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2020 (10) TMI 1228 - HIGH COURT OF KARNATAKA
Winding up proceedings of Mutual fund scheme - objections to the e-voting results - Need for approval of unit-holders - validity of Regulations 39 to 40 of the Mutual Funds Regulations - majority of unit-holders on the happening of any event which in the opinion of the Trustees requires a Scheme to be wound up - duties of the Trustees under the Mutual Funds Regulations - obligation of the Trustees or Trustee Company - role of SEBI - issuance of direction to SEBI - HELD THAT:- We hold that Regulations 39 to 40 of the Mutual Funds Regulations are valid.When the Board of Directors of a Trustee company, by majority, decides to wind up a Scheme by taking recourse to sub-clause (a) of clause (2) of Regulation 39, the Trustee company is bound by its statutory obligation under sub-clause (c) of clause (15) of Regulation 18 of obtaining consent of the unit-holders of the Scheme. The consent of unit-holders will be by a simple majority. In view of the obligation of the Trustees under sub-clause (c) of clause (15) of Regulation 18, a notice as required by clause (3) of Regulation 39 can be issued and published only after making compliance with the requirement of obtaining consent of the Unit-holders.
Clause 15A of Regulation 18 of the Mutual Funds Regulations 1996 operates in a different field which has nothing to do with the process of winding up of a Scheme. Therefore, compliance with Clause 15A of Regulation 18 is not a condition precedent for winding up of a Scheme pursuant to sub-clause (a) of clause (2) of Regulation 39.
Considering the duties of the Trustees under the Mutual Funds Regulations, they perform a public duty. Therefore, when it is found that the Trustees have violated the provisions of the SEBI Act or Mutual Funds Regulations, a Writ Court, in exercise of its jurisdiction under Article 226 of the Constitution of India, can always issue a writ of mandamus, requiring the Trustees to abide by the mandatory provisions of the SEBI Act or the Mutual Funds Regulations.
In the facts of the case, for the reasons which we have recorded earlier, no interference can be made with the decision of the Trustees dated 23rd April 2020 of winding up of the said Schemes. However, the decision can be implemented only after obtaining the consent of unit-holders as required by sub-clause (c) of clause 15 of Regulation 18.
On compliance being made with sub-clauses (a) and (b) of clause (3) of Regulation 39, Regulation 40 triggers in and therefore, AMC or Trustees have no right to continue the business activities of the Schemes which will include borrowings. Similarly, from the date of publication of the notice in accordance with sub-clause (b) clause (3) of Regulation 39, AMC is disentitled to honour the redemption requests made earlier.
The copy of the Forensic Audit report produced in a sealed cover, does not contain final findings and it is specifically mentioned therein that after taking the views/responses of SEBI, AMC and Trustee company, some of the conclusions in the report may undergo a change. Hence, the said report can at best be termed as a tentative report. Hence, the same is not relevant for deciding these petitions. As the said document is not relevant, it is not necessary for this Court to go into the legality of the claim for privilege.
After receiving the final findings/report of the Forensic Auditors, SEBI is bound to consider of initiating an action as contemplated by Regulation 65, depending upon the findings recorded therein. It is the obligation of the Trustees or Trustee Company to provide copies of the minutes of the meeting held on 20th and 23rd April 2020 to the Unit-holders and no confidentiality can be attached to the said minutes of the meetings - In exercise of the powers under Section 11B of the SEBI Act, SEBI has no jurisdiction to interfere with the decision of winding up of a Scheme made by taking recourse to Regulation 39(2)(a).
ORDER:-
i) We hold that no interference is called for in the decision of the Trustees taken on 23rd April 2020 of winding up the said six Schemes;
ii) We hold and declare that the decision of the Trustees (the Franklin Templeton Trustee Services private Limited) to wind up six Schemes mentioned in paragraph-1 of the Judgment by taking recourse to sub-clause (a) of clause (2) of Regulation 39 of the Mutual Funds Regulations cannot be implemented unless the consent of the unit-holders is obtained in accordance with sub-clause (c) of clause (15) of Regulation 18. Hence, we restrain the Trustees from taking any further steps on the basis of the impugned notices dated 23rd April 2020 and 28th May 2020, till consent of the unit-holders by a simple majority to the decision of winding up is obtained by the Trustees in accordance with sub-clause (c) of Clause (15) of Regulation 18 of the Mutual Funds Regulations;
iii) It will be open for the Trustees to obtain consent of the unit-holders as provided in sub-clause (c) of clause (15) of Regulation 18 and to take further steps in accordance with clause (3) of Regulation 39 of the Mutual Funds Regulations;
iv) We hold that Regulations 39 to 41 of the Mutual Funds Regulations are legal and valid;
v) We direct the Securities and Exchange Board of India to ensure that the Forensic Auditors submits their report in accordance with Regulation 64 at the earliest. After the report is submitted by the Forensic Auditor, the Securities and Exchange Board of India or its Chairman shall examine the report and shall take a decision on the question of taking action as provided in Regulation 65 of the Mutual Funds Regulations and under SEBI Act. The decision shall be taken within six weeks from the date of the receipt of the Forensic Audit Report;
vi) We direct the Trustees to provide true copies of the Board Resolutions placed on record in sealed cover to unit-holders of the said six Schemes as and when they apply for providing copies thereof;
vii) We hold that the unit-holders are not entitled to receive a copy of the Forensic Audit Report filed on record in a sealed cover;
viii) No other relief is required to be granted in these writ petitions.
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2020 (10) TMI 1227 - MADRAS HIGH COURT
Maintainability of petition - Petitioner did not prefer any appeal (inspite of being available) before that Revisional Authority, but has instead filed this Writ Petition challenging the order passed by the Respondent - HELD THAT:- There is no acceptable explanation from the Petitioner for not having resorted to that alternative remedy provided under the statute. In this context, it must be recapitulated here that the Hon'ble Supreme Court of India in ASSISTANT COLLECTOR OF CENTRAL EXCISE, CHANDAN NAGAR VERSUS DUNLOP INDIA LIMITED AND OTHER [1984 (11) TMI 63 - SUPREME COURT] has succinctly explained the legal position relating to the exercise of discretionary powers under writ jurisdiction and held that Article 226 is not meant to short-circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article226 of the Constitution. But then the Court must have good and sufficient reason to bypass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are available are not such matters.
This Court does not express any view on the correctness or otherwise on the merits of the factual controversies involved in the matter - Petition dismissed.
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2020 (10) TMI 1226 - MADRAS HIGH COURT
Principles of Natural Justice - non-service of impugned order - case of petitioner is that it was only when coercive recovery proceedings were initiated on 26.09.2019 that he came to be aware of the passing of the assessment order - TNVAT Act - HELD THAT:- The records were called for to ascertain the veracity or otherwise of the above submission. Compilation dated 08.09.2020 contains a copy of a statement recorded at the time of inspection dated 20.10.2014 as document No.1. This reveals that the petitioner as well as his father, J.Tezoram, were in the premises during the visit. Pre-assessment notice dated 11.06.2015 appears to have been received on the same day by an individual who has signed and affixed the seal of the petitioner entity. However it is unclear as to who the person is who has received the notice - Order of assessment dated 10.09.2015 has been returned as ‘refused’ and postal cover with the aforesaid endorsement is available. The order of assessment has been served to two different addresses, and while the first order has been returned as ‘refused’, the second has been returned as ‘left’. Both acknowledgments have been placed at pages-15 and 21 of the compilation. Service is thus complete.
In view of the petitioners’ insistence that the entity is not presently functioning, revenue was directed to make a visit of the premises and file a report. An e-mail dated 07.10.2020 from the Assistant Commissioner (ST), N.S.C. Bose Road, Assessment Circle annexing photographs of the functioning entity has been received and placed on record evidencing that the assessee/petitioner entity is carrying on the same business as before from the same address and location.
There are no justification whatsoever to entertain this writ petition as the delay between 2015 and today stands unexplained. In fact, the explanation of the petitioner in regard to the delay is found to be factually incorrect - petition dismissed.
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2020 (10) TMI 1225 - ALLAHABAD HIGH COURT
Grant of Interim Bail - precarious medical condition of the accused-applicant - HELD THAT:- As per the medical report which has been taken into consideration by the Delhi High Court while granting interim bail, it appears that the accused-applicant is required some surgical treatment for his ailment and, it would be appropriate to provide interim bail for medical treatment pending this bail application for final order.
Considering the medical health of the accused-applicant, Anil Kumar Sharma involved in Case No.ECIR/06/PMLA/LKZO/2019 under Section 3/4 Prevention of Money Laundering Act, 2002, P.S. Enforcement Directorate, Lucknow Zone is released on interim bail for six weeks or till he is recovered, whichever is earlier, from the date of his release on his furnishing a personal bond of ₹ 1,00,000/- and two sureties of the like amount to the satisfaction of the Special Court (P.M.L.A.), Lucknow to get himself treated at AIIMS, New Delhi - Application allowed.
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2020 (10) TMI 1224 - ITAT BANGALORE
Disallowance of provision made for privileged leave encashment - HELD THAT:- This issue is covered against the assessee by the judgment of Hon’ble Apex Court rendered in the case of UOI and Ors Vs. Exide Industries Limited [2020 (4) TMI 792 - SUPREME COURT] as per this judgement, it was held by Hon’ble Apex Court that clause (f) in section 43B of the Income Tax Act, 1961, is valid and operative for all purposes and this disallowance was made by the AO in both the years on the basis of this clause (f) of section 43B as can be seen on page 2 of the Assessment Order for Assessment Year 2011-12 and page 3 of the Assessment Order for Assessment Year 2012-13. In view of this factual and legal position, this issue is decided against the assessee.
Disallowance of provision for Bad and Doubtful Debts under section 36 (1) (VIIa) - HELD THAT:- The details as required as per Rule 6ABA were not furnished before the AO and the Tribunal restored the matter back to the file of the CIT(A) for a fresh decision after affording reasonable opportunity of being heard to both sides. Since the facts in the present two years are similar, in the present two years also, we restore this matter back to the file of CIT(A) for a fresh decision after obtaining the remand report from the AO if the assessee files the required details before the CIT(A) in compliance of Rule 6ABA. Needless to say learned CIT(A) should provide reasonable opportunity of being heard to both sides. Accordingly, the relevant ground on this issue is allowed for statistical purposes in both the years.
TDS u/s 194A - disallowance of interest paid on bank deposits - Addition u/s 40(a)(ia) because Form No.15G / 15H were not submitted before the AO and no proof was submitted before the AO regarding filing the copy of the same before the concerned CIT - HELD THAT:- An opportunity should be given to the assessee to bring on record the respective Form No.15G/15H received by the assessee and assessee should also bring evidence on record regarding submission of those Form No.15G/15H before the concerned CIT even if such submission before CIT is delayed submission. We direct he AO that if the assessee brings such evidences on record and if it is found that Form No.15G/15H were available with the assessee and copy of the same was submitted with concerned CIT even if belatedly, assessee will get the benefit of availability of such Form No.15G/15H. Hence, we restore this matter back to the file of the AO for a fresh decision
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2020 (10) TMI 1223 - ITAT DELHI
Validity of Reopening of assessment - invalidate sanction under section 151 - Addition u/s 68 - HELD THAT:- Wrong Section have been mentioned in the reasons and some of the Columns material for re-assessment are left ‘Blank’ and that Addl. CIT did not record how he was satisfied on wrong facts and wrong reasons would clearly show that reopening have been done in the matter without application of mind based on wrong facts and as such the reopening of the assessment cannot be justified. It may also be noted here that the Learned Addl. CIT, Range-12, Delhi while granting sanction under section 151 of the I.T. Act has mentioned in the reasons that “Yes, I am satisfied that this is a fit case for reopening under section 147.”
Such a satisfaction was not found valid by ITAT, Delhi Benches in the cases of Shree Balkishan Agarwal Glass Industries Ltd., Delhi [2020 (9) TMI 1153 - ITAT DELHI] and M/s. Behat Holdings Ltd., Delhi vs., ITO, Ward-4(3), New Delhi[2020 (1) TMI 1358 - ITAT DELHI] based on several decisions of the Hon’ble High Courts. Thus, the issue is covered against the Revenue by the above decisions of the Tribunal as well. The A.O. has thus no justification to assume jurisdiction under section 147 of the I.T. Act, 1961, in a Lawful manner and as such the same are liable to be quashed. - Decided in favour of assessee.
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2020 (10) TMI 1222 - GUJARAT HIGH COURT
Provisional Attachment of property - HELD THAT:- Let Notice be issued to the respondents returnable on 19.10.2020.
On the returnable date, we expect the respondent No.5 to indicate by way of an appropriate reply as to his reasonable belief to take the decision to pass an order of provisional attachment of the property in exercise of his powers under Section 83 of the GST Act.
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2020 (10) TMI 1221 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI, COURT - II
Misappropriation of property - petitioners are are the shareholders in the first Respondent company and together they are holding 37% of shares of the issued capital - allegation that the Respondents are misappropriating the property of the first Respondent company and in case the property is sold and consideration is taken by the Respondents in their personal accounts, they will deprive the Petitioners of their rights - HELD THAT:- The petitioners have made out prima facie case, balance of convenience is in the favour of Petitioners and in case the property of the Respondent No. 1 is sold, the same will cause irreparable loss to the Petitioners and Respondent No. 7. This cannot be compensated in terms of money.
The Respondents no. 2 to 7 are restrained from selling property of the Respondent no. 1. till further orders. Besides this, the Respondents are also directed not to change the share holding pattern of the first Respondent company without seeking prior permission from this Tribunal - List the matter on 12th November 2020.
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2020 (10) TMI 1220 - SUPREME COURT
Review Petition - proceedings under Signature Not Verified Digitally signed by ARJUN BISHT - HELD THAT:- We request the High Court to take up the review petition in the meantime. In the event that the High Court considers it appropriate to take up and dispose of the main writ petition, it is entirely at liberty to do so.
No coercive steps shall be taken against the petitioners till the next date of hearing - List the Special Leave Petition on 26 October 2020.
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2020 (10) TMI 1219 - GUJARAT HIGH COURT
Approval of revised rates of license fees for the advertising hoardings in private properties - collection of license fees in garb of tax for the advertisement hoardings in the private properties - HELD THAT:- The petitioners have consistently paid the license fees on the advertisement hoardings in a private property as per the provision of Section 386(2) of the GPMC Act prior to 1992 onwards and at no point of time the petitioners have challenged the power to levy the license fees under the provisions of Section 386(2) of the GPMC Act. It is also pertinent to note that in the year 2012, the petitioners agreed for levy of the license fees by enhancing the rate by 10% every year after initial embargo of 5 years. Thus, the petitioners can be said to have waived the right to challenge the power to levy of fees for the license for outdoor advertising hoardings in private properties.
When an Article of Constitution is an enabling provision, it does not mean that the State is obligated to provide for such a statute and on that ground existing laws could be stuck down only on that premise - Section 386(2) of the GPMC Act is in operation since 1949 and the challenge thereto being ultra vires to the Articles of the Constitution would result in detriment to the public interest since the amount of license fee being collected by the Municipal Corporation along with the other amount collected by way of tax or otherwise are always being utilized for the benefit of people at large.
The Court should be conscious of the position as to the extent of public interest involved when the provisions operate the field as against the prevention of such operation. Even if the writ court is of the view that the challenge raised requires to be considered, then again it will have to be examined, while entertaining the challenge raised for consideration, whether it calls for prevention of the operation of the provisions in the larger interests of the public. An attempt has been made only to set out some of the basic consideration to be borne in mind by the writ court and the same is not exhaustive. In other words, the writ court should examine such other grounds for consideration while considering a challenge on the ground of vires to a statute or the provision of law made before it for the purpose of entertaining it and when such writ petitions are entertained, those petitions should be disposed of as expeditiously as possible and on a time-bound basis, so that the legal position is settled one way or the other.
On bare perusal of Sub-section-2 of Section-386 of the GPMC Act, it cannot be said that the Commissioner has excessive delegation because license fees which may be charged by the Commissioner shall come into effect only after the sanction of the Corporation and not otherwise. Thus, in effect sub-section-2 provides for procedure and limits in form of checks and balances to control the power conferred upon the Commissioner to levy the fees for the licenses to be issued as per Subsection-1 of Section 386 - It is also pertinent to note that Subsection-2 starts with the words “except as may otherwise be provided by and under this Act”, which means that it is an exception carved out from other provisions of the Act providing for any fees of license which may be issued under Sub-section-1 of Section 386. The Commissioner of the Municipal Corporation is therefore, empowered to levy fee at such rate from time to time which may be fixed but such power is subject to the sanction of the Corporation.
The fees to be charged as per the provisions of Sub-section-2 of Section 386 cannot be said to be having unbridled or unfettered power. It is also evident from the materials on record that the levy of fees to be charged for advertisement hoardings in private properties does not become effective immediately when the Commissioner proposes unless and until the same is approved by the Standing Committee which in turn is required to be approved and sanction by the Corporation as provided under Sub-section-2 of Section-386 of the GPMC Act.
The provisions of Sub-section-2 of Section 386 of the GPMC Act is constitutionally valid as per Etnry-5 read with Entry-66 of list-II of the VIIth Schedule and deletion of Entry-55 of list-2 cannot be said to have any effect on the power to levy fees as provided by Section 386(2) of the GPMC Act - the provisions which are inconsistent with any of the provision of part-IX of the Constitution of India including Article 243X would be required to be amended but the provision contained in Section 386(2) of the GPMC Act cannot be said to be inconsistent with any of the provision of part-IX of Constitution of India and therefore, Article 243ZF would not come into play in the facts of the case.
The submissions of the petitioner that provision of Sub-section-2 of Section 386 suffers from excessive delegation and provided for unguided and uncanalised power to the Commissioner as there is no procedure for limits for imposition of fees in absence of any guideline is concerned, it is settled position of law that the guidelines are required to be prescribed by legislature in case where there is levy of tax and not in case where there is imposition of fees.
If the State Government is of the opinion that execution of any resolution or order of the Corporation for any of other Municipal Authority or officer subordinate thereto for doing of any act, which is about to be done or has been done for and on behalf of the Corporation is in contravention of excess of powers conferred by the GPMC Act or any other law for the time being in force or such action is likely to lead breach of the peace etc., then the State Government may by order in writing suspend the execution of order or prohibit doing of any such act. Therefore, even the sanction of the Corporation as provided under Sub-section-2 of Section 386 is subject to the control of the State Government as provided under Section 451 of the GPMC Act. In view of the above, it cannot be said that there is excessive delegation by legislature upon the Commissioner for determination of the levy of the fees under Sub-section-2 of Section 386 of the GPMC Act.
These writ applications fail and are accordingly rejected subject to the right of the petitioners to challenge the quantum of license fees before the State Government as per the provisions of the GPMC Act in accordance with law. The respondent State Government is therefore, directed to consider such challenge if made by the petitioners without being influenced in any manner by what has been stated hereinabove and decide such challenge as expeditiously as possible.
Application disposed off.
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2020 (10) TMI 1218 - ITAT CUTTACK
Addition on account of provision for dam maintenance - allowable expenditure - assessee follows mercantile system of accounting as per which liability for expenses can be recognized and claimed only when the liability crystallizes - HELD THAT:- CIT-A observed that though the expenditure have been incurred by the assessee for dam maintenance, it was kept under provision account for settlement with the government against amounts receivable from the Government - CIT(A) relying on the decision of this Bench of the Tribunal in assessee's own case allowed the provision for dam maintenance. - Decided against revenue.
Disallowance of depreciation - assessee did not produce the details of the assets on which depreciation has been claimed @ 25% - HELD THAT:- Assessee company appearing before the Ld. A.O. vide its written submission explained that the miscellaneous assets as aforesaid have been considered as plant and machinery and accordingly the depreciation as provided under the I.T. Rules for the plant and machinery have been claimed by the assessee on such assets - A.O. without appreciation the explanation and observing that in absence of the break up of details of such assets not being furnished has disallowed the claim of depreciation on such assets. In this connection, it is pertinent to state here that during the previous year i.e., relevant to the Asst. Year 2004-05, no disallowances as called for on these assets. Since presently the assessee has explained the particulars of assets and their classification under the head plant and machinery, the assessee company is entitled for depreciation as claimed. Under the circumstances the disallowance on this account are not sustainable on fact and law - Decided in favour of assessee.
Addition towards provision for guarantee commission - not an allowable expenditure - CIT(A) held that the claim of guarantee commission is in accordance with the business requirement and as such allowable - HELD THAT:- As per letter No. SG-21/07/3810/F dt. 29.1.2008 relating to the Dy. Accounting General (Commercial) from the Addl. Secretary to the Govt. of Odisha, the guarantee commission could not be reduced since the guarantee amount given by the Government of Odisha has not been reduced. The appellant is required to pay the guarantee commission on the maximum amount of guarantee irrespective of the loan outstanding as long as the guarantee amount itself has not been reduced. In view of the same, the claim of guarantee commission is in accordance with the business requirement and as such allowable. The addition made by the AO in this regard is deleted - Decided against revenue.
Provision for Leave Encashment - HELD THAT:- Hon'ble Calcutta High Court in the case of Exide Industries Ltd. Vs. Union of India, [2007 (6) TMI 175 - CALCUTTA HIGH COURT] the Hon'ble Calcutta High Court has struck down the provisions of Section 43B(f) of the Act as being arbitrary and unconscionable. Thereafter the Hon'ble Apex Court in case of Exide Industries Ltd. [2009 (5) TMI 894 - SC ORDER] has stayed the operation of the judgment of Hon'ble Calcutta High Court. Considering the above position, the Tribunal on the similar issue in case of Ernst and Young P. Ltd. [2015 (3) TMI 931 - ITAT KOLKATA] has restored the matter to the file of AO for fresh adjudication - Respectfully following the order of the Tribunal and we restore this issue to the file of AO to examine and allow the claim of the assessee and we allow this ground of appeal of the assessee for statistical purposes.
Non-disclosure of dues from DOWR - HELD THAT:- Assessee has already conceded to the addition made by the AO for which the CIT(A) has upheld the action of AO. Accordingly, we do not see any good reason to interfere with the findings recorded by the CIT(A) in this regard.
Prior Period Expenses - HELD THAT:- As decided in [2017 (9) TMI 1902 - ITAT CUTTACK] we restore the matter to the file of AO who shall examine the genuineness and crystallisation of the expenses in the financial year and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information.
Non-disclosure of interest on advance to contractor - HELD THAT:- Assessee during the course of hearing submitted that since the advance was given to contractor for capital construction by the assessee, therefore, the same deserves to be allowed. In view of the above, we restore the issue to the file of AO and direct the AO to examine the nature of advance as to whether it was given during the period of construction before commencement of commercial production of the assessee. If it is found that it was given during the construction period for the capital asset construction, the assessee's contention may be accepted. Accordingly, this ground of appeal of assessee is allowed for statistical purposes.
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2020 (10) TMI 1217 - BOMBAY HIGH COURT
Transitional Credit - submission of declaration in Form GST TRAN-1 on 27th December, 2017 in time - vires of Articles 14, 265 and 300-A of the Constitution of India - HELD THAT:- In this case, we are not examining the issue whether the Petitioner is entitled to VAT tax credit as claimed by the Petitioner which will be examined by the authorities. What we are concerned with is that despite the admitted successful filing of Form TRAN-1 by the Petitioner on 27th December, 2017, the request of the Petitioner for transitioning of credit has not been approved by the ITGRC merely on the basis that there were no technical glitches on the GSTN side. There is no further explanation or clarification or evidence on the issue by the Respondents. Even the learned Sr. Counsel for the Respondents has only reiterated this stand during his submission.
The whole objective of digitization is to convenience the tax payers and not to harass them. We are conscious that the GST system is still evolving in its implementation. We are of the view that merely because there were no technical glitches in the GSTN with respect to the Petitioner’s TRAN-1 which was admittedly filed in time, the claim of the Petitioner, if it was otherwise eligible in law, cannot be rejected for no apparent fault on the part of the Petitioner. This cannot be the objective of the GST system or digitisation. Such a situation cannot be countenanced as it would be wholly unfair and unjust - this is a fit case for invocation of our writ jurisdiction.
The Respondents are directed to consider the case of the Petitioner and after looking into the merits of the claim and physically or otherwise verifying the amount of VAT as claimed by the Petitioner take such actions as may be necessary for transitioning the credit of such amount into the Petitioner’s credit ledger/ electronic credit ledger within four weeks from the date of this order.
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2020 (10) TMI 1216 - PUNJAB & HARYANA HIGH COURT
Grant of regular bail - Sections 132(1)(b)(c) of the Punjab Goods and Service Tax Act - HELD THAT:- The criminal trial for the offences under Section 132 of the PGST Act, 2017 as also the arrest under Section 69 are without jurisdiction, having no backing of the constitutional provisions - The petitioner has been in custody for a period of 4 months and 14 day. The trial will take time to conclude, especially due to prevailing situation of Covid-19.
The moot question of law regarding the stage of initiation of prosecution under the Finance Act is involved; complaint is triable by a Magistrate; the petitioner is not required for further custodial investigation - Thus, the petition is allowed and the petitioner is ordered to be released on regular bail to the satisfaction of the learned trial Court/Duty Magistrate, subject to him furnishing bail/surety bonds.
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2020 (10) TMI 1215 - GUJARAT HIGH COURT
Confiscation of vehicle alongwiith the goods - owner/driver/person in charge of the goods conveyance Shri has not tendered any documents for the goods in movement - defective documents - E-Way bill not tendered - HELD THAT:- The writ applicant is engaged in the business of Tobacco etc. The writ applicant holds registration under the GST. The writ applicant received an order for supply of 14694 Kgs of Tobacco from a firm situated at Meghalaya running in the name of M/s. J.J. Exports & Imports.
A show-cause notice was issued to the writ applicant in Form GST MOV-10 calling upon the writ applicant to show-cause as to why the goods and the conveyance should not be confiscated under Section 130 of the GST Act, 2017. It appears that before the writ applicant could respond to the notice issued in Form GST MOV-10, the final order of confiscation in Form GST MOV-11 came to be passed on the very same date, i.,e, 25th July, 2020 - It appears from the materials on record and the facts recorded above that no opportunity of hearing was given by the authority concerned to the writ applicant to meet with the notice issued in Form GST MOV-10.
The matter is remitted to the authority concerned for giving an opportunity of hearing to the writ applicant - Appeal allowed by way of remand.
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2020 (10) TMI 1214 - GUJARAT HIGH COURT
Removal of Provisional attachment of Bank Accounts - Section 83 of the GST Act, 2017 - HELD THAT:- Section 83 talks about the opinion which is necessary to be formed for the purpose of protecting the interest of the government revenue. Any opinion of the authority to be formed is not subject to objective test. The language leaves no room for the relevance of an official examination as to the sufficiency of the ground on which the authority may act in forming its opinion. But, at the same time, there must be material based on which alone the authority could form its opinion that it has become necessary to order provisional attachment of the goods or the bank account to protect the interest of the government revenue. The existence of relevant material is a precondition to the formation of opinion. The use of the word “may” indicates not only the discretion, but an obligation to consider that a necessity has arisen to pass an order of provisional attachment with a view to protect the interest of the government revenue. Therefore, the opinion to be formed by the Commissioner or take a case by the delegated authority cannot be on imaginary ground, wishful thinking, howsoever laudable that may be. Such a course is impermissible in law.
In the absence of any cogent or credible material, if the subjective satisfaction is arrived at by the authority concerned for the purpose of passing an order of provisional attachment under Section 83 of the Act, then such action amounts to malice in law. Malice in its legal sense means such malice as may be assumed from the doing of a wrongful act intentionally but also without just cause or excuse or for want of reasonable or probably cause. Any use of discretionary power exercised for an unauthorized purpose amounts to malice in law. It is immaterial whether the authority acted in good faith or bad faith.
The order of provisional attachment of the five bank accounts of the writ applicant under Section 83 of the Act is quashed and set aside - Application allowed.
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2020 (10) TMI 1213 - SC ORDER
TP Adjustment - ALP of the guarantee commission charges provided by the Respondent Co. - Disallowance u/s 36(1)(iii) - acquisition of business by way of investing into shares of that company through either Special Purpose Vehicle or directly cannot be considered to be ordinary event of the business and therefore, cannot be termed as expenditure incurred for the purpose of assessee’s business, which is providing ITES services - HELD THAT: Special Leave Petitions are dismissed on the ground of delay.
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2020 (10) TMI 1212 - GUJARAT HIGH COURT
Increase the professional fees for filing of income tax return of each companies under liquidation - HELD THAT:- Pursuant to the request letter dated 05.09.2020 to the Office of Official Liquidator regarding enhancement of professional fees for filing income tax return of various companies in liquidation from present rate i.e. ₹ 1300/- to ₹ 2500/- per company per assessment year, accordingly, learned advocate for the applicant has made a request to revise the professional fees.
Having heard submissions made by learned advocate Mr. Pathik Acharaya and after perusal of the order passed the Co- ordinate Bench on 03.05.2013, and having regard to provisions incorporated in Income Tax Act, prayer appears to be reasonable and deserves to be partly accepted.
Professional fees for filing income tax of each company in liquidation is fixed at ₹ 2000/-. Official Liquidator is permitted to make payment as per facts mentioned in para 4 to 6 of this report.
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2020 (10) TMI 1211 - MADRAS HIGH COURT
Disallowance u/s 14A read with Rule 8D - whether there is no exempt income received even if the investments have been made in the subsidiary company of the Assessee? - HELD THAT:- Tribunal found that the investments were made in by their assessee and this cannot be construed that investment is made for earning exempt income.
Tribunal rightly held that the provisions of Section 14A of the Act would not stand attracted. Therefore, the order passed by the Tribunal requires to be confirmed.- Decided in favour of assessee.
Section 43A Applicability - Assessee is acquiring the assets in India and in consequence of loan taken in Indian currency for acquisition of such asset which was converted into foreign currency loan increasing the liability as expressed in Indian Currency - HELD THAT:- Tribunal decided the said position against the Revenue in the assessee's own case [2020 (10) TMI 1164 - MADRAS HIGH COURT] - Decided in favour of assessee.
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2020 (10) TMI 1210 - MADRAS HIGH COURT
Computation of the ALP - Reason for selection by CASS (Computer Aided Search Selection) - approval of the PCIT for reference of the matter to the TPO - HELD THAT:- The petitioners’ submission to the effect that the reason for selection of scrutiny by CASS only involves a numerical reconciliation is, in our view an over simplification of the reason stated for selection. Perhaps the officer might have been more detailed in the choice of words employed so as to specifically refer to the issue of total employee cost. Non-reference to this is not fatal as the reason for selection by CASS has been produced and placed on record by the Officer while seeking approval of the PCIT for reference of the matter to the TPO.
After the expiry of the interim protection by this Court on 29.03.2019 the Assessing Officer has issued a show cause notice dated 11.10.2019 in response to which the petitioner has replied on 23.10.2019 enclosing various details on the computation of the ALP as sought for by the Officer. The affidavit filed in support of the writ petition however, is silent in regard to these facts. The petitioner has thus not only cooperated and participated in the conduct of assessment but has also filed objections before the DRP that are pending disposal. WP disamissed.
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2020 (10) TMI 1209 - MADRAS HIGH COURT
Capital gain computation - adoption of stamp duty value fixed by the DRO (Stamps) - section 50C applicability - Whether the stamp duty value/guideline value as on the date of presentation of the sale document for registration is relevant for the provisions of Section 50C and not the enhanced value determined under the Stamp Duty Laws subsequently? - HELD THAT:- Sub Registrar entertained the document for registration, did not accept the value computed at ₹ 400/- per square feet for the purpose of calculating the Stamp duty payable under the Indian Stamp Act on the said deed of conveyance, but determined the value of the property at ₹ 555/- per Square feet. Unfortunately, the Assessing Officer, while reopening the assessment, took note of this figure namely ₹ 555/- per square feet and recomputed the total sale consideration.
The recomputation of the total sale consideration based on the higher value fixed by the Sub Registrar is for the purposes of computing Stamp duty is wholly erroneous. - Decided in favour of assessee.
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