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2012 (7) TMI 1035
Issues involved:
The petitioner challenged the forfeiture of the amount deposited by him after participating in an auction for plot allotment, questioning the legality of the action u/s Article 226/227 of the Constitution of India.
Details of the Judgment:
Forfeiture of Amount:
The petitioner participated in an auction, deposited a sum at the fall of hammer, and another amount later. Upon requesting a refund due to concerns about infrastructure and project feasibility, a show cause notice for balance payment or forfeiture was issued. The petitioner argued against forfeiture, stating that no provision allowed it without issuance of the letter of intent or allotment letter. The respondents contended that the matter was contractual and not within the Court's jurisdiction u/s Article 226/227. The Court referred to various judgments, including Yogesh Mehta case and CWP No.23204 of 2010, emphasizing the Court's power to adjudicate such matters.
Legal Precedents:
The Court cited the Century Spg. And Mfg. Co.Ltd. case, ABL International Ltd. case, and Noble Resources Ltd. case to establish that a writ petition is maintainable even in contractual matters if violative of constitutional provisions. The Court highlighted the importance of judicial review to prevent arbitrariness in contractual dealings by government bodies.
Decision and Rationale:
The Court found no clause for forfeiture in the auction proceedings without a specific provision. Referring to the Division Bench's observations, the Court deemed the forfeiture clause illegal and struck it down. While the petitioner's action was deemed unreasonable, the respondents' unease was acknowledged. To balance equities and deter such actions, the petitioner was burdened with costs, and the remaining amount was to be refunded within six months.
Conclusion:
The Court disposed of the case, ruling against the forfeiture of the amount but imposing costs on the petitioner to settle equities and discourage similar actions in the future.
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2012 (7) TMI 1034
Issues involved: Interpretation of Cenvat credit rules for availing GTA service, imposition of penalty under Section 76 of Finance Act, 1994.
Interpretation of Cenvat credit rules for availing GTA service:
The appellant believed that Cenvat credit could be used for availing GTA service, arguing that tax liability was discharged using legitimately earned credit. However, the Department contended that Cenvat credit was not available for tax liability arising from GTA service after 18.4.2006. The appellate record revealed that the dispute pertained to the period from October 2007 to December 2007. The Appellate Authority examined the definition of output service under Rule 3(4)(e) of Cenvat Credit Rules, 2002, concluding that credit could only be set off against tax liability from providing output service. As the present case did not meet this criteria, the utilization of Cenvat credit amounting to Rs. 4,04,179 was deemed recoverable and ordered accordingly.
Imposition of penalty under Section 76 of Finance Act, 1994:
A penalty of Rs. 4,04,179 was imposed under Section 76 of the Finance Act, 1994. Since the tax element was recoverable, the penalty also became payable. The appellant's failure to discharge tax liability was attributed to a misinterpretation of the law. Therefore, the penalty aspect was remanded to the Adjudicating Authority for reconsideration of whether the conditions of Section 76 of the Finance Act, 1994 necessitated the imposition of a penalty. The appellant was granted an opportunity to provide an explanation as penalty proceedings are quasi-criminal in nature and require a fair hearing. The adjudication confirmed the tax liability, with only the penalty aspect being remanded for further consideration. It was emphasized that interest would be applicable once the tax became payable.
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2012 (7) TMI 1033
The Supreme Court dismissed the Special Leave Petition due to delay. (Citation: 2012 (7) TMI 1033 - SC Order)
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2012 (7) TMI 1032
Issues Involved:1. Interpretation of Rule 5 of Cenvat Credit Rules and definition of "input service". 2. Inclusion of various expenses as services "used in manufacture". 3. Ignoring Notification No. 5/2006-C.E. (N.T.), dated 14-3-2006. Summary:Issue 1: Interpretation of Rule 5 of Cenvat Credit Rules and definition of "input service"The Court examined whether the Tribunal erred in interpreting Rule 5 of Cenvat Credit Rules along with sub-rule 2(l) concerning the definition of "input service" by treating various maintenance services as service "used in manufacture". The Court noted that the respondent, M/s. Pharmanza Herbal Pvt. Ltd., engaged in the manufacture of Herbal Extract and Ayurvedic formulation, filed a refund claim u/s 11B of the Central Excise Act, 1944 for Rs. 7,392/-. The Assistant Commissioner sanctioned the refund, which was upheld by the Commissioner (Appeals). The Department's appeal to the Tribunal was rejected. Issue 2: Inclusion of various expenses as services "used in manufacture"The Court considered whether the Tribunal erred by including advertisement expenses, insurance premium for employees (PA Policy), labor processing charges, repair of computers, legal and professional expenses, mobile expenses, consultation engineering services, and maintenance and repair service as services "used in manufacture" of the final product for export. The Court did not delve into the merits of these inclusions due to the monetary limits set by the Department's circulars. Issue 3: Ignoring Notification No. 5/2006-C.E. (N.T.), dated 14-3-2006The Court addressed whether the Tribunal ignored Notification No. 5/2006-C.E. (N.T.), dated 14-3-2006, which stipulates that the refund of Cenvat credit is allowed only in respect of input service used in the manufacture of the final product, which is cleared for export. The Court noted that the appeal involved a refund claim of Rs. 7,392/- and referenced the Department's circulars dated 20-10-2010 and 17-8-2011, which set monetary limits for filing appeals. Conclusion:The Court highlighted that the amount involved in the appeal was Rs. 7,392/-, which fell below the monetary limits specified in the Department's circulars. The Court emphasized that the Department is bound by its own circulars and should not have preferred the appeal. Consequently, the appeal was dismissed, keeping the questions open to be decided in an appropriate case.
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2012 (7) TMI 1031
Offence under PMLA - Attachment of property involved in money-laundering - jurisdiction of this Court under Section 482 Cr.P.C.- seeking the relief of quashing the criminal proceedings in Original Complaint in Provisional Attachment Order - Held that:- It is pertinent to note here that on perusal of the records it is apparent that all the four cases in Crime Nos.277, 349, 350 and 391 of 2010 have been forwarded to the Magistrate for taking cognizance of the scheduled offences viz., the offences punishable under Sections 419, 420 and 471 I.P.C.,
It is also manifested that a prima facie case relating to an offence under Section 3 of P.M.L.A., 2002 is made out, which requires further investigation on the petitioners in accordance with the provisions of the said Act as well as with the rules framed therein. It is also crystallised that the second respondent has registered Enforcement Case Information Reports (ECIR) Nos.53 of 2010, 54 of 2010, 55 of 2010 and 56 of 2010 (Annexures VII to X).
Keeping in view of the above facts, this Court is also of opinion that since the properties 51 in numbers, described in Annexure-I, have been provisionally attached so as to prevent the petitioners from transferring them in favour of the third parties, the question of sending a final report under Section 173 Cr.P.C., does not arise at this stage.
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2012 (7) TMI 1030
Sentence in default of payment of compensation - Held that:- Deterrence can only be infused into the order by providing for a default sentence. If Section 421 of the Code puts compensation ordered to be paid by the court on par with fine so far as mode of recovery is concerned, then there is no reason why the court cannot impose a sentence in default of payment of compensation as it can be done in case of default in payment of fine under Section 64 of the IPC. It is obvious that in view of this, in Vijayan, this court stated that the above mentioned provisions enabled the court to impose a sentence in default of payment of compensation and rejected the submission that the recourse can only be had to Section 421 of the Code for enforcing the order of compensation. Pertinently, it was made clear that observations made by this Court in Hari Singh are as important today as they were when they were made. The conclusion, therefore, is that the order to pay compensation may be enforced by awarding sentence in default.
In view of the above, we find no illegality in the order passed by the learned Magistrate and confirmed by the Sessions Court in awarding sentence in default of payment of compensation. The High Court was in error in setting aside the sentence imposed in default of payment of compensation.
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2012 (7) TMI 1029
Agreement for Sale - failed to comply with the commitments made in agreement for sale - specific performance - rejection of the plaint - power of attorney - HELD THAT:- It is clear that from the date the power of attorney is executed by the principal in favour of the agent and by virtue of the terms the agent derives a right to use his name and all acts, deeds and things done by him are subject to the limitations contained in the said deed. It is further clear that the power of attorney holder executed a deed of conveyance in exercise of the power granted under it and conveys title on behalf of the grantor. In the case, though the plaint avers that the 2nd defendant is the agreement holder of the 1st defendant, the said agreement is not produced. It was also pointed out that the date of agreement is also not given in the plaint. We have already mentioned Form Nos. 47 and 48 of Appendix A and failure to mention date violates the statutory requirement and if the date is one which attracts the bar of limitation, the plaint has to conform to Order VII Rule 6 and specifically plead the ground upon which exemption from limitation is claimed. It was rightly pointed out on the side of the appellant that in order to get over the bar of limitation all the required details have been omitted. In the case on hand, the application for rejection of the plaint of the appellant-1st defendant seeks no relief against the respondent herein-2nd defendant. It is settled legal position that a party against whom no relief is claimed in the application is not a necessary party at all.
In view of the shortfall in the plaint averments, statutory provisions, namely, Order VII Rule 11, Rule 14(1) and Rule 14(2), Form Nos. 47 and 48 in Appendix A of the Code which are statutory in nature, we hold that the learned single Judge of the High Court has correctly concluded that in the absence of any cause of action shown as against the 1st defendant, the suit cannot be proceeded either for specific performance or for the recovery of money advanced which according to the plaintiff was given to the 2nd defendant in the suit and rightly rejected the plaint as against the 1st defendant. Unfortunately, the Division bench failed to consider all those relevant aspects and erroneously reversed the decision of the learned single Judge. We are unable to agree with the reasoning of the Division Bench of the High Court.
Hence, The judgment and order dated 16.08.2011 passed by the Division Bench of the High Court in OSA No. 100 of 2006 is set aside and the order dated 25.01.2006 passed by the learned single Judge in Application No. 3560 of 2005 is restored. The civil appeal is allowed with costs.
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2012 (7) TMI 1028
Issues involved: Appeal against order of Ld. CIT(A) for assessment year 2004-05. Assessee raised grievance regarding addition made by AO without proper opportunity of being heard.
Assessment of Fresh Capital:
During assessment, AO found partners introduced fresh capital. Assessee claimed it received gifts, supported by gift deeds and bank statements. AO summoned parties u/s. 131, but only two appeared. AO added capital amount of Rs. 7,20,000 and Rs. 2,00,000 for stock discrepancy.
Denial of Natural Justice:
Assessee pleaded not receiving copy of AO's recorded statements, hindering appeal attendance. Ld. CIT(A) dismissed appeal ex parte, citing legal precedents. Assessee's counsel argued for repeated requests of statement copies, highlighting denial of natural justice.
Tribunal Decision:
Tribunal considered submissions, noting repeated requests for statement copies and adjournment applications. Found denial of natural justice by lower authorities. Directed Ld. CIT(A) to re-decide appeal after providing reasonable opportunity to assessee. Appeal allowed for statistical purposes.
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2012 (7) TMI 1027
Issues Involved:
1. Maintainability of the winding-up petition.
2. Bona fide dispute regarding the amount payable.
3. Financial soundness and creditworthiness of the respondent company.
4. Just and equitable grounds for winding up.
Summary:
1. Maintainability of the Winding-Up Petition:
The petition was filed u/s 433(e) and (f) r/w Sections 434(i)(a) and 439(i) and (b) of the Companies Act, 1956, for winding up the respondent company. The petitioner argued that the initiation of proceedings before the Debts Recovery Tribunal (DRT) and criminal prosecution u/s 138 of the Negotiable Instruments Act does not bar the filing of the present winding-up petition. The court held that proceedings before the DRT and under the Companies Act are distinct and separate remedies, and invocation of one does not bar the other. The court cited judgments in *Global Trust Bank Ltd. Vs. Kullici Nixon Ltd.* and *Small Industries Development Bank of India Vs. Shri Niranjan Ayurved Bhawan Ltd.* to support this view.
2. Bona Fide Dispute Regarding the Amount Payable:
The respondent admitted the guarantee furnished by the petitioner and the invocation of the guarantee by ICICI Bank. However, the respondent contended that the interest claim at the rate of 35% is usurious and disputed the amount claimed by the petitioner. The court noted that the respondent had admitted liability in its reply to the statutory notice and had sought time for settlement. The court held that the amount claimed by the petitioner is not disputed and the agreed interest rate of 35% p.a. is binding as it was a commercial transaction.
3. Financial Soundness and Creditworthiness of the Respondent Company:
The respondent argued that it is not commercially insolvent and is in the process of revival, with credit facilities from State Bank of India amounting to Rs. 310 Crores. The petitioner countered that the respondent's creditworthiness has deteriorated, as evidenced by ICRA's poor credit rating and the respondent being listed as a willful defaulter by the Reserve Bank of India. The court found that the respondent's failure to make any payment as per its own proposed schedule indicated its inability to pay its dues. The court also noted the significant accumulated losses against minimal profits.
4. Just and Equitable Grounds for Winding Up:
The court held that the failure to pay the amount even after the issuance of recovery certificates by the DRT indicated that the respondent is not in a position to pay its dues. The court emphasized the interests of unsecured creditors and cited judgments in *UTI Bank Ltd. Vs. Shree Rama-Multitech Ltd.* and *Board Opinion Vs. Hathising Mfg. Co. Ltd.* to highlight the importance of recovering public funds advanced by banks and financial institutions. The court concluded that it is just and equitable to order the winding up of the respondent company.
Order:
The court admitted the petition and directed the following:
1. Notice on the Court Notice Board.
2. Notice to the respondent.
3. Notice to the Registrar of Companies, Madras.
4. Affixure of notice at the premises of the Registered Office of the respondent company.
5. Publication of the company petition in "The Hindu" and "Indian Express" and in the Tamil Nadu Government Gazette, fixing the date of hearing on 06.09.2012.
6. Appointment of the Official Liquidator, High Court, Madras, as Provisional Liquidator to take charge of the assets of the respondent company.
7. The Ex-Directors of the respondent company to file their statement of affairs before the Official Liquidator within 21 days.
8. The company to deposit Rs. 15,000 towards initial expenses before the Official Liquidator.
The case was adjourned to 06.09.2012.
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2012 (7) TMI 1026
Issues involved: Appeal against denial of exemption u/s 10(23C)(iiiae) of the Income Tax Act.
Summary:
The Appellate Tribunal ITAT Chennai heard an appeal filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) XII, Chennai. The only issue raised by the Revenue was the denial of exemption u/s 10(23C)(iiiae) of the Act. The assessee, a registered society, had filed a return of income claiming exemption under the said section. The Assessing Officer denied the exemption stating that the society had an intention to earn profit despite engaging in philanthropic activities. On appeal, the Commissioner of Income Tax (Appeals) allowed the exemption, leading to the Revenue's appeal before the Tribunal.
The counsel for the Revenue argued that the society's intention to earn income through property rentals disqualified it from claiming exemption under section 10(23C)(iiiae). They cited legal precedents to support their stance. In contrast, the counsel for the assessee contended that the society operated solely for philanthropic purposes, running a hospital to provide healthcare to the underprivileged. They emphasized that the rental income was accumulated for the society's objectives and not for personal gain. The assessee also highlighted its history of claiming exemptions under charitable provisions.
After hearing both parties and examining the facts, the Tribunal observed that the society primarily operated a hospital for several years, focusing on providing medical relief without a profit motive. The Tribunal noted that the rental income accumulation did not indicate a profit motive, especially since the funds were directed towards the society's objectives. They found no evidence of personal benefits being derived from the income. Ultimately, the Tribunal upheld the Commissioner's decision to grant exemption u/s 10(23C)(iiiae) to the assessee, deeming the legal precedents cited by the Revenue as inapplicable to the case.
In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the allowance of exemption to the assessee under section 10(23C)(iiiae) of the Income Tax Act.
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2012 (7) TMI 1025
Issues involved: Whether CESTAT was justified in declining to condone the delay in filing the appeal against the original order.
Summary:
The petitioner initially failed to enclose a doctor's certificate explaining the inability to move during a specific period in the appeal memo. Consequently, the Tribunal refused to condone the delay. Subsequently, the petitioner submitted the required certificate, but the Tribunal still rejected the application. Despite the delay in furnishing the certificate, the Court believed that justice would be served by condoning the delay and hearing the appeal on its merits, with the condition of paying costs. The Court quashed the Tribunal's orders and directed the petitioner to pay costs to the respondents within four weeks. Upon payment, the CESTAT was instructed to proceed with hearing the appeal.
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2012 (7) TMI 1024
Issues involved: Disallowance of commission payments u/s 40A(2)(b) of the IT Act for assessment years 2007-08 & 2008-09.
Summary:
1. The appeals were filed by the Assessee against the order of CIT-XVI (A), Ahmedabad, regarding disallowance of commission payments made to specified persons u/s 40A(2)(b) of the IT Act for the assessment years 2007-08 & 2008-09.
2. The Assessee, engaged in manufacturing, paid commissions to family members covered u/s 40A(2)(b) of the IT Act. The Assessing Officer disallowed a portion of the commissions paid, citing excessive payments to specified persons. The first appeal before CIT-XVI(A) upheld the disallowance due to lack of evidence of services rendered by the recipients.
3. The CIT (A) relied on legal precedents to confirm the disallowance, emphasizing the burden of proof on the Assessee to demonstrate services rendered by the commission recipients. The Assessee, in the subsequent appeal, argued that the commissions led to increased sales and were reasonable for the services provided.
4. The Tribunal upheld the CIT (A)'s decision, noting the Assessee's failure to provide concrete evidence linking the commissions to specific sales. The lack of documentation supporting the services rendered led to the dismissal of the Assessee's appeals for both assessment years.
5. Consequently, the Tribunal dismissed the Assessee's appeals for both assessment years, affirming the disallowance of commission payments made to specified persons covered u/s 40A(2)(b) of the IT Act.
Separate Judgement: None.
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2012 (7) TMI 1023
Applicability of the provisions of Section 133A -Held that:- The petitioner has challenged the proceedings dated 12.7.2012 to 13.7.2012 conducted under Section 133A of the Income Tax Act. As and when any report is prepared and used against the petitioner on the basis of the said survey, it would be open to the petitioner to raise all such grounds which are permissible in law before the appropriate forum. The concerned authority will decide such an objection independently without being influenced by the tentative opinion expressed by us in this order.
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2012 (7) TMI 1022
Issues:
Appeal against order confirming addition under section 40(a)(ia) of the IT Act, 1961.
Analysis:
1. Issue of Correct Amount: The appellant contended that the correct amount of TDS payable under Sec. 94C of the IT Act, 1961 was different from the amount mentioned in the ground. The correct amount was stated to be &8377; 20,02,500, and a request was made to correct the amount noted in the grounds of appeal.
2. Non-Deduction of TDS: The Assessing Officer observed that certain payments were made to sub-contractors without deduction of tax at source, amounting to &8377; 31,84,737, contravening section 40(a)(ia) of the IT Act. The appellant argued that TDS under section 194C was deducted and paid on 25.5.2005, along with filing Form No.26 on 02/06/2005. However, the AO disallowed the expenditure of &8377; 29,97,552 for late deposit of TDS.
3. Decision of CIT(A): The CIT(A) partially upheld the addition, noting that TDS on payments made in March 2005 was deposited in the government account on 25.5.05. The CIT(A) allowed relief of &8377; 9,68,087 based on an amendment to section 40(a)(ia) with retrospective effect from 1.4.2005. The CIT(A) dismissed the appellant's claim regarding payments exceeding &8377; 20,000 to each contractor.
4. Legal Precedents: The Tribunal referred to a decision of the Hon'ble Calcutta High Court in a similar case, where it was held that section 40(a)(ia) has retrospective operation. Another case cited was M/s. Alpha Projects Society P.Ltd. vs. DCIT, where the Special Bench of ITAT Mumbai held a different view. However, the Tribunal followed the decision of the Calcutta High Court, directing the deletion of the addition due to the deposit of TDS on 25/5/05.
5. Final Decision: Considering the legal precedents and the retrospective application of section 40(a)(ia), the Tribunal allowed the appeal, directing the deletion of the addition made by the AO. The Tribunal's decision was in line with the judgments of the Calcutta High Court and the factual position regarding the timely deduction and payment of TDS.
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2012 (7) TMI 1021
Issues involved: Appeal filed by Revenue regarding exemption u/s 11 of the Income Tax Act for A.Y. 2007-08.
Summary:
The appeal pertains to the assessment year 2007-08 and involves the question of whether the assessee, a society registered under the Bombay Public Trust Act, is eligible for exemption u/s 11 of the Income Tax Act. The Assessing Officer contended that the club's facilities were for its members and guests, based on the principle of mutuality, and therefore not eligible for exemption. However, the CIT(A) and ITAT Mumbai Benches held that the club was a Trust, not a mutual concern, and thus eligible for exemption u/s 11. The Revenue's appeal was based on a misinterpretation of the CIT(A)'s decision, as the status of the assessee was correctly identified as a Trust. The Tribunal upheld the decision in favor of the assessee, citing lack of new evidence to warrant a different conclusion. The appeal by the Revenue was dismissed, affirming the assessee's eligibility for exemption u/s 11.
In conclusion, the Tribunal upheld the decision in favor of the assessee, dismissing the Revenue's appeal and affirming the eligibility of the society for exemption u/s 11 of the Income Tax Act for the assessment year 2007-08.
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2012 (7) TMI 1020
The Supreme Court granted leave for appeals to be heard based on Special Leave Petition (SLP) paper books. Additional documents can be filed by the parties. No appearance was made on behalf of the respondent despite service. (Case Citation: 2012 (7) TMI 1020 - SC)
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2012 (7) TMI 1019
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Condonation of delay in filing appeal - sufficient cause to condone delay present or not - validity of ex-parte decree passed - right to appeal - regular appeal u/s 96 CPC - certified copies of the documents were misplaced by the office of the Advocate - "sufficient cause" used in Section 5 of the Limitation Act, 1963 and other statutes is elastic enough to enable the courts to apply the law in a meaningful manner which serves the ends of justice. No hard-and-fast rule has been or can be laid down for deciding the applications parties are not defeated only on the ground of delay.
HELD THAT:- the Respondent was very much conscious of the fact that the appeal filed by him against order dated 20.2.2008 passed by the trial Court had been dismissed by the High Court on 11.12.2008 and he had obtained certified copies of the documents, which are said to have handed over to the counsel on 10.1.2009, he did not make any effort to contact the concerned advocate till the first week of March, 2010 to ascertain the fate of the appeal supposed to have been filed by him against the judgment and decree dated 18.8.2006. Not only this, the application and affidavit filed by him are conspicuously silent about the name of the advocate to whom the papers were entrusted tor the purpose of preparing the grounds of appeal. The affidavit of the concerned advocate was also not filed. if there was any iota of truth in the Respondent's story that the certified copies of the documents were misplaced by the office of his counsel and the same were noticed by the counsel on 2.3.2010 while preparing arguments in A.S. No. 200/2001, the minimum which he was expected to do was to file an affidavit of the concerned advocate. Why he did not do so has not been explained by the Respondent. Notwithstanding this, the learned Single Judge assumed that the counsel to whom the Appellant is said to have handed over the documents was remiss in the performance of his duties and on that account, the same got tagged with another file resulting in the delay.
In the present case, the statement made by the Respondent about misplacement of the documents by the office of the Advocate was vague to the core and the learned Single Judge committed grave error by entertaining the fanciful explanation given for 1236 days delay. In the result, the appeal is allowed. The impugned order is set aside. The application filed by the Respondent for condonation of 1236 days delay in filing appeal against the judgment and decree of the trial Court shall stand dismissed.
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2012 (7) TMI 1018
Issues Involved:
1. Misdeclaration of imported goods.
2. Undervaluation of imported goods.
3. Continuance of criminal proceedings post departmental adjudication.
Summary:
Misdeclaration of Imported Goods:
The petitioners were accused of misdeclaring Poly Carbonate Sheets (PC Sheets) imported under Open General License, alleging that the goods were made from fresh polymer of high resin instead of degenerated scrap. The Department of Revenue Intelligence (DRI) issued a show cause notice and initiated departmental proceedings and a criminal complaint u/s 132 and 135(1)(a) of the Customs Act, 1962. The petitioners contended that all necessary documents (Bill of Entry, Invoice, Packing Lists, and Bill of Lading) accurately described the goods as PC Sheets. The CESTAT Tribunal, in its final order dated 4-11-2011, found no misdeclaration, stating that the tariff heading covers all kinds of polycarbonate sheets, and non-mention of sheets being made out of recycled material does not amount to misdeclaration.
Undervaluation of Imported Goods:
The second allegation was that the declared price of the imported PC Sheets was lower than the international/domestic price of the raw material. The CESTAT Tribunal concluded that the charge of undervaluation was dependent on the misdeclaration charge. Since the misdeclaration was not established, the undervaluation charge also failed. The Tribunal noted that the goods were cleared after proper examination and the value was adjusted to match contemporaneous values, which was not challenged by the department.
Continuance of Criminal Proceedings Post Departmental Adjudication:
The petitioners argued that continuing the criminal complaint after being exonerated in the departmental adjudication proceedings was a gross abuse of the process of law. The Supreme Court in Radhe Shyam Kejriwal v. State of West Bengal & Anr. held that if a party is exonerated in departmental proceedings on merits, criminal prosecution on the same facts cannot continue. The High Court observed that the departmental adjudication requires a lower quantum of proof (preponderance of probabilities) compared to a criminal trial (beyond reasonable doubt). Given the exoneration in the departmental proceedings, it was deemed impossible for the department to establish the charges in a criminal trial.
Conclusion:
The High Court quashed Criminal Complaint No. 25/1/03 and the consequent proceedings against the petitioners, citing abuse of the process of law and the principles laid down by the Supreme Court in Radhe Shyam Kejriwal's case. The writ petition was allowed, and all pending applications were disposed of.
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2012 (7) TMI 1017
Issues involved:
The issues involved in this case are the rectification orders u/s Rule 3(2)(c) of the Karnataka Value Added Tax Rules, 2005 and the entitlement of the petitioner to discounts offered to customers.
Rectification Orders:
The Assessing Officer rectified the assessments for the period from April 2007 to March 2008 and from April 2008 to August 2008 in accordance with Rule 3(2)(c) of the Karnataka Value Added Tax Rules, 2005. The rectification was made by disallowing the discount offered by the petitioner to its customers as the tax invoices or sale bills did not show the discounts offered. This factual aspect is not in dispute.
Rule 3(2)(c) of the Rules:
Rule 3(2)(c) provides for allowing discounts given to customers as allowable deductions, provided the tax invoice or sale bill shows the amount allowed as discount. The validity of this rule was upheld by the Court in a previous case filed by the same petitioner. The impugned rectifications were found to be in conformity with this rule.
Division Bench Judgments:
The petitioner relied on a Division Bench judgment in State of Karnataka vs. M/s. Reliance Industries Ltd., which was considered contrary to the judgment in State vs. Kitchen Appliances India Ltd. The latter judgment emphasized that discounts must be shown in the tax invoice for the assessee to be entitled to any relief. The Court found the rectification orders to be in accordance with Rule 3(2)(c) and the precedent set by the Division Bench in the Kitchen Appliances case.
Conclusion:
The Court concluded that there was no legal infirmity in the impugned rectification orders to warrant interference under Article 226 of the Constitution of India. Therefore, the petitions were dismissed.
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2012 (7) TMI 1016
Issues involved: Appeal against order of CIT(A) regarding charging of interest u/s 234A and cross objection by assessee on limitation.
Cross Objection by Assessee:
The assessee raised grounds related to limitation and direction on charging of interest. The counsel for the assessee decided not to press the cross objection, leading to its dismissal.
Departmental Appeal - Charging of Interest u/s 234A:
The case involved a dispute regarding the period for which interest u/s 234A should be charged. The Assessing Officer initially charged interest from a different period than claimed by the assessee. The assessee cited a decision of the Hon'ble Bombay High Court to support their contention. The Assessing Officer rectified the mistake u/s 154 of the Income Tax Act, which was challenged by the assessee before the CIT(A).
Arguments and Decision:
The assessee argued that interest should be charged for a specific period based on the High Court's decision. The CIT(A) upheld the assessee's claim and directed the Assessing Officer to recalculate the interest for twenty months. The department appealed against this decision, but the Tribunal found no valid ground to interfere. The Tribunal noted the department's appeal was belated by 435 days without any application for condonation of delay, leading to its dismissal. Therefore, both the department's appeal and the assessee's cross objection were dismissed.
Conclusion:
The Tribunal upheld the CIT(A)'s decision on recalculating interest u/s 234A based on the High Court's ruling. The department's belated appeal without seeking condonation of delay resulted in its dismissal, along with the cross objection by the assessee.
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9911796707
