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2024 (7) TMI 1401
Levy of service tax - insurance auxiliary services - insurance agent or not - Reverse Charge Mechanism in terms of rule 2(1)(d)(iii) of the Service Tax Rules, 1994 - CENVAT Credit - input service - group health insurance for the employees - Service tax on short account of insurance premium income - Extended period of Limitation.
Levy of service tax - insurance auxiliary services - insurance agent or not - Reverse Charge Mechanism in terms of rule 2(1)(d)(iii) of the Service Tax Rules, 1994 - HELD THAT:- The services rendered by an insurance agent, who is duly licensed under section 42 of the Insurance Act to be so, to an insurance company in relation to general insurance businesses are taxable as “insurance auxiliary services”. It is not the case of the department that the Bank is a holder of a license under section 42 of the Insurance Act to act as an “insurance agent”, nor such a finding has been recorded by the Commissioner in the impugned order. In the absence of a license, a person cannot be considered as an insurance agent for treating the activities as “insurance auxiliary services”.
The appellant had correctly discharged service tax on “business support services” and, therefore, once this service tax stands paid on the transaction, it is not open to the department to seek its recovery again. The reason stated by the appellant for discharging service tax under “business support services” is that the Bank had provided space to the appellant alongwith ancillary facilities such as chairs and desks and these infrastructural support services provided by the Bank are covered under “business support services”. This service is not liable to tax under Reverse Charge Mechanism.
The demand that has been confirmed by the Commissioner under this head cannot be sustained.
CENVAT Credit - input service - group health insurance for the employees - HELD THAT:- This issue has been decided in favour of the appellant by a Larger Bench of the Tribunal in Reliance Industries Ltd. vs. Commissioner of Central Excise and Service Tax, (LTU), Mumbai [2022 (4) TMI 1357 - CESTAT MUMBAI (LB)]. Thus, the demand confirmed under this head cannot also be sustained.
Service tax on short account of insurance premium income - HELD THAT:- The appellant has stated that as per the audited trial balance of the Regional Office at Delhi, the total premium is Rs. 253,63,68,125/- and because of an error in the Annexure, the said trial balance has been recorded as 253,72,82,715/-. The appellant has enclosed the audited trial balance from which it is clear that the total premium is Rs. 253,63,68,125/- and, therefore, there is no short accounting of premium.
The impugned order confirming the demand of service tax on insurance auxiliary service and short account of insurance premium income cannot be sustained nor can the CENVAT credit of group health insurance policy for the employees be denied to the appellant - It is not necessary to examine the contention raised by the learned counsel for the appellant on invocation of the extended period of limitation under the proviso to section 73(1) of the Finance Act.
The order dated 15.05.2017 passed by the Commissioner is, accordingly, set aside - appeal allowed.
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2024 (7) TMI 1400
Non-payment of service tax - appellant registered under Section 12AA of Income Tax Act, 1961 - violation of various Section of Chapter 5 of Finance Act and also of Rule 2A and Rule 3 of point of taxation Rules, 2011 read with Rule 2(1)(d) of Service Tax Rules, 1994 - applicability of mega exemption Notification No.25/2012-ST dated 20.06.2012 or negative list of Section 66D of Finance Act 1994 - HELD THAT:- The activity of the appellant is squarely covered under Entry No. 9 of the above notification. The Mega Exemption Notification No. 25/2012, Entry No. 6 thereof, also exempt the services provided by any person other than a business entity. The word ‘business’ has not been defined in chapter V of the Finance Act, 1994.
In the present case, the appellant is a statutory body carrying out the functions as laid down by the statute. It is collecting all such amounts as mentioned in the show cause notice but as per the statutory mandate of Section 18, 19, 21, 27, 29, 32, 33, 38 and 49 of the Architects Act, 1972 read with Rule 30 and 34 of Council of Architecture Rules. All kinds of the fees are apparently charged for inspection and approval of new institution as well as existing institutions admitting and offering recognised qualifications in the Architecture in India and for meeting out the other statutory objectives including promotion, research and development in architectural education - the impugned prescribed fees are collected by the appellants as a regulatory body for self financing its expenses incurred without motive of carrying out any kind of the commercial and economic activity of profit.
The appellant admittedly is registered under Section 12AA of the Income Tax Act. The section provides that nonprofit organisations like charitable trusts, welfare societies, NGOs, religious institutions etc. are entitled to tax exemption. The certificate of appellants’ registration as a charitable trust is also on Further, there is department’s own Circular No. 177/09/2022- TRU dated 03.08.2022 wherein it has been held that all services supplied by an ‘educational institution’ to its students are exempts from GST. Consideration charged by the educational institutes by way of entrance fee for conduct of entrance examination is also exempt - it is clarified that the amount for fee charged prospective students for entrance or admission, or for issuance of eligibility certificate to them in the process of their entrance/admission as well as the fee charged for issuance of migration certificates by educational institutions to the leaving or ex-students is covered by exemption under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
A prior circular also bearing no. 89/7/2006-ST dated 18.12.2006 has clarified that statutory functions performed in terms of specific responsibility assigned to a sovereign/public authority or any authority under law in force does not constitute provision of taxable service to a person and therefore no service tax is leviable on the activities of such authority. CESTAT Mumbai while relying upon this circular in the case of MIDC Vs. CCE [2014 (11) TMI 311 - CESTAT MUMBAI] has held that the fee collected by the authority constituted under provisions of law for performing such activity which is in nature of compulsory/statutory levy as per the provisions of relevant statute and that it is deposited in the government treasury, such activity is undertaken as mandatory and statutory function and thus, do not come under the ambit of taxable service. Hence, no service tax is leviable on such activity.
The overall quantitative limit prescribed in the proviso to Section 2(15) (as amended from time to time) has to be complied with, if the regulatory body is to be considered as one with 'charitable purpose' eligible for exemption under the IT Act. Like statutory authorities which regulate professions, statutory bodies which certify products (such as seeds) based on standards for qualification, etc. will also be treated similarly. The original adjudicating authority has confirmed the demand holding that the appellants are neither covered under Mega Exemption Notification nor under the negative list, are therefore not sustainable.
The orders under challenge are hereby set aside - Appeal allowed.
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2024 (7) TMI 1399
Challenge to assessment order - Board’s Circular No.98/1/2008-Service Tax, dated 04.01.2008, issued vide F.No.345/6/2007-TRU - HELD THAT:- The CESTAT, Bangalore in Golflinks Software’s case [2018 (8) TMI 331 - CESTAT BANGALORE] where it was held that 'The Apex Court in the case of Orient Paper Mills Ltd. Vs. UOI [1968 (5) TMI 15 - SUPREME COURT] held that Appellate Authority which exercised quasi-judicial power should not be influenced by departmental clarifications and Board Tariff Ruling while adjudicating the cases.'
A plain reading of the question framed leaves no room for any doubt that Board’s circular became the subject matter of the substantial question. The High Court gave its stamp of approval to the order of authority below and the appeal was dismissed.
There exists no substantial question of law, which needs adjudication - Appeal dismissed.
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2024 (7) TMI 1398
CENVAT Credit - input services - period March 2009 to May 2013 - denial on the ground that those services are not confirming to the definition of ‘input service’, contained in Rule 2(l) of the CENVAT Credit Rules, 2004 - HELD THAT:- The disputed services involved in the present appeal were considered as ‘input service’ by the Tribunal in the case of C.C.E., DELHI-III VERSUS FIAMM MINDA AUTOMOTIVE LTD. [2016 (3) TMI 64 - CESTAT NEW DELHI], SECURE METERS LTD VERSUS CE & ST-UDAIPUR [2018 (8) TMI 950 - CESTAT NEW DELHI], ACCENTURE SERVICES PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI-II [2015 (3) TMI 1114 - CESTAT MUMBAI], M/S RELIANCE INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, LTU, MUMBAI [2016 (8) TMI 123 - CESTAT MUMBAI] and RMZ INFOTECH PVT. LTD. VERSUS COMMR. OF CENTRAL TAX, BENGALURU EAST [2021 (11) TMI 1108 - CESTAT BANGALORE].
During the course of the arguments, the appellant submitted fairly that post 01/04/2011, they would not be entitled for CENVAT credit on ‘Rent-a-Cab’ service and accordingly, he would not press for the same. The appellant would pay up that part of the demand, as it relates to Rent-a-Cab service post 01/04/2011. We accept the contention of the appellant in view of the exceptions provided under the definition of ‘input service’ w.e.f. 01/04/2011.
The impugned order is modified to the extent of confirming the demand of CENVAT credit availed on Rent-a-Cab service w.e.f. 01/04/2011 along with interest. Rest of the demands are however set aside - Appeal allowed in part.
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2024 (7) TMI 1397
Valuation of clearances - undervaluation of goods sold from their depot and consignment agents - period from 2006-07 to 2010-11 - applicability of Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - recovery alongwith interest and penalties - HELD THAT:- The appellant has transferred their goods to their depot at Delhi and six consignment agents located at various places from where the goods were sold to unrelated buyers. The appellant were following Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and discharged duty at the time of clearance from their factory. As per Rule 7 of the Rules, Central Excise Duty was paid at the factory gate at a price prevailing at the depot / consignment agents’ end at the same time or the time nearest to the time of removal of goods from their factory.
The appellant has adopted the method of payment of duty as mentioned above in Rule 7 of the Central Excise Valuation Rules, for the clearances effected to their depot and consignment agents. Once duty has been paid at the time of clearance from their factory as provided under Rule 7, the appellant is not liable to pay any differential duty based on subsequent sale of the same goods from the depot or consignment agents, at a higher price to independent buyers - the ld. adjudicating authority has given a finding stating that the appellant has adopted Rule 7 of the Central Excise Valuation Rules and there is no evidence available on record to establish that the goods were sold at a different price from the depot or consignment agents’ end at the same time.
Interest - HELD THAT:- There is no other evidence available on record to establish that the appellant has not adopted the price prevalent at the depot / consignment agents at the same time or at the nearest time when they paid the duty at the time of clearance from their factory. Accordingly, it is held that the appellant has rightly paid duty as per Rule 7 of the Central Excise Valuation Rules, 2000 and there is no liability to pay any differential duty on account of difference in the value of clearance of the same goods from the depot / consignment agents subsequently to independent buyers - the appellant is liable to the differential duty only to the extent of Rs.23,052/- confirmed in the impugned order along with interest.
Penalty - HELD THAT:- The issue involved in this case related to valuation of clearances effected through the depot and consignment agents of the appellant. There is no suppression of fact with intention to evade payment of tax established in this case and hence, no penalty is imposable on account of confirmation of the above said demand.
Appeal disposed off.
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2024 (7) TMI 1396
Challenge to provisional assessment - mere change of opinion - Eligibility for abatement on the value of bought-out items in the absence of any findings by the adjudicating authority regarding the availment of CENVAT credit on such brought out items - non-verification of actual purchase price of bought-out items supplied directly to site.
Whether the First Appellate Authority is justified in setting aside the provisional assessments?
HELD THAT:- The Common/Final order of this Bench in the appellants own case for earlier periods in BHARAT HEAVY ELECTRICALS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, TIRUCHIRAPPALLI [2019 (3) TMI 1362 - CESTAT CHENNAI] which was relied upon by the appellant and we find that the facts are almost identical - it was held in the said case that 'once the appellants have not been found in breach of Guidelines contained in the Office Order dt. 22.12.2004 the finalization of provisional assessment indeed will naturally be treated to have done only following the said Order. It is also to be noted that certain verifications regarding the value and weight of DTS items and the items supplied by assessee’s units for all items covered by commercial invoices are required to be done periodically, to ensure that at the time of finalization of assessment there will not be any need to check even figures with respect to any documents other than the commercial invoice.'
There are no change in the facts or the circumstances and that all the objections/contentions urged here by the Ld. Joint commissioner stand answered, that is to say, this Bench has considered all such grievances of the department and has answered such grievances by resting on the office memorandum. The crux of the findings thus appears to be that as long as the revenue does not have any grievance against the Office Memorandum and as long as the assessee is not found to have violated the terms and conditions in the said office memorandum, the same is binding on both the assessee as well as the revenue - thus, setting aside of the assessments by the First Appellate Authority was uncalled for and hence, there are no reasons to sustain the impugned order.
The view of the First Appellate Authority is a mere ‘change of opinion’ and, as long as the view expressed by the Adjudicating Authority after following the guidelines in the Office Memorandum is not found to have resulted in revenue loss, setting aside the finalised assessments on account of ‘change of opinion’ is clearly impermissible in law and hence, unsustainable.
The impugned order is set aside - appeal allowed.
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2024 (7) TMI 1395
Refund of unutilized CENVAT credit lying in their books of accounts under Rule 5 of CENVAT Credit Rules, 2004 - rejection of refund on ‘Erection’, ‘Telephone‘ and ‘outward transportation’ service - period October 2009 to June 2010 - HELD THAT:- The impugned period i.e. October 2009 to June 2010 is prior to the changes brought in by Notification No. 3/2011 dated 1.3.2011, to the definition of ‘Input service' under Rule 2 (l) of the Cenvat Credit Rules, 2004 with effect from 01/04/2011. Prior to the said date the definition of “input services” had a wide ambit as it included the phrase “activities relating to business”. Thus, almost all the services were covered within the definition of “input services” if used for providing the output services. There is nothing to show that the said services were not used for the provision of output service.
Further considering the low tax amount involved in these appeals and the appellant being prima facie eligible for the refund it would be in order, to grant such benefits without straining the plain words of the section at this distant date.
The impugned order is set aside and the appeals are allowed.
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2024 (7) TMI 1394
Refund claim - clearances made to SEZ units - physical exports or not - refund claim filed beyond time limit of one year prescribed under Section 11B of Central Exercise Act, 1944 - Appeal against confirmation of the recovery of the amount - Confirmation of demand of interest.
Appeal against confirmation of the recovery of the amount - HELD THAT:- It is brought out from facts that the appellant has already repaid the amount. The Commissioner (Appeals) in the impugned order has given the liberty to the appellant to avail recredit. The Ld. Counsel has brought to our notice that the appellant has repaid the amount and then availed recredit on 23.03.2014. In such circumstances, appeals have become infructuous. These appeals are dismissed as infructuous.
Confirmation of demand of interest - HELD THAT:- The credit availed by the appellant is eligible. Rule 5 provides for an assessee to get refund of the unutilized cenvat credit in case of exports. This is a beneficial provision to facilitate exports. By filing the claim belatedly, the appellant has lost the benefit of refund. The department has not adduced any evidence to establish that there is suppression of facts on the part of the appellant. There are no ingredients for invoking the extended period for demand of interest. The demand of interest is time barred and requires to be set aside.
Appeals disposed off.
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2024 (7) TMI 1393
Recovery of Central Excise Duty alongwith interest and penalty - determination of assessable value of goods sold or cleared to the related party - section 4(1)(b) of the Central Excise Act read with rules 8,9,10 & 11 of the Central Excise Valuation Rules 2000 - HELD THAT:- It is not in dispute that the facts pertaining to the present appeal and to the aforesaid decided appeal in M/s Khyati Ispat Private Limited (Rolling Mill Division) vs. Principal Commissioner, Central Tax & Central Excise [2022 (3) TMI 399 - CESTAT, NEW DELHI] in the matter of the appellant are identical. Infact, the period involved in the appeal decided by the Tribunal is from April, 2010 to March, 2014, while the period involved in the present appeal is from April, 2014 to March, 2015. The decision of the Tribunal which has been relied upon by the Commissioner (Appeals) would, therefore, govern the issues raised in this appeal.
It cannot be doubted that the dispute in the present appeal is identical to the dispute raised in the appeal decided by the Tribunal.
In view of the decision of the Tribunal in the matter of the appellant itself, the present appeal filed by the department deserves to be dismissed and is dismissed.
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2024 (7) TMI 1392
Challenge to revisional order - assessment proceedings for the financial year 2006-07, barred on grounds of limitation in view of Section 33 of the TVAT Act having been undertaken on 15/18.11.2012 i.e. after five years - assessment order and reassessment order are based upon audit reports which are presumptuous in nature or not - formation of independent opinion or not - levy of penalty without a proper show cause notice in terms of Section 45 (6) of the TVAT Act, 2004.
HELD THAT:- The reassessment order dated 14.05.2019 passed on a previous remand by the revisional authority vide order dated 16.08.2016 has once again been set aside taking into account all the grounds urged by the petitioner by the impugned order dated 06.02.2024 and once again the matter has been remanded for reassessment. As such, the issues being canvassed before this Court are not open in that sense. The Assessing Authority has to apply its mind to all the grounds both of law and facts being raised by the petitioner in respect of each of the financial years in question.
Since a ground of limitation has been taken so far as the assessment proceedings of the financial year 2006-07 is concerned, the Assessing Authority shall determine the question of limitation first upon hearing the assessee and only if he is satisfied that the assessment exercise carried out for the financial year 2006-07 is not barred by limitation in terms of Section 33 of the TVAT Act, he would proceed to determine other grounds raised on merits so far as that financial year is concerned.
It is deemed proper to direct the Assessing Authority to conclude the exercise within a period of three months from the date of receipt of copy of this order - petition disposed off.
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2024 (7) TMI 1391
Decision of appeal ex-parte - whether in absence of counsel of the revisionist/appellant, the Commercial Tax Tribunal can proceed to consider and decide the appeal 'ex parte' in absence of the revisionist/appellant? - violation of principles of natural justice - HELD THAT:- This Court is of the considered view that where the appellant does not appear before the Tribunal, the appeal should be dismissed for want of prosecution rather than deciding the same on merits. Proviso to Rule 63 (4) of the U.P. Value Added Tax Rules, 2008 provides that if despite proper service of the notice either party is not present, the appeal may be heard and decided ex parte.
The aforesaid proviso though on the face of it provides that in absence of a party to the proceedings, the appeal can be decided by the Tribunal on merits, but the word 'ex parte' used in the proviso can be interpreted as "want of appearance on behalf of the opposite party/defendant" and not the appellant/plaintiff - the word 'ex parte' can be given its natural meaning as appearing in the Code of Civil Procedure and certainly the Tribunal can proceed to consider and decide the case ex parte in a situation where only the appellant appears, but the respondent/State does not appear, while in a case, where the appellant does not appear, the only consequence of such a situation would be to dismiss the appeal for want of prosecution and not to enter and decide the case on merits of the controversy.
The other concern raised was that there is no provision for setting aside the ex parte order in such a situation where the Tribunal proceeds to allow the appeal ex parte in absence of the defendant. In this regard, reliance was placed upon a judgement of a Coordinate Bench of this Court passed in M/s Ram Sewak Coal Depot, Deori, Mirzapur Vs. The Commissioner of Trade Tax, U.P, Lucknow [2003 (2) TMI 457 - ALLAHABAD HIGH COURT], wherein interpreting the provisions of Section 22 of the U.P. Value Added Tax Act, 2008, which is pari materia with provision of Section 31 of the U.P. Value Added Tax Act, 2008, which provides for rectification, this Court has held that wherein an appeal is decided ex parte, it shall be open for moving an application for rectification of such a situation. Accordingly, adequate reasons are given for the defendant for non appearance and judgement is rendered ex parte, but recall of order, exercise of rectification has been provided under Section 31 of the U.P. Value Added Tax Act, 2008.
The impugned order dated 07.09.2017, whereby the Tribunal has proceeded to decide the appeal preferred by the revisionist in his absence, is held to be illegal and arbitrary and accordingly set aside and the matter is remitted back to the Tribunal to decide the matter afresh after affording an opportunity of hearing to the parties - Revision disposed off.
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2024 (7) TMI 1390
Nature of Royalty - Distribution of legislative powers between the Union and the States on the taxation of mineral rights - true nature of royalty determined under Section 9 read with Section 15(1) of the MMDR Act - ‘royalty is in the nature of tax or not - scope of Entry 50 of List II of the Seventh Schedule - ambit of the limitations imposable by Parliament in exercise of its legislative powers under Entry 54 of List I - Does Section 9, or any other provision of the MMDR Act, contain any limitation with respect to the field in Entry 50 of List II? - expression “subject to any limitations imposed by Parliament by law relating to mineral development” in Entry 50 of List II pro tanto subjects the entry to Entry 54 of List I, which is a non-taxing general entry - any departure from the general scheme of distribution of legislative powers as enunciated in M P V Sundararamier [1958 (3) TMI 40 - SUPREME COURT] or not - scope of Entry 49 of List II and whether it covers a tax which involves a measure based on the value of the produce of land - constitutional position be any different qua mining land on account of Entry 50 of List II read with Entry 54 of List I or not - Entry 50 of List II is a specific entry in relation to Entry 49 of List II, and would consequently subtract mining land from the scope of Entry 49 of List II.
What is the true nature of royalty determined under Section 9 read with Section 15(1) of the MMDR Act? Whether royalty is in the nature of tax?
As per Dr Dhananjaya Y Chandrachud, CJI (majority view) - Royalty is not a tax. Royalty is a contractual consideration paid by the mining lessee to the lessor for enjoyment of mineral rights. The liability to pay royalty arises out of the contractual conditions of the mining lease. The payments made to the Government cannot be deemed to be a tax merely because the statute provides for their recovery as arrears.
As per NAGARATHNA, J. (dissenting view) - The true nature of royalty determined under Section 9 read with Section 15(1) of the MMDR Act, 1957 is that it is in the nature of a tax coming within the scope and ambit of Article 366(28) of the Constitution which defines taxation to include the imposition of any tax or impost, whether general or local or special and the word “tax” is to be construed accordingly.
What is the scope of Entry 50 of List II of the Seventh Schedule? What is the ambit of the limitations imposable by Parliament in exercise of its legislative powers under Entry 54 of List I? - Does Section 9, or any other provision of the MMDR Act, contain any limitation with respect to the field in Entry 50 of List II? - Whether the expression “subject to any limitations imposed by Parliament by law relating to mineral development” in Entry 50 of List II pro tanto subjects the entry to Entry 54 of List I, which is a non-taxing general entry? Consequently, is there any departure from the general scheme of distribution of legislative powers as enunciated in M P V Sundararamier [1958 (3) TMI 40 - SUPREME COURT]?
As per Dr Dhananjaya Y Chandrachud, CJI (majority view) - Entry 50 of List II does not constitute an exception to the position of law laid down in M P V Sundararamier (supra). The legislative power to tax mineral rights vests with the State legislatures. Parliament does not have legislative competence to tax mineral rights under Entry 54 of List I, it being a general entry. Since the power to tax mineral rights is enumerated in Entry 50 of List II, Parliament cannot use its residuary powers with respect to that subject-matter.
Entry 50 of List II envisages that Parliament can impose “any limitations” on the legislative field created by that entry under a law relating to mineral development. The MMDR Act as it stands has not imposed any limitations as envisaged in Entry 50 of List II - The scope of the expression “any limitations” under Entry 50 of List II is wide enough to include the imposition of restrictions, conditions, principles, as well as a prohibition.
As per NAGARATHNA, J. (dissenting view) - Entry 50 - List II of the Seventh Schedule is, no doubt, a taxation Entry which deals with taxes on mineral rights. But this Entry is subject to any limitations imposed by Parliament by law relating to mineral development. The use of the word “any” means the limitation could be in any form which can be imposed only by the Parliament by law relating to mineral development. In view of the use of the expression “any limitations”, it must be given the widest possible meaning to include a limitation in the form of Sections 9 and 9A, 25 or any other provision of the MMDR Act, 1957 and Rules made thereunder which act as a limitation to Entry 50 - List II.
The expression “subject to any limitations imposed by Parliament by law relating to mineral development” in Entry 50 - List II pro tanto subjects the Entry to Entry 54 - List I. The use of the expression “any limitations” would mean that the taxing Entry would be subject to a nontaxing or general Entry such as in Entry 54 - List I which could also be termed as a regulatory Entry. Consequently, there is a departure from the general scheme of distribution of legislative powers as enumerated in MPV Sundararamier insofar as Entry 50 - List II read with Entry 54 - List I is concerned which is unique to Entry 50 – List II. This is having regard to the significance of Entry 54 – List I which also overrides Entry 23 – List II.
What is the scope of Entry 49 of List II and whether it covers a tax which involves a measure based on the value of the produce of land? Would the constitutional position be any different qua mining land on account of Entry 50 of List II read with Entry 54 of List I? - Whether Entry 50 of List II is a specific entry in relation to Entry 49 of List II, and would consequently subtract mining land from the scope of Entry 49 of List II?
As per Dr Dhananjaya Y Chandrachud, CJI (majority view) - The State legislatures have legislative competence under Article 246 read with Entry 49 of List II to tax lands which comprise of mines and quarries. Mineralbearing land falls within the description of “lands” under Entry 49 of List II - The yield of mineral bearing land, in terms of the quantity of mineral produced or the royalty, can be used as a measure to tax the land under Entry 49 of List II. The decision in Goodricke [1994 (11) TMI 353 - SUPREME COURT] is clarified to this extent.
Entries 49 and 50 of List II deal with distinct subject matters and operate in different fields. Mineral value or mineral produce can be used as a measure to impose a tax on lands under Entry 49 of List II - The “limitations” imposed by Parliament in a law relating to mineral development with respect to Entry 50 of List II do not operate on Entry 49 of List II because there is no specific stipulation under the Constitution to that effect.
The decisions in INDIA CEMENT LIMITED VERSUS STATE OF TAMIL NADU [1989 (10) TMI 53 - SUPREME COURT], Orissa Cement [1991 (4) TMI 436 - SUPREME COURT], Federation of Mining Associations of Rajasthan [1991 (8) TMI 350 - SUPREME COURT], Mahalaxmi Fabric Mills [1995 (2) TMI 435 - SUPREME COURT], Saurashtra Cement [2000 (10) TMI 954 - SUPREME COURT], Mahanadi Coalfields [1995 (4) TMI 285 - SUPREME COURT], and P Kannadasan [1996 (7) TMI 554 - SUPREME COURT] are overruled to the extent of the observations made in the present case.
As per NAGARATHNA, J. (dissenting view) - Entry 49 - List II deals with taxation of lands and buildings. It does not cover taxes on mineral bearing lands. The constitutional position is different qua mineral bearing lands on account of Entry 50 - List II read with Entry 54 - List I and Section 2 of the MMDR Act, 1957. Consequently, any imposition on the basis of royalty by a State Legislature or involving royalty as a measure of the value of the minerals extracted from the land is impermissible.
Entry 50 - List II is a specific Entry in relation to Entry 49 - List II and would consequently subtract mining lands from the scope of Entry 49 - List II. This is particularly so having regard to Entry 50 - List II to be read with Entry 54 - List I and Section 2 of the MMDR Act, 1957.
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2024 (7) TMI 1389
Jurisdiction of the Civil Court u/s 34 of SARFAESI Act - suit for declaration and permanent prohibitory injunction - Order VII, Rule 11 read with Section 151 of the CPC - whether there is any substantial question of law involved in this second appeal? - HELD THAT:- It is a settled law that the existence of substantial question of law is the sine qua non for the exercise of jurisdiction under Section 100 of the Code. Section 100 provides that the second appeal would lie to the High Court from a decree passed in appeal by any court subordinate to the High Court if the High Court is satisfied that the case "involves a substantial question of law". It further provides that the memorandum of appeal shall precisely state the substantial question of law involved in the appeal and the High Court on being satisfied that the substantial question of law is involved in a case formulate the said question. Subsection (5) provides that the "appeal shall be heard on the question so formulated" - It is abundantly clear from the analysis of Section 100 that if the appeal is entertained without framing the substantial questions of law, then it would be illegal and would amount to failure or abdication of the duty cast on the court.
In Santosh Hazari vs. PurushottamTiwari [2001 (2) TMI 131 - SUPREME COURT], the Hon’ble Supreme Court has held that 'To be a question of law “involving in the case” there must be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter.'
The perusal of the aforesaid section shows that no civil court shall have any jurisdiction to entertain any suit or proceeding in respect of any matter, which the Debt Recovery Tribunal is empowered by or under SARFESI Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the aforesaid Act.
It is clear that no civil court can exercise jurisdiction to entertain any suit or proceeding in respect of any matter which Debt Recovery Tribunal or Appellate Tribunal is empowered to determine and no injunction can be granted by any court taken in pursuance of any power conferred by or under the SARFESI Act or under the Recovery of Debts Due to Banks and Financial Institutions Act.
In the instant case, except for the use of the word “fraud”, no particulars of the allegations of fraud have been specifically pleaded as mandated by the provisions of Order 6 Rule 4 of the Civil Procedure Code,1908. Thus, the plea of jurisdiction of the Civil Court based on the allegations of fraud cannot be countenanced. Hence in view of provisions of Section 34 of the SARFESI Act, both the learned Courts below have rightly rejected the plaint.
Thus, no question of law, what to say of a substantial question of law is involved in the instant case. Accordingly, it is found that no illegality or perversity in the judgments passed by both the Courts below in rejecting the plaint under Order 7 Rule 11 CPC - appeal dismissed.
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2024 (7) TMI 1388
Seeking permission to withdraw the Special Leave Petition with liberty to file a statutory appeal before the Appellate Authority within a period of one month from today - HELD THAT:- The Special Leave Petition is dismissed as withdrawn reserving liberty to the petitioner to file a statutory appeal before the Appellate Authority within a period of one month from today.
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2024 (7) TMI 1387
Levy of GST - Creation of additional demand on unbilled revenue - no reason for rejecting the petitioner’s explanation - violation of principles of natural justice - HELD THAT:- The impugned order does not indicate any reason for rejecting the petitioner’s explanation. It merely states that the reply of the petitioner was received, however “same is not acceptable being incomplete/not duly supported by adequate documents / without proper justification and thus unable to clarify the issue” - It is apparent that the Adjudicating Authority has not considered the petitioner’s reply to the impugned SCN and at any rate not provided any reason for rejecting the same.
The impugned order is set aside and matter remanded back to the Adjudicating Authority for consideration afresh - petition allowed by way of remand.
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2024 (7) TMI 1386
Cancellation of petitioner's registration - non-service of SCN - adjudication proceedings was ex-parte - Principles of natural justice - HELD THAT:- Reliance placed in M/S CHEMSILK COMMERCE PVT LTD VERSUS STATE OF U.P. AND ANOTHER [2024 (4) TMI 463 - ALLAHABAD HIGH COURT] where it was held that 'Since essential requirement of rules of natural justice has remained to be fulfilled, we set aside the order dated 31.12.2023. The petitioner may treat the said order itself to be the notice and submit its final reply thereto within a period of four weeks from today.'
For reason of exact similarity of facts, the present writ petition is also disposed of on the same terms.
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2024 (7) TMI 1385
Provisional attachment of bank account u/s 83 of the Central Goods and Services Tax Act, 2017 - wrongful claim of ITC - fake supplies - HELD THAT:- The Commissioner has considered it apposite to provisionally attach the petitioner’s bank account, to the extent of ₹ 26.91 lacs being the amount of ITC claimed in respect of allegedly fake supplies.
It cannot be accepted that the exercise of power by the Commissioner is unwarranted. The facts clearly indicate the Commissioner had found it necessary to provisionally attach the petitioner’s bank account to protect the interest of the revenue. The facts as obtaining in this case clearly indicate that material available with the Commissioner has a live nexus with his opinion. And, the impugned order cannot be faulted.
The petition is unmerited and accordingly dismissed.
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2024 (7) TMI 1384
Challenge to order u/s 74(9) of the Central Goods and Service Tax Act, 2017 - petitioner has not been provided with the relied upon documents though asked by the petitioner from the authority - violation of principles of natural justice - HELD THAT:- In view of the decision of the Hon’ble Apex Court in case of THE ASSISTANT COMMISSIONER OF STATE TAX AND OTHERS VERSUS M/S COMMERCIAL STEEL LIMITED [2021 (9) TMI 480 - SUPREME COURT], the petitioner has tried to submit that this petition may be entertained as there is breach of principle of natural justice. However, on perusal of the impugned order, it appears that the respondent-authority has already given ample opportunity of hearing to the petitioner, as prayed for. Therefore, in view of the decision of the Hon’ble Apex Court, the petitioner is relegated to avail the alternative efficacious remedy under section 107 of the Act.
The petition is disposed of with liberty to the petitioner to initiate appropriate proceedings in accordance with law before the appropriate authority.
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2024 (7) TMI 1383
Challenge to impugned order and demand notices - impugned order was passed pursuant to the SCN based on a Special Audit Report - no reasons for passing impugned order - violation of principles of natural justice - HELD THAT:- It is apparent from the reading of the impugned order that the issue regarding mismatch between the GST returns filed by the petitioner and the credit entries in its bank account is the basis of majority of the demand. However, the impugned order does not refer to any of the contentious issues and respondent no.2’s analysis on the same. It merely mentions that the demand raised in the SCN is confirmed.
The impugned order is bereft of any reasons. It is also apparent that the Adjudicating Authority/respondent no.2 has failed to consider the contentious issues.
The matter is remanded to the Adjudicating Authority for considering afresh - Petition allowed by way of remand.
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