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Showing 21 to 40 of 1434 Records
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2021 (10) TMI 1415 - GUJARAT HIGH COURT
Request for the petitioners' side to urgently fixed the matters for hearing - HELD THAT:- Considering the paucity of time, the matter is fixed for hearing peremptorily on 24.11.2021.
Both the sides shall exchange the brief written submissions and also the authorities sought to be relied upon, the same shall be also exchanged and submitted to the Court on or before 22.11.2021 - Let the matter appear on 24.11.2021.
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2021 (10) TMI 1414 - DELHI HIGH COURT
Rejection of Bail application - applicability of provisions of section 43-D(5) of the UAPA - right to a fair trial read into Article 21 of the Constitution - HELD THAT:- Though no particular correlation as between undertrial incarceration and the right to speedy trial being defeated emerges, what we see clearly is, one, that undertrials have been enlarged on bail even in cases where the offences alleged were punishable with death; and, two, that even when the period of incarceration undergone as undertrial was as little as 66 days, the Hon'ble Supreme Court enlarged the undertrial on bail.
Courts must not play coroner and attend to legal or constitutional rights only after they are 'dead'. Instead we must play doctor, and save such rights from demise before they are extinguished. Courts should pro-actively step-in to protect such rights from being stifled and buried. If equity calls upon affected persons to be vigilant to protect their rights, then surely the courts must also be vigilant, and, to quote the Hon'ble Supreme Court, act as sentinels on the qui vive when it comes to protecting constitutional and legal rights.
In the present case, the appellant has spent more than 12 years in custody as an undertrial; 256 witnesses have been examined over the last about 12 years, but 60 prosecution witnesses still remain to be examined. Regardless of how much longer the trial may take hereafter, the incarceration of more than 12 years suffered by the appellant in custody as an undertrial would certainly qualify as a long enough period for the system to acknowledge that the appellant's right to speedy trial continues to be defeated.
Further it is observed that, even assuming that the specific role attributed to the appellant in the charge framed vide order dated 06.05.2011 against him, warrants a life sentence, section 57 of the IPC provides that in calculating fractions of terms of punishment, imprisonment for life shall be reckoned to be equivalent to imprisonment for 20 years; whereby, it would be reasonable to say, that the appellant has already undergone more than half the sentence he may eventually face. To be sure, while observing so, it is not the purport of this court to pre-judge the decision of the learned Trial Court to award to the appellant whatever sentence it deems appropriate, in accordance with law, if the appellant is eventually convicted.
In the present case, if the State plans to seek the capital sentence for the appellant, it is therefore all the more necessary that the appellant be afforded a speedy trial; failing which, the appellant deserves at least to be given back his liberty after more than 12 long years of imprisonment as an undertrial, since it cannot be ignored that as of now, the appellant has undergone punishment for more than a decade of his life, for an alleged offence for which he has not yet been found guilty.
It is directed that the appellant be released on regular bail, pending trial, subject to the conditions imposed - application allowed.
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2021 (10) TMI 1413 - KARNATAKA HIGH COURT
Exemption u/s 80-P - claim denied as petitioner is not a Co-operative Society within the meaning of Section 2(19) - HELD THAT:- As decided in Swabhimani Souharda Credit Co-operative Ltd [2020 (1) TMI 831 - KARNATAKA HIGH COURT] all entities registered under the said Act of 1997 are Cooperative Societies within the meaning of Section 2(19) of the IT Act, 1961 and that they would be entitled to stake their claim for exemption under Section 80-P.
In view of the decision of M/s. Swabhimani Souharda Credit Cooperative Ltd.,(supra), we are of considered opinion that the impugned Assessment Order at Annexure-E is erroneous and illegal and therefore, deserves to be quashed and the matter be remitted back for re-consideration afresh in accordance with law, bearing in mind the observations and findings recorded in this order. Decided in favour of assessee.
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2021 (10) TMI 1412 - KARNATAKA HIGH COURT
Exemption u/s 11 - scope and amplitude of the definition “charitable purpose” - correct interpretation of the proviso to Section 2(15) for “charitable purpose” - scope of amendment to section 2[15] - HELD THAT:- As the issue involved herein is squarely covered by the Co-ordinate Bench ruling of this Court in the assessee’s own case in Karnataka Industrial Area Development Board [2020 (11) TMI 483 - KARNATAKA HIGH COURT]
As no reasons to differ from the findings of the Co-ordinate Bench on the issue involved herein. Hence, we answer the substantial questions of law in favour of the assessee
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2021 (10) TMI 1411 - MADRAS HIGH COURT
Smuggling - 24 karat gold in the form of crude chain, paste etc. - contraband item - baggage rules - it is the stand of the petitioners that they never intended to cross the Customs barrier at the airport through green channel as averred by the respondent / Customs and they in fact, intended to declare the same, since before they crossed the DFMD they were intercepted, the chance was not given to them to make the declaration.
Passengers numbering about 129 who are involved in this case had arrived in three consecutive days from various destinations through various flights - Can all these passengers cannot be put under one basket by drawal of one seizure mahazar.
Prayers of remitting the matter back to the adjudicating authority by affording the opportunity of cross examination - principles of Natural Justice.
HELD THAT:- Here in the case in hand, whether any such attempt has been made by the Customs to comply with clause (a) of Section 138-B (1) is a question, where, there is no such attempt seems to have been made and no summons have been given to these two independent witnesses and even the mahazar drawn officer and the seizure officer who signed in the mahazar were not made present before the adjudicating officer or made available before the adjudicating officer for examination - In the absence of any such attempt being made by the respondent Customs to bring the person who made the statement, it cannot be stated that the contingency noted at clause (a) have been complied with in this case. Therefore, the relevancy or admissibility of the statement is questionable in this case.
In the facts of the case, the entire case has been built up based on the single seizure mahazar, wherein, each and every aspect, according to the mahazar, was done only in the presence of the independent witnesses. They also claimed that, even after the seizure was completed the entire goods seized were kept in 5 boxes and in each of the boxes these independent witnesses signed and in every stage of search and seizure these independent witnesses were present. When that being so, the proprietary requires that, the adjudicating authority should have issued summons to these independent witnesses to corroborate the statements ie., the mahazar. Unless and until the basic fact of mahazar is corroborated by two independent witnesses, whether the veracity can be automatically admitted in favour of the Customs is yet another question for which this Court at this moment do not want to make any comment. However, for the limited purpose of giving the chance of cross examination to the petitioners atleast that attempt should have been made by the Customs to bring those independent witnesses during the adjudication proceedings and made them available for such examination / cross examination.
As rightly opined by the Division Bench, there is no straitjacket formula on the principle as to whether the chance of cross examination is a must or not, as it depends upon the facts of each of the case.
Moreover, insofar as the request of cross examination is concerned, it has not been specifically denied by giving any order in writing by the adjudicating authority. Had the adjudicating authority decided the issue as to whether chance of cross examination should be given to the petitioner or not as a preliminary issue and rendered a finding, giving an order to that effect, certainly the arguments advanced by the learned Counsel for the respondents can be accepted and an appeal can be filed. However, in the case in hand, that issue has not at all been considered and decided, but the adjudicating authority proceeded to complete the adjudication on whole merits of the case and passed a final order. Therefore, the arguments advanced by the learned Standing Counsel on the side of the respondent on this aspect is also not countenanced.
Here in the case in hand, the contents of the show cause notice has already been discussed, where the contents recorded in the seizure mahazar has been reproduced in the show cause notice and that is the main basis for the Customs case to proceed for adjudication. In the mahazar as stated already, two independent witnesses have been shown and one Intelligence Officer of the DRI who has drawn the mahazar and another Intelligence Officer of the mahazar who is incharge of the whole seizure, atleast these four persons should have been made available for examination / cross examination when specifically this was asked by the noticees. This principle as has been indicated in Clause 14.9 of the Master Circular can be considered to be an apt direction in the given circumstances of the case.
Here in the case in hand, the cross examination chance which is one of the integral facet of the natural justice principle since has been specifically denied, this Court feels that on that ground the impugned orders certainly get vitiated.
In that view of the matter, for the limited purpose of remanding the matters for re-adjudication to the respondents Customs, this Court feels that the impugned orders can be interfered with - the matters are remitted back to the respondents for re-adjudication. While making readjudication, the observations as stated shall be borne in mind by the adjudicatory authority where fair opportunity of cross-examination to cross examine the witnesses, especially the two independent mahazar witnesses and two Intelligence Officers of DRI who are responsible for drawal of mahazar and the seizure of the goods atleast shall be made available to the petitioners for cross-examination. After giving such chance of crossexamination, it is open to the adjudicatory authority to complete the adjudication proceedings and pass orders on merits.
Petition allowed by way of remand.
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2021 (10) TMI 1410 - TELANGANA HIGH COURT
Jurisdiction to issue SCN - Seeking quashing of SCN issued with regard to suspension of the Petitioners - seeking direction to the Respondents to permit the Petitioners to continue as Ward Members till January 2024 - quashing of SCN seeking removal of the Petitioner from the office of Sarpanch of the 2nd Respondent Gram Panchayat - quashing of SCN seeking suspension of the Petitioner from the office of Upa-Sarpanch of the 2nd Respondent Gram Panchayat.
Whether the 1st Respondent is having power to issue the show cause notices under Section 37(5) of the Act to Sarpanch, Upa-Sarpanch and Ward Members?
HELD THAT:- It is relevant to note that the election of Sarpanch and Ward Members of Gram Panchayat is a direct election and election to the Upa Sarpanch is indirect election. Against Upa Sarpanch, there is procedure to move No Confidence Motion - The Upa Sarpanch is second/Joint Signatory to the cheques of Gram Panchayat. The Upa Sarpanch does not have any independent power to act on behalf of the Gram Panchayat.
As per Section 70(4) of the Act, all cheques against the Gram Panchayat fund shall be signed jointly by the Sarpanch and Upa Sarpanch. All orders related to the above will be issued by the Sarpanch on behalf of the Gram Panchayat.
A perusal of the impugned show cause notices issued to the petitioners herein would reveal that on the complaints lodged by the 5th Respondent and the villagers of the 2nd Respondent-Gram Panchayat, the 1st Respondent had called for report from 3rd Respondent who in turn submitted his report. Basing on the said complaints and report of the 3rd Respondent, the 1st Respondent formed an opinion and issued impugned show cause notices to the Petitioners herein - there is no provision under the Act to issue show cause notices to the Upa Sarpanch and Ward Members of Gram Panchayat. Section 37 of the Act deals with the removal of the only Sarpanch but not with regard to removal of Upa Sarpanch and Ward Members. As stated above, the election of Upa Sarpanch is indirect election and there is procedure for removal. Though, prima facie, there are serious allegations against the Upa Sarpanch and Ward Members, there is no procedure prescribed under the Act, to remove them from the post of Upa Sarpanch and Ward Members by the 1st Respondent by way of initiating procedure.
In RESERVE BANK OF INDIA VERSUS PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD. ORS. AND VICE [1987 (1) TMI 452 - SUPREME COURT], it was held by the Apex Court that interpretation must depend on the text and context. They are the bases of interpretation. One may well say if the text is texture, context is what gives the colour. Neither can be granted. Both are important. That interpretation is best which makes the textual interpretation match the contextual.
As the language of Section 37(5) is clear, the contention of learned Government Pleader that Sarpanch includes Upa-Sarpanch is not sustainable. The impugned show cause notices issued against the Ward Members and Upa-Sarpanch were issued without jurisdiction and are liable to be set aside - With regard to Sarpanch, it is relevant to note that Section 37 of the Act, deals with the procedure to remove Sarpanch. The 1st Respondent on consideration of complaints, submitted by the 5th Respondent, villagers of the 2nd Respondent-Gram Panchayat and also the report of the 3rd Respondent formed an opinion and framed specific charges against the Sarpanch of the 2nd Respondent-Gram Panchayat. Accordingly, referring to the same, he has issued show cause notice dated 06.09.2021 to the Sarpanch of the said village framing specific charges and called for explanation from him within 7 days from the date of receipt of the said show cause notice.
The 1st Respondent had issued the impugned show cause notice to the Sarpanch basing on the complaint of the 5th Respondent and villagers of the 2nd Respondent Gram Panchayat and also on the report of the 3rd Respondent. Therefore, the contention of Sri. Vedula Venkataramana, learned Senior Counsel, that the 1st Respondent has to form an opinion independently without referring to the complaints and the report of the 3rd Respondent-DPO, cannot be accepted and the said contention is not sustainable - according to this Court, there is no illegality in issuing the impugned show cause notice to the Sarpanch of the villagers by the 1st Respondent. Therefore, on the said ground, the impugned show cause notice cannot be set aside.
The Sarpanch, aggrieved by an order of removal to be passed by the 1st Respondent under Section and 37(5) of the Act or by an intimation under Sub Section 2 of Section 35 of the Act, within 30 days from the date of receipt of the order or as the case may be, to be intimated preferring an appeal to the Gram Panchayat Tribunal. Therefore, there is specific procedure prescribed under the Act. Thus, there is alternative and efficacious remedy available to the petitioner herein under the Act. The petitioner herein, instead of availing the same, filed the present writ petition.
The impugned show cause notices dated 06.09.2021 issued by the 1st Respondent against the Petitioners/Ward Members and Upa-Sarpanch with regard to their suspension from their positions from the 2nd Respondent Gram Panchayat, is hereby set aside - Petition allowed.
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2021 (10) TMI 1409 - SUPREME COURT
Clubbing of FIR - remission of orders of acquittal and conviction arising out of two separate FIRs for fresh trial and clubbing of both - whether holding separate trials arising out of two FIRs warrants the direction of the High Court for a de novo trial?
HELD THAT:- The scope of the power of the Appellate Court to direct a re-trial has come up before this Court for interpretation in several decisions. The judgment of a Constitution Bench in PANDIT UKHA KOLHE VERSUS THE STATE OF MAHARASHTRA [1963 (2) TMI 60 - SUPREME COURT] has dealt with the issue extensively. In that case, the appellant was tried before the Judicial Magistrate for the offence of rash and negligent driving while under the influence of liquor thereby causing the death of one person and injuries to four others and for offences under the Motor Vehicles Act. The Trial Judge held that the evidence was not sufficient to prove that the appellant was driving the motor vehicle at the time of the mishap and acquitted him of the offences under the Motor Vehicles Act and the Penal Code. But he held that the evidence established that the appellant had consumed illicit liquor and committed an offence punishable under Section 66(b) of the Bombay Prohibition Act. The appellant was convicted and sentenced to imprisonment for three months and was directed to pay fine. On appeal, the Sessions Court set aside the order of the trial court and ordered a retrial on the ground that a “fair and full trial” had not taken place.
In Zahira Habibulla Sheikh v. State of Gujarat [2004 (4) TMI 629 - SUPREME COURT], this Court had directed the retrial of the “Best Bakery Case” where communal riots in the State of Gujarat had led to a massacre. The trial court had acquitted the accused and the appeal against it was dismissed by the High Court. Along with the appeal, the High Court also dismissed the petitions filed for adducing additional evidence and a direction seeking retrial.
In NAR SINGH VERSUS STATE OF HARYANA [2014 (11) TMI 1271 - SUPREME COURT], this Court was considering the question whether the Appellate Court can direct a retrial if all the relevant questions are not put to the accused by the trial court as required under Section 313 CrPC. This Court answered the question in the affirmative, holding that the Appellate Court may direct a retrial in such circumstances from the stage of questioning the accused because non-compliance of Section 313 CrPC had caused prejudice to the accused.
Power to Direct Joint Trial - whether the non-joinder of the trials in FIR 96 and FIR 187 has caused a miscarriage of justice, prejudicing the rights of the accused-respondents or the case of the prosecution such that it necessitated the order of the High Court directing a retrial after clubbing the proceedings arising out of both the FIRs? - HELD THAT:- The Court observed that a separate trial on the charge of causing the homicidal death of one ‘L’ was not contrary to law even if a joint trial of this offence together with others was permissible. The Court also observed that this matter was required to be considered by the trial court at the beginning of the trial and is not to be determined on the basis of the result of the trial. The Court further observed that its attention was not drawn to any material on record suggesting that prejudice had been caused to the appellant as a result of a separate trial. It was finally held that the plea of self defence and the argument that both the offences were committed during the course of the same transaction was rejected by both the courts below, and that the court would not interfere with concurrent findings of fact.
In ESSAR TELEHOLDINGS LTD VERSUS CENTRAL BUREAU OF INVESTIGATION [2015 (9) TMI 1749 - SUPREME COURT], Justice R F Nariman, speaking for a three-Judge Bench reiterated the principles which have been enunciated in Chandra Bhal [1970 (2) TMI 144 - SUPREME COURT]. Further, it was held that even if the conditions stipulated in Section 223 CrPC to conduct a joint trial have been fulfilled, it may not be desirous to direct a joint trial if a joint trial would (i) prolong the trial; (ii) cause unnecessary wastage of judicial time; and (iii) confuse or cause prejudice to the accused, who had taken part only in some minor offence.
The High Court in the present case was conscious of the fact that the appellant Nasib Singh was tried together with the other appellants during the trials in both the FIRs in view of Section 223(a) CrPC 223. What persons may be charged jointly.—The following persons may be charged and tried together, namely:— (a) persons accused of the same offence committed in the course of the same transaction - The evidence which has been recorded during the separate trials cannot exist for some of the accused and not for the others. The effect of the decision of the High Court is to relegate the appellant to a fresh trial together with the other accused. The High Court has in fact directed that the trial would be conducted afresh by observing that the accused be charged together for the different offences committed by them.
The respondents have not been able to demonstrate before the Court that separate trials led to a miscarriage of justice. No explanation has been rendered on the aspect of a miscarriage of justice. Though the High Court has in the impugned judgment observed that the separate trials in FIR 96 and FIR 187 led to a miscarriage of justice, no analysis has been undertaken to explain the finding. Moreover, the High Court has only observed that there ‘may’ be a miscarriage of justice. Therefore, quite apart from the individual prejudice to the appellant which has been brought out before the Court, we are clearly of the view that the holding of separate trials was not contrary to law and that there was no resultant failure of justice demonstrated to the satisfaction of the High Court.
The State of Punjab is not in appeal before this Court against the retrial which has been ordered by the High Court. But as a matter of first principle, it is evident that even the appellant has been able to establish that a retrial would be a matter of serious prejudice since vital evidence which has been recorded during the course of the trial would be obliterated as a result of the death of the witnesses from the investigating team lead by the appellant. That apart, a retrial will not serve the ends of ensuring that justice is done in a heinous crime alleged to have been perpetrated on the prosecutrix resulting in her suicide.
The impugned judgment and order of the High Court of Punjab and Haryana dated 20 December 2019 set aside - appeal allowed.
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2021 (10) TMI 1408 - KARNATAKA HIGH COURT
Computation of operating income/loss - Tribunal directing the assessing authority to include the foreign exchange fluctuation loss or gain as part of the operating income/loss - HELD THAT:- This issue is covered by the decision of this Court in Pr. Commissioner of Income Tax and Another V/s. M/s. NXP Semi Conductors India Pvt. Ltd. [2018 (7) TMI 2311 - KARNATAKA HIGH COURT] where one of us Hon’ble SSJ was the member, considering the identical question, placing reliance on the Principal Commissioner of Income Tax and Another V/s. M/s. Softbrands India Pvt. Ltd. [2018 (6) TMI 1327 - KARNATAKA HIGH COURT] has held that no substantial question of law arises for consideration. Accordingly, appeal filed by the Revenue has been dismissed.
TP Adjustment - Comparable selection - exclude both M/s. Bodhtree Consulting Ltd and Infosys Ltd., as comparables by holding that the said companies are functionally different from the assessee – company - HELD THAT:- This issue is covered by the decision of this Court in Principal Commissioner of Income-tax, Bangalore V/s. Softbrands India [P] Ltd. [2018 (6) TMI 1327 - KARNATAKA HIGH COURT] as held this Court cannot be expected to undertake the exercise of comparison of the comparables itself which is essentially a fact finding exercise. Neither the sufficient Data nor factual informations nor any technical expertise is available with this Court to undertake any such fact finding exercise in the said appeals under Section 260-A of the Act.
Allowability of market loss - Whether Tribunal erroneously held the market loss is neither speculative nor contingent in nature when the said market loss is not allowable as per CBDT Instruction No.3/2010 dated 20.03.2010 as actual losses are allowable as non-speculative only if the transactions qualify as eligible derivative transactions under clause [d] of proviso to section 43 [5] ? - HELD THAT:- This issue is covered by the Co-ordinate Bench of this Court in the case of M/s. Quest Global Engineering Services Pvt. Ltd. [2021 (3) TMI 434 - KARNATAKA HIGH COURT] as held loss sustained by the assessee due to fluctuation in foreign exchange while implementing export contract is incidental to assessee's course of business, therefore, such a loss is not a speculative loss but a business loss. The aforesaid findings have not been demonstrated to be perverse. substantial questions answered against the revenue and in favour of the assessee.
Claim for loss on account of forward contracts in Forex derivatives - HELD THAT:- As substantial question of law No.3 being answered in favour of the assessee, this realized gain/loss requires to be answered in favour of the assessee and against the Revenue. Accordingly, this substantial question of law is answered in favour of the assessee and against the Revenue.
Exemption u/s 10A - whether is an exemption section although sections 10A and 10B as substituted by Finance ct, 2000, provide for ‘deduction’ of the profits and gains derived from the export of articles, even though it is placed in Chapter III, section 10A begins with sentence ‘subject to the provisions of this section, the deduction ’?” - HELD THAT:- This question is covered by the decision of Commissioner of Income-tax V/s. Yokogawa India Ltd. [2016 (12) TMI 881 - SUPREME COURT] from a reading of the relevant provisions of Section 10A it is more than clear to us that the deductions contemplated therein is qua the eligible undertaking of an assessee standing on its own and without reference to the other eligible or non-eligible units or undertakings of the assessee. The benefit of deduction is given by the Act to the individual undertaking and resultantly flows to the assessee.
The deductions under Section 10A therefore would be prior to the commencement of the exercise to be undertaken under Chapter VI of the Act for arriving at the total income of the assessee from the gross total income. The somewhat discordant use of the expression “total income of the assessee” in Section 10A has already been dealt with earlier and in the overall scenario unfolded by the provisions of Section 10A the aforesaid discord can be reconciled by understanding the expression “total income of the assessee” in Section 10A as ‘total income of the undertaking’.
Though Section 10A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI. All the appeals shall stand disposed of accordingly. Decided in favour of the assessee.
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2021 (10) TMI 1407 - BOMBAY HIGH COURT
Validity of assessment u/s 144B - Assessment Order has been passed without following principles of natural justice and without even issuing a show-cause notice with a draft Assessment Order as mandatorily required u/s 144B - HELD THAT:- Respondents have filed an Affidavit of one Deputy Commissioner as affirmed that from the assessment order it appears that there was no show cause that was issued to the petitioner and unable to state as to why the faceless assessment centre has not issued a draft assessment order.
In view of this candid admission by Respondents, the impugned order dated 23/06/2021 is hereby quashed and set aside. The consequential notice of demand dated 23/06/2021 as well as show-cause notice dated 23/06/2021 issued under Section 274 read with 270A of the Income Tax Act, 1961 are also quashed and set aside. The Respondents may take such steps as advised in accordance with law.
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2021 (10) TMI 1406 - SC ORDER
Validity of Section 212(6) of the Companies Act, 2013 - Not punishable for offence of fraud punishable under Section 447 of the Companies Act, 2013 - appellant is only a signatory to financial documents pertaining to the company - HELD THAT:- The High Court has categorically noted in paragraph 49 of the impugned judgment that the petitioner is not accused of having committed the offence of fraud punishable under Section 447 of the Companies Act, 2013. He is only a signatory to financial documents pertaining to the company - The nuances of the arguments of the prosecution can be considered at an appropriate stage. Further, it is not in dispute that the co-accused have been granted interim protection who are charged with the offence u/s 447 of the Companies Act, 2013.
It is deemed appropriate to grant interim protection to the present petitioner until disposal of the main matter.
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2021 (10) TMI 1405 - SUPREME COURT
Seeking grant of Anticipatory Bail - absconding and concealing himself to avoid service of warrant of arrest - rejection of bail on the ground that as the accused is absconding and even the proceedings under section 82/83 Cr.PC have been issued, the accused is not entitled to the anticipatory bail - HELD THAT:- It is required to be noted that after investigation a chargesheet has been filed against respondent no.2 – accused for the offences punishable under sections 406, 420 of IPC also. Thus it has been found that there is a prima facie case against the accused. It has come on record that the arrest warrant was issued by the learned Magistrate as far as back on 19.12.2018 and thereafter proceedings under sections 8283 of Cr.PC have been initiated pursuant to the order passed by the learned Chief Judicial Magistrate dated 10.01.2019. Only thereafter respondent No.2 moved an application before the learned Trial Court for anticipatory bail which came to be dismissed by the learned Additional Sessions Judge, Saran, by a reasoned order.
The specific allegations of cheating, etc., which came to be considered by learned Additional Sessions Judge has not at all been considered by the High Court. Even the High Court has just ignored the factum of initiation of proceedings under sections 8283 of Cr.PC by simply observing that “be that as it may”. The aforesaid relevant aspect on grant of anticipatory bail ought not to have been ignored by the High Court and ought to have been considered by the High Court very seriously and not casually.
The High court has committed an error in granting anticipatory bail to respondent No.2 – accused ignoring the proceedings under Section 8283 of Cr.PC. - Appeal allowed.
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2021 (10) TMI 1404 - KARNATAKA HIGH COURT
Murder - Misuse of power by political parties and the Police authorities, to bury the truth in respect of an unnatural death of one Yogishgouda goudar - seeking sanction to the Central Bureau of Investigation (CBI), under Section - 6 of Delhi Special Police Establishment Act, 1946, to conduct further investigation with respect to Crime - Investigating Officer of the 2nd respondent/CBI is empowered to proceed with the investigation, in view of the interim order passed by the Hon'ble Supreme Court staying the operation of the order passed by the learned Single Judge of this Court, or not.
HELD THAT:- On careful perusal of the material documents including the objections filed by the respondents, it clearly depicts that the deceased Yogishgouda Goudar was a member of the Zilla Panchayat from Bharatiya Janatha Party ('BJP') and the accused, especially Accused No. 15 was in the congress party and there was a verbal altercation between the deceased and accused in the meeting held on 24.4.2015, thereby the Accused No. 15 and other accused have developed vengeance. Accordingly, after entering into conspiracy, on 15.6.2016 the deceased was killed near the Gym within the jurisdiction of Dharwad Sub-Urban Police Station and the Police registered the case for the offence punishable under the provisions of Section 302 of IPC in Crime No. 135/2016 against unknown persons. During the course of examination of the prosecution witnesses in SC 50/2017, mother and brother of the deceased approached the then Chief Minister with a representation requesting to refer the matter to CBI and the said representation was not fructified into action - Admittedly Accused No. 15 and other accused persons belong to Congress party as alleged by the respondents in the Statement of objections as well as in the submissions made by the learned counsel for the parties and the deceased Yogishgouda Goudar belong to BJP as alleged in the grounds of the present writ petition and as contended by the learned counsel for the petitioners/accused persons, which clearly indicates that the political parties are trying to settle the scores against each other taking the advantage of the judicial process.
It is high time for the judiciary to protect the fundamental rights of the citizens of this country to ensure justice must not only be done but must be seen to be done and majesty of rule of law is to be upheld and it is to be ensured that guilty are punished in accordance with law notwithstanding their status and authority which they might have enjoyed. This Court being the protector of the civil liberties of the citizens, has not only power and jurisdiction but also an obligation to protect the fundamental rights guaranteed by part III in general and Article 21 of the Constitution in particular, zealously and vigilantly.
It is relevant to consider at this stage whether the State Government is justified in entrusting the matter to the CBI in pursuance of the impugned Government Order dated 6.9.2019, in view of the representation made by the kith and kin of the deceased. A careful perusal of the records which culminated into passing of the impugned Government Order dated 6.9.2019 clearly indicates that the State Government was aware of the fact that the complainant had earlier approached this Court requesting to hand over the case to the CBI and this Court has dismissed the said writ petition. After considering the entire material on record, the State Government was of the opinion that the matter has to be entrusted to the CBI for further investigation, which is an independent authority and there is no bar for the State Government to exercise its sovereign power to entrust the matter to the CBI under Section 6 of the Delhi Special Police Establishment Act, 1946 for further investigation in Crime 135/2016 for the offence under section 302 IPC, in order to meet the ends of justice, Accordingly, the Central Government also issued notification on 23.9.2019 extending the powers and jurisdiction of the members of the Delhi Special Police Establishment in whole State of Karnataka for further investigation of Crime No. 135/2016 under Section 302 IPC lodged in Dharwad Sub-Urban Police Station, Dharwad.
It is also not in dispute that the present writ petitions are filed challenging the validity of the Government Order dated 6.9.2019 entrusting the matter for further investigation to CBI and for quashing of FIR dated 24.9.2019. The learned Single Judge of this Court granted the interim order on 21.11.2019 staying all further proceedings pursuant to the Government Order dated 6.9.2019 and FIR dated 24.9.2019, till the next date of hearing and the said interim order was extended from time to time - the investigation was conducted and carried out by the CBI. After investigation, filed the supplementary charge sheet on 20.5.2020 adding Accused Nos. 7 to 14 in the array of accused and the cognisance was taken by the competent Court. Thereafter, another supplementary charge sheet was filed on 30.1.2021 adding Accused Nos. 15 to 17. Cognizance in respect of the said charge sheets were taken on 7.6.2021. Since Accused Nos. 19 and 20 are public servants, sanction to prosecute them has also been obtained by the CBI. In these writ petitions, none of the petitioners have challenged the charge sheets filed against the accused persons nor challenged the cognizance taken by the Court after applying its judicial mind.
The material on record depicts that the Public Prosecutor, who was in-charge of the crime was changed during trial. The material also revealed that during the course of further investigation by CBI, it has come to light that some of the Police officials including previous Investigating Officer are also found to be involved in the case, were found to have taken gratification to scuttle the investigation and they have been arrayed as Accused Nos. 19 and 20 - The material on record clearly depicts that there are overt acts against the accused persons in the supplementary charge sheets and the competent Court took cognizance of the additional charge sheets. Therefore, the contention of the learned counsel for the petitioners that the investigation is defective, mala fide and there is no permission obtained from the Court, cannot be accepted and same is devoid of any merit.
By careful perusal of the provisions of Section 173(8) of the Code of Criminal Procedure, it is clear that it does not prohibit the Police for conducting further investigation nor does it impinge on the power of the State Government to entrust the matter to CBI for further investigation under of Section - 6 of the Delhi Special Police Establishment Act, 1946.
There are materials against the accused persons including Accused No. 15 - Vinay Kulkarni in the supplementary charge sheet filed after examining 88 witnesses and considering more than 75 documents and now, the learned Judge has taken cognizance and the matter is committed to the Court of Sessions and the matter is posted for further trial. It is not open to contend that the State has no jurisdiction to entrust the matter to CBI and there cannot be further investigation and once the trial commenced, there is no further investigation under the provisions of Section 173(8) of the Code of Criminal Procedure, cannot be accepted.
In the present case, the allegations made in the first information report, prima facie constitute cognizable offence and make out a case against the accused persons. After investigation, the Investigating Officer of the 2nd respondent/CBI filed supplementary charge sheets and the competent Court took cognizance of the supplementary charge sheets and the matter is committed to the court of Sessions. The accused persons have not made out an express legal bar engrafted in any of the provisions of the Code to the institution and continuance of the proceedings in Crime No. 135/2016 - In the absence of any prejudice shown for continuation of the further investigation, it is not open for the petitioners/accused persons to seek for quashing the impugned Government Order dated 6.9.2019 and the FIR filed by the CBI, on the ground that the State Government has no power for entrusting the matter to CBI, that too after much water has flown under the bridge culminating into further investigation, recording the statements 88 witnesses, collection of more than 75 documents and filing of the supplementary charge sheets and taking cognizance by the competent Court etc. On that ground also the petitioners are not entitled for grant of any relief.
The Government is justified in entrusting the matter to the CBI, an independent agency to conduct a fair trial and investigation. When there is an improper investigation by state police and high Police officials are involved, in order to do complete justice, direction for investigation by an independent and specialized agency like CBI, is warranted.
The points raised in these writ petitions are answered as follows:
a) The 1st point raised in these writ petitions is answered in the negative holding that the petitioners - Accused Nos. 1, 5, 15, 16 and 21, in these writ petitions have not made out a case to quash the impugned Government Order bearing No. HD 48 PCB 2016, Bengaluru, dated 6.9.2019, by which sanction has been accorded to the Central Bureau of Investigation, under Section (6) of Delhi Special Police Establishment Act, 1946 for "further investigation" of Crime No. 135/2016 under Section 302 of IPC lodged in Dharwad Sub-Urban Police Station, Dharwad, and to quash the FIR dated 24.9.2019 made in Bangalore/CBI/ACB/BLR 2019 RC 17(S)/2019, by the Superintendent of Police, Central Bureau of Investigation, in the facts and circumstances of the present case.
b) The 2nd point is answered in the affirmative holding that the Investigating Officer of the 2nd respondent/CBI is empowered to proceed with the investigation, in view of the interim order passed by the Hon'ble Supreme Court dated 20.2.2020 in SLP (Criminal) No. 1348/2020 (from 20.2.2020 to 11.8.2021) staying the operation of the order passed by the learned Single Judge of this Court dated 21.11.2019 made in W.P. No. 51012/2019, in the peculiar facts and circumstances of the present case.
Petition dismissed.
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2021 (10) TMI 1403 - ITAT CHANDIGARH
Disallowance made of provision of stock obsolescence being charged to the profit and loss account - HELD THAT:- Since the issue already stands adjudicated as above in the preceding assessment year, A.Y. 2005-06 [2021 (7) TMI 1408 - ITAT CHANDIGARH] the decision rendered therein will apply to the issue in all the remaining years concerned wherein as held that claim of the assessee as fully justified vis a vis write off of vaccines since undoubtedly such vaccines were not capable of being used beyond expiry period and had no realizable value thereafter. The assessee has been able to establish documentarily the fact of write off of the said product and the Revenue has not proved anything to the contrary. For the reasons stated above in the context of write off of vaccines we see no reason to disallow the claim of the assessee. Moreover identical claim of the assessee, we have noted, was allowed by the ITAT in identical facts and circumstances in A.Y 2003-04. The claim of the assessee to write off of toothbrush also is therefore allowed
Accordingly, the issues of disallowance of provision of stock obsolescence stands decided in favour of the assessee.
Disallowance of 1/3rd of the expenditure on advertisement and promotion, holding that it results in promotion of brand name owned by the foreign company - HELD THAT:- Since the issue already stands adjudicated as above in the preceding assessment years, A.Y. 2005-06 & 2006-07 [2021 (7) TMI 1408 - ITAT CHANDIGARH]as held that it cannot simply be derived from the fact that assessee has incurred huge expenses on advertisement and sale promotion of products the brand of which belonged to another entity, considering the clear distinction in the end objective of the said expenses and the assessee consistently claiming that it had acquired the exclusive license to manufacture and sell the products in India and thus being the sole user of the brand name in India. These contentions of the assessee have remained uncontroverted. The entire benefit, in such circumstances, inured to the assessee alone as it alone was operating in the Indian market. Benefit if any to the AE was only incidental. And on account of such incidental benefit accruing to a third party it cannot be said that the expense was not wholly and exclusively for the benefit of the assessee. As long as the objective /purpose for incurring an expenditure is to benefit the assessee solely, the expenditure can be said to be incurred wholly and exclusively for the benefit of the assessee. Any incidental benefit accruing to a third party on account of the same, being beyond the control of the assessee, does not dilute the character of the expense.
No reason or basis therefore for holding a part of the expense as pertaining to brand building - Thus the decision rendered therein will apply to the issues in all the remaining years concerned. Accordingly, the issues of disallowance of 1/3rd of advertisement and promotion expenses stands decided in favour of the assessee.
Disallowance of purchase of vaccine of GlaxoSmithkline Biological S.A. u/s 40(a)i) - HELD THAT:- Since the issue already stands adjudicated as above in the preceding assessment years, A.Y. 2005-06 & 2006-07 [2021 (7) TMI 1408 - ITAT CHANDIGARH] the decision rendered therein will apply to the issues in all the remaining years concerned. Accordingly, the issues of Disallowance of purchase of vaccine of GlaxoSmithkline Biological S.A. u/s 40(a)i) of the Act stands allowed for statistical purposes.
Nature of expenditure - Disallowance of Product Development Expenses in relation to pre-launch of product being capital in nature - HELD THAT:- Since the issue already stands adjudicated as above in the preceding assessment year, A.Y. 2006-07, the decision rendered therein will apply to the issues in all the remaining years concerned. Accordingly, the issue of Disallowance of Product Development Expenses in relation to pre-launch of product, being capital in nature stands allowed for statistical purposes.
Disallowance of market research expenses incurred on market surveys, market research being capital in nature - HELD THAT:- The expenditure incurred by the assessee on market research is merely for maintaining its profit earning ability and does not enhance the same. It is an expenditure which is incurred by the industry segment to which the assessee belongs so as to remain relevant and competitive in the said segment. By no stretch of imagination, the impugned expenditure, therefore, can be said to be capital in nature. The benefit, though made may be derived for a few years but is definitely not on capital account but on the contrary is on a revenue account to maintain its profitability only and not by way of enhancing it.
The decision of the ITAT in the case of GlaxoSmithKline Consumer Healthcare Ltd. cited before us strengthens the case of the assessee wherein product development expenses which were found to have been incurred not on capital account but on revenue account, though giving enduring benefit in future, were held to be revenue in nature and hence allowable. Disallowance of market research expense is directed to be deleted and we hold that the assessee is entitled to claim the same as revenue in nature. The assessee has alternately pleaded for allowance of depreciation which is of no relevance since the entire claim of expenses has been allowed treating it as revenue in nature - Decided in favour of assessee.
Disallowance of post retirement medical benefit holding this expenditure as being in the nature of contingent liability - HELD THAT:- As gone through the orders of the ITAT in the case of GlaxoSmithKline Consumer Healthcare Ltd.(supra) and have noted that the issue of allowability of provision created for meeting medical expenses of the employees post retirement had been adjudicated in the said case wherein the ITAT had allowed the said provision on noting that it had been created on scientific basis by actuary in terms of and recognizing the scheme of employment and also the Accounting Standard-15 issued by the ICAI in this regard. Considering the same, the ITAT had held that the said provision could not be, therefore, said to be contingent in nature and was duly allowable, being recognized method of accounting. In the impugned case also, we find, that the assessee had claimed the provision, valued by an actuary, created in terms of the scheme of employment and the Accounting Standard-15 of the ICAI, which facts have not been controverted by the revenue before us. - Decided in favour of assessee.
Disallowance of claiming CENVAT recoverable holding that expenditure to be not in the nature of trading expenditure - assessee had written off service tax recoverable which was not allowed by the Revenue holding that it pertained to earlier years and could not also be treated as bad debt - HELD THAT:- CENVAT Credits represented cost of services availed, which was not claimed in the relevant years since they were eligible to be set off against output service tax to be paid by the assessee. On this claim of set off being judicially held to be not allowable, we agree with the assessee, the impugned CENVAT Credits partook the character of cost of services and did so in the year in which the order holding them as not eligible for setoff against output tax, was passed. Till then they merely represented asset by way of service tax credit available on account of the same. In view of the same, we find merit in the claim of the assessee that the write off of cenvat credit recoverable was allowable as revenue expenditure in the year written off and the disallowance so made by the revenue authorities, holding them to be non trading in nature, we hold is not in accordance with law and is directed to be deleted. Decided in favour of the assessee.
Disallowance of provision of Market Claims on account of the assessee having failed to establish the nature of liability - HELD THAT:- Assessee has contended that it has incurred liability on account of VAT claims to be made by dealers which is to be discharged in the subsequent years, but, we find, no documentary evidence in this regard has been filed to substantiate its claim. In the absence of the same, we fail to understand how the liability arose in the impugned year or could be said to be present obligation of the assessee even though it was required to be discharged in future years. The facts regarding the claim itself are not clear and therefore, we are not inclined to agree with the contention of the assessee. However, the alternate claim of the assessee of reducing the said provision reversed in subsequent years from its taxable income is justifiable and the revenue authorities are directed to allow the same in accordance with law. Decided against assessee.
Education cess falls within the scope of amounts not allowed as deduction u/s 40(a)(ii)
Adjustment made on account of interest on receivable allegedly recharacterizing as on secured loans - treatment of the delayed payment of receivables as international transactions as defined u/s 92B - Determination of arms’ length price adjustment be made to the income of the assessee in relation to the said transaction - HELD THAT:- As noted from the order of Kusum Healthcare Pvt. Ltd. [2015 (4) TMI 180 - ITAT DELHI] that it has been held that the delay in recovery of receivables would have an impact on the working capital of the assessee which also needs to be studied. In the decision of the ITAT in the case of Kusum Healthcare Pvt. Ltd relied upon by assessee before us, we have noted that the adjustment on account of outstanding receivables was deleted holding that the working capital adjustment would take into account the impact of delayed recovery of debtors as also any account payable mechanism adopted by the assessee to balance the delayed realization. It was, therefore, held that if the operating profit margin of the assessee are higher than the operating profit margin of comparable cases after working capital adjustment, then no adjustment on account of realization of trade receipts is required.
We restore the issue of treating the accounts receivables as international transactions and bench marking the same for the purpose of adjustment to be made to the income of the assessee, to the TPO to determine the same afresh in accordance with law.
Transfer Pricing Adjustment in relation to export of goods - assessee’s contention of no adjustment to be made on account of the end purpose of the transaction of sale of goods to its AE being philanthropic - HELD THAT:- No merit in the same for the reason that the commercial intention in the transaction between the assessee and its AE is an admitted fact, the assessee having charged a margin of 9% approximately on the cost incurred by it. When there is an admitted commercial intent in the transaction, it should ideally be, therefore, then at arms’ length only. The subsequent action of the AE of using the product/goods for philanthropic purpose cannot have any effect considering the admitted commercial transaction between the assessee and its AE.
Comparable selection - We consider it fit to restore the issue back to the TPO for reconsideration of the contention of the assessee regarding exclusion of certain comparables from the list of comparables selected by the TPO. The TPO is directed to pass a speaking order detailing the reasons for rejecting the above comparables as pointed out by the assessee and thereafter adjudicate the issue in accordance with law. Needless to add the assessee be granted due opportunity of hearing in this regard. This issue therefore, is partly allowed for statistical purposes.
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2021 (10) TMI 1402 - ITAT AHMEDABAD
Expansion of Scope of limited scrutiny to complete scrutiny - CIT(A) held that the limited scrutiny can be converted into full scrutiny with the approval of higher authorities and the assessee could not produce any evidences to show that approval from concerned authority was not taken - HELD THAT:- As perused the material on record and it is noticed that nowhere in the assessment record, AO has made any reference that any approval of the higher authority was taken for converting the case of the assessee from limited scrutiny to the detailed scrutiny.
We opined that the decision of CIT(A) is unjustified since the CIT(A) has neither called any remand report from the AO on the objection of the assessee regarding taking of approval from higher authority for converting limited scrutiny to the detailed scrutiny nor the CIT(A) has given detailed reason along with the points for determination of his decision as prescribed in section 250(6) - it would be appropriate to restore this case of the assessee to the file of the ld. CIT(A) for adjudicating afresh - Appeal of the assessee is allowed for statistical purposes.
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2021 (10) TMI 1401 - ITAT MUMBAI
Income taxable in India - Amounts received for leasing of alloys taxed as royalty - India US DTAA - assessee being a non-resident company incorporated in accordance with the corporate laws of United States of America and a tax resident of that County - HELD THAT:- Royalty for design of bushing is not paid by OCIPL to OCNLIC and payment to assessee is only towards lease rentals i.e. bushings made of alloys comprising Platinum and Rhodium. We note that the assessee has not provided any services to OCIPL and OCIIPL inconnection with intellectual property related to bushing and, since, the intellectual property right with regard to the bushings is with OCNLIC and assessee is merely providing alloys of Platinum and Rhodium, consideration for alloys cannot be treated as royalty.
The case is covered by the decision of Neyveli Lignite Corpn. Ltd. [1999 (10) TMI 40 - MADRAS HIGH COURT] wherein it has been held that payment to be constituted as royalty should be the payment made to a person who has exclusive right over a thing for allowing another to make use of that thing.
Similarly, the case is also covered by the decision of the Delhi Bench of the Tribunal in the case of Bharti Airtel Ltd. [2016 (3) TMI 680 - ITAT DELHI] wherein it has been held that in order to receive a royalty in respect of allowing the usage or right to use any property including an intellectual property, the owner thereof must have an exclusive right over such property.
Technology for manufacture of glass fibre including the use of bushing has been provided by OCNLIC a Dutch Company and royalty has been paid to that Dutch Company and, therefore, the amount of lease rental on alloy which are used to refurbish the bushing cannot be again treated and taxed as royalty in the hands of the assessee by invoking the India US DTAA and provisions of section 9(1)(vii) read with Explanation 5 of the Income-tax Act. Addition deleted - Decided in favour of assessee.
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2021 (10) TMI 1400 - ITAT MUMBAI
Revision u/s 263 - scope of limited scrutiny or expanded the scope of limited scrutiny - assessee’s case was selected under limited scrutiny category on Low income in comparison to high loan / advances / investments in shares appearing in balance-sheet and Minimum alternate tax (MAT) liability mismatch - HELD THAT:- Perusal of the notices issued u/s 142(1) as well as 143(2) make it clear that in course of assessment proceedings, AO did examine both the issues for which assessee’s case was selected for scrutiny - in response to query raised by the AO from time to time, the assessee had furnished all relevant and necessary details relating to loans and advances given and investment made in shares as appearing in balance sheet. AO has conducted necessary enquiry on the issues for which case was selected for scrutiny and after applying his mind to the materials on record, has completed the assessment.
As per CBDT instruction No.20/2015 dated 29-12-2015, in limited scrutiny cases the reasons / issues shall be verified as communicated to the assessee concerned and the questions u/s 142(1) of the Act shall remain confined only to a specific reasons / issues for which the case has been taken up for scrutiny - the scope of enquiry by the assessing officer shall be restricted to the limited scrutiny issue. The aforesaid position stands reiterated in CBDT Instrn. No.5 of 2016 dated 14-07-2016. Thus, the assessing officer being bound by instructions issued by CBDT from time to time, could not have gone beyond the scope and ambit of limited scrutiny for which the case was selected. AO was required to strictly confine himself to conduct necessary enquiry relating to issues for which limited scrutiny was required.
AO while completing the assessment has restricted himself and, rightly so, to the scope and ambit of the limited scrutiny. Thus, unless the scope of scrutiny is expanded by converting it to a complete scrutiny with the approval of the higher authority, the assessing officer could not have travelled beyond his mandate.
That being the case, the assessment order cannot be considered to be erroneous and prejudicial to the interest of revenue for not examining the loans taken by the assessee and their utilization as well as capitalization of interest. The material on record clearly establishes that the assessing officer adhering to the scope of limited scrutiny has enquired into and examined the specific issues. When the assessing officer is not empowered to do certain acts directly, the revisionary authority certainly cannot direct the assessing officer to do so indirectly by exercising power u/s 263 of the Act. While coming to such conclusion, we get support from the decision of M/s Su-Raj Diamond Dealers Pvt Ltd vs PCIT [2019 (12) TMI 26 - ITAT MUMBAI] - The assessment order cannot be considered to be erroneous and prejudicial to the interest of revenue. In view of the aforesaid, we set aside the impugned order of PCIT passed u/s 263 of the Act and restore the order of assessment. Appeal of assessee allowed.
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2021 (10) TMI 1399 - ITAT DELHI
Rectification of mistake u/s 254 - Incorrect and incomplete recording of the fact that the responsibility for installation and commissioning alongwith supply of equipment is with the appellant/applicant - HELD THAT:- The issue has been decided by this Tribunal [2020 (12) TMI 857 - ITAT DELHI] wherein the Tribunal has taken a view that the dominant purpose of the appellant/applicant is not to sell telecommunication equipment but to commission it after due customisation of hardware and software in accordance with the requirement of telecommunication service provider.
After carefully perusing the contents of the Miscellaneous Applications, we are of the considered view that this Tribunal has taken a view after due appreciation of facts. It may be an error of judgment but not an error as contemplated in section 254(2) of the Act. We, therefore, do not find any reason to hold that there is a mistake apparent from record in the view taken by this Tribunal. This issue is, accordingly, dismissed.
Incorrect adjudication of Ground of appeal No. 6 – Attribution of profits - Non-adjudication of Ground of Appeal No. 7 – Taxation of software as royalty - HELD THAT:- We have given thoughtful consideration to the orders of this Tribunal. We are of the considered view that for the limited purpose of adjudication of Ground No. 6 with its sub-grounds and Ground No. 7, needs to be re-adjudicated as there is a mistake apparent from record in not adjudicating the captioned grounds. Therefore, for this limited purpose, the captioned order of this Tribunal is recalled for the captioned A.Ys for the adjudication of Ground Nos. 6 and 7 in their true perspective.
Registry is directed to list the appeals for hearing of Ground Nos. 6 and 7 on 08th February, 2022 and inform the parties accordingly.
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2021 (10) TMI 1398 - MEGHALAYA HIGH COURT
Smuggling - Betel Nuts of foreign origin - seizure of bags of betel nut under Section 110 of the Customs Act on the ground that the said betel nuts were brought to India through unauthorised route in violation of the Customs Act and are liable for confiscation under Section 111(b) and 111(d) of the said Act - HELD THAT:- The Division Bench of the Tribunal recorded the finding that the confiscated betel nut is non-notified goods and therefore, burden to prove the fact of smuggling lies on the department and same has not been discharged. In this regard, the department relied upon the certificate issued by the Arecanut Research and Development Foundation, Mangalore to show that the confiscated goods/betel nuts are of foreign origin. However, the Tribunal refused to consider this certificate on the ground that the said Institution is not accredited and hence the report was not relied on.
The Tribunal in this regard relied on the decision of the Patna High Court reported in M/S AYESHA EXPORTS VERSUS THE UNION OF INDIA AND ORS. [2019 (1) TMI 1633 - PATNA HIGH COURT] where it was held that This court is of the opinion that in absence of there being a standardized laboratory test for tracing the country of origin, established under some statute and such Labs have been accredited by the competent authority and the Labs could have the scientific method to come to a conclusion that a Betel Nut is of a particular country's origin, it would not be in the interest of justice to direct the petitioner to pay the custom's duty.
There are no error in the findings given by the Tribunal - appeal dismissed.
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2021 (10) TMI 1397 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, NEW DELHI
Classification of imported goods - API Supari - Chikni Supari - Unflavored Supari - Flavored Supari - Boiled Supari - Boiled & Cut Supari - classifiable under heading 0802 90 00 or under heading 2106 90 30? - HELD THAT:- The five goods, namely API supari, Chikni supari. unflavored supari, boiled supari and boiled & cut supari together. In these cases, one set of processes are found to be intended for cleaning; the second set for enhancing preservation; and third set for enhancing appearance or presentation, in addition to cutting. Addition of starch would be included under such process. These processes are clearly covered by the Chapter Note to Chapter 8 as well as the HSN, it is found that in the instant case, betel nuts atter being boiled are dried and this fact per se would not exclude the end-products from the scope of "dried nuts". Further, it is equally obvious to me that boiling or mere addition of certain additives for the limited purpose of enhancing preservation or appearance or ease of consumption per se does not result in obtaining a preparation of betel nut.
The processes to which raw betel nuts have been subjected to obtain API supari, Chikni supari, unflavored supari, boiled supari and boiled & cut supari are squarely in the nature of processes referred to in the Chapter Note 3 to Chapter 8 and HSN Note. Therefore, at the end of the said processes, the betel nuts retain the character of betel nut and do not qualify to be considered as "preparations" of betel nut, which is sine qua non for a good to be classifiable under Chapter 21.
Flavored supari - whether the addition of special flavoring agents would render the betel nuts into preparations of betel nuts, classifiable under Chapter 21? - HELD THAT:- The judgment of the Hon'ble Supreme Court of India in the case of CRANE BETEL NUT POWDER WORKS VERSUS COMMR. OF CUS. & C. EX., TIRUPATHI [2007 (3) TMI 6 - SUPREME COURT] has held that the process of cutting betel nuts into small pieces and addition of essential/non-essential oils, menthol, sweetening agent etc. did not result in a new and distinct product having a different character and use - Put simply, this decisions clearly imply that addition of flavoring agents do not change the character of the good, meaning in the present case betel nut would continue to remain betel nut and not become preparation of betel nut.
Thus, all the six goods placed before me for consideration, i.e., API supari, Chikni supari, boiled supari, boiled & cut supari, unflavored supari, and flavored supari, merit classification under Chapter 8 of the First Schedule to the Customs Tariff Act, and more precisely, under the heading 0802. This is so in view of the fact that the processes to which raw green fresh betel nuts have been subjected to obtain the said six goods are squarely in the nature of processes mentioned in Note 3 to Chapter 8, and have not materially changed the essential character of betel nuts - the said six goods are not classifiable under sub-heading 2106 9030, as contended by the applicant, since they have not attained the character of "preparations" of betel nut, which is sine qua non fora good to be so considered.
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2021 (10) TMI 1396 - ITAT LUCKNOW
Assessment u/s 153A - necessity of valid approval u/s 153D - HELD THAT:- As in cases Navin Jain & Others [2021 (9) TMI 1068 - ITAT LUCKNOW] and SHRI NARESH KUMAR JAIN [2021 (9) TMI 1080 - ITAT LUCKNOW]has been followed, the Tribunal has held to the effect that granting of a mechanical approval u/s 153D of the Act vitiates the entire proceedings. It is on this basis that the issue was decided in favour of the assessee in both these cases, under facts and circumstances exactly similar to those present herein.
Respectfully following the view taken in the above appeals, we allow additional ground of appeal and quash the assessment order. As the assessment order has been quashed, the consequent order of learned CIT(A) is also quashed. Rest of the grounds do not survive for adjudication. Appeal of assessee allowed.
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