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Showing 461 to 480 of 1557 Records
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2025 (1) TMI 1098
Admission of the Section 9 application under the Insolvency and Bankruptcy Code, 2016 (IBC) - pre-existing dispute between the parties or not - transactions under running account - demand is barred by Limitation Act, 1963.
Pre-existing dispute between the parties - HELD THAT:- Any dispute between the Promoters / Directors / Shareholders of the Respondent No.1 or Corporate Debtor is outside the scope of Section 9 of the IBC as both Respondent No.1 and Corporate Debtor are separate corporate legal entities different from their Promoters / Directors / Shareholders. Furthermore, the pre-existing dispute has to relate to the debt which is the subject matter of the application. The purported dispute does not relate to the subject matter of the present proceeding.
In the conspectus of the case, issue of the pre-existing dispute cannot be put to a strait jacket as there is a complex nature of transactions when the Demand Notice was issued. It is found that there is a pre-existing dispute between the Promoters inter-mingled with the two legal entities and is not a patently feeble argument or an assertion of fact unsupported by evidence, rather it is an actual dispute requiring adjudication.
The Hon’ble Supreme Court in the matter of Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited [2017 (9) TMI 1270 - SUPREME COURT] has mandated that such an application needs to be dismissed under Section 9(5)(ii)(d).
There is a pre-existing dispute between the parties and Section 9 petition is not maintainable. There is sufficient material on record to suggest that there is a pre-existing dispute and Section 9 petition is not maintainable, even then the other additional grounds raised by the Appellant - with respect to limitation and the account being running account or not, are being delved in subsequent paragraphs to unearth the real nature of transactions between the two parties.
Time limitation - HELD THAT:- Even the Adjudicating Authority has concluded that “The latest part-payment being made on 02.03.2022 extended the limitation for further 3 years, hence, the claim of the Operational Creditor in respect of the invoices raised, is not time-barred.” This conclusion of Adjudicating Authority doesn’t provide any benefit to the Appellant and the maintainability of the petition cannot be questioned on the grounds of limitation.
Conclusion - There are multiple transactions which were happening in the purported running account - some of which relate to the supply of goods and their payment from two legal corporate entities, but others not directly related to the supply of goods and services. The dispute is apparent from the material on record with respect to the arrangement for use of the premises on rent. There are disputes, which are between the Operational Creditor and its Promoters and Corporate Debtor and its Promoters. The transactions between the Corporate Debtor and the Operational Creditor cannot be seen in isolation and it is required to go beyond the corporate veil. The disputes between all of them cannot be brushed aside. Therefore, it is concluded that there is a pre-existing dispute between the Corporate Debtor and the Operational Creditor.
The Section 9 proceedings against the Corporate Debtor are set aside - Appeal allowed.
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2025 (1) TMI 1097
Seeking direction to the Enforcement Department (ED) to produce all the records as regards purported inquiry being conducted under the Foreign Exchange Management Act, 1999 - challenge to search and seizure proceedings - quashing of the illegal act of freezing of the bank account of the petitioner company - reasons to believe - HELD THAT:- Though the jurisdiction under Article 226 of the Constitution of India is plenary, however, there are self imposed limitations which are required to be followed before exercising the power of judicial review. Ordinarily, interference at the stage of investigation carried out by the law enforcement agencies is not advisable because the law enforcement investigation techniques include coercive as well as covert techniques.
The method of search and seizure is coercive as it is used to carry out the investigation/inquiry into the affairs if violation of a statutory provision is suspected. The search and seizure is a well known tool in the investigation which enables the law enforcement agencies to come to a conclusion. Though the Constitutional Courts are the sentinels of justice, however, this power is required to be exercised with due care and caution and interference at the stage of investigation is made in rare and exceptional cases.
It is evident that while carrying out search, proper information was supplied to the petitioner. Moreover, the petitioner has not attached the ECIR. The petitioner has attached the search and seizure memos and freezing orders sent by the ED to the various banks. In the freezing orders, it has been stated that the Assistant Director, Unit-III (2) ED has reasons to believe from the documents in his possession that the proceeds of crime might have been diverted to the above said bank account maintained with that particular bank. Moreover, as already noticed, these orders were passed on 26.11.2024, whereas on the date when the arguments are heard, 30 days are yet to be completed.
Section 5 (5) of the 2002 Act mandates the ED to file a complaint stating the facts of such attachment before the Adjudicating Authority within a period of 30 days. The Adjudicating Authority is entitled to adjudicate the matter on receipt of a complaint. Before the Adjudicating Authority all the stakeholders are entitled to participate and explain their position. The Adjudicating Authority is required to decide the matter in a time bound manner. Against the final order of confirmation of attachment, the appeal is maintainable before the Appellate Tribunal. Once the 2002 Act itself provides for sufficient safeguards, it is not found appropriate for this Court to interfere at this stage.
Conclusion - The legal authority of the ED to conduct search and seizure operations and freeze bank accounts without prior notice affirmed. The petitioners are provided with the opportunity to present their case before the Adjudicating Authority under the 1999 Act and the 2002 Act.
Petition disposed off.
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2025 (1) TMI 1096
Money laundering - proceeds of crime - provisional attachment of properties - applicability of Section 5 (1) of the PMLA - issuance of SCN without application of mind - HELD THAT:- As there is nothing on record that appellants are in possession of any proceeds of crime. Moreover, there is nothing on record that such proceeds of crime are likely to be conceive, transfer or dealt with in any manner by the appellants. Appellant M/s Emaar Hills Township Pvt. Ltd. took the specific plea that even prior to the passing of PAO, the appellant was unable to transfer or deal with the properties in terms of the order dated 21.12.2010 passed by Hon'ble Company Law Board Chennai Bench in CP No.608/2010 without the consent of the Conciliation Board.
A perusal of this definition would show that the “proceeds of crime” includes the property derived or obtained directly or indirectly out of criminal activity, but that is not end of the definition of Proceeds of Crime. It can be for “value of any such property’’. The aforesaid words used in the definition of “Proceeds of Crime” is to cover those properties which are not derived or obtained directly or indirectly out of the criminal activity, but attached for value equivalent to the Proceeds of Crime, if money acquired has been vanished. The Act of 2002 was enacted pursuant to the International Convention to address the offence of money laundering. If the definition of “Proceeds of Crime” is given restricted meaning to hold that it shall include only the properties obtained or derived directly or indirectly from the criminal activity then it would nullify the very objects of the enactment and the consequence of it would be serious. It would result to a situation where the accused would immediately try to vanish or siphon off the proceeds, so that the properties may not be attached.
Any property of equivalent value can be attached when the proceeds directly or indirectly obtained out of the crime has been vanished or siphoned off. Here, the significance would be to the property acquired even prior to commission of crime. It is for the reason that any property acquired subsequent to the commission of crime would be directly or indirectly proceeds of crime and then, it would fall in the first limb of the definition of proceeds of crime. In the second limb, which refers to “the value of any such property” would indicate any other property which was acquired prior to the commission of crime and it would be attached only when the proceeds directly or indirectly obtained or derived out of the criminal activity is not available.
Conclusion - The definition of 'proceeds of crime' is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property.
Appeal dismissed.
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2025 (1) TMI 1095
Levy of service tax - supply of food and beverages at their counters provided in the cinema halls - whether the supply of food and beverage in the cinema complex falls within the definition of ‘service’ and ‘declared service’ in terms of Section 65B(44) and Section 66 E of the Act? - it was held by CESTAT that 'no service tax can be charged on the sale of food stuff in the PVR complex to the viewers of the movie, the provisions of Service Tax (Determination of Value) Rules, 2006 will not be applicable.'
HELD THAT:- There are no good reason to interfere with the impugned order dated 30.11.2023 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi.
Appeal dismissed.
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2025 (1) TMI 1094
Eligibility for availment of CENVAT credit of tax paid on premium mandatorily required for functioning as banks under the supervision of Reserve Bank of India - HELD THAT:- The decision of the Larger Bench of the Tribunal in M/S. SOUTH INDIAN BANK VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX-CALICUT [2020 (6) TMI 278 - CESTAT BANGALORE - LB] had settled the issue of eligibility by holding that 'The insurance service provided by the Deposit Insurance Corporation to the banks is an “input service” and Cenvat credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering ‘output services’.'
Conclusion - The eligibility for CENVAT credit of tax paid on such premium is beyond any controversy.
Appeal allowed.
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2025 (1) TMI 1093
Levy of interest and penalty - short payment of service tax - time limitation - suppression of facts.
Levy of penalty u/s 78 of Finance Act, 1994 - HELD THAT:- From the record of the appeal that audit party pointed out short payment of service tax only on the basis of contracts entered with M/s. Gujarat Alkalies and Chemicals Limited and all the contracts/ work orders were available with them. The classification of the service in this case is also a subject matter of dispute, however, since the appellant has already deposited the payment of service tax, there are no reason to go into this issue. It is found that element which need to be present for invoking provisions of Section 78 are not present in this particular case and therefore, the impugned order-in-appeal as well as order-in-original are legally not sustainable in so far as invoking of Section 78 of the Finance Act, 1994 is concerned.
Demand of interest under Section 75 of FA - HELD THAT:- The demand of interest under Section 75 vide show cause notice dated 07.08.2014 on the payment made in 2011 and for the demand which pertains to 2005-06 to 2007-08 is much beyond the normal period of limitation and extended time proviso - Hon'ble Gujarat High Court decision in the case of GUJARAT NARMADA FERTILIZERS CO. LTD. VERSUS COMMR. OF C. EX., VADODARA [2010 (7) TMI 857 - CESTAT AHMEDABAD] has held that 'It is settled law that mis-declaration means not declaring something or making an incorrect declaration about something, which he is required to declare under the law and not declaring something which is not required to be declared under the law does not constitute mis-declaration.'
The impugned order-in-appeal is legally not sustainable - appeal allowed.
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2025 (1) TMI 1092
Failure to pay/reverse the amount of credit availed on input services used in the manufacture of exempted goods - HELD THAT:- This Tribunal finds that a division bench of this Tribunal, in the case of SIVARAJ SPINNING MILLS PVT. LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, MADURAI [2024 (8) TMI 990 - CESTAT CHENNAI], in a similar fact situation of the appellant therein clearing cotton yarn on payment of duty under Notification No. 29/2004-CE dated 09.07.2004 and clearing cotton yarn at nil rate as per Notification No. 30/2004 – CE dated 09.07.2004, simultaneously, after discussions, has rendered the decision in favour of the appellant therein holding 'the credit availed on input services is eligible and the contention of the Department that the credit has to be reversed is against the provisions of law.'
Conclusion - The goods exported under bond are exempt from the reversal of CENVAT credit and that CENVAT credit can be availed on input services used in the manufacture of such goods.
The impugned order in appeal is hence set aside. The appeal is allowed.
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2025 (1) TMI 1091
Seeking condonation of delay of 179 days in filing the appeal - sufficient cause for delay or not - HELD THAT:- A perusal of the affidavit would indicate that the appellants, after passage of over four months, whereas in the order dated 22.5.2024 three months time was granted for complying with the direction, for the first time found it appropriate to seek opinion of the Chief Standing Counsel regarding filing of the appeal. As to what transpired after passing of the order dated 22.5.2024 till 11.9.2024, when the opinion was sought, no indication, whatsoever, has been made. The opinion was immediately tendered on 14.9.2024 by the office of the Chief Standing Counsel whereafter also the appeal has been filed on 13.12.2024, i.e., after three months from the date the opinion was tendered. The said period apparently has been consumed in seeking opinion first by the Secretary from the Special Secretary, Secondary Education and again by the Upper Secretary from the Special Secretary Secondary Education and once the permission was granted on 20.11.2024 also, about 25 days have been taken in filing the appeal.
The affidavit, which has been filed, does not give sufficient cause for the delay of 179 days in filing the appeal inasmuch as there are large gaps in affidavit wherein the period spent between 22.5.2024 till 13.9.2024 has nowhere been explained/adverted to despite, as noticed hereinbefore, the fact that the Court had granted only three months for the compliance. The manner in which the direction including time line, as indicated by the Court, has been taken and thereafter also the proceedings of the matter at snail pace cannot be countenanced in a case, wherein the direction by the Court only pertains to reconsideration of the matter by the appellants.
Conclusion - The appellants failed to demonstrate "sufficient cause" for the delay, noting the slow pace of proceedings and lack of adherence to the court's timeline.
Thus, no case for condoning the delay in filing the appeal is made out. The application seeking condonation of delay is dismissed.
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2025 (1) TMI 1090
Maintainability of petition - whether a writ petition under Article 226 of the Constitution would be maintainable against an order passed by the Micro and Small Enterprises Facilitation Council (MSEFC) in exercise of power under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006? - interplay between the MSMED Act and the Arbitration and Conciliation Act, 1996 (A&C Act), especially regarding the roles of conciliation and arbitration.
HELD THAT:- This is a case of statutory arbitration that is mandatory. It is possible to argue that it bars a party from moving the court of law under Section 9 of the Code of Civil Procedure, 1908. Section 18 also overrides the principle of party autonomy when they enter into an arbitration agreement which prescribes the procedure for the appointment of an arbitrator and conduct of arbitral proceedings. The statute further prescribes an undoubtedly high rate of interest – three times the Reserve Bank rate of interest – presently 6.5 per cent i.e. 19.5 per cent. The interest is compounded with monthly rests - Pre-deposit is a condition for hearing a decision on the objections to the award. The issue therefore which arises and needs consideration is whether there would be an absolute and complete bar to invoke writ jurisdiction under Article 226 of the Constitution even in exceptional and rare cases where fairness, equity and justice may warrant the exercise of writ jurisdiction.
The access to High Courts by way of a writ petition under Article 226 of the Constitution of India, is not just a constitutional right but also a part of the basic structure. It is available to every citizen whenever there is a violation of their constitutional rights or even statutory rights. This is an inalienable right and the rule of availability of alternative remedy is not an omnibus rule of exclusion of the writ jurisdiction, but a principle applied by the High Courts as a form of judicial restraint and refrain in exercising the jurisdiction. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and the same is not limited by any provision of the Constitution and cannot be restricted or circumscribed by a statute.
It is deemed appropriate to refer the following questions raised in the present appeal to a larger Bench of five Judges, namely:
(i) Whether the ratio in M/s India Glycols Limited (supra) that a writ petition could never be entertained against any order/award of the MSEFC, completely bars or prohibits maintainability of the writ petition before the High Court?
(ii) If the bar/prohibition is not absolute, when and under what circumstances will the principle/restriction of adequate alternative remedy not apply?
(iii) Whether the members of MSEFC who undertake conciliation proceedings, upon failure, can themselves act as arbitrators of the arbitral tribunal in terms of Section 18 of the MSMED Act read with Section 80 of the A&C Act?
The first and second question will subsume the question of when and in what situation a writ petition can be entertained against an order/award passed by MSEFC acting as an arbitral tribunal or conciliator - The Registry is directed to place the papers before the Chief Justice so that an appropriate decision can be taken on the administrative side for the constitution of a larger Bench in the present case.
Conclusion - The writ jurisdiction is discretionary and not barred by the existence of alternative statutory remedies. A final determination is not provided but instead the significant questions are raised to a larger bench for comprehensive resolution.
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2025 (1) TMI 1089
Dishonour of Cheque - power of the trial Court to proceed with the trial for an offence punishable under Section 138 of the Negotiable Instruments Act in absence of the accused - when neither accused nor his advocate appeared during evidence recording stage, whether trial Court can a) proceed further, b) dispense statement under section 313 of the Criminal Procedure Code and c) convict the accused?
HELD THAT:- It is very well true that this view does not fit into the traditional view of ‘mandatory recording of the statement and even giving the benefit to the accused about certain lacunaes in recording Section 313 statement’.
Recently, the Hon’ble Supreme Court in case of P. MOHANRAJ & ORS. VERSUS M/S. SHAH BROTHERS ISPAT PVT. LTD. [2021 (3) TMI 94 - SUPREME COURT] has dealt with nature of cases under Section 138 being quasi-criminal. The Hon’ble Supreme Court observed “Section 138 proceeding can be said to be a “civil sheep” in a ‘criminal wolf’s’ clothing” - The issue involved in that case was whether the proceeding under Section 138 read with Section 141 of the Negotiable Instruments Act are covered by the moratorium provisions under Sections 14 of the Insolvency and Bankruptcy Code. That is why there was an occasion for the Hon’ble Supreme Court to consider the nature of proceeding under Chapter XVII of the Negotiable Instruments Act. The ingredients of Section 138, 141, 142, 143-A, 148 were considered.
If the proceeding under Section 138 of the Negotiable Instruments Act are quasi-criminal in nature, there is reason to believe that one of attribute of criminal trial about mandatory recording of statement under Section 313 of the Criminal Procedure Code is not applicable. So in given set of facts narrated hereinabove, the accused cannot make complaint about causing prejudice if evidence is adduced in his absence and he cannot make complaint of non recording of the statement under Section 313 of the Criminal Procedure Code if they have remained absent without justification. In a given case and after ascertaining certain factors, the Magistrate is justified in proceeding further in absence of accused and even dispense his statement.
It cannot be said that there is illegality in the findings recorded by the trial magistrate and confirmed by the Court of the Additional Sessions Judge. There is no merit in both these revisions applications.
The order of conviction and the sentence passed by the Court of Metropolitan Magistrate for the offence punishable under Section 138 of the Negotiable Instruments Act is confirmed - Both the revision applications are dismissed.
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2025 (1) TMI 1088
Enhancement of the rent/licence fee from Rs. 20/- to Rs. 50/- per day for the petitioner, a fruit vendor - enhancement is discriminatory compared to other vendors in the locality or not - HELD THAT:- This court is not in agreement with the submissions advanced by the learned counsel for the respondents for the reasons that when the petitioner obtained the permission for selling of fruit vend at the space in question, the rent was being charged at Rs. 20/- per day, since January, 2016. The same has been enhanced to Rs. 50/- per day within a span of one year and it is this enhancement which the petitioner’s claim to be discriminatory as the same amounts to the petitioner’s paying an amount of Rs. 1500/- per month whereas others are being levied lesser rent/licence fee.
The fact that the petitioner is a fruit vendor is not a relevant consideration to subject the petitioner to such discriminatory treatment. All other vendors in the same locality, as per the public notice dated 27.03.2017 are vendors of similar consumable items with reference to whom he is claiming discriminatory treatment - The Court finds the levy to be shockingly disproportionate and discriminatory. Such arbitrary demand is thus found to be unsustainable. The levy of Rs. 50/- per day is clearly unsustainable since other vendors have been charged much less than Rs. 1500/- per month, i.e. Rs. 1000/- per month or Rs. 800/- per month.
In view of the shocking disparity as evident from the public notice dated 27.03.2017, this Court finds that the determination of rent for the petitioner at Rs. 50/- per day is clearly unsustainable. This Court directs the respondent no.2 to take a final decision on the petitioner’s claim as contained in annexure P-7 to the writ petition taking into consideration the observations made.
Conclusion - The rent enhancement was discriminatory and arbitrary. The municipal authority is directed to reconsider the petitioner's claim for parity and determine rent based on relevant parameters.
Petition disposed off.
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2025 (1) TMI 1087
Classification of goods - Tees and Crosses - HELD THAT:- The Tribunal is correct in holding that ‘Tees and Crosses’ would be covered under Customs Tariff Heading (CTI) 7307 22 00 - ‘Threaded elbows, bends and sleeves’. The heading/entry being specific, it could not be covered by CTI 7307 29 00, which refers to ‘Other’.
Appeal dismissed.
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2025 (1) TMI 1086
Recovery of Cenvat credit availed on the basis of invalid and improper documents - credit availed on the basis of invoices issued by bank branches and photocopies of invoices - denial of Cenvat Credit on the basis of carbon copy/ extra copy of invoices - invocation of extended period of limitation.
Credit availed on the basis of invoices issued by bank branches and photocopies of invoices - HELD THAT:- The head office of M/s Indian bank at Chennai is centrally registered with the service tax department for banking and Financial Services and were complying with the prescribed statutory formalities. As the Appellants submitted the Certificates/Statements of Service Tax collected issued by M/s Indian Bank from its Branches at Coimbatore and Mecheri referring to Centralized Accounting System at their Head Office which contain all the relevant particualrs required in terms of the proviso to Rule 4A of the Service Tax Rules, which are valid documents in terms of Rule 9(1) (f) of the Cenvat Credit Rules, 2004 for availing Cenvat credit., it is opined that the denial of Cenvat Credit is not justified, more particularly when the impugned order had completely ignored provisions of Rule 4A of the Service Tax Rules and the Proviso to Rule 9(2) of the CENVAT Credit Rules, 2004.
Availment of Cenvat Credit on the strength of xerox copy of invoice - HELD THAT:- In similar circumstances various courts/ Tribunals have decided the issue in favour of the Appellants and allowed Cenvat Credit - In the case of SHIVAM ELECTRICAL INDUSTRIES VERSUS UNION OF INDIA [2018 (2) TMI 816 - JAMMU AND KASHMIR HIGH COURT] it was held that 'The aforesaid Rule (Rule 9 of CCR) in our considered opinion nowhere provides that Cenvat credit cannot be availed on the basis of photocopy of the documents especially when the respondents have not disputed the correctness of the contents of the photocopies of the invoices produced by the petitioner. From the perusal of the certificate issued by the Superintendent, Customs and Central Excise, Range-III, Division-I, Ghaziabad, it is evident that the excise duty has been duly paid by the petitioner'.
Conclusion - The documents issued by banking companies containing requisite particulars are valid for availing Cenvat Credit. The Appellant is entitled to avail the Cenvat Credit based on Certificates/ statements issued by M/s. Indian Bank and based on the photocopies of invoices in the facts of this appeal.
Appeal allowed.
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2025 (1) TMI 1085
Denial of the benefit of exemption under N/N. 10/97-CE dated 01.03.1997 on for aircraft parts supplied to specified research institutions - goods fall under the specified categories in the notification or not - suppression of facts or not - levy of penalty u/r 25 of CER, 2002 - HELD THAT:- In fact on a perusal of the notification which provides for exemption to specified goods supplied to specified institutions, it is evident that in case of public funded research institution specified in Sl.No.1, when goods of the description provided in column (3) are supplied, condition specified in column (4) at (i) (a) stipulates that if the institution is a public funded research institution under the administrative control of the Department of Space or Department of Atomic Energy or the Defence Research Development Organisation of the Government of India and produces a certificate to that effect from an officer not below the rank of a Deputy Secretary to the Government of India in the concerned department to the manufacturer at the time of clearance of the specified goods. That is to say, if the institution is a public funded research institution under the administrative control of the Department of Space or Department of Atomic Energy or the Defence Research Development Organisation of the Government of India, all that the institutions specified in condition (i)(a) are required to do, is to produce a certificate simplicter from an officer not below the rank of a Deputy Secretary to the Government of India in the concerned department to the manufacturer at the time of clearance of the specified goods, stating that the institution is a public funded research institution under the administrative control of the Department of Space or Department of Atomic Energy or the Defence Research Development Organisation of the Government of India.
The Department cannot therefore, without adducing any positive evidence from any subject matter professional or expert stating that the goods in question do not satisfy the description of goods covered under the said notification, arbitrarily reject the claim for exemption duly supported by such certificates issued by the public funded research institutions that are specified in condition (i) (a) of the notification and when such institutions that are specified in condition (i)(b), additionally also certify that the goods are required for research purposes only.
In the Appellant’s own case, this Bench in M/S. TANEJA AEROSPACE AND AVIATION LTD. VERSUS THE COMMISSIONER OF CGST & CENTRAL EXCISE [2024 (7) TMI 1586 - CESTAT CHENNAI] has held that 'It is seen that the Commissioner (Appeals) for subsequent period has considered the very same issue and allowed the exemption observing that the gods which are in the nature of parts of air craft would fall under the category of "Engineering Goods". We do not find any grounds to take a different view We hold that the appellant is eligible for the exemption as per Notification No.10/1997-CE”.'
Conclusion - The Department has evidently erred in sitting in judgement over such certification without any proof or evidence to the contrary. The appellants are eligible for the exemption.
Appeal allowed.
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2025 (1) TMI 1084
Refund of Input Tax Credit (ITC) for compensation cess leviable under Section 8 of the Goods and Services Tax (Compensation to States) Act, 2017 - the rejection is upheld on the basis that the words input tax defined under Section 2 (62) of the CGST Act would not include Composition Cess - HELD THAT:- It appears that Respondent No. 2 has got confused by equating composition Levy with Compensation Cess. Composition Levy is something that is covered under Section 10 of the CGST Act. Compensation Cess on the other hand is leviable under Section 8 of the Compensation Cess Act. This apart, according to Respondent No. 2, since Compensation Cess is not specifically mentioned in the definition of “input tax”, the same has been denied to the Petitioner. This issue is squarely covered by two Circulars. The first Circular is dated 26th July 2017. In paragraph 8 of this Circular, it is made clear that the Exporter will be eligible for refund of Compensation Cess paid on goods exported by him (on similar lines as refund of IGST under Section 16 (3) (b) of the IGST Act).
This has been further made clear by a subsequent circular of the Central Board of Indirect Taxes and Customs dated 18th November 2019. Once again, by this Circular, in paragraph 42, it is made clear that a registered person making a zero rated supply under LUT may claim refund of unutilized credit including that of Compensation Cess. Of course, it is needless to state that the Input Tax Credit taken for Compensation Cess can be allowed for utilization of Input Tax Credit of Cess only for payment of Cess on the outward supplies, and not any other tax.
From these Circulars, it is absolutely clear that the Petitioner is entitled to a refund even of Compensation Cess. These Circulars have been glossed over by the Additional Commissioner in the impugned order. The Additional Commissioner (Respondent No. 2), after setting out the relevant portion of the Circular dated 26th July 2017 merely states that there is no provision for refund of Input Tax Credit other than those defined and included under Section 2 (62) and Section 2 (63) of the CGST Act, which does not include Compensation Cess - this finding, and which is the only finding on which the refund is rejected, is wholly unsustainable in light of the clarifications issued by the aforesaid two Circulars.
Conclusion - The refund is allowed. Compensation Cess should be treated similarly to other taxes under the GST framework for the purposes of refund on zero-rated supplies. The circulars issued by the tax authorities are authoritative and provide necessary clarifications that must be adhered to by the adjudicating authorities.
Petition disposed off.
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2025 (1) TMI 1083
Violation of principles of natural justice - cancellation of registration of petitioner - failure to provide an opportunity of hearing as well as such order was passed without assigning any reason for cancellation of the registration of the petitioner - violation of principles of natural justice - HELD THAT:- In the present petition, order of cancellation of registration is passed without giving any reason by the respondent authorities, and appeal filed by the petitioner under Section 107 of the GST Act is also dismissed.
As the Appellate Authority has dismissed the appeal of the petitioner, the respondent authorities will not be able to exercise the revisional power under section 108 of the GST Act. Therefore, the impugned order passed by the Appellate Authority as well as the order of cancellation of registration are required to be quashed and set aside. Accordingly, the matter is remanded back to the Assessing Officer at the show cause notice stage.
This petition is partly allowed by quashing and setting aside the impugned order passed by the Appellate Authority as well as order of cancellation of registration and the matter is remanded to the Assessing Officer at show-cause notice stage, however, the registration number of the petitioner shall remain suspended till such show cause notice is disposed of.
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2025 (1) TMI 1082
Challenge to adjudication order passed under Section 74 (9) of the WBGST/CGST Act, 2017 - appellant claimed input tax credit against supply received form non-existent RTPs whose registration has been cancelled - submissions not considered entirely - violation of principles of natural justice - HELD THAT:- The submissions does not appear to have been considered by the assessing officer as there is no recording of any finding with regard to the decisions which were relied on by the assessee.
Two major issues had to be considered by the adjudicating authority, namely, the effect of retrospective cancellation of the registration of the suppliers and the aspect as to whether the purchaser/appellants have proved movement of goods.
This exercise appears to have not been done by the adjudicating authority and, therefore, the matter has to be re-adjudicated by taking note of all the factual issues bearing in mind the legal principles laid down in various decisions. Though the reply to the pre-show cause notice dated 6.10.2023 gives the necessary details and the documents which have been annexed, the appellants should submit a fresh reply dealing with all issues with liberty to place the decisions of the various courts on which they seek to place reliance.
The order passed in the writ petition is set aside and the order passed by the adjudicating authority under Section 74 (9) of the Act dated 10.07.2024 is set aside and the matter is remanded back to the adjudicating authority for a fresh decision on merits and in accordance with law after affording opportunity of personal hearing to the authorized representative of the appellants.
Appeal allowed by way of remand.
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2025 (1) TMI 1081
Detention and seizure of goods and the vehicle by GST officials - validity of notice issued under Section 129(3) of the GST Act - HELD THAT:- Considering the Clause 6 of Annexure P-9 i.e. Circular dated 31-12-2018, issued by the Government of India, by which owner of goods has been clarified, accordingly it shall be decided as per invoice or any other specified document accompanying the goods and instant case Annexure P-2 is an invoice wherein petitioner has been shown as cosigner of the goods, which was being transported in truck bearing Registration No. CG 10 AJ 1477, therefore, the application is to be allowed.
It is directed that the seized goods and truck bearing Registration No. CG 10 AJ 1477 shall be given in the interim custody of the petitioner on the fulillment of conditions imposed - application allowed.
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2025 (1) TMI 1080
Challenge to SCN - Cancellation of client’s registration under Central Goods and Services Tax Act, 2017 - petitioner is ready and willing to pay the tax, interest, late fee, penalty and any other sum required to be paid for the return form - HELD THAT:- Reliance placed in M/S. MOHANTY ENTERPRISES VERSUS THE COMMISSIONER, CT & GST, ODISHA, CUTTACK AND OTHERS [2022 (11) TMI 1521 - ORISSA HIGH COURT] where it was held that 'the delay in Petitioner’s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc., due and complying with other formalities, the Petitioner’s application for revocation will be considered in accordance with law.'
Petition disposed off.
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2025 (1) TMI 1079
Challenge to SCN - Cancellation of client’s registration under Central Goods and Services Tax Act, 2017 - petitioner is ready and willing to pay the tax, interest, late fee, penalty and any other sum required to be paid for the return form - HELD THAT:- Reliance placed in M/s. Mohanty Enterprises [2022 (11) TMI 1521 - ORISSA HIGH COURT] where it was held that 'the delay in Petitioner’s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc., due and complying with other formalities, the Petitioner’s application for revocation will be considered in accordance with law.'
Petition disposed off.
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