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Showing 221 to 240 of 1415 Records
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2023 (4) TMI 1196
Levy of Service tax - Liquidated damages received by the appellant for tolerating the delay - amounts to declared service within the meaning of Section 66E (e) of Finance Act or not - HELD THAT:- The assertion of the Learned Advocate for the appellant is found to be correct since a more or less similar issue has been considered and settled in favour of the assessee.
In the order in the case of M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI], it is found that the Learned Delhi Bench has analysed the scope and ambit of Sections 65B (44), 66E (e) and 67 (1) of the Act and they have also analysed and applied various decisions of the Hon’ble Apex Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT], UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] and FATEH CHAND VERSUS BALKISHAN DAS [1963 (1) TMI 46 - SUPREME COURT] and thereafter, has concluded that the view of the Principal Commissioner therein that the penalty amount, forfeiture of earnest money deposit and liquidated damages received by the appellant therein towards “consideration” for “tolerating an act” as being amenable to Service Tax under Section 66E (e) of the Finance Act, was not sustainable.
The issue is required to be answered in favour of the assessee, for which reason the impugned order cannot sustain - Appeal allowed.
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2023 (4) TMI 1195
Classification of services - business auxiliary service - commission paid to foreign agents - reverse charge mechanism - benefit of exemption under Notification No. 14/2004-S.T. dated 10.09.2004 - HELD THAT:- The assertion of the Learned Advocate for the appellant is found to be correct, as a more or less similar issue has been considered in the light of the very same Notification No. 14/2004-S.T. dated 10.09.2004 by this very Bench in the case of M/s. Texyard International [2015 (8) TMI 794 - CESTAT CHENNAI] where it was held that The exemption of service tax under BAS was allowed in relation to four industries namely agriculture, printing, textile processing and education. Therefore, the appellant being textile industry, it is covered under the category "textile processing" in the notification.
The liaising with customers and getting export orders is itself a ‘procurement of service’ within the meaning of (a) under Notification No. 14/2004 and the same would also amount to provision of service on behalf of the client as per (c) of the above Notification.
The findings arrived at by the lower authority that the activities of the foreign agents would not amount to any taxable service under Notification No. 14/2004, cannot be agreed upon.
The denial of the benefit of exemption under Notification No. 14/2004 by the lower authority is not sustainable, for which reason the same is set aside - Appeal allowed.
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2023 (4) TMI 1194
Classification of Services - mandap keeper service or not - appellant provides services in relation to birthday parties, kitty parties and marriage parties and has the ability to arrange parties for a group comprising between 700 to 800 people - period 2008-2009 to 2011-2012 - demand has been calculated on the basis of daily receipt and expenditure sheet for the disputed period even though the appellant had explained that all the entries did not relate to appellant company as some of the entry related to family members - misreading of statements - invocation of extended period of limitation - suppression of facts or not - HELD THAT:- A mandap keeper is a person who allows temporary occupation of a mandap for a consideration for organizing any official, social or business function. ‘Mandap’ means any immovable property and includes any furniture, fixtures, light fittings and floor covering let out for a consideration for organizing any official, social or business function. Any service is provided or to be provided to any person by a mandap keeper in relation to the use of mandap in any manner would be taxable under section 65(105)(m) of the Finance Act.
A Circular dated 23.08.2007 issued by the Central Board of Excise and Customs clarifies that halls or rooms let out by hotels/restaurant for a consideration for organizing any official, social or business function would be covered under the definition of mandap and such hotels and restaurant would be covered within the scope of mandap keeper. Accordingly, service tax would be leviable on services provided by hotels and restaurant in relation to letting out of halls or rooms for organizing any official, social or business function.
The defence taken by the appellant that it was operating hotels/ restaurant and serving food on per plate basis was not accepted by the Commissioner in view of the categorical statement of the manager (operations) and the director of the appellant, as also the records resumed by the investigating officers under the panchnama dated 24.12.2011 containing bills relating to mandap keeper service. The contention of the appellant that the documents which formed the basis of the order passed by the Commissioner were not relied upon by the department cannot also be accepted for the reason that Annexure A to the panchnama clearly contains the description of the said documents. The finding recorded by the Commissioner in this regard, therefore, does not suffer for any infirmity.
It is clearly a case where the appellant had suppressed material facts on the department in order to evade payment of service tax and, therefore, the extended period of limitation was correctly invoked under the proviso to section 73(1) of the Finance Act. The imposition of the penalty and interest by the Commissioner in the impugned order also does not suffer from any illegality.
Appeal dismissed.
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2023 (4) TMI 1193
Valuation of manufactured goods - Change in Retail Sale Price (RSP) - existing retail sale price of Rs. 2.00 discontinued permanently and restored sales price of Rs. 1.50 with effect from 08.04.2012 - Revenue confirmed charges of the show cause notice and demanded Central Excise duty by considering that the said three machines operated for manufacture of goods having RSP of Rs. 1.00, Rs. 1.50 and Rs. 2.00 in the month of January 2012 and April 2012 - Revenue held that the appellant did not file declaration showing balance stock lying in the factory for the discontinued retail sale price hence, it was not considered as permanently discontinuation of existing retail sale price - penalty under Section 11AC of the Central Excise Act, 1944.
HELD THAT:- The appellant proposed to avail the option of 4th proviso to Rule 9 of Pan Masala Packing Machines (Capacity Determination and Collection of duty) Rules 2008 - From 4th proviso to Rule 9, the manufacturer is allowed to permanently discontinue the goods of existing retail sale price or commence a new retail sale price during the month. In such case, monthly duty payable shall be re-calculated pro-rata on the basis of total number of days in that month and the number of days remaining in that month counting from the date of such discontinuation or commencement and the duty liability for the month shall not be discharged.
The entire case of the department is that since the appellant have changed the retail sale price twice i.e. one in January, 2012 and second in April, 2012, the appellant has not permanently discontinued the manufacturing of goods of existing retail sale price. As per the Adjudicating Authority, only when the retail sale price is changed permanently, the appellant can be eligible for pro-rata duty on the reduced retail sale price whereas in the present case, since the retail sale price was reintroduced, the change in retail sale price was not permanently made. Hence, the 4th proviso to Rule 9 is not applicable in the appellant’s case.
From the careful reading of above 4th proviso to Rule 9 of Pan Masala Packing Machine Rules, it is observed that the term ‘permanently’ ‘discontinues’ or ‘commences’ is in respect of a particular month wherein the new retail sale price is discontinued or commenced, from which it is clearly inferred that the term ‘permanently’ does not mean that the discontinuation or commencement of new retail sale price should be once forever. It is clear that the discontinuation or commencement of new retail sale price should be once in a month and in the said month the retail sale price should not be changed again in the same month, connotes to the term ‘permanently’. In the present case either commencement or discontinuation of a particular retail sale price was made only once in particular month i.e. in the month of January, 2012 or in April 2012. The Adjudicating Authority has wrongly interpreted the 4th proviso to construe that ‘permanently’ discontinuation or commencement of retail sale price means once a new retail sale price is commenced or discontinued the same cannot be re-introduced or discontinued ever in future - The proviso clearly suggests that the action of permanent discontinuation or commencement of new retail sale price during the month is for the purpose of calculation of pro-rata duty for that particular month. Therefore, the term permanently is clearly related to a particular month and not forever as contemplated by the Adjudicating Authority in his adjudication order. Therefore, we are of the clear view that since in the present case appellant have changed retail sale price either by commencement or discontinuation only once in the month of January, 2012 and April, 2012 it cannot be said that the appellant have not discontinued or commenced the new retail sale price permanently in the respective months. Therefore, on this count the Adjudicating Authority’s contention is clearly not acceptable.
Revenue also demanded duty in only one month i.e. January, 2012 and April, 2012 whereas if the Revenue stick to interpretation of term ‘permanently’ then the differential duty for the months of February, 2012, March, 2012 and even for May, 2012 should have been demanded. This itself establish that permanent discontinuation or commencement of one retail sale price means permanent in a particular month, hence the same was not violated in the present case for the reason that in the month of January, 2012 or April, 2012 the retail sale price was changed only once in the respective month, hence the said change was permanent in that particular month. Accordingly, the condition of 4th proviso to Rule 9 of PMPM Rules was scrupulously complied with by the appellant - there is no doubt that the term ‘permanently’ ‘discontinuation’ or ‘commencement’ of retail sale price must be considered in a particular month and not otherwise - the terms ‘permanently’ in the 4th proviso to Rule 9 was not violated by the appellant.
Third proviso to Rule 9 provides that a manufacturer permanently discontinue manufacturing of goods of existing retail sale price or commence manufacturing of goods of new retail sale price during the month. The appellant had discontinued retail sale price Rs. 1.50 since January 2012 which has been accepted by the Revenue for the month of February and March 2012 therefore, findings of the Revenue that no intimation for discontinuation permanently is factually incorrect - the double standard of the same authority cannot be accepted. It is also noted that the appellant permanently discontinued retail sale price Rs. 2 with effect from 08.04.2012 thereafter they did not manufacture the notified goods having retail sale price Rs. 2.00 in the same month which demonstrates that the appellant permanently discontinued the retail sale price Rs. 2.00. Therefore, the Revenue ought to have accepted the duty payment on pro-rata basis in terms of 3rd proviso read with 4th provisoto Rule 9.
The appellant have not filed declaration under Rule 13(5) of Pan Masala Rules, 2008 inasmuch as the non-declaration of closing stock of notified goods, we find that merely by non-filing of declaration under Rule 13(5) the benefit of pro-rata duty on retail sale price as per 4th proviso to Rule 9 cannot be denied. It is not the case of the department that the appellant have manipulated the stock. The stock of the finished goods was very much recorded in the records of the appellant and the same was neither altered nor manipulated - The Revenue has not disputed the correctness of the stock in the appellant’s factory which was recorded in the records. Due to this procedural lapse, the benefit of pro-rata based duty in terms of 4th proviso read with 3rd proviso, cannot be denied.
The differential duty confirmed by the lower authority is not sustainable. As regards the Revenue’s appeal which is seeking imposition of penalty under Section 11AC for confirmation of demand of duty, since the duty demand itself is not sustainable, there is no question of any penalty, hence the Revenue’s appeal has no substance - Appeal of assessee allowed.
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2023 (4) TMI 1192
Default in payment of duty - constitutional validity of Rule 8(3A) of CCR - Wilful mistake or not - HELD THAT:- The issue is no more res integra and is squarely covered by the judgement of the Hon’ble Calcutta High Court in the case of M/S. GOYAL MG GASES PVT. LTD VERSUS UNION OF INDIA & OTHERS [2017 (8) TMI 1515 - CALCUTTA HIGH COURT], wherein it is categorically held that when Rule 8 (3A) is declared ultra vires by the different High Courts then the Revenue cannot take a different stand contrary to the said judgements. The Hon’ble Court further declared Rule 8(3A) as invalid which is not stayed by the Hon’ble Supreme Court.
The Hon’ble Gujarat High Court in the case of INDSUR GLOBAL LTD. VERSUS UNION OF INDIA & 2 [2014 (12) TMI 585 - GUJARAT HIGH COURT] has declared the words “without utilizing Cenvat Credit” under Rule 8(3A) as ultra vires which means that the assessee can discharge duty by utilizing Cenvat Credit which is what exactly has been done in the instant case by the Appellant - the said judgment has been followed by the Hon’ble Calcutta High Court in the case of Goyal MG Gases Pvt. Ltd. v. UOI which is not stayed by the Hon’ble Supreme Court. The Hon’ble Calcutta High Court in the said case, has declared the provisions of Rule 8(3A) ibid as invalid and further has held that the Revenue cannot take a different stand and parity has to be extended to the assessee.
The demand in the instant case has been raised for contravention of Rule 8(3A) ibid restricting utilization of Cenvat credit during the period of default which provision has been declared ultra vires/invalid by Court, hence the demand cannot be sustained and the Appeal, thus, succeed on this count.
Appeal allowed.
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2023 (4) TMI 1191
Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT:- The issue involved in this writ petition is squarely covered by a decision of this Court in M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER & COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [2019 (2) TMI 1850 - MADRAS HIGH COURT] wherein the identical issue was considered and it was held that The Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the ‘C’ forms from the websites as the same stand blocked from use. Upon enquiry with the Assessing Authorities, they have been informed that the benefit of the decision in M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) [2018 (10) TMI 1529 - MADRAS HIGH COURT] Ltd can be extended only to those dealers in that are party to the decision.
Petition allowed.
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2023 (4) TMI 1190
Omission of the 2nd respondent-Tahsildar in entertaining Form A application submitted by the petitioners for re-assessment of rate of Basic Tax on land and for making necessary entries in the Basic Tax Register - HELD THAT:- This Court has considered the issue of reassessment of land tax on the basis of the orders obtained under the Kerala Land Utilisation Order, 1967 in the judgment in MARY ABRAHAM VERSUS STATE OF KERALA AND ORS. [2020 (3) TMI 1445 - KERALA HIGH COURT]]. This Court held that once enabling order is passed under Rule 6(2) of the Kerala Land Utilisation Order, 1967 permitting conversion of the land, then the earlier entries in the BTR showing the land as Nilam, Paddy Land, etc. will become superfluous and redundant and the competent Revenue officials like the Tahsildar are obliged under law to make a fresh assessment of the property under Section 6A of the Kerala Land Tax Act, 1961.
As the nature of the land of the petitioners has been permitted to be changed pursuant to passing of a statutory order under the Kerala Land Utilisation Order, 1967, the competent authority is bound to re-assess the rate of Basic Tax in respect of the land and to make necessary entries in the Basic Tax Register, if necessary, after verifying the veracity/genuineness of the permission obtained under the Kerala Land Utilisation Order, 1967 produced by the petitioners.
There will be a direction to the 1st respondent-Revenue Divisional Officer to consider Ext.P6 Form-5 application submitted by the petitioners and take a decision thereon, within a period of one month - Application disposed off.
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2023 (4) TMI 1189
Auction - company declared as a sick company - disposal of assets for recovery of dues - reserve price in the auction notice in terms of Section 21(c) of the Act, 1985 not indicated - absence of a competitive bidding - HELD THAT:- The process was initiated by the Operating Agency (IDBI) to sell the subject assets of the sick industrial company (BCI) in terms of the order passed by the BIFR in exercise of its power under Section 20(4) of the Act, 1985. Pursuant thereto, the Operating Agency was under an obligation to obtain the valuation report of the subject property and after due assessment has to arrive at the reserve price for the sale of the property in terms of Section 21(c) of the Act, 1985 and thereafter has to proceed with a procedure known to law while adopting a method for sale of the assets by public auction or by inviting tenders or in any other manner specified and for the manner of publicity therefor in terms of Section 18(2)(k) of the Act, 1985.
Indisputedly, in the instant case, it has not been placed on record if there was any valuation report assessed by the Operating Agency from the approved valuer of the subject property and, at the same time, the reserve price of the subject property was never disclosed/indicated in the first place when the public notice came to be notified on 24th May, 2004 inviting offers from the interested parties for Block IV. Thus, the very procedure adopted by the Operating Agency appears to be defective at its very inception - The purpose of auction (open or close format) is to get the most remunerative price and giving opportunity to the intending bidders to participate and fetch higher realizable value of the property. If that path is cut down or closed, the possibility of fraud or to secure inadequate price or underbidding would loom large. In the given circumstances, it is the duty of the Court to exercise its discretion wisely and with circumspection and keeping in view the facts and circumstances in each case.
The question of locus was never raised by the appellants before the High Court and once the subject issue has been looked into by the High Court on merits and we too are persuaded that order of the AAIFR confirming the bid pursuant to its order impugned dated 1st April, 2005 is not legally sustainable, we do not find any justification at this stage to non-suit the claim of the appellants prayed for in Civil Appeal No.10127 of 2011.
The money deposited by the appellants in Civil Appeal No. 10128 of 2011 shall be refunded in terms of the order of the High Court impugned dated 5th February, 2010.
Appeal dismissed.
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2023 (4) TMI 1188
Smuggling - Heroin - reliance placed upon the confessional statement of the appellant recorded under Section 67 of the NDPS Act before the officers of the NCB who are invested with the powers under Section 53 of the NDPS Act - reliability of such statements - HELD THAT:- Admittedly, the confessional statements were made by the accused to an officer empowered under Section 53 of the NDPS Act and hence, in view of the bar of Section 25 of the Evidence Act, the confessional statements will have to be kept out of consideration.
A finding was recorded by the High Court that the prosecution has not proved that the witnesses are dead or cannot be found or are incapable of giving evidence or kept out of the way of the accused or their presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable. These findings are based on the perusal of the entire record. There is no explanation offered by the prosecution about their failure to examine these two independent material witnesses. Hence, the statements of both witnesses are not admissible in evidence.
Admittedly, PW2 drew two samples from each of the packets of the contraband found in the hotel room and kept them in two separate plastic covers. These covers were sealed and the remaining contraband was also sealed. Thus, the prosecution claims that the samples were prepared even before the packets were sent to the Station House Officer. The submission of the learned senior counsel appearing for the appellant in Criminal Appeal 451 of 2011 was that a grave suspicion is created about the prosecution’s case as this action by the PW2, was contrary to Section 52A of NDPS Act - the act of PW2 of drawing samples from all the packets at the time of seizure is not in conformity with what is held by this Court in the case of Mohanlal2. This creates a serious doubt about the prosecution’s case that the substance recovered was contraband.
It cannot be said that the contraband was found in the custody of accused no.1. At the highest, it was found in the room occupied by accused no.4. It is noted here that accused no.4 has been convicted by the High Court only for the offence punishable under Section 30 of the NDPS Act which is for the offence of making preparation to do or omitting to do anything which constitutes an offence punishable under the provisions of Sections 19, 24 and 27A. The prosecution has not produced any evidence to show that the contraband was brought to the room of the accused no.4 by the other three accused persons or anyone of them. It is not the case that the room of accused no.4 was in possession of accused nos.1 to 3 who were staying in different hotels.
The case of the prosecution is not free from suspicion. The prosecution has not proved beyond a reasonable doubt that the appellants in these two appeals were in possession of the contraband or that they brought the contraband to the hotel room of the accused no.4 - the appellants are acquitted of the offences alleged against them - Appeal allowed.
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2023 (4) TMI 1187
Invocation of doctrine of necessity for initiating non-compliance proceedings against Google - non-effective compliance by Google of the CCI’s final order - Section 42 of the Competition Act, 2002 - CCI is validly constituted presently with two members to continue its adjudicatory roles or not - effect of Section 15 of the Act - whether, in the present case, would there remain any requirement to apply the principles of doctrine of necessity at all?
HELD THAT:- A plain reading of the provision of Section 15 brings to fore that it contemplates two different functions of CCI which would be governed by the said Section, namely an “act” or “proceeding”. It is manifest that the “act” contemplated, would obviously be distinguishable from the “proceeding”, in that, a “proceeding” would be relatable to adjudicatory powers exercised by the CCI and anything other than an adjudicatory process would be covered by the word “act” which could mean regulatory or administrative powers of the CCI. Moreover, it is trite that when an enactment uses the word “or”, it clearly indicates that the same ought to be read disjunctively, meaning thereby, that the saving clause of section 15 would equally apply to adjudicatory/judicial powers of the CCI. So read, the intention of the Legislature to ensure that the adjudicatory functions of the CCI does not get impeded for defect arising out of vacancy or constitution arising out of vacancy, becomes clear - any adjudicatory process wherein there is a vacancy or any defect in the constitution of the Commission would not invalidate the proceedings of CCI. It is trite that a statutory interpretation ought to be based on plain reading of the Section itself unless there is any ambiguity which would entail reliance upon extraneous materials.
This Court is of the considered opinion that the aims and objects of a particular enactment ought to be interpreted in a manner so as to ensure that the object desired to be fulfilled by the legislature by such promulgation are taken to its logical conclusion. In other words, merely because of a defect or a vacancy in the constitution of the CCI, the CCI cannot be considered as a statutory authority not having jurisdiction to adjudicate the complaints or other proceedings pending before it. Any interpretation, other than the aforesaid, would render the provisions of Section 15 otiose and which could not possibly be the intention of the Legislature either.
The arguments of Mr. Sandeep Sethi, learned senior counsel in respect of quorum being complete only if three members of the CCI, including the Chairperson, constitute the same, is untenable. For the same reason, the argument of Mr. Sethi, learned senior counsel that the word “vacancy” used in Section 15 read with sub-section 3 of Section 22 of the Act mean that the word “vacancy” would be applicable only and only if the vacancy is in respect of members more than three and less than seven, would also be untenable, considering the plain language of both the Sections. Though the argument, at the first blush, appears to be logical, however, in view of the fact that the provisions of Section 22 are not relatable to the adjudicatory process at all, the interpretation sought to be given to the word “vacancy” in Section 15, by reading the proviso to sub-section (3) to Section 22 of the Act into it, would also stand rejected.
This Court is of the considered opinion that the provisions of Section 15 act as a saving clause in regard to a situation where a vacancy or a defect in constitution of the CCI would arise and any such vacancy or defect in the constitution would not invalidate any proceedings so far as the adjudicatory powers of the CCI is concerned.
Doctrine of necessity - HELD THAT:- Having regard to the definition of what constitutes doctrine of necessity as rendered by the Hon’ble Supreme Court in J. MOHAPATRA & CO. VERSUS STATE OF ORISSA [1984 (8) TMI 350 - SUPREME COURT], it is clear that it is only when an adjudicator who is subject to disqualification on the ground of bias or interest in the matter which he has to decide, may be required to adjudicate if there is no other person who is competent or authorized to adjudicate or if a quorum cannot be formed without him or if no other competent Tribunal can be constituted, that the doctrine of necessity may become applicable. The Hon’ble Supreme Court has also held that in such cases, the principles of natural justice would have to give way to the necessity, for otherwise there would be no means of deciding the matter and the machinery of justice or administration would break down.
In the present case, none of the learned senior counsel appearing on behalf of the respondents, at all submitted that the members who presently comprise the CCI are disqualified for any reason. Having regard thereto, the question of examining whether the doctrine of necessity is or is not applicable to the present case does not arise at all.
There is no impediment, legal or otherwise, in directing the CCI to take up the applications under Section 42 of the Act, as filed by the petitioner, for hearing and considering the same in accordance with law on or before 26.04.2023 - petition disposed off.
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2023 (4) TMI 1186
Alleged disobedience of the orders of this Court - non-party arrayed as contemnor? - Court ordered the third respondent to consider the petitioner's OTS offer/representation and to pass appropriate orders on merits and in accordance with law after issuing notice to the petitioner and the persons interested in this regard and by affording them an opportunity of personal hearing or virtual hearing within a period of four weeks from the date of receipt of a copy of this order.
HELD THAT:- The learned counsel for the petitioner submitted that, at the time of passing the order by this Court on 21.04.2021 though a direction was given to the Deputy General Manager, Industrial Financial Corporation of India Ltd. at the time of filing the contempt petition, the name of Mr.Manoj Mittal, Managing Director & Chief Executive Officer, Industrial Financial Corporation of India Ltd., has been arrayed as contemnor as if he has committed the contempt - When this Court specifically asked as to why a non-party has been impleaded as a party as if he has committed contempt, there was no specific answer from the learned counsel for the petitioner.
The Supreme Court has repeatedly held that the higher level officials or officers, who are heading any institution need not be unnecessarily called for these kind of proceedings by summoning them to appear before the Court. By doing the same, their time, energy and also money would get wasted. That apart, the important work to be attended by the higher officials, especially the officials, who are heading any institution would be heavily affected. Therefore, unless, there is a dire need or necessity, such kind of higher officials need not be summoned to the Court.
There are two violations on the part of the petitioner in this contempt petition. One is that, when the Managing Director & Chief Executive Officer, Industrial Financial Corporation of India Ltd. is not a party in the writ petition and the direction was issued only to the Deputy General Manager, Industrial Financial Corporation of India Ltd, the name of the Deputy General Manager, Industrial Financial Corporation of India Ltd should have been mentioned in the contempt petition, instead, the Managing Director & Chief Executive Officer, Industrial Financial Corporation of India Ltd. has been arrayed as a party unnecessarily without any plausible reason - Secondly, once a direction was issued by this Court to consider the representation dated 12.01.2021, the petitioner should have awaited for the orders to be passed by the respondent, thereafter only, he could have persuaded with the contempt petition. However, unmindful of the directions issued by this Court, it seems that the petitioner has given further improved offers to the respondent as one time settlement and that has also been considered and rejected by the respondent company. This is the second mistake committed by the petitioner.
First of all, this Court feels that there has been no willful contempt on the part of the respondent. Secondly, the array of Managing Director & Chief Executive Officer, Industrial Financial Corporation of India Ltd. as contemnor or alleged contemnor is a gross misuse of process of law by the petitioner and merely because the petitioner was able to get an order, that too, in the admission stage even without hearing the respondents, it will not give premium to the petitioner to array the head of the institution and in this case, the Managing Director & Chief Executive Officer, Industrial Financial Corporation of India Ltd., thereby, unnecessarily is troubled as he had to travel all along from New Delhi to appear before this Court pursuant to the statutory notice issued to the respondent. This kind of practice is to be deprecated.
In view of the order passed by the respondent where the subsequent applications submitted by the petitioner with improved offer as one time settlement having been considered and rejected by the respondent, absolutely, there is no contempt committed by the respondent company.
The Contempt Petition is liable to be closed, accordingly, it is closed with the order imposing cost/compensation of Rs.25,000/- payable by the petitioner to the respondent officer.
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2023 (4) TMI 1185
Assessment u/s 153A - estimation of net profit, addition u/s 68 respect of the share application money and premium - As submitted all the persons responsible for the affairs of the company were in judicial custody and, therefore, the assessee could not produce all the relevant books, vouchers etc., before the authorities to prosecute the case diligently. HELD THAT:- As from 12/02/2016 to 23/10/2018 all the persons responsible for the affairs of the company were in custody and in their absence, as claimed by the learned AR, some part of the material was produced before the authorities. There is nothing contrary to disbelieve the statement of the learned AR that the assessee could not prosecute the proceedings before the authorities diligently due to the fact of non-availability of the persons responsible for the affairs of the company. In fact, this peculiar circumstance is taken note by the Co-ordinate Benches of this Tribunal in the cases of the group concerns on earlier occasions.
Thus we are of the considered opinion that it would be in the interest of justice to set aside the impugned orders and to restore the matters to the file of AO to adjudicate the same afresh, after giving an opportunity of being heard to the assessee and also to produce all the relevant material at their custody. We hold and direct accordingly. Grounds of appeals of both the assessee and the Revenue treated as allowed for statistical purpose.
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2023 (4) TMI 1184
Seeking refund of tax deposit during search proceedings - whether the amount paid by the petitioner on 16.01.2021, could be retained by the department without issuing the show cause notice under Section 74 (1) of the CGST Act that too after expiry of two years?
HELD THAT:- Though the respondents can initiate proceedings under Section 74 (1) of the Act by issuing notice within the period of limitation, they cannot retain the amount of Rs.1.54 crore deposited by the petitioner, which as per respondent-department was voluntary. The amount was deposited during search and as as per judgment passed in Vallabh Textiles’ case [2022 (12) TMI 1038 - DELHI HIGH COURT], this deposit cannot be taken to be voluntary. Since no proceedings under Section 74 (1) of the CGST Act have been initiated till date, as per Rule 142 (1A) of CGST Rules, 2017, the department cannot even issue Form GST DRC-01A to ask the petitioner to make payment of tax, interest and penalty due.
The very fact that in two years’ time, no notice has been issued, the deposit of tax during search cannot be retained by the department till the adjudication of notice, which can take more time in future.
A direction is being given to the respondents to return the amount of Rs.2.54 crores to the petitioner(s) along with simple interest at the rate of 6% per annum from the date of deposit till the payment is made. This amount will be refunded to the petitioner within a period of 10 days from the date of receipt of certified copy of this judgment.
Petition allowed.
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2023 (4) TMI 1183
Maintainability of appeal - barred by time limitation - challenge to orders of assessment - opportunity of hearing not provided (in passing order of assessment) - Violation of principles of natural justice (audi alterem partem) - HELD THAT:- The appeals were filed on 20.02.2020. Inter alia, the appeal memorandum contained an error, in that, the date of receipt of the order was stated as '21.10.2019'. In fact, the orders of assessment had only been received on 29.09.2019 as confirmed by a certificate issued by the State Tax Officer, Group - VI, Intelligent - II dated 26.05.2020 placed on file before this Court - With the aforesaid confirmation, to the effect that the date of service of the orders was 29.10.2019, the appeals have been filed within time and the rejection of appeals as nonmaintainable is erroneous. However, no fault can be attributed to the second respondent in this regard as the officer has merely proceeded on the facts as contained in the appeal memorandum filed by the petitioner.
In any event, there is no necessity to advert to the aspect of maintainability any further, seeing as the orders of assessment suffer from violation of principles of natural justice. The exchange of correspondence between the parties establishes that the petitioner was cooperating with the proceedings for assessment. This, and the request contained in letter dated 10.09.2019, lead me to the conclusion that the petitioner should be afforded an effective opportunity of hearing and has been denied the same prior to passing of the orders impugned.
The assessments remanded to the file of the Assessing Authority to be re-done, de novo - Petition allowed by way of remand.
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2023 (4) TMI 1182
Interest on delayed refund - Relevant Date - Refund of ITC - Purchases made during the earlier month - export made during the subsequent months - Date from which statutory interest under Section 56 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- A careful perusal of the main part of Section 56 would show that if any tax is ordered to be refunded under Section 54(5) of the CGST Act visa-vis an applicant, and if the same is not refunded within sixty days from the date of receipt of an application under Section 54(1), interest at such rate not exceeding 6%, as has been specified in the notification issued by the Government on the recommendation of the Council, is payable immediately after the expiry of sixty (60) days from the date of the receipt of the said application, which runs, as per the said provision, till the date of refund of such tax - the reasons based on which a part of the refund was sought to be denied, was that the value of exports for the given month was less than the purchases made in that month. Accordingly, for the month of August 2017, the inadmissible amount was pegged at Rs. 59,67,280/-; likewise for the month of September 2017, the inadmissible amount was quantified at Rs. 1,70,20,253/-.
The petitioner is right in its contention that interest should trigger in accordance with the main part of Section 56 of the CGST Act, i.e., from 18.04.2018, and that interest should run, both on CGST and DGST, up until the date when the amount was remitted to the petitioner. The dates when the remittance was made have been captured.
The respondents/revenue will remit the interest to the petitioner in accordance with what is stated hereinabove, within two weeks from receipt of a copy of the judgment - Petition disposed off.
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2023 (4) TMI 1181
Centralization of the cases - Transfer of case from one tribunal to another i.e from ITAT Bangalore to ITAT Mumbai - Transfer of cases u/s 127 - High Court has allowed the said writ petition preferred by the Assessee and has quashed and set aside the order passed by the President of the ITAT transferring four appeals from Bangalore Bench to Mumbai Bench, which was passed in exercise of powers under Rule 4 of the Income Tax Appellate Rules - HELD THAT:- As it cannot be said that the High Court has committed any error in setting aside the order passed by the President of the ITAT transferring the appeals from the Bangalore Bench to the Mumbai Bench. We are in complete agreement with the view taken by the High court. Therefore, now the appeals will be heard by the ITAT, Bangalore Bench.
The present Special Leave Petition deserves to be dismissed and is accordingly dismissed.
As observed that the other issues including the powers of the President under Section 255 read with Income Tax Appellate Rules are kept open to be considered in an appropriate proceedings.
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2023 (4) TMI 1180
Order of Acquittal - offence u/s 276(C)/277 of the IT Act - complaint was made against the assessee/accused for filing false return to defraud the Income Tax Department - defence plea of the assessee accused was that he did not tendered any false statement to the Income Tax Department and he filed the IT return by getting the contents verified by the Office of the Branch Manager, LIC, but the ITO hurriedly passed the assessment order without appreciating the material furnished by him
HELD THAT:- Admittedly, this is an appeal against acquittal, which was recorded by the learned trial Court way back in the year 1994 and law is well settled that in case of acquittal, the presumption of innocence of accused as provided under law, is reinforced and unless there appears miscarriage of justice and compelling reasons, no judgment of acquittal can be interfered with after near about 29 years more particularly in a case of this nature, where the offences with which the respondent-accused stood charged.
In this case, the appellant was charged for offence u/s 276(C)/277 of the IT Act, but offence u/s 276(C) of IT Act can be established by way of evidence that such persons willfully attempted in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act. Similarly, offence u/s. 277 of IT Act can be established by way of evidence that such persons made a statement in any verification under this Act or under any rule made there under or delivered an account of statement, which is false, and which he either knows or believes it to be false or does not believe it to be true.
While scrutinizing the impugned judgment, it appears that the learned trial Court has rightly framed the points of determination and proceeded to appreciate the evidence on record.
Respondent-accused had not been noticed to have his say in the matter and the BM, LIC did not proved by showing any document of his Office that the respondent-accused had received Rs. 1,00,000/- (Rupees One Lakh) towards his additional conveyance allowance at the time of his assessment and in the course of hearing of appeal, the appellate authority was pleased to deduct Rs. 30,000/- (Rupees Thirty Thousand) from the additional conveyance allowance of the respondent-accused. It is also a fact that the respondent-accused was never given an opportunity to explain as to why complaint should not be filed against him and there appears from the record that a penalty proceeding was also pending at the time of institution of the complaint, which is contrary to law inasmuch as unless there is any finding in the penalty proceeding, the department should be slow to file complaint against the respondent-accused for the self same cause of action.
In the course of trial, the respondent-accused had stoutly taken two pleas. One is that even for a moment, the evidence of prosecution is taken into consideration, yet he cannot be convicted for the offences with which he stood charged for want of sanction, which is defective and illegal. Second is the pendency of penalty proceeding U/S.271(1) against him is a bar for institution of the complaint. The learned trial Court after due analysis of provision and evidence, had concurred with the above pleas of the respondent-accused, but in the course of hearing of this appeal, the appellant could not validly dispute the said findings of the learned trial Court and, it therefore, appears to this Court that the appellant has failed to satisfy this Court either on merit or on the ground of technicalities.
In view of the aforesaid discussion, this Court has no other option left, but to concur with the findings of the learned trial Court acquitting the respondent-accused.
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2023 (4) TMI 1179
Reopening of assessment u/s 147 - Validity of second notice of reopening - whether it was permissible in law for the assessing officer to issue the second notice u/s 148 of the Act when once there was already a notice issued in exercise of the same powers under the very provision in respect of the same assessment year 2012-13? - HELD THAT:- Supplying the reasons as to why the second notice under section 148 for reopening of the assessment would be impermissible, the Division Bench observed that as long as the assessment was at large by virtue of the first notice of reopening, the question of issuing second notice for the same purpose would not arise.
The observations in the decision in Aditya Medisales Ltd. [2016 (8) TMI 1235 - GUJARAT HIGH COURT] reflect that the Court was not oblivious of the aspect that in a given case where second notice for reopening was set aside, a piquant situation for the revenue may arise.
Position of law enunciating from the decision in Aditya Medisales Ltd. (supra), the petitioner is entitled to succeed. The impugned notice dated 30.03.2019 under Section 148 of the Act, which is a notice for reopening the assessment for the same year under consideration cannot sustain. The same is liable to be set aside.
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2023 (4) TMI 1178
Settlement of case - full and true disclosure - Application rejected by the Income Tax Settlement Commission - objection of the revenue was that the petitioner had not provided for interest on non-performing assets, purity of gold which had been sold in various auctions, was estimated at 80% for working out the income of the petitioner under this head - HELD THAT:- Writ petition is liable to be allowed. The procedure for settlement, as contemplated by Chapter XIX-A of the Income Tax Act, 1961 as it then stood, was a procedure enabling assessees to declare their previously undisclosed income and arrive at a settlement of their case.
After considering the reports of the Department, the Settlement Commission would proceed to adjudication to arrive at a conclusion as to whether any further tax is to be paid by the assessee under any head. While the assessee is required to make a full and true disclosure, the Settlement Commission is also authorised to render findings on any additional income that must be brought to tax and, consequently, the amount of tax, penalty or interest payable by the assessee that should be paid in addition to the tax, penalty or interest already paid on the income offered in the application for settlement. This is clear from a reading of Sub-Sections (4) and (6) of Section 245-D of the Act.
It is clear that the Settlement Commission does not proceed merely on the basis of the statements contained in the application for settlement or any further pleadings before it and can, for reasons to be recorded, come to a conclusion that some higher income had to be offered by the assessee for arriving at a settlement. Therefore, taking into consideration the spirit and mandate of the provisions contained in Chapter XIX and merely for the reason that further amounts had to be offered by the assessee, the Settlement Commission cannot reject the application for settlement. This is not to say that the assessee is not required to make full and true disclosure.
One of the main reasons which weighed with the Settlement Commission is the alleged non-disclosure owing to the fact that the purity of gold which was sold in the auction was determined at 80% (on average) to arrive at the previously undisclosed income under this head. There appears to be some material on record to suggest that the yardstick adopted by the assessee was correct. Similarly, the documents produced by the Department could also be scrutinised by the Commission to determine whether the purity of gold sold in auction should be taken at some higher value than 80% for the purpose of determining whether the assessee is required to disclose further income and to pay tax, interest and penalty on the same. However, it was wrong on the part of the Settlement Commission to come to the conclusion that merely because the purity of gold recorded at the time of issuing the loan in favour of one P.M. Reji was higher than the average recorded or disclosed in the settlement application, there was failure to make a full and true disclosure.
Failure to offer the interest accruing on Non-Performing Assets as part of the income - The decision of the Supreme Court in Vasisth Chay Vyapar Ltd [2018 (3) TMI 56 - SUPREME COURT] is the authority for the proposition that the instructions issued by the Reserve Bank of India on income recognition will take precedence over any contrary provision in the Income Tax Act, 1961. Therefore finding of the Settlement Commission that the failure to offer interest income on non-performing assets constitutes a failure to make a full and true disclosure for the purpose of Section 245-C of the Act, is unsustainable.
Settlement Commission has ceased to exist - whether, in a case like this (where the order of the Settlement Commission is required to be quashed), the matter can be reconsidered by the Interim Board ? - As relying on K.S. Thirumalaivasan v. The Chairman, Income Tax Settlement Commission and others case [2022 (7) TMI 438 - MADRAS HIGH COURT] the application filed by the Appellant would have to be treated as a pending application and appropriate orders are to be passed after giving the appellant sufficient opportunity and by considering all the materials placed by him.
The effect of an order quashing the order passed by the Settlement Commission would result in the application for settlement filed by the petitioner being treated as a ‘pending application’ which has to be disposed of by the interim board.
Order of the Settlement Commission has been quashed, will be considered afresh by the Interim Board after affording an opportunity to the petitioner and to the respondent Department.
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2023 (4) TMI 1177
Validity of reopening of assessment u/s 147 - assessee was subjected to scrutiny and accordingly, an order u/s 143(3) of the Act was framed - whether the AO could have commenced the reassessment proceedings based on the information already available on record? - HELD THAT:- On a careful perusal of the reasons, it appears that there is no reference to an audit objection, or to any other objection for that matter. Therefore, insofar as the AO is concerned, the trigger was the information which was already available on record. The respondent/assessee had debited, as it appears, the loss on sale of fixed assets in its Profit and Loss account, and this was an aspect which the AO seems to have noticed after the scrutiny assessment was framed.
It is well-established that reassessment proceedings can be based on new material, and not material information which is already on record.
The respondent/assessee in this case had disclosed primary facts. AO, decidedly, committed an error in appreciating the information that was already available on record.
To our minds, the power available to the AO under Section 147 of the Act does not go so far as to correct errors in appreciating the primary facts, which are disclosed by the respondent/assessee. Insofar as Appellant submission is concerned, that the respondent/assessee had agreed to the addition with regard to the deduction qua loss on sale of fixed of assets wrongly claimed by it, we can only say that once we hold that the error was impregnated with jurisdictional flaw, no amount of concession can help the cause of the appellant/revenue. Decided in favour of assessee.
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