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Showing 181 to 200 of 18103 Records
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2022 (12) TMI 1338 - CESTAT NEW DELHI
Valuation of imported goods - it is alleged that the declared value of the goods was lower than the values in the contemporaneous data of the similar goods imported - contemporaneous data of imports - rejection of declared value - opportunity was granted to the appellant for hearing or not - HELD THAT:- If the transaction value is rejected under rule 12 then the value of identical goods must be considered and if it is not available and the value of similar goods must be considered and if the value of identical or similar goods were both not available then the value can be deducted by considering the price at which such goods are sold in wholesale and after certain deductions. If such prices are also not available then the value can be computed by considering the cost of raw-material and fabrication cost plus other expenses. If none of these methods are possible then the residual method can be followed based on the above principles.
In this case all the four Bills of Entry based on which the declared values were rejected were imported or the Bills of Entry were filed more than a month after the disputed Bill of Entry. From the Table we cannot make out as to which Customs House the goods in these Bills of Entry were imported from and in what quantities and from which country. Further, we find that the assessable value in these Bills of Entry were given in Rupees whereas the declared values in the Bill of Entry are in US dollars. It is not clear of what rate of exchange is applied to convert rupees into dollars to re-determine the assessable value under Rule 5.
The rejection of the transaction value by the Deputy Commissioner is not in accordance with law. Consequently, its re-determination under Rule 5 cannot also sustain - in the impugned order the Commissioner (Appeals) did not discuss any issue related to rejection of transaction value and re-determination of the values - appeal allowed.
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2022 (12) TMI 1337 - DELHI HIGH COURT
Jurisdiction of civil court - Rejection of plaint of appellant under Order VII Rule 11(d) of Code of Civil Procedure, 1908 - rejection on the ground that the civil suit was barred by virtue of Section 430 of the Companies Act, 2013 as the appropriate forum for the adjudication of the disputes involved is the National Company Law Tribunal - applicability of Companies Act, 1956 or the Companies Act, 2013? - reliability on decisions of on Jai Mahal Hotels Pvt. Ltd. [2015 (10) TMI 265 - SUPREME COURT] and Standard Chartered Bank [2006 (5) TMI 185 - SUPREME COURT] - bar on the jurisdiction of civil courts - applicability of bar under Section 430 - liquidation of TCL have an impact on the outcome of the instant appeal?
Whether the instant suit is governed by the Companies Act, 1956 or the Companies Act, 2013? - Can the Appellants in the facts and circumstance of the present case rely on Jai Mahal Hotels Pvt. Ltd. and Standard Chartered Bank? - HELD THAT:- I am in agreement that with the findings recorded by the learned trial Court inasmuch as the bulk of the provisions of the Companies Act, 2013 relevant to the present controversy was notified on 30th August 2018 and with Section 46 dealing with ‘Certificate of Shares’ was notified on 1st April 2014. The ratio of Jai Mahal Hotels Pvt. Ltd. and Standard Chartered Bank is of no help to the plaintiff companies as the same were decided in the context of the Companies Act, 1956 and hence, are not applicable to the facts and circumstances of the present case.
Even otherwise, this Court is afraid that such a plea taken by the learned senior counsel cannot be sustained particularly in view of Section 465 of the Act, 2013 which deals with ‘Repeal of certain enactments and savings’ as well as the judgment of the Hon’ble Supreme Court in Shashi Prakash Khemkha (D) Through LRs vs. NEPC Micon, [2019 (2) TMI 971 - SUPREME COURT] wherein the Hon’ble Supreme Court being confronted with an identical plea, held that We are conscious of the fact that in the present case, the cause of action has arisen at a stage prior to this enactment. However, we are of the view that relegating the parties to civil suit now would not be the appropriate remedy, especially considering the manner in which Section 430 of the Act is widely worded.
There are no merit in the contentions of the learned senior counsel and hence, the present case will be governed by the provisions of the Companies Act, 2013 and not Companies Act, 1956. The instant issue is answered accordingly.
How is a bar on the jurisdiction of civil courts to be inferred? - Whether in the facts and circumstances of the present case bar under Section 430 is attracted? - Does liquidation of TCL have an impact on the outcome of the instant appeal? - HELD THAT:- On bare perusal of section 9 of the code, it is found that there are two types of exceptions which are canvassed in Section 9, first, exceptions under the Code of Civil Procedure itself which is apparent from the use of ‘subject to the provisions herein contained’ and secondly, exceptions which are not covered under the Code of Civil Procedure which is apparent from the use of ‘excepting suits of which their cognizance is either expressly or impliedly barred’. In the present case we are concerned with the latter exception which can further be divided into two types, first, jurisdiction expressly barred and secondly, jurisdiction impliedly barred. Considering the language of Section 430 of the Act, 2013, the analysis in the present judgment pertains to jurisdiction expressly barred.
A suit is said to be expressly barred when it is barred by any enactment for the time being in force. Indisputably, it is open for a competent legislature to bar the jurisdiction of civil Courts in respect of a particular class of suits of a civil nature, provided that in doing so it acts within the four corners of the legislative powers conferred upon it and does not violate the letter and spirit of the Constitutional provisions. It is a settled proposition that every presumption should be made in favour of the jurisdiction of a civil Court and the provisions of exclusion of jurisdiction of a Court must be strictly construed - The NCLT is a specialised agency created for the purpose of a speedier and efficient regulation of the management of a company. Its powers are much broader than what are vested in the civil courts by virtue of Section 9 of the Code.
The bulk of the dispute between the parties pertain to the ownership of the 50.21% shareholding in TCL and the validity of the meeting of the board of directors which is alleged to have taken place on 27th August 2013. Having perused the scheme of the Act, 2013, on the first sight though it appears that the disputes at hand between the parties can be adjudicated by the NCLT but in my opinion, such a decision would render the Appellants herein remediless as TCL has been dissolved and is no more in existence. The fundamental principle behind the bar on the jurisdiction of the civil court is that the there must adequacy of remedy being available to the parties who are relegated out of the civil Courts and they must not be rendered remediless.
This Court does not find any merit in the objection of the Respondents that the subsequent liquidation of TCL will have no bearing on the present case. No corporate entity now exists in the form of TCL which may be governed by the provisions of the Companies Act, 2013. Hence, it cannot be said that the suit filed by the plaintiff companies was barred under Section 430 of the Companies Act, 2013.
There is an inherent right in every person as per Section 9 of the Code to bring a civil suit setting forth as to how the plaintiff’s legal rights have been violated for which he/she is seeking the indulgence of the Court and every interpretation must be made by which the jurisdiction of the civil Court is not readily ousted. Further, in case of suspicion, an interpretation should be made which leans in favour of the jurisdiction of the civil Court - this Court is of the considered opinion that the trial court has erred in rejecting the plaint as being barred by Order VII Rule 11(d) of the Code inasmuch as the suit was not barred under Section 430 of the Act, 2013.
Appeal allowed.
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2022 (12) TMI 1336 - MADRAS HIGH COURT
Exemption from Service Tax - work contract service other than those which are commercial in nature rendered to the Central / State Government, Local Statutory Authorities etc. - Entry 12(a), (c) & (f) in Mega Exemption Notification No.25/2012-Service Tax, dated 20.06.2012 - validity of Notification No.6/2015-Service Tax, dated 01.03.2015 - HELD THAT:- Chapter-V of the Finance Act, 1994 contains the provisions for levy and collection of service tax on services. There was no standalone enactment for levy of service tax all through of its period of existence. Since its introduction, it was under Chapter V of the Finance Act, 1994 - Service Tax was chargeable at the rates prescribed under Section 66 of the Finance Act, 1994 on the “taxable value” under Section 67 of the Finance Act, 1994. Upto 30.06.2012, there were specific definitions for various services and taxable services in Chapter V of the Finance Act, 1994.
Service tax on “Works Contract Service” was introduced in the Finance Act, 1994 with effect from 11.05.2007 and made liable to tax with effect from 01.06.2007 vide Notification No.23/2007-ST dated 22.05.2007 after Section 65(105)(zzzza) came to be introduced in the Finance Act, 1994 vide the Finance Act of 2007. Thus, for the period starting from 01.06.2007 to 30.06.2012, the respective petitioners may have been liable to service tax for the services rendered by them in relation to “works contract” - In fact, prior to that, a confusion existed in view of levy of service tax on “construction service” vide Finance (No.2) Act, 2004 with effect from 10.09.2004 as in Section 65(105)(zzzza) read with Section 65(25b) & 65(30a) and Section 65(105)(zzzh) read with Section 65(91a) of the Finance Act, 1994 (Chapter V of the Finance Act, 1994).
The Hon’ble Supreme Court has clarified the position in its judgment in M/S. KONE ELEVATOR INDIA PVT. LTD. VERSUS STATE OF TAMIL NADU AND OTHERS [2014 (5) TMI 265 - SUPREME COURT] that the services provided under “works contracts” was liable to service tax only with effect from 01.06.2007.
Services provided by these petitioners were “declared services”. Thus, the services provided by these petitioners would have been liable tax at 12% on the taxable value and later at 14% vide Notification No.14/2015-ST, dated 19.05.2015 with effect from 01.06.2015 but for the exemption vide Entry 12(a), (c) & (f) to Mega Exemption Notification No.25/2012-ST, dated 20.06.2012 - services provided by these petitioners were exempted from payment of service tax vide Entry 12(a), (c) & (f) to the Mega Exemption Notification No.25/2012-ST dated 20.06.2012.
The exemption under the Mega Exemption Notification No.25/2012-Service Tax, dated 20.06.2012 which was granted in the exercise of power under Section 93(1) & (2) of the Finance Act, 1994 (Chapter V of the Finance Act, 1994) was withdrawn vide the impugned Notification No.6/2015-Service Tax, dated 01.03.2015 with effect from 01.04.2015. The exemption which was earlier granted in the public interest was withdrawn in the public interest - Whether public interest existed or not in withdrawing the exemption is not justiciable unless it is found that such withdrawal was vitiated on account of malafide, extraneous consideration or arbitration. High Court while exercising its jurisdiction under Article 226 of the Constitution of India does not sit in appeal over the decision of the Government to withdraw a Notification or an exemption. It is further a policy decision of the Government to withdraw the exemption.
The prayer for a direction to refund of tax already paid by the petitioner also cannot be countenanced as these petitioners are liable to tax. Therefore, wherever the Orders-in-Original have been passed, the respective petitioners are given liberty to file statutory appeal before the Appellate Authority subject to the compliance of the other requirements of pre-deposit the amount as is contemplated under Section 35F of the Central Excise Act, 1944 as made applicable to the Finance Act, 1994, within a period of thirty (30) days from the date of receipt of a copy of this order.
Petition dismissed.
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2022 (12) TMI 1335 - CESTAT NEW DELHI
Rejection of refund claim - section 11B of the Excise Act - finalization of provisional assessment - principles of unjust enrichment - HELD THAT:- In the present case, it is not in dispute that the appellant had made a request for provisional assessment in terms of rule 6(4) of the 1994 Rules and such permission was granted to the appellant. It filed returns on provisional basis and, thereafter, the assessment was finalized by the department on 21.06.2011, raising a demand of Rs. 8,71,249/- as the tax liability was found to be more than what was covered by the amount reflected in the challans. The department has calculated the period of one year from which the refund claim could have been filed under section 11B of the Excise Act from the date of finalization of the assessment i.e. 21.06.2011, in terms of clause B(eb) of the Explanation to section 11B of the Excise Act. According to the appellant, refund could not have been claimed on the basis of this finalization of the assessment on 21.06.2011, as it was the appellant which had to pay an excess amount of Rs. 8,71,249/- towards the tax.
Against the finalization of the assessment carried out on 21.06.2011, the appellant had filed an appeal before the Commissioner (Appeals) and this appeal was allowed by order dated 17.10.2012. The demand of service tax was set aside for the reason that the appellant had deposited more tax as the chart indicated that the appellant had paid an excess amount of Rs. 71,88,504/- towards the tax liability.
The Adjudicating Authority and the Commissioner (Appeals) both calculated the limitation of one year for filing the refund claim under section 11B of the Excise Act from the date of final assessment i.e. 13.07.2011 and, accordingly, rejected the refund claim. Clearly an error was committed in arriving at such a conclusion for no refund could have been claimed by the appellant pursuant to the final assessment made on 13.07.2011 and it is only when the Commissioner (Appeals) passed the order on 17.10.2012 that the refund could be claimed by the appellant. The provisions of clause B (ec) and not (eb) of the Explanation to section 11B of the Excise Act would be attracted to the facts of the present case - the assessment can be said to have been finalized only when the Commissioner (Appeals) passed the order and for this reason also the relevant date would be 17.10.2012 and not 13.07.2012.
Principles of unjust enrichment - HELD THAT:- It is not possible to accept the reasoning given by the Commissioner (Appeals). As noted above, the appellant was discharging its service tax liability on provisional basis, in terms of rule 6(4) of the 1994 Rules by computing the tax liability on the projected receipts for each month. It was, however, found that the actual premium collected was lower than the amount of taxable value assessed in the provisional return. Refund of tax would accrue in such a situation. There can be no question of passing the tax burden to the customers as tax was paid on a higher value and it is the balance amount of tax that was claimed by the appellant in the refund application. It cannot, therefore, be urged that the burden of tax had been passed to a third person.
The order passed by the Commissioner (Appeals) rejecting the refund claim cannot be sustained and is set aside. The appellant is entitled to refund of an amount of Rs. 71,88,504/- with interest, which shall be calculated in accordance with law - Appeal allowed.
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2022 (12) TMI 1334 - CESTAT AHMEDABAD
Imposition of penalty under Section 76,77 and 78 of the Finance Act, 1994 - benefit of Section 80 of FA - HELD THAT- It is seen that the Hon’ble High Court of Punjab & Haryana in the case of CCE VERSUS FIRST FLIGHT COURIER LTD. [2011 (1) TMI 52 - PUNJAB AND HARYANA HIGH COURT] has observed that Section 76 provides for penalty for failure to pay the amount while Section 78 provides for penalty for suppressing the taxable value. Section 78 is, thus, more comprehensive and provides for higher amount. Even if technically, the scope of sections 76 and 78 is different, penalty under Section 76 may not be justified if penalty had already been imposed under Section 78.
In view of that penalty under both Section 76 and Section 78 cannot be imposed simultaneously.
Moreover, it is seen that the penalty under section 77 has been imposed for an offence pertaining largely to period prior to removal of limit of Rs one thousand from Section 77 (w.e.f 10.05.2008. In view of this respect the penalty under section 77 is also not sustainable. It is also noticed that the appellant has paid service tax before issue of SCN. The issue of taxability of stadium under CICS The matter of dispute at the material time.
Keeping in view the above facts invoking Section 80, the impugned penalty under section 76,77 and 78 are set aside - appeal allowed.
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2022 (12) TMI 1333 - CESTAT AHMEDABAD
Refund of excess Service tax paid - rejection on the ground of limitation that the refund claim was filed on 07.2.2019 consequent to the OIA dated 13.10.2017 - HELD THAT:- The letter dated 15.1.2019 filed by the appellant is admittedly not a refund claim whereas, the refund claim was filed on 24.8.2016 which was well within time. Since the refund was rejected, the appellant has taken the matter upto the learned Commissioner (Appeals) and it is that refund which was to be decided by learned Commissioner (Appeals). The refund was supposed to be given by the department on the basis of learned Commissioner (Appeals) order. Even the letter from the appellant was not required moreover, the letter dated 29.1.2019 is not a refund application therefore, the entire basis for rejecting the refund claim being time barred is devoid of merit and fact. Since the appellant is legally entitle for refund on the basis of OIA dated 13.10.2017, the appellant’s refund claim is not time barred.
Appeal is allowed.
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2022 (12) TMI 1332 - TELANGANA HIGH COURT
Recovery of Central Excise Duty alongwith interest and penalty - landowners - manufacture of excisable items or not - HELD THAT:- Though the petitioners became owners of the subject land, they cannot be construed as manufacturers of the excisable goods in the plant and machinery which belonged to respondent No.4 out of which the excise duty arose. This issue is squarely covered by the decision of the Supreme Court in M/S. RANA GIRDERS LTD. VERSUS UNION OF INDIA & OTHERS [2013 (8) TMI 540 - SUPREME COURT]. That was a case where land belonging to the manufacturer was purchased in auction sale. When similar demand notice was issued, the same came to be challenged by the auction purchaser. Notice was issued to the auction purchaser because the borrower had failed to discharge the excise duty liability. In Rana Girders Ltd, Supreme Court had considered two earlier decisions in MACSON MARBLES PVT. LTD. VERSUS UNION OF INDIA [2003 (11) TMI 71 - SUPREME COURT] and UNION OF INDIA VERSUS SICOM LTD. [2008 (12) TMI 53 - SUPREME COURT] and thereafter held UPFC being a secured creditor had priority over the excise dues. We further hold that since the appellant had not purchased the entire unit as a business, as per the statutory framework, he was not liable for discharging the dues of the Excise Department.
Statutory liabilities arising out of the land and building could be in the form of the property tax or other types of cess relating to property, etc. Likewise, statutory liability arising out of the plant and machinery could be the sales tax, etc. payable on the said machinery. As far as dues of the Central Excise are concerned, they were not related to the said plant and machinery or the land and building and thus did not arise out of those properties. Dues of the Excise Department became payable on the manufacturing of excisable items by the erstwhile owner, therefore, these statutory dues are in respect of those items produced and not the plant and machinery which was used for the purposes of manufacture.
Following the decision of the Supreme Court in M/S. RANA GIRDERS LTD. VERSUS UNION OF INDIA & OTHERS [2013 (8) TMI 540 - SUPREME COURT] as well as of this Court in GOPAL AGARWAL VERSUS THE COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, HYDERABAD [2015 (2) TMI 607 - ANDHRA PRADESH HIGH COURT], impugned notice dated 02.11.2004 issued by respondent No.3 is hereby set aside. However, it would be open to respondents No.1, 2 and 3 to take such steps as may be permissible in law for recovery of outstanding excise duty from respondent No.4 (M/s. Chemo Steels Private Limited).
Petition allowed.
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2022 (12) TMI 1331 - TELANGANA HIGH COURT
Constitutional Validity of provisions of Rule 5 of the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 - ultra vires the provisions of Section 3A of the Central Excise and Salt Act, 1944 or not - violative of Article 14 of the Constitution of India or not - HELD THAT:- It has been brought to the notice of this Court that the issue involved in the present writ petition is covered by the decision of the Supreme Court in COMMISSIONER OF C. EX. & CUSTOMS VERSUS VENUS CASTINGS (P) LTD. [2000 (4) TMI 37 - SUPREME COURT] where it was held that If the entire enactment is read as a whole indicates the purpose and that purpose is carried out by the rules, the same cannot be stated to be ultra vires of the provisions of the enactment. Therefore, it is made clear that the manufacturers, if they have availed of the procedure under Rule 96ZO(3) at their option, cannot claim the benefit of determination of production capacity under Section 3A(4) of the Act which is specifically excluded.
The present writ petition is disposed off.
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2022 (12) TMI 1330 - CESTAT NEW DELHI
CENVAT Credit - ammonia, intermediate products - common inputs/ input services used in manufacture of exempted and dutiable goods - non-maintenance of separate records - reversal of proportionate credit under rule 6(3A) of the CENVAT Credit Rules, 2004 - HELD THAT:- The issue in M/S CHAMBAL FERTILISERS AND CHEMICALS LIMITED VERSUS THE COMMISSIONER, CENTRAL EXCISE AND CENTRAL GOODS & SERVICE TAX, UDAIPUR (RAJASTHAN) [2022 (11) TMI 644 - CESTAT NEW DELHI] arose out of two show cause notices for issued the previous period on the same ground that the appellant had availed excess CENVAT credit by including the value of urea and single super phosphate while computing proportionate credit. It was held in the case that we find that the appellant has correctly reversed proportionate amount of Cenvat credit reckoning the value of the urea removed instead of reckoning the intermediate product ammonia which has gone into the manufacture of such urea.
The appellant had correctly reversed the proportionate amount of CENVAT credit - Appeal allowed - decided in favor of appellant.
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2022 (12) TMI 1329 - KARNATAKA HIGH COURT
Classification of goods - rate of GST - denatured Anhydrous alcohol is a kind of Ethyl alcohol or not - HELD THAT:- Section 3 of the KTEG Act deals with levy of tax and it specifies that “tax shall be levied and collected on the entry of any goods specified in the First Schedule into a local area for consumption, use or sale therein at such rates not exceeding 5% of the value of the goods as may be specified retrospectively or prospectively by the State Government by Notification, and different dates and different rates may be specified in respect of different goods or different classes of goods of different local areas”. In other words, the tax can be levied only by issuing a notification and not otherwise.
The notification dated 30.04.1992 issued by the Government of Karnataka in exercise of powers conferred under section 3(1) of KTEG Act, tax was levied at the rate of 2% on denatured spirit, rectified spirit and ethyl alcohol. The notification dated 31.03.1997 provided for levy tax on denatured spirit at the rate of 4%. Thereafter, a notification dated 15.02.2001 was issued exempting payment of tax on denatured spirit and also in the subsequent notification dated 30.03.2002. These notifications are not disputed by the State Government which provides for exemption from payment of tax on denatured spirit under notification dated 30.03.2002 issued in exercise of powers under section 3(1) of the KTEG Act. The levy of tax on denatured spirit have been omitted and the petitioner is not liable to pay tax for the period 2007-08 and 2008-09 and levy or payment of tax on denatured spirit is exempted.
The levy of tax is for the period 2007-08 and 2008-09 and for the said period, there was no notification issued under section 3(1) of the KTEG Act levying entry tax on the denatured spirit. Hence, the petitioner is not entitled to pay the entry tax on the denatured spirit for having purchased, manufactured or supplied it to the various petroleum companies for the said period. Accordingly, the writ petition is allowed and the clarification dated 10.02.2009 issued by the respondent No.2 at Annexure-C is hereby quashed.
Petition disposed off.
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2022 (12) TMI 1328 - ANDHRA PRADESH HIGH COURT
Jurisdiction - time limitation - whether the contention of petitioner that as second respondent has already exercised the suo motu powers of revision under Section 32(2) of the VAT Act, exercise of such powers again by the first respondent, is permissible under law? - HELD THAT:- A plain reading of Section 32(1) of the VAT Act shows that the Commissioner may suo moto call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to him under the provisions of the Act, including sub-section (2), if such order or proceeding is prejudicial to the interests of the revenue. Further, a reading of same also shows that in Section 32(2) of the VAT Act, the powers of revision are also conferred on Additional Commissioner, Joint Commissioner, Deputy Commissioner and Assistant Commissioner in case of orders passed or proceedings recorded by the authorities, officers or persons subordinate to them. The powers under Section 32(2) are to be exercised by the subordinates to the Commissioner. The exercise of powers under Section 32(2) are no other than the revisional powers akin to the powers conferred on the Commissioner. There is no denial of the fact that the authorities under the VAT Act are vested with the powers to make assessment etc.
Whether the VAT dealer transferred the right to use the vehicles of him to the oil company or not is a question of fact and if the petitioner has suffered with any adverse findings in the impugned order, he ought to have challenged these factual aspects by filing an Appeal before the appellate authority but not by way of this Writ Petition under Article 226 of Constitution of India. Apart from that, the first respondent in the impugned order opined that the self serving certificate issued by the Oil Company, as regards collection of service tax cannot be taken as a valid document, when the same is disputed by the respondents. Hence, the petitioner cannot rely upon the above to support his contention.
In RASHTRIYA ISPAT NIGAM LTD. VERSUS COMMERCIAL TAX OFFICER, COMPANY CIRCLE, VISAKHAPATNAM [1989 (12) TMI 325 - ANDHRA PRADESH HIGH COURT], it was held that the agreement has to be read as a whole in order to determine the nature of the transaction to ascertain the effective control of the machinery was in the use of the contractor or that of the company.
The proper remedy for the petitioner would be to avail the remedy of Appeal in terms of Section 33 of the VAT Act. The material on record shows that the petitioner did not file the Appeal on the ground that filing of Appeal would make him to deposit 25% of the disputed tax. This cannot be a ground to file a Writ Petition under Article 226 of the Constitution, before this Court.
The Hon'ble Apex Court in SETH CHAND RATAN VERSUS PANDIT DURGA PRASAD (D) BY LRS. & ORS. [2003 (3) TMI 703 - SUPREME COURT], while dealing with scope of Article 226 of the Constitution of India held that when a right or liability is created by a statue, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before seeking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is no doubt a rule of policy, convenience and discretion and the Court may in exceptional cases issue a discretionary writ of certiorari, where there is complete lack of jurisdiction for the officer or authority or Tribunal to take the action or there has been a contravention of fundamental rights or there has been a violation of principles of natural justice or where the Tribunal acted under a provision of law, which are ultra vires. Then notwithstanding the existence of an alternative remedy, the High Court can exercise its jurisdiction to grant relief.
Petition dismissed.
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2022 (12) TMI 1327 - MADRAS HIGH COURT
Enhancement to property tax in terms of the Chennai City Municipal Corporation Act,1919 and the Coimbatore City Municipal Corporation Act, 1981 - HELD THAT:- The efforts to rationalize property tax assessment continued and G.O.Ms.No.11 dated 04.01.1983 considered a situation that ‘rent’ may be removed from the ambit of the enactment and that the mode of assessment may be shifted wholesale to a new basis, such as value of land, plinth area, location and usage after dividing the area into various zones and sub-zones. Following this methodology will obviate the necessity for arriving at a annual rental value or fair rent method.
After examining the proposal from the Vice Chairman, Madras Metropolitan Development Authority under cover of his letter dated 30.03.1982, the Commissioner, Corporation of Madras was directed to undertake studies in this regard to be carried out by the Operations Research Group (ORG) of the Madras Metropolitan Development Authority under World Bank Systems for rationalization of property tax assessment. The records reveal notes written in hand, calling for the report of the ORG and Annexure VIII of compilation filed by the Greater Chennai Corporation on 21.09.2022 contains a report of the study submitted during September, 1985.
Property taxes are a major source of revenue to the State and the report of the Committee as well as the analysis of data supplied by the respondents reveal more than adequately, that this source of revenue was not being deployed effectively. Non-deployment of revenue sources only leads to the denial of proper infrastructure and facilities to the citizens and the enhancement in property tax rates is only a move forward in that direction - the present impugned enhancement is not vitiated simply by virtue of the recommendations made by the Finance Commission. At best, it is an exercise in collaboration by the Union and State in the best interests of the Country. This argument is answered accordingly.
The impugned G.O. cannot be considered as a diktat. It does precede the CRs and is couched in affirmative terms, indicating that changes are strongly urged in the property tax regime. However in conclusion, it advises, rather urges, that the Corporations take note of, and address the issues raised effectively, in the best interests of the State/District.
The impugned GO, CR and Notification do make reference to the recommendations of the Central Finance Commission. However, such references do not, in my considered view, dilute the proposal for enhancement as the need for such enhancement has been made out by the State, de hors the recommendations of the Central Finance Commission. The admitted position that there has been no enhancement of property tax for the last nearly three decades would itself suffice to justify a proposal for enhancement now - the challenge to the impugned G.O. and CR on these grounds, stands rejected.
Arbitrary and illegal procedure followed in enhancement - violation of principles of natural justice - HELD THAT:- In the present case, public notice has admittedly been issued and objections have, admittedly, been called for from the taxpayers falling within the jurisdiction of both the Chennai and Coimbatore Corporations. In the former, there are 13 lakhs/approx. assessees. The information relating to the number of assessees in Coimbatore has not been supplied by the Coimbatore Corporation. From among approximately 13 lakhs, 30 objections have been received. The disposal of the objections is merely by way of reiteration of the Council Resolution and Notification - the objections been dealt with in a serious manner as would behove the respondents, there would have been no necessity for the present Writ Petitions, since complete clarity could be provided by the Corporations even at that stage.
The State would be well advised to put in place proper machinery in this regard and to ensure that future modifications, including enhancements, are made in accordance with fairness, transparency and following a fair and transparent procedure for dealing with tax payer queries, grievances and objections - Though an infirmity, it has been cured by virtue of the efforts taken by the City Corporation pendente lite, where efforts do appear to have been taken to enable the infrastructure, both physical as well as by use of technology, to provide services in method of computation, provision of grievance resolution centres, facilitation counters and an easy-to-use website, to ease the burden upon the taxpayers.
Basis of enhancement is arbitrary and contrary to the provisions of the Act or not - HELD THAT:- In the present case, there is no doubt that the respondents have complied with the procedure for enhancement, though as noted in the paragraphs above, the entirety of the procedure followed appears to be rather farcical. However, there is no dispute on the position that the impugned/offending orders have been placed in public domain and objections called for and disposed - In PATEL GORDHANDAS HARGOVINDAS VERSUS MUNICIPAL COMMISSIONER, AHMEDABAD [1963 (3) TMI 53 - SUPREME COURT], a Constitutional Bench of the Hon’ble Supreme Court considered an appeal on certificate granted by the Bombay High Court challenging imposition of a rate by the Municipal Commissioner, Ahmedabad, on vacant lands. The levy of rate was under Section 73 of the Bombay Municipal Boroughs Act, 1925.
The provisions of the Hyderabad Municipal Corporations Act, 1955 and the relevant rules in the Hyderabad Municipal Corporations (Assessment of Property Tax) Rules, 1990 provided that tax shall be levied at such percentages of rateable value as may be fixed by the Commissioner. It also provided for the method and manner of determination of such rateable value which is the annual rental value of the property - there was a complete scheme of assessment of tax that is inbuilt in that Statute and in the Rules. Neither the Act nor the Rules provide for a fair rent under the Rent Control Act to be binding upon the Commissioner and the Court lauded this discretion, since they noted that determination of annual rental value depended on several criteria that may expand beyond the criteria set out under the Rent Control Act.
Admittedly, there is no restriction on the methodology as to how ALV is to be determined and thus there is substantial play in the joints that has been afforded to the respondents in this regard - This issue is thus held in favour of the respondents.
Whether the slab rate provided within the BSR is permissible? - HELD THAT:- Evidently, and as the respondents have also pointed out, the fixation of slabs is intended as a benefit extended to owners of properties graded on the basis of size. The factorial for properties admeasuring less than 600 sq. ft., has been enhanced from 1.25 to 1.50, for properties between 601 to 1200 from 1.50 to 1.75, for properties between 1201 to 1800 the factorial stands enhanced from 1.75 to 2.00. In all situations, there is an enhancement of .5 percentage of the rate previously applicable. Properties admeasuring above 1801 sq. ft. stands enhanced to 2.00 from 1.50 as it was previously - The respondents project as though the slab system existed even earlier and the tabulation extracted above reveals the slabs fixed in 2011. However, no document has been produced by the Corporation/State in support of the existence of slab rates prior to the present impugned proceedings. This point has not been argued by the petitioners.
Petition dismissed.
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2022 (12) TMI 1326 - CALCUTTA HIGH COURT
Cancellation of registration of petitioner - Genuineness of the transaction going by the pay load of the vehicles, which was used for transporting the goods - HELD THAT:- The appellate authority straight away refers to the action taken by the tax authorities of Ultadanga wherein two separate enquiries were conducted in the business premises of M/s. Suraj Enterprise and the enquiry was conducted on 14th November, 2019 and 17th February, 2020. Admittedly, the transaction done by the appellant was in October, 2018. Thus, to conclude that the other end dealer is a non-existing dealer, there should be material to show that on the date when the appellants had transaction with him, there was no valid registration. If the cancellation of the registration of the other end dealer is by way of retrospective cancellation, then the question would be as to whether it would affect the transaction done by the appellants, more particularly when the appellants have been able to show that the payments for the transaction have been done through banking challans - The appellate authority was solely guided by the action taken by the Ultadanga tax authorities without examining the specific facts and circumstances of the case on hand.
It is found that the order passed by the appellate authority to be a non-speaking order in the sense that there is no independent finding rendered by the appellate authority qua the allegation against the appellants. Therefore, it is a fit case where the matter should be remanded back to the appellate authority to specifically consider the contentions, which was advanced by the appellants and also the fact that the other end dealer’s registration was cancelled with retrospective effect - appeal allowed by way of remand.
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2022 (12) TMI 1325 - AUTHORITY FOR ADVANCE RULING, CHHATTISGARH
Exemption from GST - activity of custom milling of paddy - entitlement for exemption under which notification? - HELD THAT:- The contention of the applicant, claiming that they are carrying out the function of public distribution system which is a function entrusted to a Panchayat under the Constitution of India, is incorrect and appears to be based on misconstrued notion in as much as the applicant is engaged for the aforesaid activity on behalf of the government, in lieu of monitory consideration for purely commercial gains. The applicant neither forms a part of public distribution system of the state government nor panchayat body, therefore its activity of custom milling does not comes under entry No. 3A to Notification No, 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 as amended vide Notification No. 2/2018- Central Tax (Rate), 25th January, 2018. Accordingly, the claimed benefit of tax exemption, citing reference of Circular No. 51/25/2018-GST dated 31/07/2018 is misplaced and thus it is concluded that the applicants claim of any tax exemption on custom milling of paddy merit rejection.
Circular No. 19/19/2017-GST dated 20.11.2017 from F. No. 354/263/2017-TRU issued by Government of India Ministry of Finance Department of Revenue Tax research Unit, North Block, New Delhi, clarifies on the subject of taxability of custom milling of paddy holding that milling of paddy into rice is not eligible for exemption under S. No 55 of Notification 12/2017 - Central Tax (Rate) dated 28th June 2017 and corresponding notifications issued under IGST and UTGST Acts. GST rate on services by way of job work in relation to all food and food products falling under Chapters 1 to 22 has been reduced from 18% to5% vide notification No. 31/2017-CT(R) [notification No. 11/2017-CT (Rate) dated 28.6.17, S.No. 26 refers]. Therefore, it is hereby clarified that milling of paddy into rice on job work basis, is liable to GST at the rate of 5%, on the processing charges (and not on the entire value of rice).
The activity of custom milling of paddy carried out by the applicant is not exempted from the purview of Goods and Service Tax and is liable to GST at the rate of 5%.
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2022 (12) TMI 1324 - AUTHORITY FOR ADVANCE RULING, UTTAR PRADESH
Classification of supply of services - supply of Services by the Applicant to M/s. UTTAR PRADESH JAL NIGAM - local authority or not - Governmental authority or not - scope of N/N. 15/2021 Central Tax (Rate), dated 18th November, 2021 r/w. N/N. 22/2021- Central Tax (Rate), dated 31st December, 2021 - applicable rate of Tax under the Goods and Services Tax Act. 2017 on such Supplies made w.e.f. 01-01-2022 - applicable rate of tax on such supplies under the Good's and Services Tax Act, made w.e.f. 01-01-2022.
Whether the Uttar Pradesh Jal Nigam (UPJN) is local authority or not? - HELD THAT:- The applicant have arrived at conclusion that UPJN is local authority on the basis of 4th character of PAN of UPJN being 'L' and the registration certificate of UPJN bearing constitution as local authority.
Constitution of UPJN - HELD THAT:- UPJN was created by the Government of Uttar Pradesh by enacting the U.P. Water Supply and Sewerage Act, 1975 (hereinafter referred to as the UPWSS Act). It is a body corporate having perpetual succession and a common seal and capable of suing and being sued in its name. It has power to acquire, hold and dispose of the property - the definition of local authority in the CGST" Act includes within its ambit any other authority legally entitled to or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund. Thus, for the purpose of the GST Laws, any authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund qualifies as a local authority.
The Apex court in the RC Jain case [1981 (2) TMI 200 - SUPREME COURT] has held that that the authority should be elected by the inhabitants of the area. As per Section 4 of the UPWSS Act, the UPJN shall consist of Chairman and members appointed by the state government. As such, the UPJN is not elected by the inhabitants of the area but the same is established by the state. Therefore, the said is not satisfied in the case of UPJN - In case of UPJN, there is no local fund entrusted by the Government with UPJN. A perusal of the UPWSS Act would reveal that no municipal or local fund has been entrusted by the Government. The fund of UPJN is its own fund and cannot be equated with a fund entrusted by the Government. Thus, the important requirement in order to qualify as a local authority, viz. control and management of a municipal/local fund is absent in the present case - the UPJN is not a 'local authority'.
Whether the UPJN is Governmental Authority? - HELD THAT:- To qualify as a governmental authority, such authority must be set up by an act of Parliament/State Legislature, should have 90% or more stake of government, and should carry out any function entrusted to a Municipality under article 243 W of the Constitution of India - the UPJN is a body corporate formed by the State legislature under UPWSS Act enacted by the UP State Legislature. As such, the first requirement of a governmental authority stands fulfilled in the present case. Further, as per Section 3 of the UPWSS Act, UPJN is a body corporate established by the Government of U.P., as such, the second requirement of governmental authority has also been fulfilled in the present case. Moreover, the UPJN is constituted for the development and regulation of water supply and sewerage services in the State of U.P. Under the Section 14 of UPWSS Act, UPJN is inter alia entrusted with the function to operate, run, and maintain any waterworks and sewerage system.
As per Article 243 W read with Twelfth Schedule of the Constitution of India, water supply for domestic, industrial and commercial purposes and public health, sanitation conservancy and solid waste management is a function of municipality. The requirement that the authority must be established to carry out any function entrusted to a Municipality under article 243 W of the Constitution has also been fulfilled in the present case. Thus, the UPJN is a governmental authority - by way of Notification No. 22/2021-Central Tax (Rate) dated 31.12.2021, the lower rate of tax of 12% provided by Entry 3(iii) of Notification No.11/2017- Central Tax (Rate) dated June 28, 2017, was restricted to works contract supplied to Central Government, State Government, Union territory and a local authority only with effect from 01.01.2022. As the UPJN does not qualify as a 'local authority' and it qualifies as a governmental authority, tax rate of 18% is applicable on the works contract services provided to UPJN by way of Entry 3(xii) of Notification No. 11/2017- Central Tax (Rate) dated June 28, 2017.
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2022 (12) TMI 1323 - ITAT RAJKOT
Rectification of mistake u/s 154 - Difference of MAT credit not allowed to the assessee as related to surcharge and cess components of the MAT taxes paid in earlier years - AO had computed the MAT credit allowable to the assessee as per provision of section 115JAA(5) of the Act only considering the normal tax components and excluded surcharge and cess from the same - HELD THAT:- We have noted that the ld.CIT(A) dismissed the assessee’s appeal on the ground that there was no representation made by the assessee before him. Assessee has pointed out that on the last date of hearing, he did file written submissions to the ld.CIT(A). Be that so, we have noted the contentions of the ld.counsel for the assessee on merit also, and we find that rectification application filed by the assessee is to the effect that the assessee be allowed benefit of MAT credit as per section 115JAA(5) of the Act by including surcharge and cess in the tax credit so calculated. Precisely, this is the only issue on which the assessee has sought rectification of the intimation u/s 143(1) of the Act.
We find merit in the contentions of the ld.counsel for the assessee. In a series of the decisions, the Hon’ble High Courts and the ITAT have held that the tax credit allowable under section 115JAA of the Act is including surcharge and cess components of tax thereon.
Denial of tax credit u/s 115JAA of the Act to the extent of surcharge and cess components in the same, we agree with the ld.counsel for the assessee, is a mistake apparent from the record and rectification sought to this extent is therefore upheld. The rectification application filed by the assessee is therefore directed to be allowed, and adjustment of tax credit as claimed by the assessee is directed to be granted. The appeal of the assessee is allowed.
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2022 (12) TMI 1322 - ITAT PANAJI
Deduction u/s 80P - assessee’s status as to whether it is a cooperative bank or a credit cooperative society as per the Revenue’s and assessee’s arguments, respectively - HELD THAT:- There could be hardly any dispute that hon’ble apex court’s recent landmark decision in Mavilayi Service Co-operative Bank Ltd [2021 (1) TMI 488 - SUPREME COURT] has settled the issue that assessee’s registration under the respective cooperative law itself forms the decisive factor. This assessee is further found registered as credit cooperative society only. I thus reject the Revenue’s instant arguments to this effect.
Assessee had deposited its surplus in cooperative banks and derived interest therefrom which has been claimed as eligible for section 80P deduction - As decided in BELGAUM COAL & COKE CONSUMER COOPERATIVE ASSOCIATION LTD. [2021 (11) TMI 1121 - ITAT PANAJI]we hold that the interest income earned by the appellant society on investment made with the cooperative bank which are also cooperative societies is exempt from the Income Tax Act u/s 80P(2)(d) of the Act. Therefore, we hold that the lower authorities was not justified in denying the claim of deduction u/s 80P(2)(d) of the Act. Accordingly, we direct the Assessing Officer to allow the same as deduction u/s 80P(2)(d) - Assessee appeal is allowed.
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2022 (12) TMI 1321 - ITAT HYDERABAD
Reopening of assessment u/s 147 - reason to believe - Change of opinion - proportionate interest attributable to the interest free advances made by the assessee to its related parties - HELD THAT:- As all the material papers which the learned AO made a basis to reopen the concluded assessment were available with the learned Assessing Officer at the time of original assessment itself. From the record is also evident that the learned Assessing Officer noticed from the P&L Account and Balance Sheet that during the year the assessee incurred interest expenditure on long-term borrowings and the amount of interest free advances to related parties, by specifically asking the assessee to furnish the information relating to the loans and advances where no interest was charged/chargeable. It is only after the assessee furnished the information, the assessment was complete after scrutiny considering the income only under “house property” and “other sources”, and loss from business was not allowed observing that as there remains no business income/activity, the expenditure is not allowed to be set of against income computed under other heads.
We are of the considered opinion that the original assessment under section 143(3) of the Act was concluded after noticing all the relevant facts which forms basis for issuance of the notice under section 148 of the Act, and, therefore, the opinion formed by the learned Assessing Officer on subsequent perusal of the record is nothing but change of opinion and in view of the decisions of the Hon’ble Apex Court in the cases of Kelvinator of India Ltd (2010 (1) TMI 11 - SUPREME COURT] and Techspan India (2018 (4) TMI 1376 - SUPREME COURT] such a course is impermissible. - Decided against revenue.
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2022 (12) TMI 1320 - ITAT DELHI
Deduction u/s 54B - deduction denied as agricultural land in which the capital gain was invested was purchased in the name of assessee’s wife - HELD THAT:- This above view, is unsustainable. Deduction under Section 54B/54F of the Act is available in cases where investments are made in property purchased in the name of wife. Therefore, following the ratio laid down in these decisions Laxmi Narayan [2017 (11) TMI 1622 - RAJASTHAN HIGH COURT, JAIPUR], Kamal Wahal [2013 (1) TMI 401 - DELHI HIGH COURT], Natarajan [2006 (2) TMI 136 - MADRAS HIGH COURT] and Ravinder Kumar Arora [2011 (9) TMI 343 - DELHI HIGH COURT]
Thus hold that the assessee is eligible for deduction under Section 54B of the Act. Accordingly, direct the AO to allow deduction under Section 54B of the Act - Decided in favour of assessee.
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2022 (12) TMI 1319 - ITAT CUTTACK
Estimation of income of the assessee at 10% of the administrative expenses and export expenses - HELD THAT:- As it is noticed that the issue is squarely covered in the group concern of the assessee being in the case of M/s. Serajuddin & Co. [2022 (10) TMI 1139 - ITAT CUTTACK] and in the case of Aliza International Pvt Ltd. [2022 (10) TMI 1141 - ITAT CUTTACK] respectfully following the decisions of the Co-ordinate Bench of this Tribunal the disallowance as confirmed by the ld CIT(A) at 10% stands reduced to 5%.
Disallowance of auxiliary service addition - As it is noticed that this issue has already been considered in [2022 (10) TMI 1141 - ITAT CUTTACK]. and we have reduced the said disallowance made from 10% to 5%, Ground No.3 of the revenue stands dismissed.
Direction of the ld CIT(A) in adopting the total income before depreciation - HELD THAT:- As it is noticed that the ld CIT(A) has reduced the total income assessed by the AO by considering the remand report as filed by the AO and as it is noticed that the said remand report has also been extracted by the ld CIT(A) in his order, we find no reason to interfere with the order of the ld CIT(A) on this issue. Ground Nos.4 & 5 of the revenue stand dismissed
Deemed dividend addition u/s 2(22)(e) - HELD THAT:- A perusal of the provisions of section 2(22)(e) clearly shows that the word used is “on behalf, or for the individual benefit, of any such shareholder”. Thus, the deemed dividend, if at all, can be assessed is to be assessed in the hands of the shareholder on whose behalf or individual benefit, the loan has been given. In the present case, the assessee is not the shareholder of M/s. Aliza International Pvt Ltd., which would attract the provisions of section 2(22)(e) of the Act. In these circumstances, we are of the view that the findings of the ld CIT(A) is on right footing and does not call for any interference. Ground No.6 of the revenue stands dismissed.
Addition of other income - As submitted CIT(A) did not add the same on the ground that the net profit as shown by the assessee was inclusive of the said amount of other income - HELD THAT:- As it is noticed that the ld CIT(A) has taken into consideration the fact that the said other income has already been considered while determining the net profit as per the accounts which are audited u/s.44AB, we are of the view that no addition of the said amount is called for. Consequently, Ground No.7 of the revenue stands dismissed.
Disallowance of peripheral development expenses and maintenance expenses - HELD THAT:- Respectfully following the decision of the Co-ordinate Bench in the case of Aliza International Pvt Ltd. [2022 (10) TMI 1141 - ITAT CUTTACK] the addition as made by the AO and confirmed by the ld CIT(A) in respect of peripheral development expenses and maintenance expenses stands deleted.
Penalty levied u/s.271(1)(c) - As submitted by ld AR that the search in the case of the assessee took place on 28.5.2008 and the assessment year 2009-10 was the specified period and for the purpose of levying the penalty, if at all, was u/s.271AAA and not u/s.271(1)(c) - HELD THAT:- The penalty leviable u/s.271AAA is 10% of the concealed income whereas under section 271(1)(c), the penalty is leviable at 100% of the tax sought to be evaded. A perusal of the order of the Assessing officer shows that the AO has levied penalty at 100% of tax sought to be evaded. Consequently, the order passed by the AO cannot be held as typographical error. In regard to levy of penalty u/s.271AAA assessment year 2009-10 is the specified year in respect of the assessee, as the search took place on 28.5.2008. Respectfully following the decision of the Co-ordinate bench of this Tribunal in the case of S.M.Enterprises [2022 (11) TMI 275 - ITAT CUTTACK] penalty levied u/s.271(1)(c) by the AO and confirmed by the CIT(A) stands deleted.
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