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2021 (5) TMI 941 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH
Seeking reduction of share capital of the Petitioner Company - HELD THAT:- The Special Resolution as approved by the shareholders in their Extraordinary General Meeting held on 13.05.2020 is hereby confirmed. The Company shall, within thirty days hence, publish the confirmation of the reduction of share capital in the same newspapers (i.e. Free Press Journal and Navshakti) having circulation in the state of Maharashtra, as required under section 66(4) of the Act. It may also be published on the website, if any, of the Company.
The Petition for reduction of share capital is allowed.
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2021 (5) TMI 940 - ITAT MUMBAI
Disallowance u/s 37(1) - HELD THAT:- While dealing with the issue, the Tribunal in [2019 (6) TMI 1621 - ITAT MUMBAI] having found that in assessee’s own case for assessment year 2012-13, the Tribunal has deleted similar addition made by assessing officer, followed the same and upheld the decision of learned Commissioner of Income-tax (Appeals) in deleting the additional disallowance made by the assessing officer. Facts being identical, respectfully following the aforesaid decision of the Tribunal in assessee’s own case, we uphold the order of learned Commissioner of Income-tax (Appeals) on the issue. Ground raised is dismissed.
Disallowance u/s 14A - HELD THAT:- Having considered rival contentions, we find from materials on record that in the year under dispute, the assessee had not actually earned any exempt income. That being the case, the question of disallowance under section 14A r.w.r.8D would not arise. In fact, while considering identical issue in assessee’s own case in assessment year 2014-15 [2019 (6) TMI 1621 - ITAT MUMBAI] the Tribunal in the order referred to above, deleted the disallowance made by the assessing officer in absence of any exempt income earned during the year. In view of the aforesaid, we uphold the decision of learned Commissioner of Income-tax (Appeals) by dismissing the ground.
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2021 (5) TMI 939 - NATIONAL COMPANY LAW TRIBUNAL , HYDERABAD BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - existence of debt or dispute or not - HELD THAT:- It is found that due to defaults committed by the respondent/CD, the account of the CD was classified as NPA on 27.12.2018. Subsequently, the FC has issued Demand Notice dated 08.01.2019 (page 73) under section 13(2) of SARFAESI Act demanding total outstanding dues. Unable to get response from the CD, the FC has taken symbolic possession of properties on 07.06.2019 and 20.06.2019.
Both the parties have preferred proceedings before different forums. The respondent/had preferred a writ petition before the Hon'ble High Court of Telangana - the Adjudicating Authority admits this Petition under Section 7 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code - Petition allowed.
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2021 (5) TMI 938 - ITAT DELHI
Penalty u/s 271(1)(c) - disallowance of professional fees for non-deduction of TDS - HELD THAT:- Expenses disallowed u/s 40(a)(i) on account of non withholding of taxes was subject to payments made to vendors based in Thailand who are in the business of providing movers and packers Services to its client. This was in relation to the expats’ transfer movement. The service related to Movers and Packers cannot be characterized as royalty income in the hands of those vendors under the provisions of India Thailand DTAA and the same does not quality as technical service as it does not include the element of technical services relating to FTS.
The tax relating to Section 40(a)(i) will not be applicable in assessee’s case and is a contesting issue. Merely not filing appeal on the contesting issues does not tantamount to concealment of income and furnishing inaccurate particulars of income. These two elements along with Explanation 1 of Section 271(1)(c) are not present in assessee’s case for imposing penalty or initiating penalty proceedings. As related to payment made to control risk, the same also does not impugned to FTS as per the provisions of Article 12(4) of India Singapore DTAA as the same does not result in making available technical knowhow to the recipient.
Thus, these two elements upon which the penalty has been imposed by the Revenue Assessment Year contesting in nature and the assessee though has not opted for any appeal, it cannot be stated that these are the element of concealment of income and furnishing of inaccurate particulars. The case laws given by the assessee are clearly applicable in assessee’s case specially that of Reliance Petroproducts Pvt. Ltd.[2010 (3) TMI 80 - SUPREME COURT]. Hence we delete the penalty and allow the appeal of the assessee.
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2021 (5) TMI 937 - ITAT JAIPUR
Revision u/s 263 - Manner of presentation of the corpus fund in the final accounts of the assessee - donation so received was received for a specific purpose and use, hence it was Corpus Donation. The corpus donation cannot be treated as part of Income and Expenditure account - HELD THAT:- As far as the accounting principles/methods are concerned the Capital has to be shown in the balance sheet of the assessee. The capital shall not be treated as part of the income and expenditure account. Therefore, act of the assessee is correct - Hence, this fund is a nature of Capital Receipts and is required to be shown in the balance sheet not in the income and expenditure account. Therefore, the assessee has correctly shown the same in the books of accounts and final accounts of the assessee.
Since the assessee received certain amounts for the specific use i.e. for construction of building and this fact has been mentioned on the donation receipts also, copies of the some of the receipts are reproduced by the Ld. CIT(E) in his order itself, wherein it is categorically mentioned the purpose of donation. This fact has been duly examined by the then assessing officer and mentioned that he is satisfied with the submission and evidences. Even otherwise the directions of the doner a mutual trust has been created between the doner and donee and because of this the donee is bound to use that specific fund into the specifically directed activities for which it was donated. The same has to be kept as liability of the assessee till the utilization of the entire fund into the specified activities. Hence the same is required to be shown in the balance sheet not in the Income and expenditure account.
We also observe that the fund in question is a capital fund/corpus fund therefore, it is out of preview of the provisions of section 11(2) of the Act. Section 11 of the Act deals with the utilization of income of a trust. This section is not having any provision about the utilization of corpus donation / fund like general fund or other receipts. The amount so received to the assessee is a Corpus fund / donation, therefore is out of preview of the provisions of section 11(2) of the Act. Therefore, we are of the view that any amount received as donation with specific direction shall be treated as Corpus of the assessee and because of specific directions this is not taxable as per the provisions of section 11(1)(d).
Thus we are of the view that where the A.O. has taken a broad view by accepting the issue of corpus donation by carefully examining and satisfying himself with evidences produced by the assessee during the course of hearing, then order of the A.O. cannot be held to be erroneous on the ground of lack of inquiry.
Notice issued by the ld. CIT(E) was on the basis of proposal of subsequent ITO, therefore, this act does not provide such powers to the ITO U/s 263 - In the present case, the proposal was sent by the subsequent A.O. to the CIT(E) on the basis of which a show cause notice was issued which is against the provisions of the Act. However, on this proposition, our view is not in favour of the ld AR as we convinced with the arguments of the ld. CIT-DR who had submitted that there is no prohibition U/s 263 of the Act for the Commissioner to act on the basis of proposal by the A.O. if other conditions under the said Section are satisfied. In this regard, the ld. CIT-DR has relied on the decision in the case of Apollo Tyres Ltd.[1997 (10) TMI 98 - ITAT DELHI-E] and Stewarts and Lloyds of India Ltd.[2016 (3) TMI 178 - ITAT KOLKATA] therefore, we reject this contention raised by the assessee. Since, keeping in view our above discussion and reasoning mentioned in detail, we are of the view that the order passed by the A.O. was not erroneous and prejudicial to the interest of the revenue and thus we allow this ground raised by the assessee and set aside the order passed by the ld. CIT(E). - Decided partly in favour of assessee.
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2021 (5) TMI 936 - COMMISSIONER (APPEALS) CENTRAL GOODS AND SERVICE TAX, JAIPUR
Refund claim of excess tax paid - time limitation - refund claims were liable to be rejected on the grounds hit by limitation of time limit as the appellant has filed refund claims after expiry of 2 years from the relevant dates - also the refund claim was filed in the category of excess payment of tax and excess payment of tax falls under the phrase “any other amount paid” as prescribed under sub-section (1) of Section 54 of the CGST Act, 2017 - HELD THAT:- It is clear from the provision of Section 54(1) that any application for refund for any amount paid under CGST Act, 2017 has to be filed within two years from the relevant date. In the instant case, relevant date is the date of filing of GSTR 3B return.
The appellant has never made any concerted efforts for rectification of errors made while filing their FORM GSTR-3B nor any corroborative evidence regarding the above has been provided whereas, sufficient period of time was made available to the appellant for rectification of errors through various circulars and guidelines issued from time to time. Moreover, in the present case, the appellant has confessed himself that the excess amount of tax has been paid inadvertently due to mistake of their staff and the mistake has been committed by the appellant himself not by the department. The adjudicating authority while passing the Orders in Original has taken the “relevant date” for refund claims i.e. the GSTR-3B filing date as per Section 54(1) of the CGST Act, 2017 for counting the limitation period of two year and on this basis the adjudicating authority has held that the refund claims filed by the appellant is barred by limitation. The refund claims were required to be filed within two years from the relevant date (i.e. the GSTR-3B filing date) but the appellant has failed to do so.
There are no reason to interfere in the impugned orders passed by the adjudicating authority - refund claims had been correctly rejected on the grounds as hit by limitation as per Section 54(1) of the CGST Act, 2017 - appeal dismissed.
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2021 (5) TMI 935 - COMMISSIONER (APPEALS) CENTRAL GOODS AND SERVICE TAX, JAIPUR
Detention of goods alongwith the conveyance - Quantity loaded in the conveyance found excess than the quantity mentioned in the invoice - HELD THAT:- It is found from the records that the quantity of goods in the conveyance found excess than the quantity mentioned in the invoice. Less quantity of goods shown in the invoice with intent to evade the GST and tried to escape from correct liability.
The contention of the appellant cannot be agreed with, that the measurement taken by the officers was wrong and unjustified and copy of calculation of quantity has not been served and the proceedings under Section 130 is wrong and illegal and only one fine i.e. on goods or conveyance can be imposed under the said section - it is clear that the impugned goods found excess i.e. quantity 3947 Sq. Ft on physical verification than the quantity mentioned in invoice were loaded intentionally to evade the GST. The excess quantity was supplied without declaring in the invoice with intent to evade the payment of tax therefore, the Section 130 of the Act was rightly invoked and the said section also provides for confiscation of goods or conveyance and find in lieu of confiscation.
The excess found goods were loaded intentionally to evade the payment of GST - Appeal dismissed - decided against appellant.
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2021 (5) TMI 934 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - supply of Services by way of admission to exhibition of cinematograph films where the price of admission ticket was one hundred rupees or less - despite the reduction in the rate of GST, the benefit had not been passed on - contravention of section 171 of CGST Act - HELD THAT:- The Central and the State Governments had reduced the rates of GST on “Services by way of admission to exhibition of cinematograph films where the price of admission ticket was above one hundred rupees” from 28% to 18% and “Services by way of admission to exhibition of cinematograph films where the price of admission ticket was one hundred rupees or less” from 18% to 12% w.e.f. 1-1-2019, vide Notification No. 27/2018-Central Tax (Rate), dated 31-12-2018, the benefit of which was required to be passed on to the recipients by the Respondent as per the provisions of Section 171 of the above Act.
In this case, since the Respondent has increased the price of the movie tickets of the First and the Second class categories only in the month of May, 2019, this price increase cannot be correlated to provisions of Section 171 of the CGST Act, 2017. It is also a fact that the DGAP has reported that in the post-tax-rate reduction period, the Respondent has maintained the same base prices in respect of the Upper and Lower Balcony categories of movie tickets and hence, it is observed that there is no profiteering in the above category of these movie tickets. Therefore, though profiteering has been established against the Respondent in the categories of First class and Second class movie tickets, the computation of profiteering merits to be limited only up to 10-3-2019 as the Respondent had reduced the base prices commensurately for the First class and Second class movie tickets after 11-3-2019. No profiteering can thus arise for the period after 11-3-2019. Therefore, this case is a fit case for recomputation of the amount of profiteering - under the provisions of Rule 133(4) of the CGST Rules, 2017, this Authority directs the DGAP to recompute the amount of profiteering in line with the observations made in the preceding paragraph. The DGAP is further directed to furnish his Report under Rule 129(6) of the CGST Rules, 2017.
As per the provisions of Rule 133(1) of the CGST Rules, 2017 this order was required to be passed within a period of 6 months from the date of receipt of the Report from the DGAP under Rule 129(6) of the above Rules. Since the present Report has been received by this Authority on 30-10-2019 the order was to be passed on or before 29-4-2020. However, due to the prevalent pandemic of COVID-19 in the Country, this order could not be passed on or before the above date due to force majeure. Accordingly, this order is being passed today in terms of the Notification No. 65/2020-Central Tax, dated 1-9-2020 issued by the Government of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes & Customs under Section 168A of the CGST Act, 2017 - application disposed off.
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2021 (5) TMI 933 - SUPREME COURT
Classification of goods - textile made ups - whether the commodity which is described as an “embroidered ladies suit”, which the respondent claims to be unstitched, would fall within the description of a ‘textile’ under Entry 21 of Schedule I (as the respondent asserts) or under Entry 16 of Schedule II which is “other textile made ups” and the residuary entry in Schedule V? - UP VAT Act, 2008 - HELD THAT:- Firstly, the expression in Entry 16 of Schedule II is “other textile made ups”. A textile made up is an article which is manufactured or stitched from any type of cloth. In the present case, going by the case of the respondent, the product is unstitched because the ultimate work of stitching the salwar kameez is yet to be performed and is not carried out by the respondent. In the circumstances, the product can certainly not be called as a textile made up. Secondly, the entry “other textile made ups” is not a residuary entry for Schedule II, but is used in conjunction with the expression “bedsheets and pillow covers”. The expression “other textile made ups” must be read ejusdem generis with the articles which precede it and should hence comprehend goods of the same class and description. The general entry “other textile made ups” must receive a meaning and connotation bearing in mind the preceding items of Entry 16. Hence, it is not possible to accept the view of the first appellate authority that the product falls within the purview of Entry 16 of Schedule II.
The product would fall for classification under Serial 1 of Schedule V which is a residuary entry which covers all goods except those which are mentioned and described in Schedules I, II, III and IV - the judgment of the Tribunal as well as of the first appellate authority would have to be set aside.
Appeal allowed.
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2021 (5) TMI 932 - DELHI HIGH COURT
Time Limitation period for filing a suit for malicious prosecution, against the customs authorities/officials - Section 155(2) of the Customs Act, 1962 - HELD THAT:- A reading of Section 155(2) of the Customs Act, 1962, shows that the earlier Section (in the Sea Customs Act, 1878), has simply been merged and set out in continuity. The side headings of the provision have also been omitted. A cause for confusion has thus arisen, leading to varying interpretations of this provision by different Courts - A perusal of the provisions of The Limitation Act, 1963, shows that the period of limitation for filing of a suit for malicious prosecution is one year, from the date when the Plaintiff is acquitted or when the prosecution against the Plaintiff is otherwise terminated.
In the present case, the Plaintiff was acquitted on 11th April 2007. Parallelly, however, show-cause proceedings were commenced against the Petitioner and the show-cause notice, issued by the Customs Authorities, was quashed on 13th September, 2006. The quashing of the said show-cause notice was upheld by the ld. Supreme Court on 18th August, 2017. Considering the fact that the show-cause notice had also raised issues which were overlapping in nature, it is possible to take a view that until and unless this show cause notice finally terminated, with the judgment of the Supreme Court, the limitation does not begin for the Plaintiff to avail her remedy to file a civil suit - In the present case, however, the Court need not even venture so far. The date of the acquittal of the Plaintiff/Respondent is 11th April 2007 and the suit for malicious prosecution was instituted by her on 11th April 2008. As per Section 12(1) of the Limitation Act, the date from which the period of limitation is to be reckoned, is to be excluded while calculating the said period. This would clearly mean that the date, as on which the order of acquittal of the Plaintiff was pronounced by the ld. Sessions Judge, would have to be excluded for the purpose of calculating the limitation of one year for filing of the suit for malicious prosecution. Thus, the limitation, under Section 3 of the Limitation Act r/w Entry 74 of the Schedule would commence only on 12th April 2008. The suit for malicious prosecution in the present case, having been filed on 11th April 2008 which is within the period of one year, is therefore well within the limitation prescribed under The Limitation Act, 1963.
This court is of the opinion that the suit is well within limitation, as the period of limitation under Section 3 and Section 12 of the Limitation Act, 1962, r/w Entry 74 of the Schedule of the Limitation Act, would have ended only on 12th April 2008, which is one day after the date when the suit for malicious prosecution was presented by the Plaintiff/Respondent. The suit is thus within limitation.
Petition dismissed.
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2021 (5) TMI 931 - GAUHATI HIGH COURT
Refund / Recovery of alleged excess amount of the money refunded earlier to the petitioner towards excise duties - case of petitioner is that though the petitioner is entitled to special rate to get these benefits and applied for finalizing the same, the authorities have not considered the same despite repeated representations submitted in that regard - HELD THAT:- It is directed that the respondent No.2, i.e., Commissioner, Central Goods and Service Tax, Guwahati shall dispose of the representations submitted by the petitioner including the one dated 27.01.2021 for fixation of special rate within four weeks from the date of receipt of a certified copy of this order. It is also directed that till such decision is taken by the authorities on consideration of the representation(s) submitted by the petitioner, the authorities shall not take any coercive action against the petitioner pursuant to the demand notice dated 01.01.2021 challenged in this writ petition.
This Court would make it clear that any such repayment in instalments may be made by the petitioner after disposal of the representation submitted by the petitioner in the manner directed above and if there be any amount to be refunded, the same be refunded in equal instalments as indicated in the aforesaid letter dated 29.01.2021 - List along with WP(C) No.2841/2021 on 14.07.2021.
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2021 (5) TMI 930 - GAUHATI HIGH COURT
Refund of alleged excess amount of the money refunded earlier to the petitioner towards excise duties - HELD THAT:- It is directed that the respondent No.2, i.e., Commissioner, Central Goods and Service Tax, Guwahati shall dispose of the representations submitted by the petitioner including the one dated 05.02.2021 for fixation of special rate within four weeks from the date of receipt of a certified copy of this order. It is also directed that till such decision is taken by the authorities on consideration of the representation(s) submitted by the petitioner, the authorities shall not take any coercive action against the petitioner pursuant to the demand notice dated 01.01.2021 challenged in this writ petition.
List along with WP(C) No.2566/2021 on 14.07.2021.
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2021 (5) TMI 929 - DELHI HIGH COURT
Offence under FEMA - Distinction between the two stages of the adjudication process - eligible reasons by the respondent no. 1 for the formation of opinion to proceed with the inquiry against the petitioner - HELD THAT:- The Adjudicating Authority, under the Scheme of the FEMA, performs a quasi-judicial function as opposed to a purely administrative function. The requirement of giving reasons therefore cannot be undermined and must be insisted upon from the Adjudicating Authority. The reasons to be given for its opinion under Rule 4(3) of the Adjudication Rules to proceed with the inquiry though need not be as elaborate as in a Court decision or let’s say an order passed by the Adjudicating Authority under Rule 4(8) of the Adjudication Rules, but have to be adequate, proper and intelligible, sufficiently clear and explicit. They must reasonably deal with the substantial points raised in the matter and show that they were taken into consideration. However, the extent and nature of reasons depend upon specific facts and circumstances of each case.
The Impugned Opinion/Order dated 05.06.2020, does not satisfy the test of giving reasons by the respondent no. 1 for the formation of opinion to proceed with the inquiry against the petitioner.
The reasons are the bridge between the material on record and the final decision. Therefore, after considering the judgment of the Supreme Court, the Complaint and the reply of the petitioner to show cause, that is the material on record, the Adjudicating Authority is to give reasons, howsoever brief, at least showing that he is alive to the contentions raised in the reply to the Show Cause Notice and why he is of the opinion that inquiry must still be held. In the present case, this bridge is missing.
It is also to be seen as to whether the inquiry deserves to be set aside only for the above violation. In the present case, as noted herein above, the Supreme Court has passed a detailed judgment finding various acts of violation of the FEMA and the Rules/Regulations framed there-under inter alia against the JP Morgan group of companies, may not be specifically by name against the petitioner. The present inquiry has been initiated on the direction of the Supreme Court in the said judgment. The allegations against the petitioner also cannot be said to be such that do not warrant any inquiry given the above factual background. The role of the petitioner and its employees and the capacity in which they acted in the transactions in question need a detailed inquiry as such allegations form part of a larger whole which is being inquired into.
Considering that at the stage of Rule 4(3) of the Adjudication Rules, the Adjudicating Authority was merely to form an opinion whether to proceed with the inquiry; and as held by the Supreme Court in Natwar Singh [2010 (10) TMI 156 - SUPREME COURT] it is only thereafter that the “real and substantial inquiry into allegations of contravention begins”; and that unlike the final order imposing penalty, “the opinion formed by the Adjudicating Authority whether an inquiry should be held into the allegations made in the complaint are not fraught with such grave consequences”, and as held by the High Court of Bombay in Shashank Vyankatesh Manohar [2013 (8) TMI 435 - BOMBAY HIGH COURT] that “in case the objections are such as would require detailed consideration, the authority concerned can dispose of the objections by stating that the same would require detailed consideration, which would be done at the disposal of the notice by the final order”, it is held that there was enough reason for the respondent no. 1 to form an opinion to proceed with the inquiry against the petitioner and no useful purpose would be served by quashing the impugned Opinion and insisting on the reasons to be first recorded. Exercise of powers under Article 226 being discretionary in nature, this court, in the peculiar facts of the present petitions, does not find it fit to exercise the same.
Even though the Impugned Opinion of the Adjudicating Authority does not record any reasons for the same, the same is sustained. This shall, however, not be considered as an affirmation of this Court to the manner in which such opinion is to be recorded. It is also made clear that this Court has not expressed any opinion on the merit of the allegations made against the petitioner in the Show Cause Notice or the inquiry.
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2021 (5) TMI 928 - RAJASTHAN HIGH COURT
Grant of Bail - offence punishable under Sections 132 (1)(B) & (C) read with 132(1)(I) Central Goods & Service Tax (CGST) Act, 2017 - non-bailable and cognizable offence or not - HELD THAT:- The present bail application deserves to be allowed for the reasons; firstly, the maximum sentence provided for the alleged offence under the Act is 5 years; secondly, there is no apprehension, if any, shown by the respondent-department about the accused-petitioner of running away, or tempering or influencing the witnesses in any manner; thirdly, challan has already been presented in the court and due to ongoing Covid-19 problem, the trial is not proceeding; fourthly to show his bona fides the petitioner has already deposited Rupees One Crore Fifty Four Thousand with the department and lastly the petitioner is a 68 years old person and he is not required for any custodial interrogation/investigation.
Petitioner be admitted to regular bail subject to satisfaction of the trial Court - Petition allowed.
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2021 (5) TMI 927 - KERALA HIGH COURT
Conduct of lotteries - Power of Host State to make rules under section 12 of the Act to monitor the conduct of lotteries of Organising States within the territory of the Host State - Doctrine of occupied field - Doctrine of ultra vires - Federalism.
Whether a Host State is entitled to enact rules for monitoring the conduct of lotteries by other Organising States within the territory of the Host State? - HELD THAT:- In BR. ENTERPRISES VERSUS STATE OF UP. AND OTHERS [1999 (5) TMI 498 - SUPREME COURT] it has been held in paragraph 71 that State lotteries are gambling and that it would not be a trade to qualify itself to be 'a trade and commerce' as used in Article 301 and neither the individual, far less the State, can seek enforcement of such right for it to be declared free, throughout the territory of India. It further held that the right of sale of lottery tickets whether by the State or others could neither be a fundamental right nor a right under Article 301 and that none could seek it as free trade, like other trades, even though it may have the authority of law. The Court went on to hold that the authorization under the Act to States to conduct lottery is solely for the purpose of earning revenue.
A reading of section 12 of the Act will reveal that a general power is conferred upon the State Government to make rules to carry out the provisions of the Act. There is no indication either in the Act or in section 12, that the power conferred on the States to make rules, is confined only to the Organising State. Such a narrow interpretation is not warranted under the terms employed. If such an interpretation is adopted, the same will lead to an anomalous situation - Under section 12 of the Act, apart from the general rulemaking power, specific power is also conferred upon the State Government to make rules in respect of time to be fixed for claiming prize money and the period to be fixed for draws of all lotteries. That power, no doubt, relates to Organising States. In exercise of the general power conferred upon the State Government to make rules, the State Government cannot transgress areas that are already covered by the Act or the Central Rules. However, if in respect of areas where the Act and the Central Rules are silent, it cannot be said that the Host State is powerless to make rules.
Doctrine of occupied field - HELD THAT:- The doctrine of occupied field cannot be invoked to test the validity of a State rule enacted in exercise of the power conferred by the Central legislation. If a Central legislation confers general rule-making power upon the State, in areas where the Central Government has not framed rules, the State Government will be entitled to frame rules. The doctrine of occupied field will not in such instances be applicable, unless there is an intrusion. In simple terms, the principle of the doctrine of occupied field is that if the Parliament legislates on a particular subject, and thereby occupies the field, the State legislature is completely debarred from legislating on the same subject. When the very legislation enacted by the Parliament confers power upon the State Government to make rules to carry out the provisions of the Act, the doctrine of occupied field has no application, unless the State entrenches upon the field already occupied.
Doctrine of ultra vires - HELD THAT:- The Central Rules have not eroded the power of the Host State under section 12 of the Act also on account of rule 3(22) and rule 5(1) of the Central Rules. In fact, according to us, the enactment of Central Rules enhanced the need for the Host State to enact rules. As mentioned earlier, to ensure compliance of the conduct of lottery of the Organizing State, within the territory of the Host State, in accordance with the Act and also for the Host State to form an opinion about any violation or irregularities in organizing or conducting lottery in the Host State, rules are essential - the Host State is entitled to make rules under section 12 of the Act to monitor the conduct of lotteries of Organising States within the territory of the Host State.
Whether any of the provisions of the Amended Rules are ultra vires the Act? - HELD THAT:- Rule 4(4) of the Amended Rules shows that the Secretary of the Kerala Government, Taxes Department shall be the authority for conduct of lotteries organized by other States. The right to conduct a lottery is vested with the State Government under section 4 of the Act. The right to conduct a lottery is vested with the Organizing State under section 4 of the Act. When the right to conduct the lottery is vested with the Organizing State, rule 4(4) of the Amended Rules, to the extent it specifies that the Secretary to the Government Department of Taxes, Kerala, shall be the authority for the conduct of lotteries run/organized/promoted by other States, infringes upon the right of the Organising State to conduct lotteries as per the provisions of the Act - the plain meaning of the word 'conduct' in rule 4(4) of the Amended Rules gives a meaning that conduct of lottery of the Organizing State shall be by an officer of the Host State. This is a clear intrusion into the authority of the Organising State and is contrary to the provisions of the parent Act. The said Rule is a clear infraction of the Act.
It is a settled principle that when a provision of law is found to infract the Constitution or the parent statute, the entire statute or even the entire provision need not be struck down, if the offending portion could be severed from the non-offending portion of the provision or statute - Applying the said principle to rule 4(4) of the Amended Rules, it can be seen that the offending portion of the said rule are the words "including lotteries run/organized/promoted by other States” and if the said offending portion is deleted or severed, the rule will still continue to have meaning and life. Applying the doctrine of severability, we sever the aforesaid words from rule 4(4) and hold the severed portion of the said rule as ultra vires the Lotteries (Regulation) Act, 1998.
The provision under rule 9A(3) can also be viewed in another perspective. If the Host State forms an opinion that the conduct of lottery by an Organizing State within the territorial jurisdiction of the Host State is in contravention of the Act or the Rules, then it need not continue to let its subjects be exploited by the Organizing State or its promoter, until the Central Government takes a decision. From the time it forms an opinion, till a decision is taken by the Central Government, if such lotteries continue unabashedly to exploit the subject of the Host State, a remedy must be available to the Host State. Rule 9A(3) comes into play in such instances. Such a provision cannot be regarded as intruding into the powers of an Organizing State.
Federalism - HELD THAT:- The Kerala Paper Lotteries (Regulation) Amendment Rules, 2018 are valid and within the legislative competence of the State of Kerala and made validly in exercise of the powers under section 12 of the Act. The words “including lotteries run/organized/promoted by other States” in Rule 4(4) shall stand severed from the remaining provision of the Amended Rules and the severed portion is hereby held as ultra vires the Act.
Appeal allowed - decided in favor of appellant.
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2021 (5) TMI 926 - GUJARAT HIGH COURT
Reopening of assessment u/s 148 - non disposing of the objections raised by the assessee against the reasons recorded before issuance of notice under Section 148 - HELD THAT:- Applying the dictum as laid down in the case of GVK Driveshaft [2002 (11) TMI 7 - SUPREME COURT], we are of the view that disposing of the objections raised by the assessee against the reasons recorded before issuance of notice under Section 148 of the Act, though not part of the statutory requirement, as prescribed under the Act, however, same is guided by the directions issued by the Apex Court.
The specific objections raised by the writ applicant, produced on record at page-33 to 45 to this writ application, have not been properly dealt with by the AO. The lapse is in clear violation of the decision of the Apex Court. We are of the view that the AO has passed the order mechanically and without application of his mind.
Writ application succeeds in part. The order disposing of the objections filed by the assessee to this petition is hereby set aside and the matter is remitted to the AO. The AO shall take into consideration the objections raised by the assessee and pass a fresh speaking order in accordance with law.
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2021 (5) TMI 925 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - notice beyond the period of 4 years - HELD THAT:- In the case of GKN Driveshaft [2002 (11) TMI 7 - SUPREME COURT] the Supreme Court has laid down the procedure as to the manner of dealing with the objections raised against the notice under Section 148 of the Act. The Supreme Court has held that when a notice u/s 148 of the Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notice. AO is bound to furnish reasons within a reasonable time and upon receipt of reasons, the noticee is entitled to file an objection to issuance of notice and AO is bound to dispose of the same by speaking order.
In the case of SABH Infrastructure Ltd [2017 (9) TMI 1589 - DELHI HIGH COURT] has held that the exercise of considering the assessee’s objections to the reopening of the assessment is not a mechanical ritual. It is a quasi judicial function. The order disposing of the objection should deal with each objection and give proper reason for conclusion. The order should reflect proper application of mind.
Applying the dictum as laid down by the Supreme Court in the case of GVK Driveshaft (supra), we are of the view that disposing of the objections raised by the assessee against the reasons recorded before issuance of notice under Section 148 of the Act, though not part of the statutory requirement, as prescribed under the Act, however, same is guided by the directions issued by the Apex Court. The specific objections raised by the writ applicant, produced on record at page-44 to 56 to this writ application, have not been properly dealt with by the AO.
The lapse is in clear violation of the decision of the Apex Court. We are of the view that the AO has passed the order mechanically and without application of his mind. In other words not in a meaningful manner.In view of the above, this writ application succeeds in part.
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2021 (5) TMI 924 - MADRAS HIGH COURT
Revision of assessment order - principles of natural justice - Levy of purchase grievance of the petitioner is that the second respondent passed the impugned Revision of Assessment order even without any new/fresh facts, de hors the records and on mere change of opinion - Section 22(2) of the TNVAT Act - HELD THAT:- The issues involved in these present writ petitions are squarely covered by the order of this Court in batch of Writ Petitions in M. RAVICHANDRAN, N. SENTHILKUMAR, P. DHASARATHAN, B. SUBRAMANIAN, R. RAJAGOPAL VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, STATE TAX OFFICER [2018 (12) TMI 1885 - MADRAS HIGH COURT] where it was held that It has been consistently held that the reopening of assessment by change of opinion is impermissible.
Petition allowed.
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2021 (5) TMI 923 - KARNATAKA HIGH COURT
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - compliance with the requirement to ascertain amount claimed as pre-deposit with respect to the dispute, that the amount of pre-deposit has not been appropriated for any other demand other than the demand reflected in the show-cause notice and that there have to be verification as to the factual assertions of the petitioner by looking into the challans of the petitioner - HELD THAT:- This court has disposed of W.P.No.11485/2020 on 17.02.2021 [2021 (3) TMI 1018 - KARNATAKA HIGH COURT] examining in detail the aspect relating to adjudication of pre-deposit and accordingly, no detailed order as regards to the legal contentions advanced in common in the present petition as were raised in W.P.No.11485/2020 is required while observing that legal aspects have been elucidated in the said order - While taking note of the observations made in W.P.No.11485/2020, the estimate made in Form SVLDRS-2 and 3 are set aside. The first respondent to re-work the statement in SVLDRS-3 after arriving at a conclusion regarding the deposit over and above the amount of ₹ 20,27,249/- that has already been given credit as per the earlier SVLDRS-2 form, which is now set aside. Insofar as other deposits are concerned, the respondents to verify after taking note of the submissions at Annexure-'E' to the petition and affording an opportunity of personal hearing for the purpose of clarification by the petitioner and then arrive at a fresh statement in SVLDRS-3.
While taking note of the observations made in W.P.No.11485/2020, the estimate made in Form SVLDRS-2 and 3 are set aside. The first respondent to re-work the statement in SVLDRS-3 after arriving at a conclusion regarding the deposit over and above the amount of ₹ 20,27,249/- that has already been given credit as per the earlier SVLDRS-2 form, which is now set aside. Insofar as other deposits are concerned, the respondents to verify after taking note of the submissions at Annexure-'E' to the petition and affording an opportunity of personal hearing for the purpose of clarification by the petitioner and then arrive at a fresh statement in SVLDRS-3.
Petition disposed off.
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2021 (5) TMI 922 - KARNATAKA HIGH COURT
Deduction u/s 80IB(10) - when the assessee has not satisfied the requirements of the said provision and when the project was approved with a sanctioned built up area and the assessee has eventually constructed the area far in excess of what was approved - HELD THAT:- On close scrutiny of the judgment rendered by this court in Brigade Enterprises Ltd.[2020 (9) TMI 1137 - KARNATAKA HIGH COURT] and the facts involved in the said case, we are of the considered opinion that the substantial question of law involved in this appeal is squarely answered in the said case.
Following the dictum in Brigade Enterprises, the substantial question of law raised in this appeal is answered against the Revenue and in favour of the assessee.
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