TMI Tax Updates - e-Newsletter
January 1, 2019
Case Laws in this Newsletter:
GST
Income Tax
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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GST:
Clarification on refund related issues
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GST:
Clarification on certain issues (sale by government departments to unregistered person; leviability of penalty u/s 73(11) of the CGST Act; rate of tax in case of debit notes / credit notes issued u/s 142(2) of the CGST Act; applicability of notification No. 50/2018-Central Tax; valuation methodology in case of TCS under Income Tax Act and definition of owner of goods)
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GST:
Clarification on export of services under GST
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GST:
Where the taxpayer has sought withdrawal from the composition scheme, the effective date shall be the date indicated by him in his intimation/application filed in FORM GST CMP-04 but such date may not be prior to the commencement of the financial year in which such intimation/application for withdrawal is being filed.
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GST:
Supply of Services or not? - distinct persons - activities performed by the employees at the Corporate Office in the Course of or in relation to employment, such as accounting, other administrative and IT System Maintenance for the units located in the other states - Held as taxable supply, liable to GST
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GST:
Profiteering - supply of “Handloom Design-King Supreme Lungi” - there was no reduction in the rate of tax on the above product w.e.f. 01-07-2017, hence the anti-profiteering provisions are not attracted.
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GST:
Profiteering - manufacture and supply of consumer goods comprising of four major categories, viz. Home Care, Personal Care, Foods and Refreshments - the consumer would have never got the benefit of tax reductions unless the MRP was revised by the Respondent on the packs and the bar codes were changed, which does not seem to have happened - Allegation of profiteering established.
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GST:
Validity of attachment order - failure to discharge its GST liabilities for the past several months - According to the petitioner, since it was unable to pay the tax, the Returns could not be filed. - Attachment to bank accounts suspended with conditions.
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Income Tax:
Addition u/s 68 - the theory of gift was not established by the assessee. The so called transfer through an NRO account was also self-serving because, the amount was transferred through telegraphic transfer and the source of transfer was not established as to how it was relatable to the donor
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Income Tax:
Capital gain computation - reference to DVO - fair market value determination - It is just and fair to allow 30% deduction instead of 20% granted by the DVO by considering the negative factors to the land.
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Income Tax:
Revision u/s 263 - assessee claimed deduction as loan written back under OTS scheme, considering it as “ capital receipt” not liable to tax - the order directing the A.O. to carry through proper enquiry cannot be said to be liable to be set aside.
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Income Tax:
Imposition of penalty u/s 271G - failure to furnish information or documents in respect of segmental amount relating to transaction made with AEs and non-AEs for determination of arms length price of international transactions - when there is no adjustment made in the arms length price, penalty so imposed is not justified.
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Income Tax:
Penalty u/s 271)1)(c) - penalty for furnishing inaccurate particulars of income can neither be imposed nor sustained on enhancement of net profit rate based on an estimate
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Income Tax:
Disallowing the deduction u/s 54F - the assessee has entered into both types of agreement i.e.both purchase and construction and both these are essentially running concomitantly. - Benefit of exemption allowed to assessee.
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Income Tax:
Disallowance of deduction u/s.80ID - No record to show that assessee had some other business or sources of income, then it has to be reckoned that receipts are purely from the hotel business and if that is so, then assessee is eligible for deduction u/s.80ID.
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Income Tax:
Levying of interest u/s 215 - advance tax - merely because there is an observation that delay cannot be attributed to the assessee itself, that will not result in waiver of interest.
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Income Tax:
TDS u/s 194C - addition u/s 40a(ia) - it could be safely concluded that there is an oral contract entered into by the assessee with the ultimate truck owner - the provisions of section 194C are applicable
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Income Tax:
Unexplained cash deposits in the bank account u/s. 69 - money might have been utilized in the interregnum period for some purpose and thereafter appropriated towards discharge of loan. But that fact cannot be held against the assessee.
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DGFT:
Restriction on Import of Peas from 01.01.2019 to 31.03.2019
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Central Excise:
Classification of the product - Hajmola Candy - the re-classification will operate only prospectively from the date of issuance of show cause notice and no demand for the earlier period can be raised.
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Central Excise:
Clandestine manufacture and removal - The case of revenue is that since the transactions of trading cannot be establish, the entire sales value is treated as value of clearance of goods manufactured by the appellants. We find the same to be pure presumption.
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Central Excise:
Classification - the product namely “Ground Natural Calcium Carbonate” is altogether different from “Precipitated Calcium Carbonate” - the product in question having merit classification under chapter heading 25.30
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VAT:
Form C - Section 8(5) of Central Sales Tax Act, 1956 (CST Act) was amended by Finance Act,2002 with a view to withdraw the powers of the State Governments to waive the requirement of form 'C' specified u/s 8(4), so that compliance of Section 8(4) becomes mandatory.
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2018 (12) TMI 1604
Supply of Services or not? - distinct persons - activities performed by the employees at the Corporate Office in the Course of or in relation to employment, such as accounting, other administrative and IT System Maintenance for the units located in the other states - supply as per Entry 2 of Schedule I of the CGST Act or not supply of Service as per Entry 1 of Schedule III of the CGST Act? - employer-employee relationship. Challenge to Advance Ruling No. KAR ADRG 15/2018 dated 27.07.2018 [2018 (8) TMI 876 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA] pronounced by the Karnataka Authority for Advance Ruling Held that:- There is no dispute that each unit registered in different States is a distinct person as per 25(4) of the CGST Act. When two units of the same business entity in different States take separate GST registration, then each registered unit will be considered as a distinct entity/ person as per the GST law Every distinct person will have to maintain separate records for their principal place of business. The laws relating to filing of returns and other compliance procedures shall apply to both of them separately. Every distinct person is liable to pay GST on all supplies of goods and services or both made by it and every distinct person is treated as a separate taxable person. In the event of supplies between distinct persons, there will not be a consideration element as the transaction is within units of the same business entity. Prior to the introduction of GST, the events which were liable to tax under the existing laws were the events of manufacture, sale and the provision of a taxable service. Under the GST regime of taxation, the taxable event which attracts the levy of GST is the supply of goods or services in terms of Section 9 of the CGST (and SGST) Act or Section 5 of the IGST Act, depending on whether the transaction of supply is intrastate or interstate Thus the object of tax in GST is clear and far more comprehensive and is certainly broader than any single earlier law that has been subsumed in it The object of tax in GST is supply as understood in Section 7 of the Act. Employer-employee relationship - Held that:- The employee-employer relationship is to be viewed separately for every registered unit of the business entity. Therefore, in instant case, the services of the employees at the IMO in so far as they are benefiting the other registered units of the Appellant are to be considered as a Supply of service by one distinct person to another, and by virtue of the entry 2 of Schedule I, supply of services between distinct persons even if without consideration is a supply within the scope of Section 7 and is liable to GST. What and how should the value of Such Supplies made by the to their branch offices be established? - Held that:- Rule 31 of the CGST Rules provides that where the value of a supply of goods or services or both cannot be determined under Rules 27 to 30, the same shall be determined using reasonable means consistent with the principles and the general provisions of Section 15 and the provisions of Chapter IV of the CGST Rules. Provided that in the case of supply of services, the supplier may opt for this rule ignoring Rule 30. Expenses incurred by the IMO - cross charge mechanism for allocating the other expenses on the basis of proportionate turnover - Held that:- The ITC of the GST paid on the receipt of services or goods from a third party by the IMO can be availed by the IMO. If there are certain services commonly used by all the distinct persons, then the ITC can be distributed to all the units by the ISD route. There is a fundamental difference between the concept of ISD and that of cross charge. In the ISD concept, only ITC on input services which are attributable to other distinct entities are distributable. However, in a cross charge mechanism, all expenses incurred by a distinct person for the purpose of carrying out activities the outcome of which benefits other distinct persons is required to be cross charged Cross charging of expenses may or may not involve ITC and relates to both goods as well as services - In the case of cross charge, there is an element of service rendered by the person who cross charges his other units even though they belong to the same legal entity. On the other hand, in the case of ISD, there is no element of Service at all, but a mere distribution of Credit Further, certain expenses like rent paid on the immovable property, housekeeping services, etc incurred in maintaining and operating the IMO will not be distributable under the ISD route, rather they are required to be allocated to the other units only by way of cross charge. Therefore, the argument of the Appellant that the ISD mechanism is squarely applicable to them and not the cross charge method is not legally correct. Thus, it is concluded that the IMO is providing a service to its other distinct units by way of carrying out activities such as accounting, administrative work, etc with the use of the services of the personnel working in the IMO, the outcome of which, benefits all the other units and whether such activity is to be treated as a taxable supply in terms of the entry 2 of Schedule I read with Section 7 of the CGST Act - The cost of the employees working in the IMO is an integral part of the cost of the services rendered by the IMO to its other distinct units. The services of the employees at the IMO in so far as they are benefitting the other registered units of the Appellant, will not be termed as employee-employer relationship and will therefore not fall within the purview of entry 1 to Schedule III - the Ruling dated 27.07.2018 passed by the Karnataka Authority for Advance Ruling is upheld. Ruling:- The India Management Office (IMO) of the Appellant is providing a service to its other distinct units by way of carrying out activities such as accounting, administrative work, etc with the use of the services of the employee working in the IMO, the outcome of which benefits all the other units and such activity is to be treated as a taxable supply in terms of the entry 2 of Schedule I read with Section 7 of the CGST Act.
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2018 (12) TMI 1603
The Chief Commissioner and the Senior Joint Commissioner, Large Tax Payer Unit, GST, Government of West Bengal, shall be impleaded as party Respondents in the present proceeding - Application is allowed.
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2018 (12) TMI 1602
Profiteering - PA Ceiling Speaker BS- 6083T - benefit of reduction in the rate of tax not passed - contravention of the provisions of Section 171 of the CGST Act, 2017 - Held that:- It is apparent from the perusal of the facts of the case that while there was reduction in the rate of tax on the above products from 28% to 18% w.e.f. 15.11.2017, vide Notification no. 41/2017-central Tax (Rate) dated 14.1 1.2017, but the base prices (excluding tax) of both the above products had remained the same and hence the allegation of profiteering is not established. The Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the above Applicants - application dismissed
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2018 (12) TMI 1601
Profiteering - benefit of GST at the time of implementation of the GST not passed on - contravention of the provisions of Section 171 of CGST Act, 2017 - Held that:- It is apparent from the perusal of the facts of the case that there was no reduction in the rate of tax on the above product w.e.f. 01-07-2017. There is also no increase in the per unit base price (excluding tax) of the above product and therefore the allegation of profiteering is not established. Though the rate of tax has been reduced from 28% to 18% w.e.f. 14.11.2017 the Kerala Screening Committee has failed to produce any invoice and has not examined any documents to establish that the benefit of tax reduction has not been passed on by the Respondent to the recipient hence DGAP has rightly observed that no supporting documents or invoices of the product ‘Mirror Series Tiles’ for the period post 15.11.2017 have been either examined or presented before the Standing Committee. Hence the allegation that the benefit of rate reduction has not been passed on is not sustained. Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 either on implementation of the GST w.e.f. 01.07.2017 or w.e.f. 14.11.2017 after the introduction of GST rate reduction - application dismissed.
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2018 (12) TMI 1600
Profiteering - supply of “Handloom Design-King Supreme Lungi” - benefit of reduction in the rate of tax at the time of implementation of GST w.e.f 01.07.2017 not passed on - contravention of the provisions of Section 171 of Central Goods and Service Tax Act, 2017 - Held that:- It is apparent from the perusal of the facts of the case that there was no reduction in the rate of tax on the above product w.e.f. 01-07-2017, hence the anti-profiteering provisions contained in Section 171(1) of the Central Goods and Services Tax Act, 2017 are not attracted. The Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the Applicant - application dismissed.
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2018 (12) TMI 1599
Profiteering - manufacture and supply of consumer goods comprising of four major categories, viz. Home Care, Personal Care, Foods and Refreshments - Respondent had not reduced the Maximum Retail Prices (MRPs) of the products which were being sold by him although GST rates were reduced - it is also alleged that the Respondent had increased the base prices of his products, so that the MRPs continued to be the same even after reduction in the rates of GST - recovery of excess Input Tax Credit (ITC) on the stocks of his brands lying with them. Held that:- It is established that the increase in his profits was entirely due to the increase in the base prices made by the Respondent through which he had denied the benefit of tax reduction to his customers and appropriated the tax benefits himself. Hence, it is established beyond any iota of doubt that the Respondent has committed breach of the provisions of Section 171 of the CGST Act, 2017 by resorting to profiteering. The basic aim is to ensure that both the benefits of reduction in the rate of tax and ITC are passed on to the consumers by commensurate reduction in the prices. As per the provisions of the above Rule the Authority has power to 'determine' and not 'prescribe' the methodology. During the course of the present proceedings the Respondent was repeatedly asked to suggest alternate methodology if he was not satisfied with the computation of the profiteered amount made by the DGAP but the Respondent has failed to do so. The Respondent has also calculated the profiteered amount himself and deposited the same in the CWF which clearly shows that he was aware of the concepts of profiteering, commensurate and reduction in the prices. Therefore, all the objections raised by him in this behalf are frivolous and cannot be accepted. The Respondent has also referred to the dictionary meaning of profiteering and claimed that he had not resorted to profiteering. However, it is quite clear from the record that he had illegally and wrongly increased the base prices of the products on which the rates of tax had been reduced w.e.f. 15.11.2017, the day from which this reduction had come in to force. Therefore, it is established that he had earned disproportionately large and grossly unfair profit by exploiting an unusual situation in which the rates of tax had been reduced and hence his act squarely falls within the definition of profiteering being unethical, immoral, illegal, malafide and contumacious. It is apparent from the record that the Respondent had tried to mislead the authorities by making false claims as he had acted quite contrary to the claims which were made by him in his above letters. Instead of passing on the benefits he had increased the base prices, had compelled the customers to pay more price than what they were legally required to pay, had forced them to pay additional GST on the increased prices and also earned extra margins on the enhanced prices. He had even illegally compelled his RSS to deposit the ITC which they could have legally claimed due to reduction in the rates of tax which would have resulted in commensurate reduction in the prices and therefore, all the claims of having passed on the benefit of tax reduction sincerely and faithfully made by the Respondent are false and malafide. Admissibility of TRAN-2 Credit as deduction - The relevant provision under which the transitional credit was claimed as TRAN-2 credit in this particular case is Section 140 (3) of the Act - Held that:- The fact that the Respondent has availed the TRAN-2 credit of ₹ 76.06 Crores is not in dispute as he has failed to produce any evidence to prove, either before DGAP or before the Authority that this benefit of Tran-2 credit has been passed on by way of reduced prices. Moreover, the Respondent, on page 23, point (d) of his written submissions dated 14.09 2018 has mentioned that the law did not mandate passing of TRAN-2 credit, which is not correct and hence his contention cannot be accepted. In the light of the above facts, it can be concluded that the Respondent has not passed on the benefit of TRAN-2 credit to any of his recipients, which under Section 140 (3) read with Section 171 of the Act, he was required to pass on. Therefore, the plea of the Respondent to claim this amount of ₹ 76.06 Crores of Tran-2 credit as a deduction from the profiteered amount is rejected. Admissibility of grammage benefit as deduction - Grammage benefit given more than the GST rate reduction - Held that:- The Authority is of the view that Section 171 of the CGST Act, 2017, puts the onus of passage of any benefit of the GST rate reductions or ITC to the recipient on the supplier. The keyword to be emphasised here is "commensurate reduction". The law expects that commensurate reduction to the extent of the rate reductions should be given by the Respondent. Any greater reduction in prices is entirely a business call taken by the Respondent well within his right and hence there is no ground to compensate him on this ground - The amount of profiteering has to be calculated by keeping the recipient at the centre. This implies that one particular recipient may have bought one product from the Respondent at a price which he was entitled to pay when the rates of tax were reduced but simultaneously there is another recipient who has paid more than what he was supposed to pay for some another product of the Respondent. The additional benefit given to one recipient cannot be offset with the denial of benefit to another recipient, as this is not the spirit of the law - the Respondent's claim for deduction of ₹ 39.08 Crores on account of the more benefit given to the customers from the profiteered amount devoid of merit and cannot be accepted. An amount of ₹ 68.77 Crores can be allowed to be deducted from the profiteered amount on account of the benefit which has been passed on by the Respondent in the shape of additional grammage as per the following table however the balance amount claimed by him cannot be allowed. Therefore, it is made clear that this deduction has been given to the Respondent due to the fact that the anti-profiteering measures have been incorporated in the tax laws for the first time and he had tried to pass on the benefit of tax reductions by increasing the quantity of his products. However, in future in case there is any reduction in the rate of tax or benefit of ITC is made available the same shall be passed on by him in the shape of commensurate reduction in the prices as per the provisions of Section 171 of the above Act and in case it is not possible to do so the amount so realised shall be deposited in the CWF. Area based fiscal incentives denied - Held that:- The DGAP is right in his assessment that there was no loss in absolute terms to the Respondent, since he was still eligible to get the same proportionate refund of actual CGST/IGST paid in cash as was available to him prior to the reduction in the rates of GST. Moreover, there exists no direct correlation between the MRP of the product (which is same over all-India) and the area based exemption benefit. The claim of the Respondent to the extent of ₹ 45.31 Crores is not justified in as much as there is no evidence to show that the products manufactured with these concessions were sold at a lower rate. Also, there is no evidence to show that these products are different from the products manufactured in other areas and were sold at the old MRPs. The products whether manufactured with concessions or without concessions are being sold at the same price. Admittedly, these prices were not reduced inspite of rate reductions - claim of the Respondent is not legally sustainable and is thereby rejected. Reimbursement to the Modern Trade - Held that:- It has been repeatedly observed by the Authority that the Respondent has not been able to appreciate the fact that the idea behind including the anti-profiteering mechanism in the GST laws, is solely to protect the interest of the consumers by preventing the supplier from unjustly enriching himself at the cost of the end-consumer. His claim that he had provided various discounts to the MT dealers to further pass on the benefit to the consumers is not established as it is not evidenced by any credible documentary evidence. Further the consumer would have never got the benefit of tax reductions unless the MRP was revised by the Respondent on the packs and the bar codes were changed, which does not seem to have happened. The Authority, thereby finds his claim short of any credence and hence the same cannot be accepted. Packing material write off - Held that:- The law was very clear when it gave the suppliers the relief to do re-stickering instead of incurring additional cost on new packaging material. It was a business call taken by the Respondent to not do re-stickering and rather go for fresh packing material. It is an admitted fact by the Respondent that vide office letter No. WM-10(31)/2017, dated 16.11.2017 issued by the Ministry of Consumer Affairs, Food and Public Distribution, it was clearly allowed by the Government to refix the stickers - this Authority finds that the deduction claimed by the Respondent, on account of packing material write off, is not supported by any legal provisions and therefore it is inadmissible. Tax collected on profiteered amount - Held that:- This Authority is of the view that since, the recipients of the Respondent have been compelled to pay extra GST which should be included in the profiteered amount. Hence, the Respondent's claim to deduct this amount is dismissed. Sales to CPF and CRPF - Held that:- The Authority is in absolute agreement with the DGAP's revised opinion and allows the deduction of the above amount from the profiteered amount as no excess realization had taken place. This benefit of ₹ 3.80 Crores is being extended as there was no increase in the base prices of these supplies. Sales of semi-finished goods - Held that:- As per Annexure-12 & 13 of his written submissions dated 09.08.2018 the Respondent has provided details of return of one product namely Coffee but for other products no evidence has been provided to prove that these goods were returned to him for further processing. In the case of Coffee also, the Respondent has not been able to provide any clear and conclusive proof to establish that the sent and the received back goods pertained to the same Batch or were exchanged during the same period of time. The Respondent has also not claimed that the prices had been reduced and his only claim is that it was a semi- finished product. Therefore the claim of the Respondent to the extent of ₹ 2.63 Crores made on this ground cannot be accepted. Wrongly collected the ITC credit from RSs - Held that:- Since this amount has been held to be profiteered amount by this Authority the same shall be deposited in the Central and the CWF of the concerned States as per the calculation to be made by the DGAP and released by him accordingly as an amount of ₹ 36.19 Crores has already been deposited by the Respondent out of the above amount of ₹ 36.25 Crores - the total profiteered amount on account of denial of benefit of ITC is determined as ₹ 76.06 + ₹ 2.91 Crores i.e. ₹ 78.97 Crores. This amount of ₹ 78.97 Crores availed through TRAN-2 statements shall be deposited by him in the Central CWF as this amount pertains to the Central taxes and the duties. Thus, it can be concluded that Respondent has resorted to profiteering being very well aware of the law and the rules which warranted him to pass on the benefit of GST rate reductions. Further he has also consciously and illegally recovered the excess realisation which was due to his RSS as ITC and thereby denied the benefit of tax reductions to the customers - Since the Respondent has been held guilty of profiteering and has also been found to have violated the provisions of Section 122 (1) (i) of the CGST Act, 2017 a fresh notice be issued to him asking him to explain why penalty should not be imposed on him. Decided against respondent.
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2018 (12) TMI 1578
Validity of attachment order - petitioner could not discharge its GST liabilities for the past several months - According to the petitioner, since it was unable to pay the tax, the Returns could not be filed. - Held that:- The petitioner can restart its manufacturing activities and start repaying the Government dues. In this context, few things become relevant. Firstly, according to the petitioner, the outstanding dues are in the vicinity of ₹ 64.00 Lacs. This does not account for possible interest or penalty or late payment charges. The petitioner must clear the dues as soon as possible. The petitioner, having collected such taxes, would not get any sympathy from us, if the unpaid taxes are not deposited in the Government revenue - The petitioner shall place before the respondent authorities material regarding its purchases and clearances in order to enable the authority to form the best judgment assessment, if so found necessary. All these procedures can continue. Attachment to bank accounts suspended with conditions. While maintaining the attachment on the plant and machinery, we permit the petitioner to carry out its manufacturing activities and clear the manufactured goods. Upon breach of any of the above condition nos.(I), (II) or (III), including failure to deposit any of the installments, such restrictions shall stand restored. - petition disposed off.
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Income Tax
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2018 (12) TMI 1598
Addition u/s 68 - whether the appellant had discharged his initial burden in respect of gift/loan received by the appellant? - Transfer through an NRO account - Held that:- AO as well as the Tribunal have analysed the materials available, then examined as regards the probabilities of a nephew, a salaried person in United States, extending a gift to his uncle in India, who has extensive business throughout the country with several branches would probablise the theory of gift. The assessee did not place any material before the CIT(A) as to why the alleged additional income earned by the donor by doing consultancy work for a company in UAE was not produced by him before the Assessing Officer. The pre-requisite for accepting a new document at the first appellate stage is that the assesee should show sufficient cause. This is lacking in the instant case. Had the assessee produced the document before the Assessing Officer in all probabilities, an investigation would have been conducted. Considering the income of the donor, a salaried person in United States, AO rightly concluded that the probability of a salaried nephew giving a gift to his uncle, who is an affluent business man is hard to believe. In cases, such as the present one preponderance of probability play a vital role. Thus, the theory of gift was not established by the assessee. The so called transfer through an NRO account was also self-serving because, the amount was transferred through telegraphic transfer and the source of transfer was not established as to how it was relatable to the donor - decided against assessee.
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2018 (12) TMI 1597
Provision created for payment of compensation to Garbandal Constructions - contract loss - Whether an unascertained liability not allowable as business expenditure? - Held that:- The details furnished by the assessee company were referred to and the break-up details were also culled out in the order passed by the CIT(A). It is not clear as to whether those materials were available with the AO, which, according to the assessee, were very much available and were furnished along with the letter dated 13.3.2015. A remand report could have been called for by the CIT(A) from the AO to examine the correctness of the break-up details furnished since, in the letter dated 13.3.2015, there are no clear figures given except to state that the provision was made in the relevant assessment year on account of the arbitration petition filed by the contractor. We find that in the said letter, there is also a mention about the amounts, which were written back and offered as income in the subsequent assessment years namely assessment year 2013-14 and 2014-15. There are other details, which appeared to have been enclosed along with the said letter dated 13.3.2015, but they have not been referred to by the Assessing Officer in the assessment order dated 23.3.2015. Therefore, a fresh exercise needs to be done by the AO by perusing all the documents produced by the assessee and the Assessing Officer should ascertain as to whether the provision made during the relevant assessment year was an ascertained liability or a contingent liability. The appeal filed by the assessee is allowed, the impugned order passed by the Tribunal is set aside and the matter is remanded to the Assessing Officer to verify all the records and decide the question as mentioned above. The substantial questions of law left open.
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2018 (12) TMI 1596
Disallowance of deduction u/s 10A - Held that:- In the earlier remand, AO, while passing the giving effect to order, noted the said Circular No.1 of 2013 and assigned certain reasons as to why the disallowance has to be made. The correctness of that order, while being tested by the CIT(A), he had noted the said Circular and given independent reasons as to how the assessee's case is acceptable. Thus, in our considered view, the Tribunal should have considered the correctness of the order passed by the CIT(A), as already the effect of the said Circular was considered by both the Assessing Officer and the CIT(A). The operative portions of the orders passed by both the Assessing Officer and the CIT(A) do not contain any mention about the said Circular. In effect, the parameters required to be examined by the Assessing Officer under the said Circular were examined and in the opinion of the AO, the case of the assessee cannot be accepted. This was reversed by the CIT(A). Therefore, the Tribunal can very well decide the correctness of the order passed by the CIT(A) instead of remanding the matter to the Assessing Officer for a fresh consideration, as, already, such an exercise was done by the Assessing Officer. Furthermore, the order of remand passed for the assessment year 2009-10 is now pending before the Dispute Resolution Panel. Therefore, in the fitness of things, it is for the Tribunal to decide the matters, since this issue arises in the first year, which is the assessment year under consideration namely 2007-08.
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2018 (12) TMI 1595
Addition made on protective assessment - criminal case is pending against assessee - Held that:- A criminal case is pending, the Assessing Officer only made a protective assessment. The Tribunal, in the common impugned order, deleted it and directed the same to be assessed in the hands of the company namely M/s.Millennium Motors. In our considered view, since the CBI filed the final report before the Special Court, any finding, as given by the Assessing Officer though as a protective assessment, may render the criminal case a futile exercise. That apart, we found that the reasons given by the Tribunal are not sufficient to delete the protective assessment in the hands of the assessee with a direction to assess the same in the hands of the company namely M/s.Millennium Motors. As the assessee submits that there are sufficient records to show that the said Ms.Dhanalakshmi swindled substantial amount and the assessee is ready and willing to substantiate the same before the Tribunal, if one opportunity is granted considering the peculiar facts and circumstances of the case, we deem it appropriate to remand the matters to the Tribunal to consider the above referred to substantial questions of law. We make it clear that in so far as the issues, which have been remanded by the Tribunal to the Assessing Officer, against which, no appeals have been filed by either the Revenue or the assessee, we do not interfere with the same and the Assessing Officer is directed to carry out the directions issued by the Tribunal.
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2018 (12) TMI 1594
Reopening of assessment - addition of expenditure including technical assistance fee paid to AVL List GMBH, Austria - reasons to believe - Held that:- The assessee has given written explanation. Therefore the Commissioner (Appeals) held that it is a clear case of change of opinion and the correctness of this was tested by the Tribunal and the Tribunal noted that the required breakup details were furnished even at the time of original assessment and therefore, no new information available with the Assessing Officer nor any information was omitted by the assessee to be given to the Assessing Officer. Further, on the merits of the matter also, the Tribunal found that the decision of the Hon'ble Supreme Court in the case of Rotork Control Ltd. vs. CIT [2009 (5) TMI 16 - SUPREME COURT OF INDIA ] was applied. Thus, we find that there is no error in the order passed by the Tribunal. Accordingly, the appeal fails and dismissed. - Decided against revenue.
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2018 (12) TMI 1593
Capital gain computation - reference to DVO - fair market value determination - Held that:- There is a merit in the argument of the assessee in respect of the land adjacent to cemetery, instead of 10%, 15% should have been granted. Insofar as passing of electrical wires, DVO considered 5%, in my opinion, he should have been granted 10%. So far as property is away from village, there is no merit in the argument of the the assessee. In this respect, find that 5% deduction considered by the DVO is fair and reasonable. The DVO overall by considering the negative factors, he has considered 20% deduction while ascertaining the fair market value, by considering the facts and circumstances of the case and also negative facts, he should have been granted overall 30% deduction. It is just and fair to allow 30% deduction instead of 20% granted by the DVO by considering the negative factors to the land. Therefore, the order passed by the CIT(A) is set aside and direct the Assessing Officer to calculate the capital gains in view of the above finding. - Appeal filed by the assessee is partly allowed.
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2018 (12) TMI 1592
Revision u/s 263 - assessee claimed deduction as loan written back under OTS scheme, considering it as “ capital receipt” not liable to tax - Held that:- We find that the A.O. has not made any enquiry regarding the nature of the loans waived off and the purposes for which they were utilized. The assessee also has at no stage given the correct and complete details and the purposes for which all the loans were utilized. Case of Mahindra & Mahindra Ltd. (2003 (1) TMI 71 - BOMBAY HIGH COURT ), provided that waiver off loans which were taken and utilized for trading purposes would fall under the realm of taxation as revenue receipt. This view is fully fortified by the decision of the Hon’ble Apex Court in the case of Sundaram Iyergar and Sons Ltd. (1996 (9) TMI 1 - SUPREME COURT) rendered by the Bench comprising three of lordship. Under such facts and circumstances, what the ld. CIT is directing to the A.O. is to pass an order after doing meaningful enquiry and as per law and after giving the assessee reasonable opportunity. We find that in such circumstances, no prejudice whatsoever is caused to the assessee. In the case of Daniel Merchants Private Limited and others vs. ITO (2017 (12) TMI 409 - CALCUTTA HIGH COURT) wherein the Hon’ble Apex Court has expounded that the order directing the A.O. to carry through proper enquiry cannot be said to be liable to be set aside - Decided against assessee.
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2018 (12) TMI 1591
Penalty levied u/s 271(1)(c) - Disallowance of legal expenses of ₹ 36,91,125/- relating to Gillette, USA - Disallowance of expenditure for increase in its authorized share capital included in deduction u/s 35D - Held that:- We find that in the present case, in the original assessment made u/s 143(3) dated 29.03.2004, the AO has mentioned that the penalty proceedings u/s 271(1)(c) have been initiated separately. Subsequently, the AO has framed the assessment u/s 143(3) r.w.s. 254 dated 12.03.2015 without mentioning the initiation of penalty proceedings. In the penalty order dated 30.04.2014 the AO has held it as a fit case for imposition of penalty stating that the assessee has concealed its income as well as furnished inaccurate particulars of its income. Imposing penalty has to be made only on the ground of which the penalty proceedings has been initiated, and it cannot be on a fresh ground of which the assessee has no notice - See CIT vs. Samson Perincherr [2017 (1) TMI 1292 - BOMBAY HIGH COURT]. - Decided in favour of assessee.
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2018 (12) TMI 1590
Penalty levied u/s 271(1)(c) - disallowance of pre-operative expenses - Held that:- In the case of Reliance Petroproducts (P.) Ltd. [2010 (3) TMI 80 - SUPREME COURT] it is held that merely because the assessee had claimed expenditure, which claim was not accepted or was not acceptable to revenue, that by itself would not attract penalty under section 271(1)(c) of the Act. In the instant case, as mentioned earlier at para 7, the assessee has disclosed the facts. There is no dispute about it. It has been delineated by the AO in para 5.1, 5.2, 5.3 and 5.4 in the assessment order dated 14.03.2015. The only issue is the treatment given by the AO to the claim of the assessee. We are of the considered view that the ratio laid down in Reliance Petroproducts (P.) Ltd. (supra) squarely applies to the present case. Following the above decision, we uphold the order of the Ld. CIT(A). - decided against revenue
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2018 (12) TMI 1589
Imposition of penalty u/s 271G - Assessee is mainly engaged in diamonds business focusing on the Manufacturing & Training segment of the diamond industry - Assessee failed to furnish information or documents in respect of segmental amount relating to transaction made with AEs and non-AEs for determination of arms length price of international transactions as required by TPO under Rule 10D(1) and Rule 10D(3) - CIT-A deleted the addition - Held that:- CIT(A) has deleted the penalty by observing that keeping in view nature of diamond business in which the Assessee is engaged, it has sustainably complied with the requirement of filing documents with respect to segmental amount relating to transactions with AE & non-AEs for determination of arms length price of international transaction. Accordingly the CIT(A) observed that when there is no adjustment made in the arms length price, penalty so imposed is not justified. CIT(A) has also relied on various judicial pronouncement having similar facts, wherein penalty has been deleted u/s 271G of the Act, when no adjustment in arms length price was made. Detailed findings so recorded by the CIT(A) have not been controverted by Ld. DR, accordingly we do not find any reason to interfere with the order of the Ld. CIT(A). - decided against revenue
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2018 (12) TMI 1588
Penalty u/s 271)1)(c) - estimation of profit - Held that:- Penalty was imposed on estimated profit enhancement. The assessee has also filed a chart depicting the net profit percentages during the immediately four preceding assessment years wherein it is seen that the net profit assessed was 1.84% for assessment year 2002- 03, 3.3% for assessment year 2003-04, 2.71% for assessment year 2004-05 and 5% for assessment year 2005-06. Although, in the captioned year, the assessee did not prefer further appeal after the CIT (Appeals) reduced the net profit estimation rate from 8% to 6.75%, the fact remains that this is an estimate of profit and the CIT (Appeals), while allowing partial relief by directing application of net profit rate of 6.75%, has not given any cogent reason for arriving at this percentage. Thus, the net profit rate, as directed to be applied by the CIT (Appeals), is just an estimate without having any sound basis as the past financial results of the assessee have not been duly considered. It is settled law that penalty for furnishing inaccurate particulars of income can neither be imposed nor sustained on enhancement of net profit rate based on an estimate. The Hon'ble Delhi High Court in CIT vs. Aero Traders Pvt. Ltd [2010 (1) TMI 32 - DELHI HIGH COURT] has held that no penalty u/s 271(1)(c) can be imposed when income is determined on estimate basis - Thus no penalty is imposable on the facts of the present case. - decided in favour of assessee. Rejection of books of accounts - N.P. determination - Held that:- We find that right from assessment year 2002-03 to the year under consideration, the net profit rate has ranged between 1.84% to 6.75%. A perusal of the assessment order also shows that the books of accounts were rejected before applying the net profit rate of 8%. AO has not given any reason for justifying the rejection of books of accounts except for mentioning that the books of accounts could not be held reliable on account of a large number of self-generated cash vouchers. Thus, this cannot be held to be a justifiable reason for rejecting the books of accounts. On a direct query from the Bench, both the parties have also agreed that interest of justice would be met if the net profit rate of 6% is directed to be applied in this year - We modify the order of the Ld. CIT (Appeals) to the extent that now the Assessing Officer shall compute the net profit by applying net profit rate of 6% as against 8%. - Decided partly in favour of assessee.
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2018 (12) TMI 1587
Revision u/s 263 - Assessment u/s 153C - AO’s power u/s 153A - Held that:- D.R has placed his reliance on the provisions of Explanation given u/s 153A(2) in order to contend that all other provisions of the Act shall apply to the assessment framed u/s 153C. We have noticed that the scope of assessment u/s 153A in respect of unabated assessments has since been settled by Hon’ble jurisdictional High Court in the case of Continental warehousing Corporation[2015 (5) TMI 656 - BOMBAY HIGH COURT]. The Explanation given u/s 153A(2), in our view, does not expand the scope of assessment u/s 153A of the Act beyond what was interpreted by Hon’ble Bombay High Court. Thus Pr. CIT was not correct in law in passing the impugned revision orders as the assessment orders passed by the AO in these years, which fall under the category of unabated years, cannot be held to be erroneous and prejudicial to the interests of revenue. Accordingly we quash the revision orders passed by Ld CIT(A) for all the years under consideration. - Decided in favour of assessee.
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2018 (12) TMI 1586
Penalty u/s 271(1)(c) - Non specification of charge - defective notice - Held that:- On the facts of the present case that the show cause notice u/s. 274 of the Act is defective as it does not spell out the grounds on which the penalty is sought to be imposed. Following the decision of the Hon’ble Karnataka High Court in the case of CIT & Anr. v. Manjunatha Cotton and Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] we hold that the orders imposing penalty in all the assessment years have to be held as invalid and consequently penalty imposed is cancelled. - Decided in favour of assessee.
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2018 (12) TMI 1585
Penalty u/s 271(1)(c) - depreciation claimed for land and building - Held that:- It is pertinent to note that in earlier Assessment Years similar claim of the depreciation has been allowed by the Revenue Authorities. The issue is debatable issue and some of the decisions decided in favour of the assessee on the issue of depreciation. Thus, there was no concealment of income or inaccurate furnishing of particulars on part of the assessee. The case law relied upon by the Ld. DR is not applicable in the present case as in that case the assessee did not disclose the details of the creditors nor their list but merely claimed in the return. In the present assessee’s case the assessee claimed the depreciation after filing the details and there was no concealment or inaccurate furnishing of documents as the issue is allowed in respect of depreciation claimed for land and building. Therefore, Section 271(1)(c) will not be attracted in the present case. The order of the CIT(A) is set aside and appeal of the assessee is allowed.
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2018 (12) TMI 1584
Disallowing the deduction u/s 54F - treating the purchase of new residential flat as a case of “ construction” and not “purchase” on the ground that the payment was made by the Appellant in installments to the builder for the flat - time limit for purchase and for construction ,for any harmonious understanding of the section - Held that:- It is clear that in transacting with M/s DLF universal ltd. for acquiring the flat(s) in question, the assessee has entered into both types of agreement i.e.both purchase and construction and both these are essentially running concomitantly. And the claim for the deduction has been restricted by the assessee to the investment done within the specified periods of one year prior to the date of sale of original assets to the three years from the date of sale of shares. Moreover the claim within the capital gains earned by the assessee. Hence the assessee would be entitled for deduction u/s 54F for the entire amount claimed. - Decided in favour of assessee.
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2018 (12) TMI 1583
Unexplained cash deposits in the bank account u/s. 69 - Held that:- The total cash withdrawn from the bank account by the assessee was ₹ 20,91,500 + 17,71,800 which was withdrawn by his self-cheque. There was also a deposit of ₹ 9 lakhs in the bank account in March, 2013. After excluding the cash deposit, net cash available with assessee from the withdrawals was a sum of ₹ 29,63,000. The availability of cash as a source of deposit in the bank account was disbelieved by the AO for the only reason that it was highly improbable for a person to keep withdrawals in the bank account for a period of two years. The Hon’ble Karnataka High Court in the case of S.R. Venkataraman (1980 (8) TMI 73 - KARNATAKA HIGH COURT) had taken a view that withdrawals of cash in the past as a source of deposit at a later point of time in the bank account cannot be disbelieved merely on the surmise that it was improbable for an assessee to keep cash withdrawn for two years. Revenue authorities were not competent to dictate as to what the assessee should do with the money withdrawn from the bank. The court held that as long as the source is explained and established and if money is withdrawn from SB account and paid to discharge loan by deposit into a loan account, it is not possible to hold that the source is not explained. The Court also held that money might have been utilized in the interregnum period for some purpose and thereafter appropriated towards discharge of loan. But that fact cannot be held against the assessee. The aforesaid decision of the Hon’ble Karnataka High Court in the facts and circumstances of the present case supports the plea of the assessee. The revenue authorities were not justified in rejecting the explanation of assessee with regard to source of deposit of cash in the bank account. The consequent addition made is directed to be deleted and the appeal of the assessee is allowed.
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2018 (12) TMI 1582
Disallowance of deduction u/s.80ID - assessee is engaged in the business running of hotel in the name of ‘Bizzotel Hotel’ in Gurgaon - revised return - Held that:- Once the assessee has disclosed such a huge amount of receipts from hotel business and there is no other material on record before the Department to hold that the assessee had some other business or sources of income, then it has to be reckoned that receipts are purely from the hotel business and if that is so, then assessee is eligible for deduction u/s.80ID. Claim of the deduction in the revised return - Held that:- From the perusal of the same, we find that there is an income tax return dated 31.03.2009 vide e-filing acknowledgement no. 67426740310309 wherein assessee has claimed deduction under Chapter-VIA amounting to ₹ 2,28,96,593/-. Original return of income has also been filed before us. Once it is an undisputed fact that revised return has been filed and claim has been made by the assessee, then such a claim has to be entertained by the Assessing Officer and this fact has been duly appreciated by the CIT (A) as incorporated above. Apart from that, on merits also assessee is eligible for deduction u/s.80ID which we have already discussed in detail while deciding the appeal for the Assessment Year 2009-10. Thus, we do not find any infirmity in the order of the ld. CIT (A). Accordingly, the appeal of the Revenue is dismissed.
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2018 (12) TMI 1581
TDS u/s 194C - addition u/s 40a(ia) - assessee liable for deduction of tax only on the assumption that assessee was having agreement with the parties through whom trucks were arranged for transportation of goods - Held that:- Truck driver had only acted as a temporary custodian of the money paid by the assessee for onward transfer/payment to the ultimate truck owners. Hence effectively payments were made by the assessee only to the truck owners through the truck drivers. We are of the considered opinion that the truck driver cannot decide the entire terms and condition of the transport such as rate of freight, weight to be carried for specific destination and other liabilities attached with the said transportation on his own without consent of the truck owner. Hence it could be safely concluded that there is an oral contract entered into by the assessee with the ultimate truck owner during the medium of the truck drivers for which payments on account of transportation charges were made. Hence, we hold that the provisions of section 194C are applicable in the instant case and disallowance u/s 40a(ia) of the Act have rightly been made by the ld. AO. Accordingly, grounds raised by the revenue are allowed.
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Service Tax
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2018 (12) TMI 1580
Banking and Other Financial Services - taxability of amount collected by the EPFO towards, inspection charges and administrative charges, penal damages, penal interest from defaulters - Held that:- Apart from the fact that there is a delay of 442 days in filing the appeal for which no satisfactory explanation is given, we do not see any merits in this appeal - Appeal is dismissed both on the ground of delay as well as on merits.
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Central Excise
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2018 (12) TMI 1579
Waiver of mandatory penalty imposable under Rule 15 of the CENVAT Credit Rules, 2004 and/or Section 11AC of the Central Excise Act, 1944 - the issue of quantum of wrong availment of CENVAT credit and differential duty demandable is remanded for determination by the Adjudicating Authority - extended period of limitation - Held that:- The letters produced by the learned Standing Counsel for the appellant dated 17.8.2018 and 29.10.2018 are placed on record. This civil miscellaneous appeal is dismissed as withdrawn and the substantial questions of law raised in this appeal are left open - liberty is granted to the Revenue to make a mention to this Court to restore the appeal to be heard and decided on merits.
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2018 (12) TMI 1577
Interest on delayed refund - Relevant dates - amount was paid under protest - demand of interest for the period between date of deposit under protest till the date of sanctioning of the refund - Held that:- The amount paid by the appellant was under protest during the course of investigation itself. Therefore, the said amount is not paid towards duty and was a deposit by the appellant under protest. As held by the Hon’ble High Court of Madras in the case of Ucal Fuel Systems Ltd. [2011 (9) TMI 903 - MADRAS HIGH COURT] the provisions of section 11BB of Central Excise Act is not applicable as the amount in question was not paid towards duty, but only by way of deposit during investigation. The learned Commissioner(Appeals) has rightly sanctioned the refund of interest to the respondent from the date of deposit till the date of refund - appeal dismissed - decided against Revenue.
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2018 (12) TMI 1576
Validity of SCN - Classification of the product - Hajmola Candy - prospective applicability of reclassification - whether the show cause notice dated 10.10.2005 can be issued to the appellant for the period September 2004 to August 2005 or not? - Held that:- Similar issue came up before the Hon’ble High Court of Bombay in the case of Eco Valley Farms & Foods Ltd. [2013 (1) TMI 51 - BOMBAY HIGH COURT] wherein the Hon’ble High Court has held that the re-classification will operate only prospectively from the date of issuance of show cause notice and no demand for the earlier period can be raised. In the present case, Revenue themselves has accepted the merit classification under chapter heading 1704.90 as sugar confectionary, in that circumstances, the show cause notice cannot be issued for the earlier period and the show cause notice can be issued for prospective period. Appeal allowed - decided in favor of appellant.
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2018 (12) TMI 1575
Clandestine manufacture and removal - failure on the part of Revenue to establish manufacture of goods in respect of which demand was raised - Held that:- There is no evidence brought forwarded by revenue to establish manufacture - Through the impugned show cause notice Central Excise duty is demanded and the duty of excise is on the activity of manufacture. We note that unless the manufacture is established Central Excise duty cannot be demanded. The case of revenue is that since the transactions of trading cannot be establish, the entire sales value is treated as value of clearance of goods manufactured by the appellants. We find the same to be pure presumption. Tribunal in the case of M/s Arya Fibres Pvt. Ltd. [2013 (11) TMI 626 - CESTAT AHMEDABAD] has held that there are certain fundamental criteria to establish clandestine manufacture and removal. Appeal allowed - decided in favor of appellant.
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2018 (12) TMI 1574
CENVAT Credit - by-product - spent sulphuric acid - Rule 6(3) of the Cenvat Credit Rules - Held that:- The explanation inserted in Rule 6(1) w.e.f. 01.03.15 is to the effect that - “for the purpose of this Rule, exempted goods or final products as defined in Clauses (d) and (h) of Rule 2 shall include non excisable goods cleared for construction from a factory.” The said explanation came to be interpreted by the Tribunal in the case of Kichha Sugar Company Ltd. Vs. CCE [2018 (10) TMI 1151 - CESTAT NEW DELHI] and it was held that placing reliance in the case of Union of India vs. DSCL Sugar Ltd [2015 (10) TMI 566 - SUPREME COURT] has held that products like bagasse and press-mud do not qualify the definition of Section 2F of CEA and as such are not being a manufacture. These are only an agricultural waste and residue which itself is not the result of any process and in the absence of manufacture, there cannot be any excise duty. Demand of reversal do not sustain - appeal allowed - decided in favor of appellant.
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2018 (12) TMI 1573
Classification of the product - Ground Natural Calcium Carbonate - whether classifiable under chapter heading 25.30 of Central Excise Tariff Act, 1985 or are classified under chapter heading 2836 of Central Excise Act? - Held that:- On going through the test report, it is found that the product namely Ground Natural Calcium Carbonate is altogether different from Precipitated Calcium Carbonate , therefore, in the light of the decision of the Tribunal in the case of Shakshi Makfin [2015 (12) TMI 1638 - CESTAT CHANDIGARH], the product in question having merit classification under chapter heading 25.30 of Central Excise Tariff Act, 1985. The appellant has correctly classified the Ground Natural Calcium Carbonate under chapter heading 25.30 of Central Excise Tariff Act, 1985 as Revenue has failed to produce any corroborative evidence in support of their classification - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (12) TMI 1572
Sale to an unregistered dealer - inter-State sale of surgical ECG Electrodes to various institutions - N/N. II (1)/CTE/38/76 dated 20.12.1975 issued under Section 8(5) of the Central Sales Tax Act, 1956 - whether exemption under notification for sale to an unregistered dealer remained unaffected by the amendment to Section 8(5)(a) and Section 8(5)(b) of the CST Act, 1956 or not? Held that:- Clause 145 of the Notes on Clauses issued to the Finance Bill 2002 makes it clear that the object of amending Section 8(5) of the CST Act by Finance Act 2002 is inter alia to make furnishing of form 'C' compulsory by the dealer except in respect of exempted goods and to withdraw powers of the State Governments to waive the requirement of 'C' form specified under Section 8(4) of the CST Act. In other words, as per the notes on clauses, Section 8(5) was amended by Finance Act with a view to withdraw the powers of the State Governments to waive the requirement of form 'C' specified under Section 8(4), so that compliance of Section 8(4) becomes mandatory in respect of sales of goods to the registered dealer or the Government covered under Section 8(1) except when exempted. The impugned orders have been passed only on the ground that the Notification is deemed to have been withdrawn. However, there is no document on record to show that the 1975 notification granting exemption had been withdrawn with effect from 13.05.2002 and therefore sale to unregistered dealer was no longer available or not exempted. The impugned orders are set aside and the case is remitted back to the original authority to pass a speaking order after giving the petitioner an opportunity to make additional submission - petition allowed by way of remand.
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2018 (12) TMI 1571
Concessional rate of tax - form XVII declarations - revision of assessment for the year 2002-2003 - Held that:- As the revised assessment order dated 10.03.2006 does not discusses as to how the proposals contained in notice dated03.02.3006 are sustainable, it is not sustainable. However, in the impugned order, there are some discussion by comparing few paragraphs in the M/s.Aditya Envirotech Private Ltd, that the goods will fall under the eighth schedule of the TNGST Act - the issue relating to classification of goods cannot be decided on merits under Article 226 of the Constitution of India as they relate to several disputed questions off act which has to be addressed in a proper assessment proceedings and thereafter, before in an appeal before the Appellate authority. In this case, the petitioner has not filed the second appeal before the Appellate authority against the impugned order. At the same time, it would unfair to direct the petitioner to file an appeal. It is noticed that there is no discussion on the basis on which the claim for exemption has been denied to the petitioner - The petitioner has also not clarified as to how the goods in question were assessable to tax under Section 3(5) of the Act. The petitioner has merely claimed concession based on the strength of Form 17 given by the buyer and has stated that if at all there was any tax payable, it ought to have been recovered from the buyer. The end of justice will be met if the case is remanded back for reconsideration of the issue as to whether the sewing machine sold by the petitioner during the relevant assessment year fell within the purview of Eighth Schedule for the petitioner to claim concession/exemption under Section 3 (5) of the TNGST Act - Petition allowed by way of remand.
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