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Showing 81 to 100 of 1574 Records
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2024 (12) TMI 1494
Challenge to assessment order - disallowance of ITC - non-filing of Annual returns in Form GSTR-9 and GSTR-9C for the assessment year 2018-19 - without application of mind the final order was passed by the Assessing Officer - violation of principles of natural justice - HELD THAT:- It is evident that the impugned show cause notice was uploaded on the GST Portal Tab. According to the petitioner, the petitioner was unaware of the issuance of the show cause notice through the GST Portal and the original of the said show cause notice was not furnished to them. In such circumstances, this Court is of the view that the impugned order came to be passed without affording any opportunity of personal hearing to the petitioner to establish its case, thereby violating the principles of natural justice and that it is just and necessary to provide an opportunity to the petitioner to establish their case on merits and in accordance with law.
The impugned order dated 08.03.2024 and the consequential order dated 11.03.2024 are set aside and the matter is remanded to the respondent for fresh consideration on condition that the petitioner shall pay 10% of disputed tax amount to the respondent within a period of four weeks from today (15.10.2024) and the setting aside of the impugned order will take effect from the date of payment of the said amount.
Petition disposed off.
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2024 (12) TMI 1493
Violation of principles of natural justice - opportunity of personal hearing not provided - direction to petitioner to pay tax, interest, and penalty - HELD THAT:- Considering the nature of relief to the granted, this Court is of the view that notice to the respondent-Bank is not necessary and the same is dispensed with.
This Court is of the view that if the respondent Department is not convinced with the reply filed by the petitioner and is in need of any documents, they ought to have called upon the petitioner to produce those relevant documents, by providing an opportunity of personal hearing, without doing so, they cannot straight away slap the petitioner with the impugned order.
It is sheer clear that the impugned order not only suffers from violation of principles of natural justice but also against the provisions contemplated under Section 75 (4) of the CGST Act, inasmuch as, in terms of Section 75(4), an opportunity of hearing ought to have been granted, where any adverse decision is contemplated against taxpayer (petitioner in this case). Therefore, this Court is inclined to set aside the impugned order.
The impugned order dated 29.04.2024 is set aside and the matter is remanded back to the respondent for fresh consideration - Petition allowed.
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2024 (12) TMI 1492
Maintainability of petition - availability of alternative remedy - Challenge to order issued u/s 73 of the Central Goods and Services Tax/State Goods and Services Tax Acts, 2017 - HELD THAT:- The petitioner is entitled to succeed. A perusal of Ext.P7 show cause notice will indicate that the only issue on which the show cause notice was issued was a mismatch between GSTR-1 and GSTR-3B for the period in question. However, Ext.P1 order proceeds to record findings on other issues as well. That apart, a reading of Ext.P1 does not indicate that the replies submitted by the petitioner have been duly considered by the authority. After extracting the details of the notice issued to the petitioner, the officer proceeds to extract the provisions of Section 16 of the CGST/SGST Acts and holds that as per Section 16(2)(a) of the CGST/SGST Acts, the petitioner shall be entitled to input tax credit only if he is in possession of a tax invoice or debit note issued by the supplier registered under the CGSG/SGST Acts and that the burden of proving the claim for input tax credit will always lie on the person claiming the input tax credit.
Conclusion - Ext.P1 is quashed due to its procedural deficiencies.
The writ petition is allowed.
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2024 (12) TMI 1491
Challenge to order issued under the provisions of Section 74 of the CGST/SGST Acts - certain amounts of input tax credit, which was availed by the petitioner in respect of supplies where the tax has already been discharged by the respective suppliers, has not been considered by the 1st respondent while passing Ext.P3 order - violation of principles of natural justice - HELD THAT:- The petitioner has not made out any case for interference with Ext.P3 order in exercise of writ jurisdiction under Article 226 of the Constitution of India. If the petitioner has a case that there has been some mistake in Ext.P3 order and as a result of which certain eligible input tax credit with reference to the invoices mentioned in the reply submitted by the petitioner had not been given to him, it is open to the petitioner to file an application for rectification under Section 161 of the CGST/SGST Acts.
Petition dismissed.
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2024 (12) TMI 1490
Challenge to adjudication order - respondent has illegally proceeded to recover the amount from the petitioner even before the expiry of three months as mentioned in the notice as contemplated under Section 78 of the KGST Act - no personal hearing was granted in favour of the petitioner - violation of principles of natural justice - HELD THAT:- In the Show Cause Notice dated 13.12.2023, the respondents have clearly stated that date of personal hearing, time of personal hearing and venue for personal hearing would be inapplicable, which is sufficient to come to conclusion that no personal hearing was granted to the petitioner before passing adjudication order. Further, the aforesaid Show Cause Notice dated 13.12.2023 was not received by the petitioner as can be seen from the material on record including the impugned order, which merely states that the said Show Cause Notice was issued to the petitioner through BOWEB and not to the registered e-mail ID of the petitioner or physically to the petitioner.
Thus, non serving of the Show Cause Notice upon the petitioner and non-providing/non-granting of personal hearing and passing the impugned adjudication order, is violative of principle of natural justice warranting interference of this Court and consequently, the impugned adjudication order deserves to be quashed and the matter is remitted back to the respondent for reconsideration afresh in accordance with law.
Conclusion - The respondents were not entitled to initiate recovery proceedings much less recover the determined amount from the petitioner prior to 27.03.2024 and consequently, the amount recovered by the respondent from the petitioner on 11.03.2024 is clearly without jurisdiction or authority of law and contrary to the facts as well as Section 78 of the KGST Act and necessary directions are to be issued to the respondents to refund the said amount back to the petitioner.
Impugned adjudication order at Annexure-B3 under Section 73 dated 28.12.2023 issued by respondent No.1 is quashed - The matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law - petition allowed by way of remand.
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2024 (12) TMI 1489
Maintainability of petition - availability of alternative remedy - non-constitution of the Tribunal - HELD THAT:- The respondent State authorities have acknowledged the fact of non-constitution of the Tribunal and come out with a notification bearing Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019 for removal of difficulties, in exercise of powers under Section 172 of the B.G.S.T Act, which provides that period of limitation for the purpose of preferring an appeal before the Tribunal under Section 112 shall start only after the date on which the President, or the State President, as the case may be, of the Tribunal after its constitution under Section 109 of the B.G.S.T Act, enters office.
Subject to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act. The petitioner cannot be deprived of the benefit, due to non- constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed.
Petition disposed off.
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2024 (12) TMI 1488
Rectification u/s 254 - jurisdiction of the Tribunal as conferred under sub-Section (2) of Section 254 - delayed payment of the statutory dues like the Provident Fund and Employees State Insurance Corporation amounts - view taken by the Tribunal qua setting aside of the additions as made by the assessing officer, cannot be accepted to be a correct view, in view of the decision of the Supreme Court in Checkmate Services Private Limited [2022 (10) TMI 617 - SUPREME COURT] which was rendered subsequent to the orders passed by the Tribunal.
Whether there was any mistake apparent on the face of the record and/or whether a decision which was rendered by the Supreme Court subsequent to the Tribunal’s decision of which rectification is sought, could be relevant to come to a conclusion on the ground that there was a mistake apparent on the face of the order, the Tribunal could substitute its original order? - HELD THAT:- As recently a bench of the Tribunal in the case of ANI Integrated Services Ltd [2024 (7) TMI 881 - ITAT MUMBAI] had the occasion to consider the very issue as raised by the Revenue in light of the decision rendered by the Supreme Court in Checkmate Services Private Limited (Supra). In such case similar applications were filed by the Revenue praying that the Tribunal set aside its orders in relation to Employees State Insurance Corporation (“ESIC” for short) (for the Assessment Year 2019-20) considering the changed position in law in “Checkmate Services Private Limited” (Supra).
Tribunal by its decision in ANI Integrated Services Limited [2024 (7) TMI 881 - ITAT MUMBAI] did not accept the contentions as urged on behalf of the Revenue and rejected the Miscellaneous Applications filed by the Revenue, also considering the decision in Beghar Foundation [2021 (2) TMI 504 - SUPREME COURT] and the scope of its limited jurisdiction under Section 254 (2) of the IT Act. We are in complete agreement with the view taken by the Tribunal in ANI Integrated Services Ltd (Supra) and which is on the very issue as urged by the petitioner.
We are of the clear opinion that the Tribunal was in a patent error in exercising jurisdiction under Section 254 (2) in passing the impugned order.
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2024 (12) TMI 1487
Challenge to Order of the FAA dismissing the appeal filed by the petitioner owing to the fact that the petitioner had not cured certain defects pointed out by the Appellate Authority - HELD THAT:- Since the petitioner before this court is seeking a limited relief, this writ petition can be disposed of setting aside Ext. P7 and directing that if the petitioner cures the defects pointed out by the Appellate Authority within a period of one week from the date of receipt of a certified copy of this judgment, appeal will stand restored to the file and shall be disposed of on merits by the Appellate Authority. If the petitioner does not cure the defects within one week (as above) the appeal will stand dismissed as already directed by the Appellate Authority.
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2024 (12) TMI 1486
Shorter period to respond to notices issued u/s 142(1) - HELD THAT:- This Court finds that a notice u/s 143(2) of the Act was issued to the petitioner on 31.03.2021 and another notice u/s 142 (1) dated 16.09.2021 along with a questionnaire. He has filed his reply to the same, whereafter subsequently another notice was issued to him on 24.09.2021 under section 142 (1) of the Act whereby he was asked to provide copy of declaration under FEMA/AMLA, contract/agreement for procurement of goods/services along with invoices/bills, evidence to show that TDS has been deducted, ledger account of trade payables, details of imports in prescribed format, copy of certificate of chartered engineer for recognizing income and expenditure for each of the project as on 31.03.2019. The notice was issued on 24.09.2021 with direction to provide the aforesaid information on or before 26.09.2021 at 3:00 PM. Thus, we find that the time provided was too short.
While initially the petitioner was asked to provide certain details along with questionnaire, the notices which have been issued on 24.09.2021 and 27.09.2021 deal with a different information altogether, and the time provided under these notices was not even of seven days, which is the minimum required time for furnishing of information.
Decision taken without giving opportunity of filing reply and details would therefore stand vitiated in law. The draft assessment order passed on the said basis as above, was also objected to as per section 144C (2) of the Act before the DRP, but the DRP has not decided the same. The Assessing Officer has also not delved with the objections. In view thereto, the final assessment order dated 30.11.2021 would not be sustainable in law
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2024 (12) TMI 1485
Compulsory selection of returns for scrutiny against government company - contention of petitioner is that no scrutiny could have been carried out, as per the guidelines issued by the Central Board of Direct Taxes and petitioner is a completely owned government company depending only on the government funds to carry out the development activities with its seat at Patna; totally funded by the Government - HELD THAT:- The guidelines, as placed is one for compulsory selection for returns of complete scrutiny during the financial year 2021-22 and the conduct of the assessment proceedings in such cases. Petitioner asserted that the petitioner does not come under any of the categories prescribed. However, we are of the opinion that the guidelines are only for compulsory selection of returns for scrutiny and it does not preclude random selection for scrutiny by the Assessing Officers. The categories coming under the guidelines are those which are to be taken up mandatorily for scrutiny and this does not create any restriction of any other category being taken up for scrutiny.
Violation of principles of natural justice, insofar as no hearing having been granted to the assessee - Admittedly, the petitioner while uploading the application did not seek for an opportunity for personal hearing. The petitioner’s contention is that the reply filed specifically sought for such personal hearing. As per the system generated notices and uploading of on-line replies in specified forms; there is a specific column provided for requesting personal hearing. Unless the personal hearing is sought for, there would be no requirement to issue such personal hearing. Admittedly, in the present case, the column for personal hearing was not ticked as ‘Yes’. The reply was filed and it was duly considered in the order passed. We find absolutely no reason to interfere with the order also on the ground of violation of principles of natural justice.
On the above reasoning, we find absolutely no reason to invoke the extra ordinary remedy under Article 226.
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2024 (12) TMI 1484
Disallowance u/s. 14A r.w.r. 8D - expenditure incurred on earning exempt income - HELD THAT:- Where interest free funds are in excess of investments, no disallowance u/s. 14A of the Act could be made. CIT(A) placing reliance on various decisions including the decision in the case of Hero Cycle Ltd. [2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT] deleted the addition. It is no more res intigra that where the assessee is having mixed bag of own interest free funds and interest bearing funds and own funds of the assessee are much more then the investments made, it shall be presumed that the investments are made from assessee’s own interest free funds. Thus, in light of settled legal position, we find no infirmity in findings of the CIT(A) on this issue, hence, ground no. 1 to 3 of appeal are dismissed.
Amortization of Premium Paid on Securities - AO disallowed assessee’s claim of amortization on securities ‘held to maturity’ and made addition - HELD THAT:- The issue is now well settled that amount paid towards amortization of premium on securities ‘held to maturity’ is an allowable deduction. We see no infirmity in the findings of the CIT(A) deleted addition as relying on HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] and in the case of ACIT vs. The Bank of Rajasthan Ltd. [2010 (12) TMI 894 - ITAT, MUMBAI]
Revision for Standard Assets - HELD THAT:- Revenue has not been able to controvert the statement of ld. Counsel for the assessee that in preceding and succeeding assessment years where assessments were completed u/s.143(3) of the Act, the claim of the assessee has been accepted by the AO. The rule of consistency demands that where the assessee has claimed an expenditure following the same accounting policy in preceding and succeeding assessment years and the same has been accepted, no disallowance should be made in one of intervening assessment years.
Provision for Fraud - HELD THAT:- In preceding assessment year, the CIT(A) decided this issue in favour of the assessee by placing reliance on various case laws and CBDT Circular no. 35DXLVII-20 dated 24.04.1965. We find no infirmity in the order of CIT(A) on this issue, hence, we see no reasons to interfere with the same. The ld. DR has anxiously raised a concern that the assessee has not explained the treatment given on subsequent recovery of the amount involved in fraud. Though, no such objection was raised by the AO during assessment proceedings, the ld. Counsel for the assessee made a statement at Bar that as and when any amount is recovered, the same is offered to tax in the year of recovery. In view of above, we find no reason to give any further direction on this issue. The ground of appeal is dismissed for the reasons stated above.
Deduction u/s. 80P(2)(a)(i) - The provision of section 80P of the Act will also be applicable to Regional Rural Banks. Hence, deduction u/s. 80P(2)(a)(i) of the Act is allowable in respect of the RRB's.
Disallowance of expenses claimed under ‘Estab-PNB’- assessee has claimed establishment expenses towards staff deputed from sponsor bank i.e. PNB - HELD THAT:- Expenditure is claimed under the sub-heads like EPF, Medical Aid, LFC, Gratuity, etc. The AO has disallowed the claim as the assessee has failed to submit any clarification or nature of payment under the aforesaid sub-heads and no bills or vouchers were submitted before the AO to prove nature of expenditure and the genuineness of the expenditure claimed. In first appeal, the CIT(A) has allowed assessee's claim in a cryptic manner. In our considered view neither the nature of expenditure has not been properly explained by the assessee nor it is substantiated with documentary evidence, we deem it appropriate to restore this issue to the jurisdictional AO for verification.
Disallowance of Establishment expenses - increase in establishment expenses is not commensurate to other expenses claimed by the assessee on account of setting up of new branches - HELD THAT:- We find that the AO has made addition merely based on surmises and conjectures, without examining material available on record. The addition cannot be made merely on assumptions and suspicion. We are in agreement with the reasons given by the CIT(A) to delete the addition.
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2024 (12) TMI 1483
Income deemed to accrue or arise in India - income received by the assessee from Indian customers for providing a cloud-native machine data analytics solution qualifies - "Fees for Technical Services" (FTS) under the Income Tax Act, 1961 and the India-US Double Taxation Avoidance Agreement (DTAA) - HELD THAT:- We observe that the assessee has submitted TRC and also offered income generated in India in the resident country and offered the same as income and it does not make any difference whether the global income assessed to tax are income or loss, as long as, the income generated are offered in the resident country as business income which is the requirement of law. In view of the above discussions we hold that receipt did not qualify as FTS under Article 12(4) of the India-US tax treaty. Thus, grounds of appeal nos. 1 to 6 filed by the assessee are allowed.
TDS credit - We observe that TDS granted by the Assessing Officer and claimed by the assessee are different. We direct the Assessing Officer to verify the same and allow the same as per law.
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2024 (12) TMI 1482
Special Audit passed u/s 142(2A) - mandation to record satisfaction required for ordering a special audit - Extension of time for furnishing the special audit report - HELD THAT:- As in the present case, the satisfaction/opinion was initially recorded by the AO and then subsequently by the CIT as well. Subsequently on 28-03-2013 CIT himself is according approval to such satisfaction. Such action is not mandated in terms of Sec. 142(2A). Further in terms of Section 142(2C) the initial period for furnishing the Special Audit Report has to be specified by the AO and not by the CIT, as has happened in the instant case. Thus the findings of ld. CIT(A) are quite in accordance with law. Since due procedure as mandated under the provisions of Sec. 142(2A) & Sec. 142(2C) has not been followed in this case, the order is rightly held to be void ab-initio on this account.
Extension of further time period of furnishing the Special Audit Report u/s 142(2A) - The extension of time period for furnishing the Special Audit Report u/s 142(2A) has been provided by the Assessing Officer on an application made by the Special Auditor in this regard. The extension has not been granted in terms of provisions of Sec. 142(2C) and therefore the extension so granted is beyond jurisdiction and is time barred. We are of considered view that there is no error in the findings of ld. CIT(A) that the statute demands that the extension can be granted either by the AO suo-moto or on an application made in this behalf by the assessee. Admittedly, in the present case, the AO has granted extension for conducting Special Audit vide his letter dated 27-03-2019 addressed to the Special Auditor, M/s Sanjay Satpal & Associates. Such an action by the AO is certainly in disregard of the provisions of proviso to Section 142(2C) of the Act, and CIT(A) has committed no error in holding that this extension is vitiated and impugned assessment liable to be quashed.
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2024 (12) TMI 1481
Addition u/s 68 - Bogus share capital - HELD THAT:- It is the submission of the assessee that even in case there is some doubt about the source of money in giving into coffers of the share applicants which they invested with the assessee, it would not automatically follow that the said money belongs to the assessee and becomes unaccounted money. According to us, the assessee appears to be correct on this aspect. We feel that something more which was necessary and required to be done by the AO was not done.
AO failed to carry his suspicions to a logical conclusion by further investigation. After the registered letters sent to the investing company had been received back undelivered, the AO presumed that these companies did not exist at the given address. No doubt, if the companies are not existing, i.e., they have only paper existence, one can draw the conclusion that the assessee had not been able to disclose the source of amount received and presumption u/s 68 of the Act for the purpose of addition of amount at the hands of the assessee. But, it has to be conclusively established that the company is non-existence.
Enhancing of income u/s 56(2)(viib) - protective addition for share premium charged by rejecting the valuation report furnished under Rule 11UA(2)(b) i.e. Discounted Cash Flow Method - The assessee has calculated and estimated the projected figures at the lowest and even then, the value arrived at Rs. 7.25 lacs. After reducing from the present value factor at the rate of 14% year wise because of diminishing value of the money, the value of the enterprise value arrived at Rs. 7.25 lacs and value per share arrived at Rs. 80 per share. This clearly justified the value of premium received by the assessee from the investors of Rs. 70 per share. The ld. Tax authorities have discredited the valuation report without any independent exercise of their own. We are of considered view that in case of fresh issue of shares made by unquoted company, the AO is not authorized to pick and choose method of valuation of shares since that option is given to the Assessee. Where the Assessee exercises its option to value its shares as per DCF method, the AO cannot completely disregard such method and replace it his method even if specific discrepancies are found by the AO in Appellant's working of DCF based FMV.
Assessee appeal allowed.
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2024 (12) TMI 1480
Reopening of assessment - information received from DG GSTI, Delhi - gross turnover declared by the assessee in its return of income and the turnover declared for the purpose of service tax are different - assessee has not submitted any supporting evidences relating to reconciliation of gross turnover - HELD THAT:- Turnover declared on the Service Tax Act which is based on receipt of advances not based on completion of project. The determination of gross revenue is different from the actual turnover. On the basis of reconciliation, there will be difference between turnover declared for the purpose of service tax and the return of income.
From the records submitted before us shows that assessee has submitted relevant reconciliation statement before the lower authorities along with relevant documents. The lower authorities failed to consider the same. Therefore, we do not see any reason to sustain the additions made by the AO. Accordingly, the estimated profit on the undisclosed turnover is deleted. Decided in favour of assessee.
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2024 (12) TMI 1479
Reopening of assessment - credit entries escaped assessment - AO disallowed 10% of purchases as an expenditure - HELD THAT:- As per Explanation 3 of the section 147 of the Act, if during the course of assessment proceedings the AO comes to conclusion that some items have escaped assessment, then notwithstanding that those items were not included in the reasons to believe as recorded for initiation of the proceedings, hence, the notice, he would be competent to make assessment to those items.
The Hon’ble Delhi High Court has interpreted this that the legislature could not be presumed to have intended to give blanket powers to the Assessing Officer that on assuming jurisdiction u/s 147 of the Act regarding reassessment of escaped income, he would keep on making roving enquiry and thereby including different items of income not connected or related with the reasons to believe, on the basis of which he assumed jurisdiction.
As in the present case, the issue is exactly identical what was in Ranbaxy Laboratories Ltd. [2011 (6) TMI 4 - DELHI HIGH COURT] and of Jet Airways (I) Ltd. of Bombay High Court [2010 (4) TMI 431 - BOMBAY HIGH COURT] Since the issue, is in favour of the assessee, we quash the reassessment framed by AO as bad in law.
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2024 (12) TMI 1478
Validity of assessment u/s 153C as barred by limitation - HELD THAT:- We are of the considered opinion, that the AO had no jurisdiction to initiate proceeding u/s 153C of the Act for the A.Y. 2011-12. Search was conducted before the amendment and also the satisfaction note for the assessee, being a non-searched party in AY 2018-19. Accordingly, the order of the AO passed u/s 153C r.w.s. 143(3) of the Act was beyond the permissible period of six years. Therefore, the assessment order passed u/s 153C/143(3) of the Act for the AY 2011-12 is quashed.
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2024 (12) TMI 1477
Exemption u/s 11 - arranging the guarantee to the credit for loans and advances - HELD THAT:- We find that the assessee is ameliorating the credit guarantee to the small venture and supporting for development of business/ livelihood. Considering the activities, we note that it is not contravening the provisions of section 2(15) of the Act and liable for exemption under section 11 of the Act.
The trust is fully governed by Government of India for development of the first-generation entrepreneurs in small-scale industries. We respectfully follow the order of [2023 (11) TMI 1107 - ITAT MUMBAI]. We set aside the impugned appeal order in this issue. In our considered view, the ground taken by the assessee is allowed.
Rejection of ‘provision of guarantee claims’ - AO had treated this provision as ‘Provision of Expenses” which not allowable as per the statue - We note that the nature of settlement of claim and the payment made by assessee is only to support the small and medium businesses. The entire activities for the purpose of providing effective credit guarantee for SSI loans extended by eligible scheduled commercial bank and rural bank to the eligible borrowers without collateral security.
As per the scheme, a lending institution has to enter into an agreement with the assessee for covering by way of guarantee. Against the outstanding guarantee the assessee creates a provision for guarantee claims as required to be maintained under the conservatism principle required to be adhered under mercantile system of accounts. We find that the deduction claimed by the assessee under ‘provision of guarantee claims’ is allowable expenses.
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2024 (12) TMI 1476
Validity of SCN issued to the deceased respondent - penalties on the deceased respondent - proper officers under Section 28 of the Customs Act - HELD THAT:- Liberty granted to the respondents - the LR’s of the deceased respondent to file an appeal before the CESTAT under Section 129-A(1) of the Customs Act within two weeks from the date of receipt of copy of this order. On such filing, the CESTAT shall decide the appeal to the extent of the grounds urged, and not considered by the authorities below in accordance with law.
Appeal disposed off.
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2024 (12) TMI 1475
Levy of penalty on petitioner, an Executive Director in a public limited company - non-fulfilment of its export obligations under the FTDR Act - territorial jurisdiction/forum non conveniens - Petitioner has contended that neither the show-cause notice nor the OIO gave any reasoning for fastening the liability on the Petitioner - violation of principles of natural justice.
Whether the Petitioner as a Director of a Company that is in violation of an export obligation, could have been personally penalized therefor? - HELD THAT:- Section 11 (2) of the FTDR Act, sets out that where a person makes or abets in the making of export or import in contravention of the provisions of FTDR Act, he shall be liable to a penalty which will not be less than Rs. 10,000/- and shall not exceed five times the value of the goods in respect of which the contravention has been made. Thus, for the provision to be applicable, the person should either have been in contravention of the FTDR Act or abetted in the same. It is not disputed that the Company had 14 directors and the Petitioner was only one of them - the Petitioner’s involvement in the license procurement was restricted to signing on a power-of-attorney person on behalf of the company, pursuant to a board resolution passed by the Company.
Territorial jurisdiction/forum non conveniens - HELD THAT:- The Respondents have relied on the judgment of the Supreme Court in Kusum Ingots [2004 (4) TMI 342 - SUPREME COURT] to submit that this Court cannot entertain the present Petition. This submission of the Respondents is misconceived. The Petitioner had previously challenged an order passed by Respondent No. 2 which challenge was allowed by a Coordinate Bench of this Court by its order dated 06.09.2012. The Respondents participated in these proceedings, thus submitting to the jurisdiction of this Court.
The Supreme Court in Kusum Ingots [2004 (4) TMI 342 - SUPREME COURT] has held that where an order is passed by a Tribunal in one place and an Appellate Authority is constituted at a different place, a Writ Petition would be maintainable at both places. In addition, it has been held that even if a small part of the cause of action arises within the jurisdiction of the High Court, the Court can entertain the Petition.
A Coordinate Bench of this Court in Krishna Kumar Bangur [2006 (4) TMI 256 - HIGH COURT OF DELHI], dealt with a similar issue where a show-cause notice was issued under Sections 8 and 11 of the FTDR Act to a company and all its directors, and reasons for arriving at the conclusion that a Director is personally liable, had not been adumbrated therein. It was held that where the authority had not specifically considered the role to be played by the Petitioner therein in the export performance and was reticent on the reasons for personal culpability of any of the directors, it could not be sustained. It was further held that if the show-cause notice or the orders in original and the appellate order did not disclose any reasons, the order would be set aside.
Violation of principles of natural justice - HELD THAT:- No reference is made in the OIO as to how the directors are personally liable. Given the fact that the Respondent was unable to get the required information, it is unclear as to how the Respondent was able to ascertain and impose fiscal penalty, especially on the Petitioner. The provision of the statute provides for a decision based on an examination of the facts and documents before it and not otherwise - The Impugned Order is passed more than 9 years after the OIO and premises itself on the fact that the firm (read Company) had not fulfilled its export obligations, and since it could not produce any document in its support, it was liable for the obligation. It further goes on to hold that the ground of liquidation of the Company could not be a ground for non-submission of export documents or non-payment of custom duty could not be taken as a ground for non-submission by the Petitioner. The discussion on this aspect is limited.
Conclusion - The impugned penalty order against the petitioneris set aside, finding no merit in the respondents' contentions and it is concluded that the orders failed to establish the petitioner's personal liability for the company's defaults.
Petition disposed off.
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9911796707
