TMI Tax Updates - e-Newsletter
January 22, 2024

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

TMI Short Notes

1. Long-Term Capital Gains and Unexplained Cash Credits in Stock Transactions: A Legal Perspective

  Income Tax:

2. Judicial Approach in Transfer Pricing and PE Attribution: Analysis of a Landmark Case: Legal Perspectives from Tribunal to Supreme Court

  Income Tax:

3. Scrutinizing the Application of Mind in Tax Assessments: Examining the Role of ACIT while granting approval u/s 153D

  Income Tax:

4. TDS Obligations and DTAA: Clarifying Tax Jurisdiction in International Telecom Services

  Income Tax:

5. Judicial Scrutiny of Arrest Powers under GST Legislation: Balancing Individual Rights and Statutory Duties

  GST:

6. Navigating the Legal Maze: Electricity Dues vs. Insolvency Proceedings

  IBC:

7. Distinction Between Business Income and Deemed Income in Income Tax Assessments: Higher rate of tax u/s 15BBE on Surrendered Income.

  Income Tax:

8. From Valuation to Penalty and redemption fine: Legal Implications of Importing Restricted Goods in Customs Law

  Customs:

9. Analyzing the Implications of Delay in Tax Adjudication: A Case Study

  Service Tax:

10. Secured Creditors and Asset Disposal in Liquidation: High Court's Balancing Act

  Corporate Laws:

11. Analysis of ITAT's Decision on Surplus Stock Taxation

  Income Tax:

12. Contractual Compliance and GST Reimbursement: Unpacking a Landmark Judgment"

  GST:

13. The Legal Contours of Input Tax Credit Eligibility: Procedural Aspects of GST and ITC

  GST:

14. Reverse Charge Mechanism (RCM): Service Tax Implications for Exporters: A Legal Perspective on Foreign Bank Charges

  Service Tax:

15. Cheque Dishonour and Corporate Responsibility: Analyzing the Supreme Court's Latest Judgment

  Indian Laws:

16. Validity of Notices / orders without DIN. The Critical Role of Procedural Compliance in Tax Administration: Analysis of a Supreme Court Stay

  Income Tax:

Articles

1. Appeal can be filed if the Authority acknowledged that key personnel responsible for compliance has died

   By: Bimal jain

2. FOREIGN EXCHANGE MANAGEMENT (MANNER OF RECEIPT AND PAYMENT) REGULATIONS, 2023

   By: DR.MARIAPPAN GOVINDARAJAN

3. GOODS AND SERVICES TAX PRACTITIONER

   By: Dr. Sanjiv Agarwal

4. Refund Application should not be rejected merely on the ground that the required documents are not supplied

   By: Bimal jain

News

1. Advisory on Payment through Credit Card (CC)/Debit Card (DC) and Unified Payments Interface (UPI)

2. Infrastructure Finance Secretariat, DEA, organises workshop on ‘Public Private Partnership (PPP) Structuring Toolkit – Solid Waste Management (SWM)’ with more than 80 participants from Central Government and State/UT Governments

Notifications

Customs

1. 06/2024 - dated 19-1-2024 - Cus (NT)

Exemption of deposits u/s 51A (4) of the Customs Act, 1962 - to be implemented from 1.3.2024 - Amendment of Notification No.19/2022 Customs (NT) dated 30.03.2022

2. 05/2024 - dated 19-1-2024 - Cus (NT)

Exemption of deposits into ECL extended upto 29-02-2024 - Amendment of Notification No.18/2023 Customs (NT) dated 30.03.2023

GST - States

3. S.O. 107/P.A.5/2017/S.9/2023 - dated 22-12-2023 - Punjab SGST

Amendment in Notification No. S.O.28/P.A.5/2017/S.9 /2017, dated the 30th June, 2017

4. S.O. 106/P.A.5/2017/S.11/2023 - dated 22-12-2023 - Punjab SGST

Amendment in Notification No. S.O.18/P.A.5/2017 /S.11/2017, dated the 30th June, 2017

5. S.O. 104/P.A.5/2017/S.9/2023 - dated 22-12-2023 - Punjab SGST

Amendment in Notification No. S.O.21/P.A.5/2017/S.9/ 2017, dated the 30th June, 2017

Income Tax

6. 13/2024 - dated 19-1-2024 - IT

Central Government authorises the inquiring authority, for specified persons, in respect of the summoning and enforcing the attendance of witnesses and examining them on oath

7. 12/2024 - dated 19-1-2024 - IT

Central Government authorises the inquiring authority, for specified persons, in respect of the summoning and enforcing the attendance of witnesses and examining them on oath

Highlights / Catch Notes

GST

• Refund Claim Denied for Lack of Documentation on Unutilized ITC in Inverted Duty Structure Supplies.

  Case-Laws - HC : Refund of unutilized Input Tax Credit (ITC) - zero rated supplies or inverted duty structure - debit entries of the refund claim were not made - non submission of supporting documents. - it is necessary for the petitioner to submit all necessary documents to establish that its claim for refund is confined to input goods that are affected by an inverted duty structure. - HC
  Visit to Get Source

  ---

• Gift Vouchers and Cards Taxable at Redemption Under GST, Court Rules in Clarification Update.

  Case-Laws - HC : Levy of GST - Gift Vouchers - specific case of the petitioner is that these Gift Vouchers/Gift Cards are “actionable claims” and therefore not liable to tax - The petitioner will be liable to tax on the date of redemption under Section 12(4)(b) of the respective GST Enactments - the clarification in the impugned order is modified to that extent. - HC
  Visit to Get Source

  ---

Income Tax

• High Court Quashes Reassessment Notice: AO Failed to Inquire Properly Despite Access to All Facts.

  Case-Laws - HC : Validity of reopening of assessment u/s 147 - AO had within his possession all the primary facts and it was for him to make necessary inquiry and draw proper inferences. The AO has not discharged his duty and in fact has relied upon financial statements and other documents furnished by Petitioner itself for his reason to believe escapement of income. It cannot be said that income chargeable to tax for the AY under consideration has escaped assessment by reason of the omission or failure on the part of Petitioner to disclose fully and truly all material facts.- notice u/s 148 rejecting the objections of Petitioner to the reasons to believe notice and the draft assessment order are quashed. - HC
  Visit to Get Source

  ---

• Sales Tax Subsidy Misclassified as Capital Receipt; Should Be Part of Sale Price, Not Capital Receipt.

  Case-Laws - HC : Nature of receipt - sales tax subsidy - revenue or capital receipt - The ITAT has committed a manifest error law - The receipts have been shown by the respondent/assessee as sale price received by him from the purchasers. Once the amount has been received as sale price, no part of it could be termed as capital receipts. - HC
  Visit to Get Source

  ---

• Dispute Over Gift from Non-Resident External Account: Tax Implications and Conversion to Rupees Explained.

  Case-Laws - AT : Addition u/s 68 - it is seen that the this Gift is given from donor's NRE bank account maintained with Axis Bank. It entails particulars of cheque number, date of giving of gift, donee, amount gifted. Source of gift of amount in rupee terms immediately credited before giving gift on credit side of the bank statement where amount in US $ are stated in narration in the bank statement. - Ld CIT(A) rightly allowed the assessee`s appeal for statistical purposes. - AT
  Visit to Get Source

  ---

• TDS Compliance on Lottery Winnings: Revision Order Upheld Due to Inadequate Examination by Assessing Officer.

  Case-Laws - AT : Revision u/s 263 - TDS u/s 194B on payments made to players on winnings from lotteries/crossword puzzles - It is not evident that the AO examined/verified whether the deduction of tax by the assessee is as per the provisions of Chapter XVII-B, particularly section 194B of the Act, which requires tax to be withheld on the winning amount from any lottery or crossword puzzle, at the time of payment, when the winning amount exceeds Rs. 10,000. - Revision order sustained - AT
  Visit to Get Source

  ---

• Decrease in Gross Profit Alone Insufficient for Addition Without Identifying Specific Defects in Books of Account.

  Case-Laws - AT : Addition made on account of low gross profit declared by the assessee - mere decrease in gross profit as compared to the earlier year is not a ground sufficient for making an addition and that too, without finding any specific defect in the books of account regularly maintained by the assessee - AT
  Visit to Get Source

  ---

• Revision Highlights AO's Oversight on Disallowance Issue, Order Deemed Erroneous u/ss 43B and 40A(3.

  Case-Laws - AT : Revision u/s 263 - It is manifest from the record and particularly from the assessment order and order sheet entries that the AO has not taken up this issue of disallowance u/s 40A(3) of the Act and hence, there is a complete lack of inquiry on the part of the AO so far as this issue is concerned. - Thus order of AO is erroneous being contrary to the provisions of section 43B as well as 40A(3) - Revision order sustained - AT
  Visit to Get Source

  ---

Customs

• Non-payment of Interest on Short-Levied Duties: Taxation Compliance and Consequences under Tariff and Customs Acts.

  Case-Laws - AT : Non-payment of interest on the short levied CVD/Additional Duty of Customs leviable under Section 3(1) of the Tariff Act - In view of Section 3 of the Tariff Act read with Section 12 of the Customs Act, the special additional duty is to be construed as Customs Duty and therefore in view of the provisions of the law, all the provisions of the Customs Act and Rules/Regulations made thereunder are squarely applicable to the issue at hand. Further, it is common knowledge that taxation does not concern principles of equity. If the appellants have failed in discharge of their statutory obligations or have been deficient thereto, consequences, advantages and disadvantages thereof shall follow. It is not open for the appellants to have the best of both ends. - AT
  Visit to Get Source

  ---

• Customs Authority's Late Notice Overturned Due to Appellant's Compliance with Documentation and Lack of Retroactive Checks.

  Case-Laws - AT : Benefit of exemption - At the time of filing the Bill of Entry the appellant have to submit the documents including the country of origin certificate which the appellant have scrupulously complied. If there is doubt in the mind of customs they could have issued show cause notice within the normal period of limitation, as per proviso to Section 28 (4) of Customs Act. However, in the present case the show cause notice was issued beyond the normal period of limitation. - Moreover, on the merit also there is no strict compliance of retroactive check and conclusion thereof - Demand set aside - AT
  Visit to Get Source

  ---

Indian Laws

• Goa Cess Act Upheld: Distinct Purpose from GST, Remains Valid Despite Tax Law Changes.

  Case-Laws - HC : Post GST era: Whether the Goa Cess Act is constitutionally valid? - The object of GST laws is totally distinct from the object and purpose of the Goa Cess Act. Even the expert body namely the GST council has refrained from subsuming and thereby recommending the repeal of the Goa Cess Act in view of the incorporation of the GST laws. It would not be out of place to mention that Entry 52 of List II which dealt with taxes on entry of goods into local area for consumption use or sale therein and Entry 55 of List II inter alia in regard to taxes on advertisement, have been repealed, that too without any corresponding amendment in Entry 66 of List II. It is therefore, an unwarranted exercise on the part of the petitioners in making an attempt to attack the validity of the Goa Cess Act on the incorporation of the GST laws. - HC
  Visit to Get Source

  ---

IBC

• Tribunal Grants Extension for Resolution Plan Implementation, Citing Applicant's Bona Fide Intent and Rule 11 Authority.

  Case-Laws - AT : Seeking extension of time for implementation of the Plan - the Successful Resolution Applicant has indicated its bona fide, at least prima facie at the present stage, to complete the implementation of the `Resolution Plan’; and therefore, this `Tribunal’ is of the considered view that powers under Rule 11, can be exercised in the facts of this matter and the aforenoted Proposal given by the Successful Resolution Applicant, be accepted. - AT
  Visit to Get Source

  ---

• Show Cause Notice Lacks Justification; Section 65 Inapplicable for Non-Liquidation Cases in Insolvency Proceedings.

  Case-Laws - AT : Penalty u/s 65 of the Insolvency and Bankruptcy Code, 2016 on assenting CoC members - The Adjudicating Authority has not given any reason for forming an opinion much less prima facie that it was a case of malicious intent on the part of the Applicant/RP with the connivance of assenting members of CoC to whom the show cause notice was given and finally the provision of Section 65 has no application because it would apply if the application is filed for the purpose other than liquidation. - AT
  Visit to Get Source

  ---

Service Tax

• NOIDA Recognized as 'Local Authority'; Services Not for Commercial Use by Public Works Department.

  Case-Laws - AT : The term ‘local authority’ is not defined in the notification and hence the commonsensical meaning of the term should be applied. A perusal of the functions of the NOIDA as per section 6 of the Act reproduced above makes it abundantly clear that it falls in the definition of ‘local authority’. Therefore, neither the NOIDA nor the PWD need to fall under the definition of ‘Government authority’ because NOIDA is a ‘local authority’ while PWD is a part of the Government itself. The services of street lighting and other maintenance work carried out by the assessee to these two organizations, also cannot by any stretch of imagination, be called predominantly meant for commerce or business. - AT
  Visit to Get Source

  ---

• Refund Granted After Late Service Tax Application Deemed Valid; Appellant Recovers Excess Tax Paid.

  Case-Laws - AT : Refund of the excess service tax paid - excess tax deposited by the appellant - The refund application by the appellant cannot be rejected on the ground of delay. - AT
  Visit to Get Source

  ---

• Service Tax Demand Dismissed: Transport by Individual Operators Excluded from "Goods Transport Agency" Definition.

  Case-Laws - AT : The demand of service tax set aside on the ground that the transport services were rendered by the individual truck or transport operators and therefore no consignment note was issued and as a result, the same would not fall within the scope of the definition of “Goods Transport Agency” as given in section 65(50 b) of the Finance Act, 1994 - AT
  Visit to Get Source

  ---

• Transport Activity Not GTA Service Due to Missing Consignment Note, Despite Transit Slips Serving Similar Purpose.

  Case-Laws - AT : GTA service or not - The adjudicating authority while declining the transportation activity as a GTA service has held that since there is no consignment note, the same cannot be held to be the GTA service. - No doubt in terms of Rule 4B of Service Tax Rule, 1994, issuance of consignment note to the recipient of service is mandatory. But in the present case, apparently and admittedly, there were issued transit slips having all such details as were to be mentioned in the consignment note. Hence just because the receipts/notes had a different nomenclature, it cannot be held that there was no consignment note. - AT
  Visit to Get Source

  ---

• Services Classification: Intermediary Status Doesn't Require Principal-Agency Tie; Bundled Card Services u/s 66F(3)(a.

  Case-Laws - AT : Classification of services - intermediary services or not - Export of Service - The finding that principal-agency relationship is not essential for terming a service provider as intermediary, is clearly contrary to law - Also, the elements of service, namely collections and contact center services for credit/debit card operations, are essentially part of the bundled services and in terms of Section 66F(3)(a), will qualify as part of main service - the elements of service, namely collection services and contact center services for credit/debit card operations, cannot be held to be intermediary services. - AT
  Visit to Get Source

  ---

Central Excise

• High Court dismisses writ petition due to petitioners' failure to notify CESTAT of authority's non-compliance before filing.

  Case-Laws - HC : If the authority did not follow the direction of the CESTAT, there is gross laches on the part of the authority in passing the order. Had the petitioners brought the fact to the notice of the CESTAT with regard to laches of the authority, in that event the CESTAT could have considered the same. Without doing so, the petitioners having approached this Court, the writ petition is not maintainable. - HC
  Visit to Get Source

  ---

Case Laws:

• GST

• 2024 (1) TMI 925
  Seeking grant of Regular Bail - Non-appearance for investigation on one or two dates - HELD THAT:- Non-appearance for investigation on one or two dates cannot be ground for cancellation of bail. It is an admitted position that after grant of regular bail, Manish Goyal did appear before the authorities pursuant to summons received by him on various occasions. Therefore, the order dated 15th September, 2023, passed by the Sessions Court cancelling bail on account of non appearance on one or two dates is harsh and is accordingly set aside. Though this Court is confirming the bail granted to Manish Goyal, he is warned that in the future, if he does not appear pursuant to summons issued by the DGGI, his bail would be liable to be cancelled. However, the DGGI shall give a notice of at least 48 hours to appear pursuant to the issuance of summons - Liberty is given to the DGGI to seek cancellation of bail in the event Manish Goyal fails to appear in a timely manner pursuant to summons issued. Appeal allowed.

  ---

• 2024 (1) TMI 924
  Refund of unutilized Input Tax Credit (ITC) - zero rated supplies or inverted duty structure - debit entries of the refund claim were not made - non submission of supporting documents. Zero rated supplies - HELD THAT:- Under Section 54 of the GST Act, refund may be claimed either for unutilized ITC on account of an inverted duty structure or in respect of zero rated exports. Therefore, the refund claim for zero rated exports does not disentitle the petitioner from claiming a refund for unutilized ITC. Consequently, the first reason for rejection is untenable. Debit entries of the refund claim were not made - HELD THAT:- When the statute provides for a refund subject to fulfillment of conditions, as long as such conditions are fulfilled, a refund claim cannot be rejected on the ground that debit entries were not made. Non submission of supporting documents - HELD THAT:- The petitioner has set out the supporting documents that were taken into account by the refund processing officer. It is possible that ITC may accumulate both in respect of input goods that are not affected by an inverted duty structure and by the purchase of input goods that are so affected. Therefore, it is necessary for the petitioner to submit all necessary documents to establish that its claim for refund is confined to input goods that are affected by an inverted duty structure. The impugned deficiency memos are quashed. As a corollary, the matter is remanded for re-consideration.

  ---

• 2024 (1) TMI 923
  Violation of principles of natural justice - no personal hearing was provided and that the replies of the petitioner were not taken into consideration - HELD THAT:- The revised notice was issued on 01.09.2023 pursuant to the petitioner s reply to the earlier notice. By reply dated 15.09.2023, the petitioner requested for a personal hearing. On examining the impugned order, it is evident that the reference therein is to personal hearing opportunities provided in April and May 2023. These opportunities were prior to the issuance of the revised notice on 01.09.2023. The impugned order also does not consider the petitioner s replies. Solely on these grounds, the impugned order calls for interference. The matter is remanded for reconsideration. The respondent is directed to provide both a personal hearing and a reasonable opportunity to the petitioner before issuing a reasoned order. This exercise shall be concluded within a maximum period of three months from the date of receipt of a copy of this order.

  ---

• 2024 (1) TMI 922
  Seeking cancellation of GST registration - wrongful claim of input tax credit - HELD THAT:- Respondents are directed to process the application expeditiously and pass appropriate order on the same in accordance with law within a period of six weeks from today. This petition is disposed of.

  ---

• 2024 (1) TMI 921
  Wrongful availment of input tax credit - HELD THAT:- The petitioner has remedy of statutory appeal under the provisions of the CGST/SGST Act. Therefore, the petitioner ought to have filed appeal, instead of approaching this Court. Considering the availability of alternate remedy of statutory appeal, this Court is not inclined to examine the assessment order. Therefore, the present writ petition is disposed of with liberty to the petitioner to file appeal under Section 107 of the CGST/SGST Act before the appellate authority. If the petitioner approaches the appellate authority in appeal within a period of three weeks from today, the appeal shall be decided on merits without going into the question of limitation. Petition dismissed.

  ---

• 2024 (1) TMI 920
  Levy of GST - Gift Vouchers - specific case of the petitioner is that these Gift Vouchers/Gift Cards are actionable claims and therefore not liable to tax as they fall within the purview of the execution in Section 7(2) of the respective GST Enactments read with Schedule III to the respective GST Enactments - HELD THAT:- Gift Voucher/Card issued by the petitioner is a document within the meaning of Section 3(18) of the General Clause Act, 1897 and thus an instrument within the meaning of Section 2(14) of the Indian Stamp Act, 1899 as a right/liability is created and is recorded. The amount specified in it is a debt - Gift Voucher/Card thus acknowledges debt. Thus, Gift Voucher/Card is nothing but a debt instrument . It can be redeemed on a future date on its presentation towards sale consideration for purchase of the merchandise from any one of the petitioner s retail outlets. The Gift Voucher/Card is a debit card. It is like a frozen cash received in advance and thaws on its presentation at the retail outlet for being set off against the amount payable by a customer for purchase of merchandise sold by the petitioner or the amount specified therein is to be returned to the customer as per RBI s Master Direction where a customer fails to utilize it within the period of its validity - Gift Voucher/Card is therefore an actionable claim within the meaning of Section 2(1) of the respective GST Enactments read with Section 3 of the Transfer of Property Act, 1882. Since Actionable claim is specified in Sl.No.6 in the Schedule III, no tax is payable on it. Gift voucher/Card issued by the petitioner qualify as actionable claim within the meaning of the definition of actionable claim in Section 3 of the Transfer Act, 1882 as incorporated in Section 2(1) of the respective GST Enactments - the view in the impugned order that there is no need to determine whether voucher is an actionable claim to arrive at a conclusion that it is neither a supply of goods nor a supply service in a way is partly correct. However, the ultimate conclusion arrived is not correct. The confusion and doubt surrounding the interpretation of Section 12(4) of the respective GST Enactments are partly on account of the fact that it is a new provision under the new regime under the respective GST Enactments as in force from 01.07.2017 - Neither, the definition of Voucher as in Section 2(118) nor Section 12(4) of the respective GST Enactments were there in the Model GST Laws that were in circulation in 2016. If the Gift Vouchers/Cards is for a specified item of jewellery of specified value, tax is payable at the time of its issuance, as there is supply(i.e transfer) within in the meaning of Section 7(1-A) of the respective GST Enactments read with Sl.No.1(c) to the II Schedule to the respective GST Enactments. Therefore, tax is payable in view of Section 12(4)(a) of the respective GST Enactments at the time of issuance of such Gift Vouchers/Cards - if there is no supply ie. no transfer within in the meaning of Section 7(1-A) of the respective GST Enactments read with Sl.No.1( c) to the II Schedule to the respective GST Enactments, time of supply will get postponed to the actual time of redemption of the voucher to a future date of sale of merchandise or such goods when such Gift Voucher/Card is presented by the customer at the Counter of the petitioner. The petitioner will be liable to tax on the date of redemption under Section 12(4)(b) of the respective GST Enactments - the clarification in the impugned order is modified to that extent. The impugned order is quashed to that extent. This writ petition is partly allowed.

  ---

• 2024 (1) TMI 919
  Non-admission of appeal preferred by the petitioner - rejection of appeal filed under sub-Section (1) of Section 107 of the Odisha Goods and Services Tax Act, 2017 - HELD THAT:- Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition. Application disposed off.

  ---

• 2024 (1) TMI 918
  Seeking grant of regular bail - availing illegal Input Tax Credit by entering into large scale financial transactions - HELD THAT:- The allegation against the applicant is regarding the evasion of GST, but no procedure is initiated by the the GST department against the present applicant under the provisions of the GST Act. Without discussing the evidence in detail, this Court, prima facie, is of the opinion that, this is a fit case to exercise the discretion and enlarge the applicant on regular bail. Hence, present application is allowed and the applicant is ordered to be released on regular bail subject to condition imposed - bail application allowed.

  ---

• 2024 (1) TMI 917
  Additional tax liability for execution of subsisting Government contracts either awarded in the pre-GST regime or in the post GST regime without updating the Schedule of Rates (SOR) - issuance of direction upon the respondents authority concerned to neutralize the impact of unforeseen additional tax burden on Government contracts since the introduction of GST w.e.f. 1st July, 2017 for ongoing contract awarded - HELD THAT:- This writ petition is disposed of by giving liberty to the petitioner to file appropriate representation in the aforesaid regard as referred in preceding paragraph of this order, before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks from date. On receipt of such representation the Additional Chief Secretary, Finance Department shall take a final decision within four months from the date of receipt of such representation after consulting with all other relevant departments concerned. Petition disposed off.

  ---

• 2024 (1) TMI 905
  Seeking grant of regular bail - evasion of tax - the present applicant has indulged into the activities of intentional evasion of tax by falsely representing that they have imported betel nuts from abroad by fabricating various purchase invoices - Petitioner has obtained false GST registration and opened bank account in the name of said firm and by creating false and fabricated record, same has been used as genuine - HELD THAT:- It is found out from the available record that the present applicant accused, in connivance with other accused persons, have hatched criminal conspiracy of evasion of tax and as a part of said conspiracy, they have prepared false and fabricated documents i.e. purchase invoices and by using it as genuine, they have committed an offence of tax evasion in crores of rupees, which has come on record during the course of investigation. It is true that the applicant is not named in the FIR, however, the role played by the applicant at the time of commission of crime is found out from the investigation papers collected so far. Further during the course of investigation, the statements of the witnesses as also the accused persons, whose names are there in the FIR, have been recorded and at that point of time, the involvement of the present applicant as prime accused is found out. There are past antecedents of the applicant accused in similar type of nature, wherein also, the applicant accused in connivance with other accused persons, have committed offence of tax evasion in crores of rupees and thereby the Government exchequer has suffered loss in crores of rupees and the said fact is substantiated from the police papers collected so far, however, it is not proper at this stage to disclose at this juncture. Thus from this fact itself, it is clear that the applicant is habitual offender and is adopting such type of modus operandi while committing offence. Further from the statements of the witnesses recorded by the concerned IO during the course of investigation, the witnesses have described the modus in a very categorically terms and from those statements, entire picture would be crystallized. Over and above that, strong apprehension has been shown by prosecution that if the applicant is released on bail then, there is possibility of tampering with the evidence and fleeing away from the trial. Further as stated above, the present application is filed before submission of the chargesheet and the investigation is not yet completed and the apprehension has been shown by prosecution that if the applicant is released on bail then, there is possibility of tampering with the evidence and hampering with the witnesses, which would affect the trial. Therefore considering the nature of offence, role attributed to the applicant, played by him and past antecedents of the applicant similar in nature, it is opined that the present application deserves to be rejected. Application dismissed.

  ---

• Income Tax

• 2024 (1) TMI 926
  Revision u/s 263 - loss through the MCX transaction for hedging its stock in trade allowed by the AO for setting off against other income - as per CIT MCX transaction falls u/s 43(5)(a) and the AO had accepted the claim of the assessee under section 43(5)(d) which deals with derivatives transactions, AO should have examined the issue under the provisions of section 43(5)(a) and the Board Circular dated 12.09.1960 making order as erroneous and prejudicial to the interests of revenue - HELD THAT:- According to the ld. Pr.CIT, the assessee s case of MCX transactions for hedging the loss falling under clause (a) of section 43(5) is not covered under speculative transaction and MCX transactions were done in the normal course of business of the assessee. Therefore the loss suffered is business loss of the assessee and accordingly the assessee is eligible for setting of loss as per CBDT Circular dated 12.09.1960 referred by the ld. CIT. Hence the order of the AO allowing the loss claimed by the assessee on this issue is not erroneous in so far as it is not prejudicial to the interest of the revenue. We further note that the ld. Pr.CIT has observed that the AO has treated the loss u/s. 43(5)(d) and has allowed the loss. Even if the assessee s case falls under any of the provisions of (a) or (d) of section 43(5), it is not speculative loss. AO was justified in allowing the loss claimed by the assessee. Hence the order passed by the AO is not erroneous and prejudicial to the interest of the revenue. The case law relied by the ld. AR in the case of Jayesh Raichand Shah [ 2013 (1) TMI 598 - GUJARAT HIGH COURT] and CIT v. Sri Vasavai Gold Bullion (P) Ltd [ 2018 (4) TMI 802 - MADRAS HIGH COURT] supports the case of the assessee. On the other issues of loss from rate deference and interest on partners capital also, the ld. Pr.CIT has directed the AO to examine these issues without giving any finding and merely directing the AO for examination of these issues is not sufficient. We note that the assessee had submitted reply to the ld. Pr.CIT, However, the ld. Pr.CIT instead of examining that it is prejudicial to the interest of revenue or not, he has merely giving direction to the AO. As per our considered opinion, the ld. Pr.CIT should have determined that the assessee s submission is not correct. Therefore merely giving direction to the AO is not sustainable. We further note from the arguments of the ld. AR of the assessee that the case was selected for limited scrutiny, therefore the ld. PCIT cannot travel beyond the reason for selection of limited. Scrutiny. On carefully going through section 263 of the Act, the ld. Pr.CIT may call for and examine the record of any proceeding under the Act and consider any order passed therein by the AO as erroneous and prejudicial to the interests of the revenue and pass such order thereon. Hence we reject this argument of the ld. AR. Thus we set aside the order of the ld. PR.CIT passed u/s. 263. Decided in favour of assessee.

  ---

• 2024 (1) TMI 916
  Validity of reopening of assessment u/s 147 - admissibility of deduction u/s 80-IA - reason to believe - whether the jurisdictional conditions for reopening assessment are satisfied in the present case? - HELD THAT:- Admittedly, the financial statements relating to the relevant AY mentions the amount received by Petitioner as compensation towards damages to its wharf. The reasons to believe escapement of income reveals that the reopening of assessment is based on the examination of financial statements furnished by Petitioner. There is nothing on record to indicate that Petitioner has failed to discharge its duty of disclosure. In fact, the reasons themselves are based on disclosure by Petitioner. AO had within his possession all the primary facts and it was for him to make necessary inquiry and draw proper inferences. The AO has not discharged his duty and in fact has relied upon financial statements and other documents furnished by Petitioner itself for his reason to believe escapement of income. It cannot be said that income chargeable to tax for the AY under consideration has escaped assessment by reason of the omission or failure on the part of Petitioner to disclose fully and truly all material facts. Thus, it can safely be held that the reopening of assessment of income is clearly on the basis of change of opinion without availability of any tangible new information. Consequently, notice u/s 148 rejecting the objections of Petitioner to the reasons to believe notice and the draft assessment order are quashed. Petition allowed.

  ---

• 2024 (1) TMI 915
  Nature of receipt - sales tax subsidy - revenue or capital receipt - ITAT treated it as capital receipt though the subsidy has been granted to the assessee only after commencement of production - whether amount exemption from trade tax on turnover of sales of the UP Trade Tax Act, 1948, availed by the assessee, is a capital receipt as subsidy or a revenue receipt? - HELD THAT:- Exemption from tax is freedom of liability from tax on turnover of sales under Section 4A of the U.P. Act, 1948. Hence in the absence of liability to pay trade tax on turnover of sales to the extent provided in the eligibility certificate issued to the assessee under Section 4A of the U.P. Act, 1948, neither trade tax on turnover of sales to the extent of exemption from liability to tax could be collected by the assessee from the purchasers either directly or indirectly nor it could be claimed as capital receipt or subsidy and instead the entire sale price received by the assessee from the purchasers towards sale of goods is revenue receipt. Hence no deduction from revenue receipts in the name of subsidy was permissible. Allowing such claim of the assessee would result in unauthorised collection and retention of trade tax and also unauthorised deduction from taxable income which is statutorily and constitutionally not permissible. As per the own case of respondent/assessee, the amount of tax component in respect to the assessment years as mentioned in the substantial questions of law afore-quoted, is the tax component which was included by him in the sales turnover of the goods as a sale price of the goods. Once it is admitted case of the respondent/assessee that the amount realized by him from purchaser was the sale price of the goods, there does not arise any question of tax component included in the sale price to be of a capital nature, irrespective of the issue as to whether the respondent/assessee could have recovered it from purchasers or not. Exemption pre-supposes liability to tax. It is not a right but it is granted subject to statutory provision. The Legislature in it wisdom by enacting Section 4A of the U.P. Act, 1948 has exempted turnover of sales of goods subject to certain conditions. Having obtained eligibility certificate under Section 4A of the U.P. Act, 1948, the respondent/assessee became entitled for exemption from tax on sales subject to certain conditions and limit. Bare perusal of Section 4A of the U.P. Act, 1948 clearly indicates that the exemption from tax on turnover of sales is not a subsidy granted by the State Government. In the present set of facts, Section 4A of the U.P. Act, 1948 has not authorised the respondent/assessee either to collect the tax component on exempted sales or to retain it and to grant it as state subsidy. Once admittedly the amount as shown in the invoices is the sale price of the goods sold by the respondent/assessee to purchasers, it is revenue receipt. Such a receipt is not of capital nature but being part of sale price of the goods, is certainly revenue receipt. The Income Tax Appellate Tribunal has committed a manifest error law in passing the impugned order to hold the aforesaid part of the sale price to be subsidy or capital receipt. In fact, the ITAT has totally misdirected it and passed the impugned orders without even having reference to the relevant provision of the U.P. Act, 1948, the nature of exemption granted to the respondent/assessee under the notification dated 780 dated 31.3.1995 and the nature of receipts of the assessee which, according to own case of the assessee, was the part of the sale price. Once turnover of sales has been exempted, trade tax as per scheme of the Act, 1948, could neither be realized by the sellers not it could be retained. No provision under the U.P. Act, 1948 has been shown to us by the learned counsel for the respondent/assessee which empowers the assessee to withhold the amount of tax recovered or which empowers the respondent/assessee to collect tax on exempted sales and to retain it as subsidy. The receipts have been shown by the respondent/assessee as sale price received by him from the purchasers. Once the amount has been received as sale price, no part of it could be termed as capital receipts. - Decided against assessee.

  ---

• 2024 (1) TMI 914
  Addition u/s 68 - No verifiable address of donor, Belgian National given - addition made as assessee was unable to produce evidences to counter the requirement and prove the genuineness of the transaction and no verifiable address of the Donor is available - HELD THAT:- We note that the address in bank statement of the donor is a PO box. In foreign countries, it is very common to give PO Box address to banks and institutions for official communications so that home address is not unnecessarily shared for correspondence purposes. Identity of the donor - CIT(A) observed, on perusal of the details submitted by the assessee, during assessment and assessee proceedings, it is seen that doner in this case, is a Belgian National who has taken an Emirati Residency. In fact, the assessee vide letter has given the Dubai Address of the donor along with electricity and water bills to the AO - The above facts have been not brought on record by the assessing officer and has merely stated that the identity of the doner is not established and there is no verifiable address of the done. AO has failed to make any correspondence on the given address but has taken a mere stand that the address of the donor is not verifiable. Apart from this the assessee has submitted the confirmations from the doner that he has given gift to the assessee. Furthermore, in the instant case, there is a notarized gift deed wherein donor gifted to his brother - This establishes the Identity of the donor. Creditworthiness of donor - CIT(A) noted that the AO in the assessment order has stated that there is a poor capital in balance sheet of Donor as taken by looking at the Indian Balance Sheet and Indian Tax Return filed by - On perusal of the details submitted by the assessee it is seen that the donor in this case is neither an Indian Citizen nor an Indian Resident. Most of his assets are situated outside India. In foreign Balance Sheet of a company 100% owned by donor Capital balance works out to Rs. 86.12 crore as on 31-12-2016. On 31.12.2016 had a profit of Rs. 114.48 Crore (USD 16,874,148) and after payment of dividend to him of USD 4.2 Million had a closing capital balance of USD 12,674,346 (approx. Rs. 86.12 crore). As such, creditworthiness when read with foreign Balance Sheet, clearly establishes capacity of the donor in foreign country. This capital balance establishes the creditworthiness of the donor. Genuineness of the transaction - CIT(A) observed that the Officer has made a finding that there was no occasion or reason for the gift. However, this logic of the assessing officer is not correct as the gifts can be made at any time. It is not necessary for gifts only to be on birthdays, anniversaries and Diwali. In the instant case, vide notarized gift deed donor gifted Rs. 10,93,00,000/- to his brother. The Gift is given into assessee s savings bank account maintained with Axis Bank. On perusal of the submissions made by the assessee, it is seen that the this Gift is given from donor s NRE bank account maintained with Axis Bank. It entails particulars of cheque number, date of giving of gift, donee, amount gifted. Source of gift of amount in rupee terms immediately credited before giving gift on credit side of the bank statement where amount in US $ are stated in narration in the bank statement. Assessee has also stated that the source of amount in USD flowing into NRE bank accounts of India from overseas foreign bank account maintained with Emirates NBD Bank, Dubai. Further the assessee stated that the source of amount in USD flowing into his NBD Bank, Dubai is primarily from Amazone Gems DMCC where Donor is 100% shareholder. Amount credited into donors account has been out of Remuneration and dividend which have been offset against loan given by Amazone Gems DMCC-a 100%, owned company - For the reasons mentioned above, the genuiness of the transaction is also established. In addition to the above, CIT(A) relied on the judgment of Smt. Neelemaben Gopaldas Agrawal [ 2015 (6) TMI 135 - GUJARAT HIGH COURT] wherein the similar issues were came before the Hon ble High Court of Gujarat. The Hon`ble Court held that where assessee received certain amount as gift from NRI through cheque and they produced bank certificate and gift deed regarding same, addition as unexplained income under section 68, was not justified. Based on these facts, ld CIT(A) allowed the assessee`s appeal for statistical purposes. On a careful reading of the order of ld CIT(A) and the findings thereon, we do not find any valid reason to interfere with the decision and findings of the CIT(A), therefore grounds raised by the Revenue are dismissed.

  ---

• 2024 (1) TMI 913
  Revision u/s 263 - TDS u/s 194B on payments made to players on winnings from lotteries/crossword puzzles - assessee is a private limited company engaged in the business of providing a platform for playing games (primarily the skill game of Rummy) online - PCIT alleged details pertaining to the winning amount and applicable TDS provisions were not examined by the AO while passing the assessment order and TDS was not deducted from the full amount of payment made by the assessee - HELD THAT:- From the perusal of submissions filed by the assessee, we find that the AO though initiated the enquiry on tax withholding on payments made by the assessee to players on winning from games available on its website, however, it is not evident whether the AO examined/verified the details so filed by the assessee. It is also not evident that the AO examined/verified whether the deduction of tax by the assessee is as per the provisions of Chapter XVII-B, particularly section 194B of the Act, which requires tax to be withheld on the winning amount from any lottery or crossword puzzle, at the time of payment, when the winning amount exceeds Rs. 10,000. From the assessment order, it is difficult to infer whether the AO was satisfied with the assessee s replies furnished from time to time or not. Further, the assessment order also does not indicate that the AO examined/verified the details furnished by the assessee with respect to the deduction of tax as per provisions of section 194B of the Act. Therefore, observations made do not support the plea of the assessee in the facts and circumstances of the present case. Thus we agree with the findings of the learned PCIT, vide impugned order, that the AO has not examined the details furnished by the assessee, and the assessment order needs enquiry on the issue of deduction of TDS under section 194B - Decided against assessee.

  ---

• 2024 (1) TMI 912
  Validity of final assessment order passed u/s 144C - Period of limitation - as argued as due date prescribed u/s 144C the order passed by the AO is barred by limitation, and hence, treated as void - HELD THAT:- The draft of the Assessment Order, in this case, has been passed on 04.03.202. The assessee filed objections before ld. DRP on 06.04.2022, i.e., after the due date of the time allowed for filing of the objections before the ld. DRP. The due date for passing of the final Assessment Order was 31.05.2022. Since the final Assessment Order has been passed on 27.12.2022 in divergence to due date prescribed u/s 144C of the Income Tax Act, we hold that, the order passed by the Assessing Officer is barred by limitation, and hence, treated as void. The assessee vide letter dated 11.04.2022 has filed a letter before the Assessing Officer informing that the assessee has filed objections before the office of DRP-II on 06.04.2022 against the draft Assessment Order. This clearly proves that the assessee has filed objections before the DRP after the due date. Under such circumstances the AO should have carried the proceedings to finalize the Assessment Order as per the provisions of section 144C(4).

  ---

• 2024 (1) TMI 911
  Deduction u/s 80IC - late filing of the return - eligible reasons for delay - CIT(A) deleted the addition - HELD THAT:- In the present case, the reason for the late filing of the return was indubitably beyond the control of the assessee for the reasons contained in the affidavit furnished by the Managing Director of the assessee company, that following the instructions of their Tax Consultants and the late filing of the Income Tax Return was not due to any fault of any of the officers of the assessee company, but due to their Tax Consultants. That being so, in the light of the findings of the Tribunal in the assessee s own case for the immediately preceding assessment year, we find no hesitation in reiterating that the provisions of Section 80AC of the Act are machinery provisions which are directory in nature and not mandatory, due to which, the delay in filing the return of income as a condition contained in the provisions of Section 80IC of the Act can be considered for being condoned, we have done above. As in the present case, the delay in question was incurred for reasons beyond the control of the assessee. Otherwise too, we are covered by Ambey Developers [ 2017 (12) TMI 1008 - PUNJAB AND HARYANA HIGH COURT] which has been rendered qua the assessee and it is, therefore, binding, which holds that if substantial compliance is established, a minor deviation would not vitiate the very purpose for which the deduction was being made available. Still further, as noted hereinabove, the CBDT Circular No.37 of 2016, dated 02.11.2016, a copy whereof has been filed with us, states that the Board has clarified that no appeal shall be filed by the Revenue in cases where disallowance relating to business activity was made by the AO, but deduction under Chapter VI-A is allowable to the assessee. In the present case, the real deduction under Section 80IC of the Act has been held to be allowable to the assessee and has been so allowed by the Tribunal. The Department s appeal against the said Tribunal order for assessment year 2013-14 has attained finality. There is no change whatsoever in the facts and circumstances for the year under consideration. Therefore, the said CBDT Circular is squarely applicable to the facts of the case and it is binding on the taxing authorities. On this count also, the addition is liable to be deleted. Considering the above elaborate discussion and finding force in ground Nos. 1 to 3, these grounds are rejected. The order under appeal is found to be well versed, requiring no interference whatsoever at our hands on this score. Accordingly, the deletion of disallowance is confirmed. Addition made on account of low gross profit declared by the assessee - as per DR here was a fall in gross profit from 16.61% in assessment year 2013-14 to 14.11% during the year under consideration - CIT(A) deleted the addition - HELD THAT:- The stand taken by the assessee for the fall in GP during the year is not a totally unpalatable stand. Assessee has maintained, as noted by both the authorities below, that the major reason for fall in GP was a substantial increase in turnover by almost 50% from Rs. 60.71 Cr during the earlier year to Rs. 90.74 Cr during the year under consideration; that to achieve such an increase in turnover, a business has to decrease its margins to obtain much higher sales; that the primary reason for the decrease in gross profit rate was the increase in the cost of material consumed; that there was a increase of 4.28% in the consumption of raw material as a percentage of sales compared to the earlier year and that on the other hand, other manufacturing expenses were comparable; that the cost of the raw material is beyond the control of the assessee as most of the raw material used is to be imported from other countries; that has resulted, the NP rate during the year under consideration fall by only 1.07%, even though the GP rate had decreased by 2.50%; that this shows that there was better management of resources and no trading expenses decreased as a percentage of sales. As rightly observed by the ld. CIT(A), the AO had not controverted, in the assessment order, any of these submissions of the assessee. Neither had these submissions been shown to be false, nor was any reason for disbelieving the explanation offered by the assessee given by the AO in the assessment order. Before us also, the position remains the same. The Department has brought nothing on record to controvert the specifics laid bare by the assessee before the AO and maintained through out. Again, as correctly observed by the CIT(A), in the light of the case laws discussed, mere decrease in gross profit as compared to the earlier year is not a ground sufficient for making an addition and that too, without finding any specific defect in the books of account regularly maintained by the assessee - The action of the ld. CIT(A) in deleting the addition made on account of low gross profit by the AO is confirmed. Decided against revenue.

  ---

• 2024 (1) TMI 910
  Validity of assessment dated u/s 143(3)/153A with no mandatory DIN - HELD THAT:- We are of the considered view that as the assessment order does not bear DIN Number on its face and intimation admittedly has been issued separately, in view of the judgement of Brandix Mauritius Holdings Ltd. [ 2023 (4) TMI 579 - DELHI HIGH COURT ] and the order of the coordinate Bench in the case of Abhinav Chaturvedi and others [ 2023 (8) TMI 378 - ITAT DELHI ] in which one of us was also on the Bench, the assessment order before us is non est in the light of the Circular No.19/2019 of the CBDT dated 14.08.2019. Although before the ld.CIT(A) no separate ground in that regard was taken by the assessee, however, the directions of the Board being binding upon the Revenue authorities the assessment order is to be considered non est and void ab initio and as if was never issued. The effect of the assessment order not bearing DIN number is that it is considered to have never been issued, so all consequential proceedings thereupon are also vitiated qua the assessee - Decided against revenue.

  ---

• 2024 (1) TMI 909
  Assessment u/s 153A - Incriminating material found from assessee premises at the time of search or not? - HELD THAT:- The Hon ble Delhi High Court in the case of Pepsico India Pvt Ltd [ 2014 (8) TMI 898 - DELHI HIGH COURT ] has concluded that since it was not even alleged that the searched person had disclaimed the said documents as belonging to them and thus it cannot be held that the documents do not belong to the searched person and once it could not be held so, then the provisions of section 153C of the Act cannot be invoked as the Assessing Officer of the searched person must be satisfied that the seized material does not belong to the person referred to in section 153A of the Act i.e. searched person. AO has not referred to any material much less, cogent material, to assume and conclude that the documents seized from the premises of the searched person belonged to the appellant company and do not belong to the searched person. In the absence of such a burden having been discharged by the searched person invocation of provisions contained in section 153C of the Act is not in accordance with law. Assessment order is accordingly quashed. Decided in favour of assessee.

  ---

• 2024 (1) TMI 908
  Revision u/s 263 - CIT observed lack of proper inquiry by the AO on t wo issues as of not making disallowance on account of outstanding Central Sales Tax (CST) and claim of cash purchase of cotton which was allowed by the AO despite absence of bills, vouchers, transportation receipts, weighment slips etc - HELD THAT:- AO made an inquiry about the genuineness of the purchase and due to deficiency in supporting evidence of purchase the AO made an adhoc disallowance. Thus to the extent of conducting an inquiry on purchase made by the assessee the case in hand does not fall in the category of complete lack of inquiry though it may be a case of inadequate inquiry. However the Pr. CIT has invoked the provisions of section 263 on two issues as stated in the show cause notice being non-allowability of the outstanding Central Sales Tax as per the provisions of section 43B and non-conducting of the inquiry on the part of the AO in respect of the cash purchase of cotton in the light of the provisions of section 40A(3) of the Act. So far as the first issue regarding non-payment of the CST is concerned the assessee has accepted that the same is not allowable as per the provisions of section 43B. Therefore, to that extent the invocation of the provisions u/s 263 are not in dispute. As regards the second issue though the Pr. CIT has taken up the issue of disallowance u/s 40A(3) as well as the genuineness of the purchase however, it is manifest from the record and particularly from the assessment record and order sheet entries that the AO has not even taken up the issue of disallowance u/s 40A(3) of the Act. It is manifest from the record and particularly from the assessment order and order sheet entries that the AO has not taken up this issue of disallowance u/s 40A(3) of the Act and hence, there is a complete lack of inquiry on the part of the AO so far as this issue is concerned. Whether the assessee would take the benefit of exception under Rule 6DD is again a matter of verification and examination of the relevant facts and record which the AO has not at all taken into account despite knowing the factum of cash purchase of more than Rs. 14.90 crore as the AO did not raise any query on this issue. Hence, there is complete lack of inquiry on the part of the AO on this issue and consequently the Pr. CIT has rightly exercised his jurisdiction u/s 263 to revise the assessment order to the extent of allowability of the claim in the light of the provisions section 40A(3) of the Act. Thus order of AO is erroneous being contrary to the provisions of section 43B as well as 40A(3) and therefore, in absence of any inquiry on these two issues the order of the AO has been rightly set aside by the Pr. CIT. Accordingly we do not find any error or illegality in the impugned order of the Pr. CIT. The decisions relied upon by the Ld.AR of the assessee are applicable only in a situation where the AO has conducted an inquiry on an issue and taken a possible view whereas in the case of the assessee there is a complete lack of inquiry on the part of the AO on the two issues; (i) Disallowance u/s 43B (ii) u/s 40A(3) and therefore, the said judgments would not help the case of the assessee. Appeal of the assessee is dismissed.

  ---

• 2024 (1) TMI 877
  Rejection of Application u/s 80G(5) - non-compliance with the prescribed time limits for filing the application in Form No.10AB. - HELD THAT:- Respectfully following the judgement of the Hon ble Delhi High Court in the case of Vishwa Jagriti Mission [ 2013 (1) TMI 157 - DELHI HIGH COURT ] wherein the delay in filing application for registration u/s 12A, was allowable / condoned, hence, we condone the delay in filing Form 10AB, u/s 80G(5), and remit the matter back to the file of Ld.CIT(E) with the direction to decide the application of assessee, in accordance with law. The assessee is also directed to file details and documents, before ld CIT(E), as and when, required by ld CIT(E). For statistical purposes, the appeal of the assessee is treated to be allowed.

  ---

• 2024 (1) TMI 876
  Deduction u/s 80G - rejection of registration to the assessee-trust u/sec. 12AB for want of supporting evidences - HELD THAT:- The purpose of the provisions for registration of trust u/sec. 12AB and granting of exemption u/sec. 80G, all these sections derives their spirit from the Directive Principles of State Policy enshrined in the Constitution of India. Since, the Govt. of India makes endeavor to provide welfare to one and all in the society at large and in view thereof the registration for public charitable trusts are given in order to ensure that through these charitable trusts benefits should flow to the entire society wherefrom various charitable activities, the entire society is benefited and the objectives of the Govt. of India in furtherance to the Directive Principles of State Policy are achieved. These provisions for the trust registration u/sec. 12A and granting of exemption u/sec. 80G enhance the socio economic welfare in the society. Furthermore, the Income Tax laws are welfare legislations and not penal in nature. Thus, we are of the considered view that one final opportunity should be provided to the assessee to file the relevant details before the ld. CIT(E) and present their case on merits. Appeal of the assessee is allowed for statistical purpose.

  ---

• Benami Property

• 2024 (1) TMI 907
  Prohibition of Benami Property Transactions - Attachment order passed u/s 24(3) of the Benami Transactions (Prohibition) Amendment Act - as decided by HC [ 2022 (9) TMI 524 - GUJARAT HIGH COURT] Authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016 and as a consequence thereof, all such prosecutions and confiscation proceedings which had been initiated came to be quashed. HELD THAT:- There is a gross delay of 370 days in filing this special leave petition. Moreover, the issues which arise in this case are covered by the judgment of this Court in Union of India Anr. vs. M/s Ganpati Dealcom Pvt. Ltd. [ 2022 (8) TMI 1047 - SUPREME COURT] . In the circumstances, the special leave petition is dismissed both on the ground of delay as well as on merits.

  ---

• Customs

• 2024 (1) TMI 906
  Acquittal of the respondent for offences punishable under Section 8(c) read with Section 20(b)(ii)(c), 23(c) and 28 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS) - Non recording of information - It was held. by High Court that on the primary ground that there has been non-compliance with the mandatory provision of law, the case sought to be made out by the appellant on the merits of the case, while it is apparent on the face of it that there was non-compliance with Sections 41 and 42 of the NDPS Act, which has also been found by the Trial Court, there is no warrant to address the case on any other aspect when there is failure of a mandatory compliance. HELD THAT:- There are no grounds to interfere with the impugned judgment and order passed by the High Court. The Special Leave Petition is, accordingly, dismissed.

  ---

• 2024 (1) TMI 904
  Seeking release of Gold Dore Bars of alleged Tanzanian origin - prohibited goods or not - HELD THAT:- Section 11(1) of the Customs Act empowers the Central Government to issue a notification in the Official Gazette to prohibit goods either absolutely or subject to specified conditions for any of the purposes set out in sub-section (2) of Section 11. In terms of Section 11, notifications were issued. The notifications issued under Section 11 do not prohibit the import of gold dore - Whether sub-section (3) of Section 3 would apply only to prohibited goods under sub-section (2) or also to restricted goods warrants consideration in an appropriate case. Because there is no notification under any statute classifying the goods as prohibited, at a minimum, it may be concluded that there is an arguable case to contend that these goods are not prohibited goods. Since the petitioner has at least an arguable case to contend that the goods are not prohibited goods, the next issue is whether and, if so, on what conditions, the petitioner may seek provisional release under Section 110A of the Customs Act. The petitioner relied upon the exemption notification and contended that duty exemption should be extended to the petitioner. In the counter affidavit, the respondents set out reasons as to why they dispute the authenticity of documents such as the packing list and the Assay Certificate provided by the petitioner. The genuineness and validity of these documents are required to be examined by the respondents in course of proceedings against the petitioner. The petitioner shall remit 100% of the duty payable on the value of the goods imported under each bill of entry. Such payment may be made under protest - petitioner shall submit a bond for a sum equal to the total value of the goods under each bill of entry - subject to fulfillment of the above conditions, goods may be provisionally released to the petitioner within a period of one week from the date of compliance with the above conditions. Petition disposed off.

  ---

• 2024 (1) TMI 903
  Seeking grant of anticipatory bail - bailable offence or not - Smuggling - prohibited goods or not - HELD THAT:- The judgement of the coordinate Bench in Mohd. Tufail, Mohammad Alam [ 2023 (3) TMI 1293 - ALLAHABAD HIGH COURT ] appears to be more reasoned wherein it is held that the import of gold into the territory of India is not prohibited goods and also that if the value of the gold being imported illegally into India is less than 1 Crore, the same would be a bailable offence. Thus having regard to the reasons mentioned given therein, there are no reason to differ from the view adopted by the coordinate Bench in Mohd. Tufail, Mohammad Alam. Thus having regard to the reasons mentioned herein before, in the considered opinion of this Court, the facility of bail may be safely extended to the applicant. Accordingly, without expressing any opinion on the merits of the case, the instant bail application is allowed.

  ---

• 2024 (1) TMI 902
  Non-payment of interest on the short levied CVD/Additional Duty of Customs leviable under Section 3(1) of the Tariff Act - Section 28AA of the Customs Act - price-escalation clause - effective rate of Central Excise Duty on goods falling under CTH 8607 was revised to 12% ad valorem vide Notification 18/2012 CE dated 17.03.2012. HELD THAT:- Going, by the principle of liberal construction as applicable to cases of no ambiguity and especially so in taxation matters, not an iota of doubt would remain about the applicability of the provisions of the Customs Act, Rules and Regulations, to that of Section 3 of the Tariff Act. That being the stated position, interest for delayed payment of duty under Section 28AA of Customs Act is certainly payable in the facts and circumstances of the present appeal. It may be relevant to point out to a well settled rule of construction, that to ascertain the legislative intent, all the constituent part of the legal provisions are to be taken together and each word, phrase or sentence is to be considered in the light of the general purpose and object of the Act itself. It is abundantly clear from the title and scope of Section 28AA of the Act, that interest is applicable on duty levied under Section 3 of the Tariff Act, as it is held to be a duty of customs within the meaning of Section 2(15) of the Act and further reinforced by the non-obstante opening of the sub-section, that reemphasised that interest is unquestionably leviable for the delayed payment of duty. Section 3 of the Tariff Act (including its subsection 8) interpreted on its own language or along with Section 28AA of Act are not ambiguous. The mischief, if any ought to be suppressed with the aid of internal tools like the non-obstante phraseology or the text and the head note of the sections, besides giving the words used in law their ordinary meaning. The apex court in the case of Doypack Systems (Pvt.) Ltd. Vs. UOI, [ 1988 (2) TMI 61 - SUPREME COURT ] observed that words used in the statute must prima facie, be given their ordinary meaning and where the grammatical construct is clear and manifest, without a doubt the said construction ought to prevail, but for strong and obvious reasons to the contrary. It can safely be concluded that interest provisions for short paid duty in terms of Section 28AA of the Customs Act, shall equally apply to a case of determination of duty under Section 28 of the Customs Act, be it duty levied under Section 12 of Customs Act or Section 3(3) of the Tariff Act or any other provision thereof or any other law for the time being in force. It is not that the payment of interest has been ordered by judicial and/or quasi judicial bodies only with respect to cases of refund of Special Additional Duty leviable under Section 3 of the Tariff Act. Examples of payment of interest even in exclusive cases of demand of duty leviable under Section 3 of the Tariff Act do galore, besides the fact that in a very large number of cases (nearly all) wherever interest on refund or demand of duty was held payable, there has invariably been a component of CVD (additional duty) in addition to the basic duty of customs. Penalty in common parlance can be understood to mean a legal punishment- be it in the form of a forfeiture, imprisonment or imposition of a monetary cost or charge and its meaning can be derived from the gathering wherein the word is actually put to use, whereas interest can be considered as a compensation fixed by the authority of law for use or detention of money, or for the loss of money by one entitled for its usage. As for interest, as it is not held and understood to be in the nature of additional tax, therefore it cannot be stated to be strictly falling into the ambit of Article 265 of the Constitution for enforcing its levy and collection, though it is undisputed that interest has its bearings with duty not paid and hence a dependent variable of such circumstances. The legislature having consciously incorporated the interest provision (Section 28AA) in the Customs Act, and as rendered applicable to the Tariff Act, the appellants are not justifiable in seeking to derive support from the judgments cited by them, as the rulings pronounced by the superior courts in the said cases would not be apposite for consideration of the question of interest which arises in the present case. This is so as the said judgments were delivered essentially in the context of penal provisions or with reference to issues concerned with settlement of case a variation/deviation from the applicability of routine structural legal process. Thus, those decisions would be irrelevant for deciding the issue in the present matter concerned with the liability to pay interest in terms of the statutory provision of the Customs Act as rendered applicable to the Tariff Act (Section 3). In view of Section 3 of the Tariff Act read with Section 12 of the Customs Act, the special additional duty is to be construed as Customs Duty and therefore in view of the provisions of the law, all the provisions of the Customs Act and Rules/Regulations made thereunder are squarely applicable to the issue at hand. Further, it is common knowledge that taxation does not concern principles of equity. If the appellants have failed in discharge of their statutory obligations or have been deficient thereto, consequences, advantages and disadvantages thereof shall follow. It is not open for the appellants to have the best of both ends. There are no infirmity in the order of the lower authority under challenge, as the same is in accordance with law - The appeal filed by the appellants is therefore liable to be dismissed - appeal dismissed.

  ---

• 2024 (1) TMI 901
  Benefit of exemption under custom Notification No.46/2011-Cus dated 01.06.2011 and Notification No. 53/2011/ Cus dated 01.07.2011 denied - denial on the assumption that value of addition by the supplier was less than 35% - HELD THAT:- Even though the appellant has made strong prima facie case on the merit but appeal can be disposed of on the threshold point of the time bar - It is found that the certificate of origin was provided by the exporting Country i.e. Malaysia. For which the appellant have no control. It is Governmental Authority of exporting country who after consideration of various aspects of value addition issued country of origin certificate. The facts behind issuance of country of origin neither the appellant are aware of the fact nor they are legally suppose to know the same. At the time of filing the Bill of Entry the appellant have to submit the documents including the country of origin certificate which the appellant have scrupulously complied. If there is doubt in the mind of customs they could have issued show cause notice within the normal period of limitation, as per proviso to Section 28 (4) of Customs Act. However, in the present case the show cause notice was issued beyond the normal period of limitation. Moreover, on the merit also there is no strict compliance of retroactive check and conclusion thereof was made by the Custom Authority. Therefore, no mala fide can be attributed to the appellant in the given facts of the present case. Therefore, we are of the considered view, that the demand is hit by the limitation. Appeal is allowed.

  ---

• Insolvency & Bankruptcy

• 2024 (1) TMI 900
  Time Limitation - Date of default as stated in the petition under Section 7 of the Insolvency and Bankruptcy Code 2016 - HELD THAT:- Issue notice, returnable on 22 January 2024. List the Civil Appeal on 22 January 2024.

  ---

• 2024 (1) TMI 899
  Seeking extension of time for implementation of the Plan - seeking relaxation of timelines of a period more than 8 months to implement the Resolution Plan - HELD THAT:- Having regard to the scope and objective of Insolvency and Bankruptcy Code, 2016, to avoid Companies going into Liquidation, as Liquidation of the Corporate Debtor should be a matter of last resort; that the IBC recognizes a wider public interest in resolving corporate insolvencies and its object is not the mere recovery of monies due and outstanding; that the Successful Resolution Applicant has indicated its bona fide, at least prima facie at the present stage, to complete the implementation of the `Resolution Plan ; and therefore, this `Tribunal is of the considered view that powers under Rule 11, can be exercised in the facts of this matter and the aforenoted Proposal given by the Successful Resolution Applicant, be accepted. Appeal disposed off.

  ---

• 2024 (1) TMI 898
  Condonation of delay of 10 days, in filing of the present appeals - sufficient reasons for delay or not - Seeking a direction to the Respondent therein to place the resolution plan submitted by the him before the CoC for consideration alongwith other resolution plans - HELD THAT:- The undisputed facts are that both the appeals have been filed against the order dated 20.07.2023. The first appeal has been filed when the application filed by the Appellant for seeking direction to the Respondent therein to place the resolution plan submitted by the Applicant before the CoC for its consideration alongwith other resolution plans and further to stay the voting results of the resolution plan, which is put for voting pending disposal of the application filed by the Applicant has been dismissed and the second appeal has been filed by the Appellant because the application filed by the RP of the Corporate Debtor for approval of the resolution plan submitted by SRA was approved. Both the appeals have been filed on 28.08.2023. The first Appeal has been filed with the free certified copy made available on 01.08.2023 whereas the second appeal has been filed with a copy of order which is alleged to have been shared by the RP on 07.08.2023. Three issues emerges in this case, firstly, the Appellant is guilty of suppressio veri and suggestio falsi who has made a totally wrong averments in para 6 and 17 of the grounds of appeal which has been declared and verified to be correct and also filed an affidavit in support of it because, firstly, the appeal is not within the limitation though a declaration is made in para 6 of the grounds of appeal that the Appeal is within the period specified in Section 61 of the Code and secondly the Appellant has obtained the certified copy (paid copy) applying the same for it on 01.08.2023 and received the same on 10.08.2023, therefore, the period of 10 days deserves to be excluded in terms of the Section 12 of the Act, 1963. Secondly, the Appellant has not even applied for the certified copy (paid copy) at all in filing of the appeals and even one application has been filed i.e. I.A. No. 1118 of 2023 for dispensing with the filing of the certified copy. Thirdly, the Appellant has taken totally a new stand in the application for condonation of delay when an objection was raised by the Respondents that the appeal is not within the period of limitation. In the application filed for condonation of delay, the ground taken is that the limitation is to be counted from the date when free certified copy was made available in so far as the first appeal is concerned whereas no such plea has been taken in so far as the second appeal is concerned in which the averment has been made that the appeal has been filed with the copy given by the RP and lastly even if there is a delay of 10 days for which the application has been filed for condonation of delay, no ground has been made out for the purpose of condoning the delay which would fall within the parameters of sufficient cause. There are no merit in the present applications and the same are hereby dismissed.

  ---

• 2024 (1) TMI 897
  Seeking Recall of the Order - Appeal was dismissed on the ground that there was a Debt and a Default and that the Section 7 Application filed by the Respondent / Financial Creditor was not barred by Limitation - HELD THAT:- Keeping in view that all the issues raised by the Applicant in the Recall Application has been addressed to in detail and this Tribunal, does not find any existence of Fraud, Collusion, an Error or a Mistake, nor any Ignorance of any fact that a Necessary Party, had not been served at all or had expired or that the Estate was not represented and therefore, there are no grounds at all to entertain this Recall Application. This Tribunal is of the considered view that in the garb of this Recall Application, the Applicant is trying to reargue the entire matter on Limitation, Acknowledgement, under Section 18 of the Limitation Act, 1963, Jural Relationship and the Locus. Keeping in view the grounds raised and this Tribunal s limited Jurisdiction, there are no substantial reasons to entertain this Recall Application and hence, the same is dismissed accordingly.

  ---

• 2024 (1) TMI 896
  Penalty u/s 65 of the Insolvency and Bankruptcy Code, 2016 on assenting CoC members - assenting CoC members jointly voted in favour of the liquidation of the CD without even exploring the possibility of resolution of the Corporate Debtor - HELD THAT:- There is no dispute that the CoC took a decision for liquidation of the CD after holding five meetings and by voting share of 88.48 per cent which meets the criteria laid down in Section 33(2) of the Code. There is an error in the approach of the Adjudicating Authority that for the purpose of taking a decision regarding the liquidation of the CD, the CoC has to complete all the steps regarding resolution of the CD because it would be against the spirit of Section 33(2) and explanation appended to it wherein the legislature has used the word any time twice i.e., firstly, in Section 33(2) and secondly, in the explanation of Section 33(2) of the Code that the CoC has the jurisdiction to pass the order of liquidation of the CD, approving it by not less than sixty six per cent of the voting share, but it should be before the confirmation of the resolution plan. In the case of Sunil S. Kakkad [ 2020 (8) TMI 392 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] , this Court has categorically framed a question as to whether the RP, with the approval of the CoC with sixty six per cent vote share, directly proceed for the liquidation of CD without taking any steps for resolution of the CD. In the said case, there were three meetings of CoC in which without making endeavour for inviting EOI, the CoC unanimously resolved to liquidate the CD and that issue came for adjudication before this Court in which while referring to Section 33(2) and the explanation appended thereto it has been ordered that the CoC has the power to liquidate the CD before confirmation of the resolution plan. The Adjudicating Authority has not given any reason for forming an opinion much less prima facie that it was a case of malicious intent on the part of the Applicant/RP with the connivance of assenting members of CoC to whom the show cause notice was given and finally the provision of Section 65 has no application because it would apply if the application is filed for the purpose other than liquidation. The impugned order does not deserve to survive and hence, the present appeal is allowed.

  ---

• 2024 (1) TMI 895
  Doctrine of merger - Seeking recall of order - it is alleged that order dated 31.03.2023 was obtained by the Respondent by citing judgments which were not good law. It is submitted that two judgments relied in the impugned order dated 31.03.2023 are; judgment of two-member bench judgment in Aggarwal Coal Corporation Pvt. Ltd. vs. Sun Paper Mills Ltd. Anr. [ 2019 (5) TMI 1140 - NATIONAL COMPANY LAW TRIBUNAL DIVISION BENCH, CHENNAI ] and judgment in KLJ Resources Ltd through its Managing Director Vs Rajinder Mool Chand Verma [ 2022 (10) TMI 383 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ]. It is submitted that correctness of the aforesaid two judgments was doubted by three-member bench vide its order dated 09.02.2023 passed in I.A. No. 3961 of 2022, Union Bank of India Erstwhile Corporation Bank VS Mr. Dinkar T. Venkatasubramanian [ 2023 (7) TMI 209 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ]. HELD THAT:- A perusal of the judgment dated 31.03.2023 makes it clear that the two-member bench has heard only on the maintainability issue. In the order dated 31.03.2023, the two-member bench noticed the facts of the case, order passed by this Tribunal dated 04.07.2019. This Tribunal also noticed the grounds claimed by Applicant No.2 to maintain the application (I.A. No.647 of 2023) - The two-member bench after consideration held that it would be difficult to entertain the application particularly on the ground of locus of the Applicant. The five-member bench of this Tribunal in Budhia Swain Ors. Vs. Gopinath Deb Ors. [ 1999 (5) TMI 596 - SUPREME COURT ], thus, categorically held that there is inherent power of recall in the Tribunal and application for recall is maintainable, however, the recall can be granted on sufficient grounds. The grounds for recall has been enumerated in Para 16 of the order, as extracted above. The preposition is well settled that power of recall would be there if an order is obtained by playing fraud on the Court. The two-member bench in its order dated 31.03.2023 while noticing the judgment of Hon ble Supreme Court in S.P. Chengal Varaya Naidu (Dead) By Lrs. Vs. Jagannath (Dead) By Lrs. Ors., [ 1993 (10) TMI 315 - SUPREME COURT ] also expressed its agreement with the conclusion that fraud vitiates everything. It is also required to be found out whether there are any grounds to recall order dated 31.03.2023 as has now been laid down by the five-member bench of this Tribunal in Union Bank of India Erstwhile Corporation Bank VS Mr. Dinkar T. Venkatasubramanian [ 2023 (7) TMI 209 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ] as well as judgment of Hon ble Supreme Court noticed therein. The counsel for the Applicants was fully heard by the two-member bench before passing order dated 31.03.2023. Thus the order was passed after hearing the Applicants fully. The submission which are sought to be advanced by learned counsel for the Applicants is that the two-member bench committed error in holding that the doctrine of merger shall apply and failed to notice the exception to the doctrine of merger as in Para 14(4) of the judgment in Kunhayammed [ 2000 (7) TMI 67 - SUPREME COURT ]. One of the reason for rejecting the application in order dated 31.03.2023 was that relying on the doctrine of merger the order of this Tribunal dated 04.07.2019 came to be merged with the judgment of Hon ble Supreme Court dated 15.11.2019. The above view taken by the two-member bench in judgment dated 31.03.2023 is sought to be challenged by contending that the precedence of Hon ble Supreme Court in Kunhayammed has been misinterpreted by the two-member bench and the proposition as laid down by the Hon ble Supreme Court in Kunhayammed in Para 14(4) was suppressed. The two-member bench having taken the view that doctrine of merger is applicable, we cannot sit over in review of the judgment. The power of review is not conferred to this Tribunal. There are no jurisdiction to sit in review over the judgment nor we can be persuaded to take a different view which was taken on 31.03.2023. The submission of the Appellant that order dated 31.03.2023 is nullity cannot be accepted. Application rejected.

  ---

• Service Tax

• 2024 (1) TMI 894
  Levy of service tax - Steamer Agent Service - excess ocean freight collected and retained by them for transportation of the goods to foreign destinations - HELD THAT:- There are merit in the contention of the learned advocate for the appellant. Analysing the transaction between the appellant, their customers and shipping lines, we find that the appellant do not act as agents of the shipping line for booking the cargo space or for canvassing or booking of the cargo space for their customers. They purchase the cargo space on behalf of the customers from the shipping lines on principal-to-principal basis. The excess ocean freight collected from the customers, thus cannot be considered as a commission paid by the shipping lines to the appellant. Whether Service Tax be leviable on the excess ocean freight collected from the customers is the issue now needs to be addressed. This issue of chargeability of Service Tax on excess ocean freight retained by the service provider is no more res integra and considered by the Tribunal in a series of cases. Recently, the Principal Bench in M/S. BALMER LAWRIE CO. LTD. VERSUS THE COMMISSIONER OF SERVICE TAX DELHI II COMMISSIONERATE, NEW DELHI AND THE COMMISSIONER OF SERVICE TAX DELHI II COMMISSIONERATE, NEW DELHI VERSUS M/S. BALMER LAWRIE CO. LTD. [ 2023 (5) TMI 100 - CESTAT NEW DELHI] held that This activity is a business in itself on account of the appellant and cannot be called a service at all. Neither can the profit earned from such business be termed consideration for service. There are no merit in the impugned order, consequently, the same is set aside - appeals are allowed.

  ---

• 2024 (1) TMI 893
  Abatement under N/N. 1/2006-ST dt. 01/03/2006 - Construction of Complex Services - period 16/06/2005 to 31/03/2008 - HELD THAT:- It is not in dispute that for the period prior to 01/06/2007, the appellant has rendered construction of complex services, which included both material as well as service components; hence squarely fall under the category of Works Contract Service . Also, during the course of hearing, the appellant has submitted the VAT returns filed by the appellant during the relevant period under Works Contract Service. In these circumstances, denial of benefit of composite scheme under Works Contract Service w.e.f. 01/06/2007, is bad in law and levy of service tax prior to 01/06/2007. when the services are in the nature of Works Contract Service also cannot be sustained in view of the judgment of the Hon ble Supreme Court in the case of Total Environment Building Systems (P) Ltd. Vs. Deputy Commissioner of Commercial Taxes [ 2022 (8) TMI 168 - SUPREME COURT ]. The impugned order set aside - appeal allowed.

  ---

• 2024 (1) TMI 892
  Short payment of service tax - un-billed revenue on account of various services rendered by the appellant - Rule 3 of the point of Taxation Rules, 2011 - HELD THAT:- The necessary reconciliation statement for the unbilled revenue with regard to payment of details, had to be made by the appellant in time before the original authority, but they failed to do so. Now, they have presented the said statement and explained that the said statement could not be filed in time before the lower authorities on account of circumstances, which were beyond their control. In these circumstances and in the interest of justice, the matter is required to be remanded to the original authority for necessary verification of the re-conciliation statement now produced. The appellants are directed to produce such statement before the original authority. Appeal stands disposed off by way of remand to the original authority.

  ---

• 2024 (1) TMI 891
  Demands raised in the SCNs under the non-existent charging sections of Sections 65 (105) (zzd), (zzg) and (zzzza) - Exemption by notification no. 25/2012-ST dated 20.6.2012 (entry no. 12) - abatement of 90% of the total cost towards the material when the assessee was only required to pay VAT on 80% of the cost under the UPVAT Rules. Demand under the non-existent charging sections - HELD THAT:- This is not a case of mere wrong mention of a provision in the SCN but a confirmation of demand on charging sections which did not exist during the relevant period at all. It is also a case of ascertaining the demand considering exemption notification which also did not exist during the relevant period. Not only were the wrong provisions invoked in the SCN, but the demands were confirmed under them in the impugned order which shows complete non-application of mind. The provisions were not only wrong but were non-existent during the relevant period - this question is answered in favour of the assessee and against the Revenue and it is held that the demand confirmed in the non-existent legal provisions cannot be sustained. Exemption under Notification no. 25/2012-ST dated 20.6.2012 (S.No. 12) - HELD THAT:- It is undisputed that the services were rendered to the PWD and to NOIDA. PWD stands for Public Works Department which is a department of the State Government. Therefore, it is Government itself and not a Governmental authority. The notification exempts not only services rendered to governmental authorities but also services rendered to the Governments and Local authorities. PWD, being the Government, the question of it having to fall under the definition of Governmental authority does not arise. As far as NOIDA is concerned, it stands for New Okhla Industrial Development Authority which governs a part of the National Capital Territory of Delhi and is part of the State of Uttar Pradesh. The term local authority is not defined in the notification and hence the commonsensical meaning of the term should be applied. A perusal of the functions of the NOIDA as per section 6 of the Act reproduced above makes it abundantly clear that it falls in the definition of local authority . Therefore, neither the NOIDA nor the PWD need to fall under the definition of Government authority because NOIDA is a local authority while PWD is a part of the Government itself. The services of street lighting and other maintenance work carried out by the assessee to these two organizations, also cannot by any stretch of imagination, be called predominantly meant for commerce or business. Since it is held against the Revenue and in favour of the assessee on the first two questions, it is not necessary to answer the third question of extent of abatement under works contract service. It is also not necessary to go into any of other submissions. The impugned order cannot be sustained and needs to be set aside - Revenue s appeal is rejected and the three appeals of the assessee are allowed.

  ---

• 2024 (1) TMI 890
  Refund of the excess service tax paid - rejected on the ground of limitation under Section 11B of the Central Excise Act, 1944 - relevant date for computing time limitation - excess tax deposited by the appellant is without any authority of law or not. What would be the relevant date in the present case for computing the period of limitation in terms of Section 11B of the Central Excise Act? - Whether the instant refund application is barred by limitation under the provisions of the Central Excise Act? - HELD THAT:- In the present case if the department had not contested the writ petition taking a preliminary objection about the proper remedy of filing an application for refund, the High Court would have considered the prayer in the writ petition on merits and in the event the same being decided in favour of the appellant, he would have been entitle to claim refund of the duty. It is relevant to refer to the decision of the Karnataka High Court in COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [ 2012 (7) TMI 22 - KARNATAKA HIGH COURT ], where the Department had objected to the maintainability of the writ petition against the rejection of the refund applications as there was alternate remedy of filing an appeal under the statute, the High Court held that writ petition could not be rejected on the ground of alternative remedy. So the relevant date in this case would be the date of the order of the High Court, i.e.12.12.2017 and not from the date of payment of tax as claimed by the revenue under Clause(f). The application for refund was filed by the appellant on 12.03.2018, i.e., within three months from the date of the order of the High Court and the same being before the expiry of one year as per Section 11B(1) of the Act has to be treated being filed within the prescribed time limit. Thus, the refund application is not barred by limitation as in the peculiar facts of the present case the relevant date would be the date of the High Court order i.e.,12.12.2017. Whether the excess tax deposited by the appellant is without any authority of law? - HELD THAT:- The service recipient ONGC had made 50% of service tax and consequently the appellant was required to pay the balance 50% only but under mistake that as per the prevailing law their liability is 100% they made the full deposit of 100%, thereby making the total deposit of 150% instead of 100%. Thus the department had received excess amount of 50%, i.e., Rs 10,27,30,532/- for which they had no authority to retain. The issue that any amount paid over and above the actual duty liability should be considered as deposit which has to be refunded and in such cases limitation prescribed under Section 11B of the Act would not be applicable has been considered in series of decisions by the various High Courts and also by the Tribunal. In the case of M/S CREDIBLE ENGINEERING CONSTRUCTION PROJECTS LTD. VERSUS COMMISSIONER OF CENTRAL TAX, HYDERABAD GST [ 022 (9) TMI 844 - CESTAT HYDERABAD ], where there was a difference of opinion between the two members regarding the application of limitation under Section 11B for the purpose of refund, the matter was referred to the Third Member who opined that if an amount is paid under a mistaken notion as it was not required to be paid towards any duty or tax, the limitation prescribed under Section 11B of the Act would not be applicable. The refund application by the appellant cannot be rejected on the ground of delay. There is one more aspect which is to be considered that amount of Rs.10,80,68,227/- was deposited by the appellant under protest . Therefore in terms of the 2ndproviso to Section 11B, limitation of one year shall not apply and in that view, the refund application cannot be rejected on the ground of limitation, being beyond the period of one year. The impugned order rejecting the refund application as time barred is liable to be set aside and the Department is directed to refund the amount as claimed by the appellant in the refund application alongwith proportionate interest. Appeal allowed.

  ---

• 2024 (1) TMI 889
  Levy of Service Tax - GTA service or not - transport services were rendered by the individual truck or transport operators - Consignment Note is missing - HELD THAT:- The authorities below relying on the decision of the learned Single Member in COROMANDEL AGRO PRODUCTS OILS LTD. VERSUS COMMR. OF C. EX., GUNTUR [ 2014 (6) TMI 657 - CESTAT BANGALORE] have non-suited the appellant on the ground that it is incorrect to say that any transport company which is not issuing Consignment Note is presumed to be GTO. However, it is found that the later decisions by the Division Benches of the Tribunal have categorically laid down the law that in absence of consignment note services cannot be considered as GTA services and the demand of service tax under the category of Goods Transport Agency does not sustain. The goods were transported locally from the mines to the factory site and since the distance to be covered is short, no consignment note has been issued by the service provider and therefore the levy of service tax under the category of Goods Transport Agency is not sustainable in view of the various decisions of the Division Benches of the Tribunal which is binding on me. Therefore, the distinction sought to be placed by the Revenue that the earlier decisions related to mines is not sustainable. The question of the applicability of the exemption notification no.34/2004 ST dated 03.12.2004 or for that matter the invocation of the extended period of limitation requires no perusal. The impugned order deserves to be set aside on the ground that the transport services were rendered by the individual truck or transport operators and therefore no consignment note was issued and as a result, the same would not fall within the scope of the definition of Goods Transport Agency as given in section 65(50 b) of the Finance Act, 1994 - appeal allowed.

  ---

• 2024 (1) TMI 888
  Recovery of short paid service tax alongwith interest and penalties - failure to include transportation charges in the assessable value - Department formed an opinion that the transportation charges are to be covered under mining services - whether the whole activity of the appellant or the services rendered by the appellant are mining service only or are two different services? - HELD THAT:- The contracts are not composite in nature and the services provided by the appellants are not composite in nature. There are separate arrangement/contract for the activity which can be called as the Mining Services and the activity which is Transportation Services. Also as apparent from the Section 66F as reproduced above, it is clear that when two separate activities are being provided even though under the single instrument or contract, those have to be treated as two separate activities and thus should be taxed separately. In the decision titled as Jain carrying Corporation Vs. Commissioner of Central Excise, Jaipur, [ 2015 (11) TMI 98 - SC ORDER] , wherein it was held that if separate rates are provided for separate activities under a common agreement/instrument, the activities should be classified under their respective categories. Though the department has also relied upon several decisions but most of them pertains to the comprehensive/composite contract. As already discussed above, it is not the fact for the contracts in question. The adjudicating authority while declining the transportation activity as a GTA service has held that since there is no consignment note, the same cannot be held to be the GTA service. No doubt in terms of Rule 4B of Service Tax Rule, 1994, issuance of consignment note to the recipient of service is mandatory. But in the present case, apparently and admittedly, there were issued transit slips having all such details as were to be mentioned in the consignment note. Hence just because the receipts/notes had a different nomenclature, it cannot be held that there was no consignment note. There are no reason to conform the order under challenge. Same is therefore set aside - appeal allowed.

  ---

• 2024 (1) TMI 887
  Classification of services - intermediary services or not - privity of contract - services provided by the appellant in connection with sales and services and collection services - taxability of services provided by the appellant to the personnel of foreign customers on their visit to India. Services provided by the appellant in connection with sales and services and collection services - HELD THAT:- From the perusal of the definition of intermediary extracted herein above and the CBIC Circular of 20.09.2021, show that the sub contracting arrangement would not fall within the purview of intermediary. In the instant case, from the perusal of the sub-contracting agreement referred to hereinabove it is seen that the services undertaken by the group entity HGRL, UK have been sub-contracted to the appellants. There is no privity of contract between the appellants and the Business Partners. Service level monitoring takes place in terms of the Performance Level agreement (PLA). Even here, as provided in the PLA, the terms of the subcontracting agreement shall always prevail in case of any conflict. The responsibility and liability is only between the appellant and the group entity - HGRL from whom compensation is received on cost-plus basis in convertible foreign exchange. It is well settled in terms of the decisions cited by the learned Counsel in Genpact [ 2022 (11) TMI 743 - PUNJAB AND HARYANA HIGH COURT] and Singtel [ 2023 (9) TMI 304 - DELHI HIGH COURT] that where the relationship between the parties is on principal to principal basis, such an arrangement cannot come within the purview of intermediary services. In view of the Board Circular and the precedent decisions it is not possible to accept the view expressed by the Commissioner in Para 31 of the First Order and Para 16 of Second Order on the interpretation of Rule 2(f) of the POPS. The finding that principal-agency relationship is not essential for terming a service provider as intermediary, is clearly contrary to law - Also, the elements of service, namely collections and contact center services for credit/debit card operations, are essentially part of the bundled services and in terms of Section 66F(3)(a), will qualify as part of main service - the elements of service, namely collection services and contact center services for credit/debit card operations, cannot be held to be intermediary services. Taxability of reimbursement claimed by the appellant for accommodation and cab charges, incurred by the appellant on behalf of HGRL/Business Partners - HELD THAT:- At any rate, for the service to be classified as rent-a-cab in terms of Section 65(91), upto 30.06.2012, the service is to be provided by a person engaged in the business of renting of cabs, which is not the case in the context of the present appellants. Also, with respect to the period after 01.07.2012, the transportation services cannot fall under Rule 11 of POPS, for determining the place of provision as taxable territory, as in the facts of this case it does not satisfy the definition of continuous journey as per Rule 2(d) of the said Rules - the costs towards rent-a-cab claimed from HGRL, UK which is remitted by the HGRL UK to the appellants in convertible foreign exchange cannot be taxed for the period from 01.10.2010 to 30.06.2012 under Rule 3(1)(ii) of the Export of Service Rules, 2005 and Rule 11 of the POPS post 01.07.2012. Similarly, the costs towards accommodation claimed from HGRL, UK cannot be taxed for the period from 01.07.2012, in terms of Rule 5 of the POPS - levy of service tax in the First Order on accommodation services and rent-a-cab services set aside. Appeal allowed.

  ---

• 2024 (1) TMI 886
  Revenue Neutrality - Reverse charge mechanism - legal services - rent-a-cab service - clouding service - purchasing licence use of Geneva brand product - interest - penalty - HELD THAT:- Legal services and rent-a-cab services were specified services under Notification No.30/12-ST dated 20.06.12 on which service tax was payable by the service recipient under reverse charge mechanism. Clouding services and Authorisation for use of Geneva product were provided by entities located abroad, i.e., non-taxable area. So, service tax on said services was payable by service recipient under reverse charge mechanism - it is further found that the Appellant was a registered person under service tax and was eligible for taking Cenvat credit paid on input services. It is a fact that all said services were input services for the Appellant. Whatever tax was paid on said services, the Appellant would have taken back as Cenvat credit. Thus there was no gain to the government exchequer in that case. It is a case of revenue neutrality. The issue of the applicability of revenue neutrality in the circumstances of charging service tax under reverse charge mechanism has been settled in catena of judgments - In the case of Jain Irrigation System Ltd. [ 2015 (9) TMI 160 - CESTAT MUMBAI ] the Tribunal holds that revenue neutral situation comes about when credit is available to assessee himself. In the case of Coca-Cola India Pvt. Ltd. [ 2007 (4) TMI 17 - SUPREME COURT ] the Apex Court accepted the stand that the duty payable in respect of beverage basis/concentrates is modvatable. Since the duty payable is modvatable, there is no revenue implication. By applying ratio of above decisions, it is found that the present case is a revenue neutrality case and as such no demand is sustainable. Interest and penalty - HELD THAT:- The issue is no more res integra. Once demand is not sustainable, interest and penalty under Section 78 of the Finance Act, 1994 would not be imposable. When demand is not sustainable on the ground of revenue neutrality, it is not essential to consider other issues raised by the Ld Counsel of the Appellant in relation to classification and invoking extended period. The impugned order is set aside - Appeal allowed.

  ---

• Central Excise

• 2024 (1) TMI 885
  Maintainability of appeal - monetary amount involved in the appeal - HELD THAT:- The appeals are dismissed owing to low tax effect, leaving the question of law, if any, open.

  ---

• 2024 (1) TMI 884
  Maintainability of petition - availability of alternative remedy of appeal - not given scope to participate in the hearing - violation of principles of natural justice - HELD THAT:- This Court finds that vide order dated 06.08.2007, the Customs Excise and Service Tax Appellate Tribunal, Eastern Bench, Kolkata remanded the matter as it found errors in the process of adjudication of the matter. Therefore, it is incumbent upon the authority to give due opportunity of hearing to the petitioners adhering to the direction of the CESTAT. If the authority did not follow the direction of the CESTAT, there is gross laches on the part of the authority in passing the order. Had the petitioners brought the fact to the notice of the CESTAT with regard to laches of the authority, in that event the CESTAT could have considered the same. Without doing so, the petitioners having approached this Court, the writ petition is not maintainable. This Court is not inclined to entertain this writ petition - Writ petition disposed off.

  ---

• 2024 (1) TMI 883
  Valuation of Excise Duty - whether the freight charges are includible in the assessable value or not? - HELD THAT:- On perusal of the Purchase Order, it is seen that delivery of goods is on EX-WORKS basis and its insurance is covered by the appellant. In the case of Commissioner of Customs Central Excise vs. Ispat Industries Limited [ 2015 (10) TMI 613 - SUPREME COURT ], it was noted by the Hon ble Apex Court that the place of removal is to be determined on the facts of each case. The payment of insurance charges or freight charges cannot be criteria for deciding the place of removal. The documents show that there is mutual agreement between the parties on EX-WORKS price. The contention of the department that because the insurance charges are borne by the appellant upto the buyers premises from factory gate, the transfer of property in the goods has not been passed on to buyer at the factory gate, cannot be accepted. The Circular issued by the Board vide F.No. 988/12/2014-CX dated 20.10.2014 as well as F.No. 999/6/2015-CX dated 28.02.2015 has clarified that handing over the goods to the transporter for the purpose of delivery to the buyer without reserving the right of disposal of goods would be the place of removal. In the present case goods are handed over to the transporter only for carrying the goods up to buyer s premise. As per mutual understanding the price is determined as ex-factory price and therefore, the goods are at the disposal of the buyer after it leaves the factory gate. The decision rendered by the Tribunal in the case of IDMC Limited [ 2023 (3) TMI 735 - CESTAT AHMEDABAD ] would be clearly applicable to the facts of the present case. In the said case, it was held that insurance charges borne by manufacturer cannot be the sole reason to decide the ownership of the goods. The decision relied by learned AR in the case of Principal Commissioner, Raipur vs. M/s. Unique Structures and Towers Limited [ 2019 (9) TMI 1007 - CESTAT NEW DELHI ] is of no assistance to the Revenue for the reasons that in the said case the fact shows that the price was inclusive of freight charges as agreed to between the parties - It was therefore held that freight charges are includible in the assessable value. In the present case, as discussed above the issue is covered by the decision in the case IDMC Limited. Thus, the freight charges are not to be included in the assessable value. The demand cannot be sustained - appeal allowed.

  ---

• 2024 (1) TMI 882
  Refund of amount paid under protest - Cenvat credit of service tax paid on product liability and recall insurance premium which was denied by revenue on the ground that the same are post removal services - principles of unjust enrichment - HELD THAT:- As there is no dispute to the fact that amounts relating to cenvat credit availed were collected from the appellant before issuance of show cause notice and adjudication order, and it is available on record that appellant during audit objection resisted the demand of reversal of Cenvat credit and have debited the same under protest ; such recovery of amount before creation of liability was without authority of law and cannot be treated as tax but revenue deposit only. It is settled law that section 11B has no application to revenue deposit made during investigation. Reliance in this behalf is placed on the decision of M/s. Parle Agro Pvt Ltd 2021 (5) TMI 870 - CESTAT ALLAHABAD] in which it is held that section 11B has no application to revenue deposit, and such deposits are required to be refunded with interest @ 12% from the date of deposit. The impugned order is set aside - Appeal allowed.

  ---

• 2024 (1) TMI 881
  Wrong availment of Cenvat Credit - huge evasions of Central Excise duty - fake Cenvat invoices - HELD THAT:- It is found that during the cross-examination before the adjudicating authority all brokers stated that disputed ship breaking material were supplied and transported to Respondent. Further Ship Breakers units/dealers nowhere admitted /stated that they have not supplied the goods to the respondent - the allegation of the department is based upon assumption and presumption that the ship breaking scrap after clearance from Ship-Breaking yard has been diverted to Re-rolling units. In the present matter not a single Re-rolling mills units who allegedly used the said ship breaking scrap identified by the department. No corroborative evidence produced by the department to show that diversion of the said ship breaking scrap. The Ld. Commissioner has given weightage to all these deficiency in the investigation and held that there is no sufficient evidences to establish fraudulent availment of credit. It is also noticed that in case of LLOYDS METAL ENGINEERING LTD. VERSUS COMMISSIONER OF C. EX., MUMBAI [ 2003 (11) TMI 502 - CESTAT, MUMBAI] it was held that burden to prove non-receipt of the inputs is required to be discharged by Revenue by sufficient evidence. Where disputed consignments are entered in RG-23A Part I and Part II in chronological order, the allegations of non-receipt of the inputs cannot be upheld - there are no fault with the discussions and the view taken by the Ld. Commissioner in regard to the issue of alleged fraudulent availment of Cenvat credit. In the disputed matter transportation of the goods was arranged by the Brokers through whom the scrap was purchased by the Respondent. Merely on the ground that the owners of the transport vehicle have denied the transportation to Respondents factory it cannot be concluded that the scrap was not received in the respondent s factory - the credit availed on the basis of invoices issued by the registered dealer, cannot be denied on the ground that the transporters have admitted the fact of non-transportation of the goods and the addresses of truck owners were found to be fake. The impugned order is upheld and the appeal filed by the Revenue is dismissed.

  ---

• CST, VAT & Sales Tax

• 2024 (1) TMI 880
  Extension of period of limitation of assessment orders - Anti dated orders - HELD THAT:- The actual provision would be Section 62 of the Act under which the said order could be challenged. A perusal of the appeal filed would go on to show that various issues were raised including the fact whether the orders passed by the Commissioner were ante-dated only for the purpose of saving the limitation. The fact that notice had not been issued and whether the limitation would be extended in a wholesale manner or opportunity of hearing had to be granted to the concerned persons was the issue to be decided by the Tribunal. The substantial question thus which was to be considered by the Tribunal was brushed aside solely on the ground that reference had been made to Section 63 of the Act in the heading of the appeal. It is settled principle that the heading of the appeal or an application is not what is to be considered by the Appellate Authority which is a creature of statute but it has to decide substantially the issue which has been raised before it. Merely on account of the fact that the assessment order was also challenged on merits was not a ground to reject the case on technicalities that a wrong section had been mentioned. Resultantly, petitions are liable to be allowed on this ground itself and the matter is liable to be remanded to the Tribunal. The valuable rights of the appellant has thus been taken away as decision had not been taken on merits regarding the issue of extension of limitation by the Commissioner which can be challenged by filing an appeal under Section 62(1)(c) of the Act. Resultantly, the order of the Tribunal dated 04.11.2019 also cannot be sustained on this ground that firstly it has to decide the first 3 appeals on the question whether the extension could be granted by the Commissioner but it has put the cart before the horse. The matter is remanded to the Tribunal to decide the issues in a consolidated manner on merits - Appeal allowed.

  ---

• Indian Laws

• 2024 (1) TMI 879
  Dishonour of Cheque - compounding of sentences - HELD THAT:- There is doubt that the offence punishable under Section 138 of the NIA, 1881 is compoundable. In the said circumstances, the parties are desirous to compound the sentence - there are no reason for not to compound the sentence of the appellant and acquit the appellant. The appeal is allowed and appellant is acquitted - The respondent shall furnish his details of the bank account to the Registry of this Court.

  ---

• 2024 (1) TMI 878
  Post GST era: Unconstitutional validity of Goa Cess Act - violation of Articles 301, 303, and 304 of the Constitution of India - violation of petitioner s rights under Article 14 of the Constitution of India, since the levy is on two classes of items, the Goan ore on which royalty is paid and the non-Goan ore on which royalty is not paid - power/competence to sustain the levy of cess. Whether the Goa Cess Act is constitutionally valid when tested on the anvil of Articles 14, 301, 303 and 304 of the Constitution - whether the Goa Cess Act levys an unconstitutional fee or a tax? - whether the State stand denuded of its power to levy cess under the said Act on the ground that levy stands subsumed by the GST Act? HELD THAT:- The title of the Goa Cess Act namely Goa Rural Improvement and Welfare Cess Act, 2000 as also the preamble of the Act would indicate that the object of the Act is to provide additional resources for improvement of infrastructure and health with a view to promote the welfare of people residing in the rural areas affected by the use of plastics, dumping of garbage and spillage of materials. It provides that the legislature thought it expedient to provide additional resources for improvement of infrastructure and health with a view to promote the welfare of people residing in the rural areas affected by the use of plastics, dumping of garbage and spillage of material. The legislative competence to enact the Goa Cess Act has been upheld by a Division Bench of this Court in the case Sociedade De Fomento Industrial Pvt.Ltd., Goa [ 2018 (9) TMI 2141 - BOMBAY HIGH COURT] . The Division Bench has held that the Goa Cess Act is relatable to Entries 6, 13, 23 and 66 of List II (State List) under the Seventh Schedule to the Constitution, and its validity is not impaired or affected by Entries 52 and 54 of List I. It is also held that it does not in any manner breach the mandate of the Central Act namely Mines and Minerals (Development and Regulation) Act,1957 read with Act 65 of 1951 and Act 53 of 1948 respectively. The Division Bench held that considering the substance and object of the Goa Cess Act and the Rules framed thereunder vis a vis MMDR Act and the Rules framed thereunder, there was no irrevocable conflict between the concerned Union Legislation and the State Legislation. Whether Tax or Fee? - HELD THAT:- In Consumer Online Foundation Ors. Vs. Union of India Ors. [ 2011 (4) TMI 1275 - SUPREME COURT] the Supreme Court was considering the decision of the Delhi High Court upholding levy of development fees on the embarking passengers, by the lessees of the Airports Authority of India, at the Indira Gandhi International Airport, New Delhi and the Chhatrapati Shivaji International Airport, Mumbai. The Supreme Court held that the nature of the levy under Section 22A of the Airports Authority of India Act, were not the charges or any other consideration for services for the facilities provided by the Airports Authority. Referring to the decision in Vijayalashmi Rice Mills Ors. [ 2006 (8) TMI 307 - SUPREME COURT] , it was held that levy under Section 22A though described as fees, is really in the nature of a cess or a tax for generating revenue for the specific purposes mentioned in clauses (a), (b) and (c) of Section 22A. It also needs to be observed that the Division Bench in Sociedade De Fomento Industrial Pvt. Ltd., Goa also considered the contention of the petitioners therein, that the State cannot levy any fee under Entries 6, 13 and 50 of List II, as it was required to provide some special service to the petitioner, and no such service, much less special service, was provided to the petitioners. The petitioners had also contended that the imposts can be by way of tax or fee, but not both - It was observed that it could not be said that the petitioners do not benefit at all from the services rendered and that there is not even a remote connection. It was held that the Goa Cess Act and the Rules are a device for the State to augment its resources and the services rendered by the collection of the levy, benefits the petitioner as well, and there existed a co-relationship. It was thus observed that the Goa Cess Act and the Rules, whether it imposes a tax or fee, could not be said to be unconstitutional. Thus, there is no substance in the contention of the petitioner that the Goa Cess Act levies a tax and not a fee. Whether Goa Cess Act is violative of Articles 301, 303 and 304 of the Constitution? - HELD THAT:- By now it is well settled that clauses (a) and (b) of Article 304 are required to be read disjunctively. Clause (a) of Article 304 provides for imposition of any tax on goods imported from other States or Union territories to which similar goods manufactured or produced in that State are subject with an intention as not to discriminate between goods so imported and goods so manufactured or produced. Thus, per se clause (a) of Article 304 is not attracted in the facts of the present case inasmuch as the Cess being levied by Goa Cess Act cannot be strictu sensu categorized as a tax on goods which are sought to be imported - The petitioners are merely concerned in regard to the iron ore/ores or coal. It is thus seen that what is sought to be included in the canvass of the Act is the massive and/ or mass transportation activity of such materials as listed under the schedule to the Act, the spillage of which is a potential threat to the health and welfare of the people and a cause of serious concern to the environment necessitating its preservation. There cannot be two opinions that the transportation of materials of the nature which are provided for in Schedule I of the Goa Cess Act and that too within a small State like Goa, which has a meager land mass would certainly bring about situations of serious issues of public health, for the reason that it is undisputedly that not only normal transportation but such heavy transportation of materials in trucks/heavy vehicles are bound to cause large scale pollution and damage to the environment. There also cannot be two opinions that pollution caused by such transportation would be of varied nature which can be spillage of dust generated from the minerals, coal, fume generated from carriage of fluid substances apart from the smoke pollution and water pollution it would generate. Moreover, the effects on health of smokes/fumes generated from the exhaust of the heavy vehicles is to be imagined. Once the legislation is traceable under Entry 6 read with Entry 66 of List-II, which provides for fees in respect of any matter in List-2 (except fees taken in any Court) and when such legislation concerns an eminent interest in relation to public health, the Courts are required to be extremely slow to tinker with such legislation, as the direct impact of any interference by the Court would be a casualty to human health and life. Challenge on the ground of Article 14 of the Constitution - HELD THAT:- It is well settled that Article 14 does not forbid reasonable classification of persons, objects and transactions by the legislature for the purpose of attaining specific ends. Such principle was reaffirmed by the Supreme Court in R.K. Garg And Ors. vs Union Of India (UOI) And Ors. [ 1981 (11) TMI 57 - SUPREME COURT] . It is well settled that fixation of rates of cess is within the domain of the rule making power of the authority and unless there is some strong material, that the rates as fixed are unconscionable and/or are patently arbitrary, it would not be appropriate for the Court to question the wisdom of the Government in fixing of the rates. Even otherwise fixing of rates is a matter of expertise which would depend on several factors to be considered. It would completely lie within the powers of the rule making authority to fix the rates. Except for a bald case of breach of Article 14, no material is placed on record to contend that the rates so arrived at and fixed by the State of Goa as issued by different notifications need interference. Challenge on the ground of GST Laws - HELD THAT:- The object of GST laws is totally distinct from the object and purpose of the Goa Cess Act. Even the expert body namely the GST council has refrained from subsuming and thereby recommending the repeal of the Goa Cess Act in view of the incorporation of the GST laws. It would not be out of place to mention that Entry 52 of List II which dealt with taxes on entry of goods into local area for consumption use or sale therein and Entry 55 of List II inter alia in regard to taxes on advertisement, have been repealed, that too without any corresponding amendment in Entry 66 of List II. It is therefore, an unwarranted exercise on the part of the petitioners in making an attempt to attack the validity of the Goa Cess Act on the incorporation of the GST laws. Further Section 174 of the Goa Goods and Services Act, 2017 would list the Acts as existing on the date of introduction of the Goa Goods and Services Act, 2017 and the Acts which would stand repealed. The Goa Cess Act does not figure in the list of the Acts repealed. In fact what is significant is that an Act which is relevant for the entry of goods in the State of Goa namely the Goa Tax on Entry of Goods Act, 2000, has stood repealed by the introduction of the Goa Goods and Services Act, 2017. Thus, it is unfounded for the petitioners to contend contrary to the clear legislative intent as reflected under the Goa Goods and Services Act, 2017 that the Court needs to consider that the Goa Cess Act stands subsumed in the GST laws and therefore, is rendered invalid. Such contention of the petitioners is required to be rejected. Thus to conclude, none of the grounds on which the Court would exercise its powers of judicial review to invalidate an Act of the Legislature are made out by the petitioners so as to declare the Goa Cess Act to be in any manner unconstitutional. The petitions accordingly, need to fail on all counts. Petition dismissed.

  ---