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TMI Tax Updates - e-Newsletter January 2, 2023 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Highlights / Catch Notes GST: Provisional attachment of bank account of the petitioner - Period of limitation - it is evident that both the provisional attachment orders dated 02.12.2019 and 08.12.2021 have spent their force. Such provisional attachment orders cannot therefore be allowed to continue beyond the period prescribed under the statute. - HC Visit to Get Source GST: Validity of assessment order - The fact of issuance of notice in Form GST-DRC-01 dated 14.1.2022 is clearly mentioned at internal page 12 of the impugned assessment order but the petitioner has neither filed copy of the aforesaid show cause notice nor disclosed it in the writ petition nor disputed the finding of fact recorded in the impugned order regarding issuance of said notice and affording of opportunity of personal hearing to him. - The petitioner has concealed material facts of the case which also dis-entitles him to any relief in writ jurisdiction under Article 226 of the Constitution of India. - HC Visit to Get Source GST: Input Tax Credit - GST charged by service provider on canteen facility provided to employees working in factory - they have been discharging GST on the canteen charges recovered from contract employees - the ITC on GST charged by the canteen service provider will be available only to the extent of cost borne by the appellant, for providing the canteen services only to its direct employees. - AAAR Visit to Get Source Income Tax: Penalty u/s. 271DA - deposit of cash in the bank account of the assessee, directly by the party, at a different location - Considering the nature of business of the assessee and one of such transaction of deposit of cash by a party to a remote location in the bank account of assessee against huge sales volume, we direct to delete the penalty impose d u/s. 271DA of the Act. - AT Visit to Get Source Income Tax: Addition made u/s.50C in respect of transfer of leasehold rights in land and building - When there is no provision in the Act to substitute Full value of consideration for computing Capital gain during the relevant point of time, then there is no scope for the AO to modify the full value of consideration without bringing any material on record which would compel such modification. - AT Visit to Get Source Income Tax: Income of salary earned by the assessee in USA to tax in India - ‘resident alien’ in USA - There is nothing before us to contradict the findings of the learned CIT(A) in respect of the tie breaker test, inasmuch as mere securing a house on rent in USA is not the conclusive fact that the assessee had become an USA resident the moment he moved from India to USA. - AT Visit to Get Source Income Tax: Royalty Payment - TDS on remittance to University of Cambridge, UK, which is for examination fee, books purchased and teacher’s training fee - the payment made by assessee was not in the nature of “royalty” as claimed by revenue-authorities and hence does not attract TDS - AT Visit to Get Source Income Tax: Reopening of assessment u/s 147 - Deduction u/s 54 - The mere delay on the part of the developer to hand over the possession of the flat would not vitiate the claim of the assessee since it would be beyond the control of the assessee to ensure timely acquisition of the flat. The provisions of Sec.54F are beneficial provisions and the same should be given effect to in full and could not be denied to the assessee on such technicalities. Therefore, we would hold that the assessee would be eligible for deduction u/s 54F. - AT Visit to Get Source Income Tax: Revision u/s 263 by CIT - addition were made u/s 69 and 69C - ld PCIT has stated that the AO has not applied the rate of tax as per section 115BBE, what he meant was rate of tax of 60% given that the AO has already applied rate of tax of 30% as so submitted by the assessee. - where the AO has erred in not applying the rate of tax as per the amended law as applicable for the impugned assessment year and the order so passed is therefore rightly held by the ld PCIT as erroneous in so far as prejudicial to the interest of the Revenue. - AT Visit to Get Source Customs: Levy of penalty u/s 114 - corroborative evidences like statements of the co-noticees - it is clear that the statements of a person made under Section 108 of the Act 1962 should not and cannot be construed as a statement of a co-accused, for when a Customs Officer records a statement under that sections of the Act, he does not act as a Police Officer, but he merely acts as a Revenue Officer, whose duty is to find out whether or not there is an evasion of customs duty in a particular transaction. - HC Visit to Get Source Customs: Levy of Customs Duty - loss of the cargo on account of the super cyclone - If the goods themselves were not available on account of the super cyclone, it is inconceivable how the PPT could be made liable to pay customs duty on such goods under Section 45(3) of the Act which applies only in a situation where imported goods are “pilfered after unloading”. There is absolutely no material to come to the conclusion that the aforementioned goods not cleared by MESCO were ‘pilfered’. - HC Visit to Get Source Customs: Confiscation - redemption fine - penalty - Classification of imported goods - Aluminium Profile - It is not the case of Revenue that the appellants had mis-declared the goods with an intent to evade payment of duty. Since, Section 111(m) ibid provides for confiscation of the goods in the eventuality of misdeclaration of the goods, which are absent in the present case, the redemption fine and penalty cannot be imposed on the appellants. - AT Visit to Get Source Customs: Valuation of imported goods - contemporaneous data of imports - rejection of declared value - the assessable value in these Bills of Entry were given in Rupees whereas the declared values in the Bill of Entry are in US dollars. It is not clear of what rate of exchange is applied to convert rupees into dollars to re-determine the assessable value under Rule 5. - The rejection of the transaction value by the Deputy Commissioner is not in accordance with law. Consequently, its re-determination under Rule 5 cannot also sustain - AT Visit to Get Source Corporate Law: Jurisdiction of civil court / NCLT - appropriate forum for the adjudication of the disputes - The fundamental principle behind the bar on the jurisdiction of the civil court is that the there must adequacy of remedy being available to the parties who are relegated out of the civil Courts and they must not be rendered remediless. - This Court does not find any merit in the objection of the Respondents that the subsequent liquidation of TCL will have no bearing on the present case. No corporate entity now exists in the form of TCL which may be governed by the provisions of the Companies Act, 2013. Hence, it cannot be said that the suit filed by the plaintiff companies was barred under Section 430 of the Companies Act, 2013. - HC Visit to Get Source Indian Laws: Validity of revision / enhancement of the property tax - Non-deployment of revenue sources only leads to the denial of proper infrastructure and facilities to the citizens and the enhancement in property tax rates is only a move forward in that direction - The impugned GO, CR and Notification do make reference to the recommendations of the Central Finance Commission. However, such references do not, in my considered view, dilute the proposal for enhancement as the need for such enhancement has been made out by the State, de hors the recommendations of the Central Finance Commission. The admitted position that there has been no enhancement of property tax for the last nearly three decades would itself suffice to justify a proposal for enhancement now - HC Visit to Get Source Service Tax: Exemption from Service Tax - The exemption which was earlier granted in the public interest was withdrawn in the public interest - Whether public interest existed or not in withdrawing the exemption is not justiciable unless it is found that such withdrawal was vitiated on account of malafide, extraneous consideration or arbitration. High Court while exercising its jurisdiction under Article 226 of the Constitution of India does not sit in appeal over the decision of the Government to withdraw a Notification or an exemption. It is further a policy decision of the Government to withdraw the exemption. - HC Visit to Get Source Service Tax: Rejection of refund claim - finalization of provisional assessment - relevant date - it is only when the Commissioner (Appeals) passed the order on 17.10.2012 that the refund could be claimed by the appellant. The provisions of clause B (ec) and not (eb) of the Explanation to section 11B of the Excise Act would be attracted to the facts of the present case - the assessment can be said to have been finalized only when the Commissioner (Appeals) passed the order and for this reason also the relevant date would be 17.10.2012 and not 13.07.2012. - AT Visit to Get Source Central Excise: Recovery of Central Excise Duty alongwith interest and penalty - landowners - As far as dues of the Central Excise are concerned, they were not related to the said plant and machinery or the land and building and thus did not arise out of those properties. Dues of the Excise Department became payable on the manufacturing of excisable items by the erstwhile owner, therefore, these statutory dues are in respect of those items produced and not the plant and machinery which was used for the purposes of manufacture. - HC Visit to Get Source VAT: The proper remedy for the petitioner would be to avail the remedy of Appeal in terms of Section 33 of the VAT Act. The material on record shows that the petitioner did not file the Appeal on the ground that filing of Appeal would make him to deposit 25% of the disputed tax. This cannot be a ground to file a Writ Petition under Article 226 of the Constitution, before this Court. - HC Visit to Get Source Articles PERSON WORKING IN THE CAPACITY OF CONSULTANT CANNOT BE DEEMED WORKMAN Rejection of appeal due to delay of one day is such a hyper technical and pedantic view HSN CLASSIFICATION – WRIT OF MANDAMUS Transportation cost separately charged should not forms part of assessable value as per the Central Excise Act Impact Analysis of Rule 37A : No Immediate ITC Reversal for Non-filing of GSTR-3B by suppliers Notifications Customs 33/2022 - dated 30-12-2022 - ADD Levy ADD on Jute Products originating in or exported from Nepal and Bangladesh (SSR) - Supersession of the notification No. 01/2017-Customs (ADD), dated the 5th January, 2017. 114/2022 - dated 30-12-2022 - Cus (NT) Sea Cargo Manifest and Transhipment (Second Amendment) Regulations, 2022 113/2022 - dated 30-12-2022 - Cus (NT) Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver GST 15/2022 - dated 30-12-2022 - CGST Rate List of Exempted supply of services under the CGST Act - Seeks to amend Notification No. 12/2017-Central Tax (Rate), dated the 28th June, 2017 14/2022 - dated 30-12-2022 - CGST Rate Reverse charge on certain specified supplies of goods u/s 9(3) of CGST Act - Seeks to amend Notification No. 4/2017- Central Tax (Rate), dated the 28th June, 2017 13/2022 - dated 30-12-2022 - CGST Rate Exemption to goods notified u/s 11 (1) of CGST Act - Seeks to amend Notification No. 2/2017-Central Tax (Rate), dated the 28th June, 2017 12/2022 - dated 30-12-2022 - CGST Rate CGST Rate Schedule u/s 9(1) - notifying rates on Supply of Goods - Seeks to amend notification No. 1/2017- Central Tax (Rate) dated the 28th June, 2017 15/2022 - dated 30-12-2022 - IGST Rate Exemptions on supply of services under IGST Act - Seeks to amend Notification No. 9/2017-Integrated Tax (Rate), dated the 28th June, 2017 14/2022 - dated 30-12-2022 - IGST Rate Reverse charge on certain specified supplies of goods under section 5 (3) of IGST Act - Seeks to amend Notification No. 4/2017- Integrated Tax (Rate), dated the 28th June, 2017 13/2022 - dated 30-12-2022 - IGST Rate Absolute Exemption from IGST on inter-State supplies of goods - Seeks to amend Notification No. 2/2017-Integrated Tax (Rate), dated the 28th June, 2017 12/2022 - dated 30-12-2022 - IGST Rate IGST Rate Schedule u/s 5(1) - notifying rates of IGST on supply of goods - Seeks to amend Notification No. 1/2017-Integrated Tax (Rate), dated the 28th June, 2017 15/2022 - dated 30-12-2022 - UTGST Rate Exemptions on supply of services under UTGST Act - Union Territory GST (UTGST) Rate - Seeks to amend Notification No. 12/2017-Union Territory Tax (Rate), dated the 28th June, 2017 14/2022 - dated 30-12-2022 - UTGST Rate Reverse charge on certain specified supplies of goods under section 7(3) of UTGST Act - Seeks to amend Notification No. 4/2017- Union Territory Tax (Rate), dated the 28th June, 2017 13/2022 - dated 30-12-2022 - UTGST Rate UTGST exempt goods notified under section 8 (1) of UTGST Act - exemption to intra-State supplies of goods - Seeks to amend Notification No. 2/2017-Union Territory Tax (Rate), dated the 28th June, 2017 12/2022 - dated 30-12-2022 - UTGST Rate UTGST Rate Schedule u/s 7(1) notifying rates on Supply of Goods - Seeks to amend Notification No. 1/2017- Union Territory Tax (Rate), dated the 28th June, 2017 Circulars / Instructions / Orders Income Tax - 25/2022 - dated 30-12-2022 Clarification for the purposes of clause (c) of Section 269ST of the Income-tax Act, 1961 in respect of dealership/distributorship contract in case of Co-operative Societies Case Laws: GST 2022 (12) TMI 1370 Cancellation of registration granted to the petitioner - failure to file returns for a continuous period of six months - Validity of SCN issued - HELD THAT:- This writ petition is liable to be allowed. The show cause notice issued to the petitioner in this case is produced as Ext.P1. A perusal of Ext.P1 shows that the same has been issued in Form GST Reg 31, which is the form for issuing a notice regarding suspension of registration - The notice is absolutely vague and it is not clearly specified with any clarity, the reasons for proposing cancellation even the period for which there was alleged failure to file returns is not specified. The quashing of the impugned order of cancellation will not have the effect of absolving the petitioner of any fiscal liability. The petitioner will be required to file all defaulted returns together with tax, late fee, interest, penalty etc., within a period of two weeks from the date on which the registration of the petitioner is restored in compliance with this judgment - Petition allowed. 2022 (12) TMI 1369 Provisional attachment of bank account of the petitioner - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- By its very nature, provisional attachment cannot be for an indefinite period. Dictionary meaning of provisional is arranged or existing for the present, possible to be changed later ; Black s Law Dictionary, eighth edition, has defined it as temporary or conditional . The two words provisional and attachment read in conjunction can only mean a temporary attachment . To ensure that the valuable right of a taxable person is not infringed for an indefinite period, legislature itself has provided for a definite time line in sub-section (2) of Section 83 of the CGST Act mandating that a provisional attachment order would have a life span of only one year from the date of the order made under sub-section (1). After expiry of a period of one year, such provisional attachment would cease to have effect - it is evident that both the provisional attachment orders dated 02.12.2019 and 08.12.2021 have spent their force. Such provisional attachment orders cannot therefore be allowed to continue beyond the period prescribed under the statute. The provisional attachment orders dated 02.12.2019 and 08.12.2021 passed by respondent No.2 are hereby set aside and quashed - petition allowed. 2022 (12) TMI 1368 Cancellation of registration of petitioner - HELD THAT:- As the issue pertains to cancellation of GST registration of the petitioner, it would be just and proper if one more opportunity is granted to the petitioner. The order of respondent No.3 dated 29.12.2020 as well as the order-in-appeal dated 25.10.2022 passed by respondent No.2 is set aside - matter remanded back to the file of respondent No.3 to consider the matter afresh and thereafter pass an appropriate order in accordance with law after giving due opportunity of hearing to the petitioner - petition allowed by way of remand. 2022 (12) TMI 1367 Cancellation of the Registration Certificate of petitioner - failure to file Goods and Services Tax monthly returns - HELD THAT:- This Court has been consistently following the directions issued in the case of TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. [ 2022 (2) TMI 933 - MADRAS HIGH COURT] and the Revenue/Department has also accepted the said view as evident from the fact that no appeal has been filed in any of the matters, this Court intends to follow the above order of this Court. This Court feels that the benefit extended by this Court in the earlier orders referred may be extended to the Petitioner - Petition disposed off. 2022 (12) TMI 1366 Detention of goods alongwith conveyance - interaction, interplay and inter se application of Section 129 and Section 130 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- As could be seen from the impugned order, with regard to truck No. GJ-10-TX-0491, the penalty amount is Rs. 12,44,920/-. The fine and other charges are demanded to the extent of Rs.69,16,220/- and the tax is demanded of Rs.12,44,920/-. So far as confiscation of truck bearing registration No. GJ- 10TX-4546 is concerned, the penalty amount is Rs. 12,58,428/-, fine and other charges are demanded to the extent of Rs.69,91,276/- and the tax is demanded of Rs.12,58,428/-. By way of interim relief, it is directed that the respondents shall release the goods and conveyance of the petitioner, confiscated and detained pursuant to the notices, subject to the conditions imposed - petition allowed. 2022 (12) TMI 1365 Validity of assessment order - no notice or opportunity of hearing was afforded to the petitioner - Section 74 of the CGST Act / UPGST Act, 2017 - HELD THAT:- The finding of the Assessing Officer regarding issuance of show cause notice in Form GST-DRC-01A, under Section 74(5) of the Act, 2017 requiring the petitioner to show cause and avail opportunity of personal hearing on the date, time and place fixed in the notice, has not been denied by the petitioner in the writ petition. A copy of the show cause notice requiring the petitioner to submit his reply and fixing the date, time and place for personal hearing, has been produced before us by the respondent no. 3 along with the aforesaid instructions dated 14.6.2022, in which the date, time and place for personal hearing is clearly mentioned. The fact of issuance of notice in Form GST-DRC-01 dated 14.1.2022 is clearly mentioned at internal page 12 of the impugned assessment order but the petitioner has neither filed copy of the aforesaid show cause notice nor disclosed it in the writ petition nor disputed the finding of fact recorded in the impugned order regarding issuance of said notice and affording of opportunity of personal hearing to him. The petitioner has concealed material facts of the case which also dis-entitles him to any relief in writ jurisdiction under Article 226 of the Constitution of India. There are no merit in the submission of learned counsel for the petitioner regarding breach of principles of natural justice by the respondent no. 3 while passing the impugned order - petition dismissed. 2022 (12) TMI 1364 Seeking grant of Regular bail - firms had availed input tax credit on the basis of the invoices received without actual receipt of the goods from 7 registered entities - HELD THAT:- There is no straight jacket formula for consideration of bail to an accused, as it all depends upon the facts and circumstances of each case. In the case of UNION OF INDIA VERSUS K.A. NAJEEB [ 2021 (2) TMI 1212 - SUPREME COURT] , it was held that under trials cannot indefinitely be detained pending trial. In the facts of present case, investigation is virtually over and amount as referred having been disclosed during the search proceedings. Therefore the contentions raised by the respondent authority that investigation is underway is not tenable. Admittedly, complaint is filed before the competent court. In such circumstances, when trial would take considerable time and the respondent authority failed to make out a case that further custody of the applicant is necessary, the detention for further period is unwarranted. The applicants are ordered to be released on regular bail, on executing personal bond of Rs.10,000/- each, with one surety each of the like amount to the satisfaction of the learned Trial Court and subject to the conditions imposed - application allowed. 2022 (12) TMI 1363 Input Tax Credit - GST charged by service provider on canteen facility provided to employees working in factory - Whether ITC will be restricted to the extent of cost borne by the Applicant (employer)? - HELD THAT:- As second proviso to Section 17(5)(b) inserted vide CGST Amendment Act, 2018 effective from 1.2.2019, is applicable to the whole of clause (b) of sub-section (5) of Section 17 of the CGST Act, Input Tax Credit will be available to the appellant in respect of food beverages as canteen facility, is obligatorily to be provided under the Factories Act, 1948, to its employees working in the factory. Input Tax Credit will be available in respect of such services provided by canteen facility to its direct employees but not in respect of other type of employees including contract employees/workers, visitors etc. The appellant also raised the question if ITC is available on GST charged by the service provider on canteen facility provided to its employees working in their factory, whether it will be restricted to the extent of cost borne by the appellant. In this regard we find that the authorized representative of the appellant during the course of personal hearing had submitted that they will not take input tax credit to the extent applicable on the amount of canteen charges recovered from their employees and will reverse the credit to that extent. Further vide their dated 12.09.2022 they submitted that they have been discharging GST on the canteen charges recovered from contract employees and they have requested to allow the ITC on GST charged by the service provider on canteen facility provided to employees working their factory to the extent of cost suffered by the appellant. Reliance placed upon the judgment of Hon'ble High Court of Bombay in the case of Commissioner of Central Excise, Nagpur Versus Ultratech Cement Ltd., [ 2010 (10) TMI 13 - BOMBAY HIGH COURT ] wherein it was held that Once the service tax is borne by the ultimate consumer of the service, namely the worker, the manufacturer cannot take credit of that part of the service tax which is borne by the consumer. The judgement was in context as to whether manufacturer can avail credit of Service Tax in cases where the cost of the food is borne by the worker - the ITC on GST charged by the canteen service provider will be available only to the extent of cost borne by the appellant, for providing the canteen services only to its direct employees. Income Tax 2022 (12) TMI 1362 Revision u/s 263 by CIT - ITAT held that the Ld. PCIT has no jurisdiction u/s 263 - As per CIT AO failed to make inquires or verification which should have been made on account of reduction in liabilities and no inquiries or verification on the disallowance of TCS amount - HELD THAT:- We are of the opinion that in view of findings of fact arrived at by the Tribunal as referred to here-in-above, and in view of settled legal position with respect to invoking jurisdiction under section 263 of the Act, 1961, there is no infirmity in the impugned order passed by the Tribunal so as to give rise to any question of law much-less any substantial question of law as proposed or otherwise. 2022 (12) TMI 1361 Penalty u/s. 271DA - deposit of cash in the bank account of the assessee, directly by the party, at a different location - HELD THAT:- As we find that there exists a good and sufficient reason in terms of proviso to section 271DA for deleting the penalty imposed by the Ld. AO. The facts demonstrated before us are uncontroverted which makes us incline towards the contentions made by the ld. Counsel narrated above. Considering the nature of business of the assessee and one of such transaction of deposit of cash by a party to a remote location in the bank account of assessee against a sales volume of Rs.56.93 Cr., we direct to delete the penalty impose d u/s. 271DA of the Act. Before parting, we make it clear to the assessee that this relief should not be construed as precedence and a lee way for accepting the money in the manner as in the pre sent case. We direct the AO accordingly. The grounds taken by the assessee in this respect are allowed. 2022 (12) TMI 1360 Deduction u/s 80IA - income included under the head other income - HELD THAT:- During the year, the assessee has received rent, interest on fixed deposits receipt, interest on income tax refund balances written back and further miscellaneous income - All these income have been considered by the co-ordinate Bench in assessee s own case as income eligible for deduction u/s 80 IA of The Act. Therefore, respectfully following the decision of co-ordinate bench in assessee s own case [ 2019 (1) TMI 458 - ITAT MUMBAI] we direct the learned Assessing Officer to consider the interest on IT refund for set off against interest expenditure and to grant deduction u/s 80IA on all other income included under the head other income . Accordingly, ground of the appeal of the assessee is allowed. 2022 (12) TMI 1359 Assessment u/s 153C - Addition based on documents impounded during the course of survey under Section 133A - Addition u/s 69C - HELD THAT:- Evidences and documents based on which the addition is made were impounded from the place where survey action took place. Further, order u/s 133A (3)(ia) was also passed by the learned Assessing Officer on 2nd August, 2014, which clearly shows that the documents were impounded during the course of survey. There is no order required to be passed under Section 133A of the Act if the documents are found and seized during the course of search. Thus, apparently, the addition has been made in the hands of the assessee on the basis of material found during the course of survey and not search. The factual report submitted by AO which also say so. Performa for recording satisfaction note under Section 153C in column no.5 (b) of the Act which shows description of the seized material also says that the material is impounded during the course of survey. In proforma, relevant details in Panchanama in column no. 5(d), the details of impounding order dated 2nd August, 2014 is mentioned. Further also it is clear that all the additions made in the hands of the assessee were arising out of the documents impounded during the course of survey under Section 133A. Thus, no material was found during the course of search based on which addition u/s 153C of the Act is made. Merely because search and survey are carried out simultaneously at several places, material found during the course of survey does not authorize the LD AO to make assessment u/s 153C - Decided in favour of assessee. 2022 (12) TMI 1358 Addition made u/s.50C in respect of transfer of leasehold rights in land and building - capital gain adopting of stamp duty value in terms of Section 50C - HELD THAT:- The asset that has been transferred by the assessee is leasehold right in land and building. In the case of CIT vs. Greenfield Hotels and Estates Pvt. Ltd. [ 2016 (12) TMI 353 - BOMBAY HIGH COURT] has held that the provisions of Section 50C will not be applicable while computing capital gains on transfer of leasehold rights in land and building. In the instant case, the capital gain has arisen only on account of adopting of stamp duty value in terms of Section 50C - Since, Section 50C of the Act is held to be not applicable on transfer of leasehold rights, the decision renderd by ld. CIT(A) gets support from the binding decision rendered by Hon‟ble Bombay High Court. Accordingly, the AO was not justified in invoking provisions of Section 50C for determining capital gain arising on transfer of lease hold rights in land and building. Accordingly, we do not find any reason to interfere with the decision of Ld CIT(A) rendered on this issue. Determination of capital gain - Addition to long term capital gain by adopting sale consideration under NAV method as against DCF method adopted by the assessee - HELD THAT:- n the present case, the AO has not disputed the amount of sale consideration received by the appellant. There is no allegation whatsoever that the appellant had received or had accrued more than the stated amount of sales consideration. Further, the Reserve Bank of India has approved the said transaction after taking into consideration the relevant transactional documents, including the impugned valuation report dated 22/07/2009 issued by Deloitte Huskins Sells. Still, the L AO has substituted the actual consideration with notional consideration calculated purportedly on the basis of the NAV method, which is in violation of the provisions of section 48 of the Act and therefore, the action of the Ld. AO is bad in law. Also it is a well settled position in law that the AO cannot subject to tax any notional income unless there are specific provisions in relation thereto, allowing the substitution of the actual consideration with notional consideration. The addition made by the AO is liable to be deleted on the above said legal contentions. When there is no provision in the Act to substitute Full value of consideration for computing Capital gain during the relevant point of time, then there is no scope for the AO to modify the full value of consideration without bringing any material on record which would compel such modification. Hence, we are of the opinion that the view taken by Ld CIT(A) on this issue does not require interference for the reasons mentioned by him and also on the legal propositions discussed above. Accordingly, we uphold the order of Ld CIT(A) on this issue also. Appeal filed by the revenue is dismissed. 2022 (12) TMI 1357 Assessment u/s 153A - Incriminating materials found during the search - HELD THAT:- In the entire proceeding, the revenue authority was unable to prove that the search was conducted against the assessee. In Panchnama, there is no assessee s name. The revenue was unable to bring any such incriminating materials on basis of the addition was made U/s 153A. AO had wrongly applied the jurisdiction for assessment u/s 153A of the Act. Also, there is no reference of incriminating documents in the assessment order. The order passed by the ld. AO is itself nullity . The addition which was made by the ld. AO is quashed. 2022 (12) TMI 1356 Revision u/s 263 - non-verification of the genuineness of the brokerage expenditure incurred on new loans and renewal of loans taken for the purpose of business and Interest of free advances given by the assessee - HELD THAT:- AO has examined all the issues and made additions after calling for necessary information from the assessee as well as from the third parties u/s 133(6) of the Act and made additions accordingly. We find that the AO has elaborately discussed the issue passed u/s 143(3) r.w.s. 263 of the Act. Therefore we are of that view the power has invalidly been exercised by PCIT to set aside the order framed u/s 143(3) read with Section 263 of the Act dated 23.12.2019 which has been validly passed by the AO and is neither erroneous nor prejudicial to the interest of the revenue. We have perused several decisions as cited before us which stated above. Assessment u/s 143(3) read with Section 263 was framed in accordance with directions by Ld. PCIT as contained in the order passed u/s 263 and accordingly the assessment so framed is neither erroneous nor prejudicial to the interest of the revenue. On this count alone, the invoking the jurisdiction u/s 263 of the Act bythe Ld. PCIT is wrong and cannot be sustained as the assessment framed pursuant to the order of ld PCIT u/s 263 of the Act is neither erroneous nor prejudicial to the interest of the revenue.This is the ratio which has been laid down in the case of Malabar Industrial Co. Ltd [ 2000 (2) TMI 10 - SUPREME COURT] wherein it has been held that in order to invoke jurisdiction u/s 263 of the Act the order passed by the AO has to be erroneous as well as prejudicial to the interest of the revenue and thus satisfaction of both conditions is sine non quo and mandatory before invoking the jurisdiction u/s 263. Period of limitation - Issue on which the ld. PCIT proposed the revision of order framed u/s 143(3) r.w.s. 263 of the Act dated 23.12.2019, issue which was directed by the ld PCIT in the order u/s 263 of the Act dated 23.03.2022 was not the subject matter of revisionary proceedings in the first round. Therefore, the period of limitation has to run from the date of assessment as framed under section 143(3) dated 26.12.2016 i.e. from the end of financial year 31.3.2017. In view of this, we incline to hold that the revisionary jurisdiction exercised by the ld. PCIT is hopelessly barred by limitation - Appeal of assesee allowed. 2022 (12) TMI 1355 Addition u/s 68 - unexplained deposits in bank account - HELD THAT:- The assessee was the employee of the Indian Railway and nature of income was salary. The cash was deposited in different dates in bank account but the assessee was unable to explain the same before the ld. AO. Before the CIT(A), the explanation was filed that source of deposit is related to sale of agricultural land. But the assessee was unable to bring the evidence before the CIT(A) and not able to take any cognizance material to substantiate its source of cash deposit in bank account. In ITAT, the assessee reluctant to submit the relevant evidence before the bench, we find that the assessee was fully non cooperative from the end of completion of appeal proceeding. There is no substantial evidence for depositing cash in the bank account submitted on behalf of the assessee. Accordingly, the appeal of the assessee is dismissed. 2022 (12) TMI 1354 Transfer of assessment record u/s 127 - transfer orders in the same city - HELD THAT:- ITO has the power to transfer within Ward as per the territorial jurisdiction, the above said transfer of record has been within the same Ward where the territorial jurisdiction where the case lies with ITO, Ward-3(3), Jaipur and transfer is done to ITO, Ward -3(3).The Citation where the ld. AR for the assessee submitted before us is not relevant to his case. We arrived at the conclusion that as per sec127(3) and the decision in the case Kashiram Aggarwalla V Union of India and Others [ 1964 (10) TMI 8 - SUPREME COURT] . Where the transfer of jurisdiction only involves Assessing Officer situated in the same city [Section 127(3)] Section 127(3) makes it clear that no opportunity is required to be given in respect of transfer of jurisdiction within the same city. It was held that the mandatory requirement of recording reasons was not to be applicable, as the transfer orders were in the same city and only wards were changed but the court did observe about the nature of transfer orders under section 127. Hence, ground No. 1 of the assessee appeal is dismissed. Nature of property - Unexplained investment OR residential property - Assessee had duly submitted the valuation report of the registered valuer but Assessing Officer did not accepted the same nor referred the case to valuation Officer, which is bad in law - whether the property is commercial property or residential property? - HELD THAT:- We observed that the Registrar Department has made valuation for the property considering it be a commercial property, where as the same was residential property from the documents furnished. We observed that the assessee has sold the above property on 05.02.2015 where the valuation of same half portion of the property was made by the Registration Department at Rs. 17,17,516/-. Further perusing the calculation sheet of DLC value, the Assessing Officer failed to note that the valuation was made by the Registrar Department considering it to be a residential property AO and CIT (A ) erred in not appreciating the facts that Valuation Report of sub registration was submitted and perused by the lower Authorities . The property was sold before the Assessment Year. On perusing the Sale deed which is mentioned of this order clearly mentioned has residential property. Ground No. 2 of the appeal of the assessee is allowed on merit. 2022 (12) TMI 1353 Revision u/s 263 by CIT - unexplained money u/s.69A - HELD THAT:- We must mention here, it is unfortunate, that he has invoked the provisions of section 69A to treat the same as unexplained money when the amount has been drawn from the bank. The addition has been made because there is cash availability in the cash book. It is in the knowledge of the revenue that the petrol pump is on the highway and the amount of Rs.80,000/- has been drawn from the bank. It is only when necessity is there, money is drawn. It does not make any inference of unaccounted money. Be that as it may, insofar as the merit of the addition is not before us. However, the addition is made. The addition having been made admittedly, the AO had the duty to invoke the provisions of section 115BBE insofar as he himself has invoked the provisions of section 69A of the Act. This, admittedly is an error in the assessment order and tax slab rate of 30% as against 60% caused prejudice to the interest of the revenue and on this issue, we are of the view that the order of the Pr. CIT is liable to be upheld and we do so. Interest paid to Bajaj Finance ltd.- Assessee has been unable to produce Form 10BA before the Assessing officer or before the ld Pr. CIT. The nondeduction of TDS on the amount paid to Bajaj Finance Ltd., is clearly a violation of law which should have come to the attention of the AO. Failure on the part of the AO on this issue admittedly makes the order erroneous and prejudicial to the interest of the Revenue on that count. Consequently, in respect of issue of non-deduction of TDS in respect of payment made to Bajaj Finance ltd., we are of the view that the order of the Pr. CIT is on right footing and does not call for any interference. Administrative expenses and general charges, interest paid to HPCL on delayed payment and in respect of solar machine as also the proposal in respect of non-examination of the low net profit and the loss account of leakage in respect of diesel and petrol - As it is noticed that in the course of survey, books of account have been impounded. Assessing Officer has made addition representing the cash withdrawal from the bank account and treating the same as unexplained money shows that even cash book was before the AO. AO has in his assessment order u/s.143(3) mentioned that he has examined the case and discussed the case. True,AO has not given any details of the various examinations and discussion done in the course of assessment proceedings does not per se make the assessment order erroneous and prejudicial to the interest of the revenue on the ground as raised by the Pr. CIT in respect of other issues. This being so, we are of the view that the order of the pr. CIT is liable to be sustained to a limited extent of the non-application of provisions of section 115BBE on the addition made u/s.69A of Rs.80,000/- and on account of non-deduction of TDS on the payment made to Bajaj Finance ltd. On the other issues, the order of the pr. CIT u/s 263 stands quashed. Appeal of the assessee stands partly allowed. 2022 (12) TMI 1352 Income of salary earned by the assessee in USA to tax in India - resident alien in USA - Grant of foreign tax credit of the taxes paid by the assessee in USA in accordance with law - calculating the SPT in the context of US Tax resident - assessee replied that he was qualified to be a resident of two countries for the period between 17/10/2015 and 31/3/2016, he is entitled to avail the benefit under the Income Tax Act, 1961 or India-USA Double Taxation Avoidance Agreement (DTAA) and, therefore, in terms of Article 4 of DTAA and more particularly in terms of Article 4(2) thereof, his residency breaks to USA for the period between 17/10/2015 and 31/3/2016 and tackling him to claim exemption in terms of schedule EI of the Act - HELD THAT:- There is nothing before us to show that an internal transfer of an employee of Amazon is equivalent to fresh employment or that under the letter dated 03/06/2015 the assessee was offered a permanent employment straight away in USA, in which case it would have been but natural to mention the place of employment along with the designation. The continuity of employment from India to USA is evident from the contents of the letter dated 03/06/2015 wherein it is stated that save as otherwise provided in the letter all the terms and conditions of employment in India shall remain unchanged. It does not indicate that there is any need of permanent movement of the assessee to America by vacating the residence in India once for all. It is also not clear whether the assessee moved to America at once with wife and children and severed all his connections with India on his first movement itself. Apart from that the assessee made an election under IRC section 7701(b)(4) to qualify as a resident in the resident of arrival in US, for which one of the conditions is that the assessee shall not meet the SPT in the current year. It is, therefore, clear that the election of the assessee under IRC section 7701(b)(4) shows that in the relevant year, he did not meet the SPT, which is mandatory to be considered as a tax resident in US. It would be worth to note that for calculating the SPT in the context of US Tax resident consideration, it is enough if the assessee stays for 31 days in the current year or 183 days during the period of three years which includes current year and two immediately preceding years counting all the days of the current year, 1/3rd of the days of presence in the first year and 1/6th of the days of presence in the second year before the current year. This calculation does not automatically trigger the US residency for the period between 17/10/2015 and 31/03/2015 and that is the reason why instead of claim the status of resident of USA , the assessee opted to be a resident alien . For the period between 17/10/2015 and 31/03/2016, the assessee was not taxed in USA not on the residence basis but on the basis of source. Article 4(1)(a) of DTAA clearly excludes a person who is liable to tax in USA in respect only on income from the sources in USA from the definition of resident who is otherwise liable to be taxed by reason of his domicile, residence, citizenship, place of management, place of incorporation etc. There is nothing before us to contradict the findings of the learned CIT(A) in respect of the tie breaker test, inasmuch as mere securing a house on rent in USA is not the conclusive fact that the assessee had become an USA resident the moment he moved from India to USA. Viewing from the angle of surrounding facts enumerated by the learned CIT(A) in the impugned order, we find it difficult to hold that tie breaks in favour of US residency, because it cannot be said that the moment he shifted to USA, he had no permanent residence whatsoever in India or that all his vital interests in the form of personal and economic relations ceased to be centered in India or that he will have no habitual abode at all in India more particularly when the assessee was not given to understand where exactly will his new place of work will be in USA in the letter dated 03/06/2015. We are of the considered opinion that the impugned order does not suffer any illegality or irregularity and, therefore, decline to interfere with the same. We, however, deem it just and necessary to direct the AO to consider the request of the assessee in respect of grant of foreign tax credit of the taxes paid by the assessee in USA in accordance with law. Additional ground is accordingly allowed. Appeal of the assessee is allowed in part. 2022 (12) TMI 1351 Addition u/s. 40A(3) - cash payment more than Rs.10,000/- - HELD THAT:- AO disallowed 20% of the said payment on the ground that the royalty was paid by way of cash. The Hon ble High Court of Rajasthan [ 2010 (11) TMI 797 - RAJASTHAN HIGH COURT] opined that the amount was paid to the contractor which was collected on behalf of the State Government as such no disallowance could have been made in view of Rule 6DD(b) of the Rules vide para 6 of the said judgment. Further, the Hon ble High Court of Rajasthan was pleased to hold that the payment received by the contractor not in individual capacity but on behalf of the Government of Rajasthan and held no disallowance Rule 6DD(b) could have been made in view of Rules 6DD(b). In the present case, MSEDCL which, is a wholly owned corporate entity of Maharashtra State, in turn, which is deemed licensee u/s. 14 of the Electricity Act, 2003, in turn, entered into an agreement with SNDL which is a subsidiary of Spanco with whom the MSEDCL entered into original agreement. The home page of SNDL shows that has been formed to look after power distribution to Nagpur city on behalf of the MSEDCL and the Spanco is answerable for its obligation towards MSEDCL, which clearly establishes that the SNDL performing its obligations in pursuance of contract entered with MSEDCL which is a State under Article 12 of the Constitution, as an agent of Maharashtra State for distribution of electricity in Nagpur city. Therefore, the payment made to the agent/franchisee of the State of Maharashtra is covered under Rule 6DD(b) of the I.T. Rules. Thus, the provisions u/s. 40A(3) are not attracted to the payments made to SNDL received on behalf of the MSEDCL. Therefore, the order of CIT(A) is not justified and the grounds raised by the assessee are allowed. 2022 (12) TMI 1350 Revision u/s 263 - TDS u/s 195 OR 194LC - loan was in the nature of External commercial borrowings (ECB) - HELD THAT:- As gathered that the assessee was subjected to TDS inspection and demand was raised u/s 201(1) / (1A) in terms of Sec.194LC and 195. It could be seen that no tax was deducted by the assessee and demand was raised by Ld. AO in terms of statutory provisions after examining the relevant documents including terms of ECB. The same would lead to a conclusion that Ld. AO had applied its mind that the provisions of Sec.194LC would apply to the case of the assessee and TDS would be required at rates mentioned therein. There was complete application of mind on the issue and the same was one of the possible views since as rightly argued by Ld. AR, foreign borrowings would always come in foreign currency notwithstanding the fact that in the relevant contracts, the terms of loan has been denominated in Indian Rupees. Nevertheless, the matter was duly examined by Ld. AO while finalizing the order and a plausible view was taken in the matter. This being so, the order could not be termed as erroneous and therefore, the impugned revision could not be sustained in law. Appeal stand allowed. 2022 (12) TMI 1349 Royalty Payment - TDS on remittance to University of Cambridge, UK, which is for examination fee, books purchased and teacher s training fee - HELD THAT:- We note that an identical controversy arose before ITAT, Delhi in ACIT, International Taxation, New Delhi Vs. M/s The Chancellor, Masters and Scholars of the University of Cambridge [ 2022 (10) TMI 450 - ITAT DELHI] treated the receipts (exactly same as paid by assessee) as Royalty , invoking the same legal provisions as in present appeal, and taxed in India. The matter travelled upto ITAT and the Hon ble Delhi Bench, relying upon the decision of Hon ble Supreme Court in the case of Engineering Analysis Center of Excellence Pvt Ltd. [ 2021 (3) TMI 138 - SUPREME COURT] was pleased to hold that the impugned receipts were not in the nature of royalty . Thus, the view taken by Hon ble ITAT, Delhi is quite clear that the impugned receipts were not in the nature of royalty . This view equally applies to the present assessee. For the sake of completeness and clarity, we may mention that the decision of ITAT, Delhi was in the matter of recipient i.e. M/s The Chancellor, Masters and Scholars of the University of Cambridge and the present-appeal before us is in the matter of payer. But that would not make any difference in the conclusion qua the nature of receipt/payment. Hence respectfully following the decision of Hon ble ITAT, Delhi, we do hold that the payment made by assessee was not in the nature of royalty as claimed by revenue-authorities and hence does not attract TDS. Resultantly, the Ld. AO is directed to delete the demand of TDS and consequential interest created upon the assessee. Appeal of assessee is allowed 2022 (12) TMI 1348 Reopening of assessment u/s 147 - Deduction u/s 54 - correct provision under which the deduction would be available to the assessee is Sec.54F and not Sec.54 since the assessee has parted with land and invested the same in residential properties. Therefore, the claim of the assessee would be ascertained at the threshold of provisions of Sec.54F - HELD THAT:- We find that the original return of income was never scrutinized. In fact, no capital gain was declared in the original return of income. Based on assessment proceedings of subsequent year, it transpired that certain capital gain would accrue to the assessee in this year. Accordingly, the case was reopened. The assessee sought reasons for reopening at fag- end. The reasons were also supplied to the assessee. Therefore, in our considered opinion, Ld. AO had rightly assumed jurisdiction u/s 147 and no infirmity could be found in the same from this angle. The adjudication in the impugned order, to that extent, does not require any interference on our part. The corresponding grounds urged by the assessee stand dismissed. Deduction u/s 54F - Assessee was eligible to acquire 7 flats against transfer of 50% undivided share in the land. The assessee has not received any consideration in cash rather the consideration is in the shape of flats only. Therefore, on the date of entering into JDA with the developer, it could be concluded that the assessee made deemed investment to acquire the flats. The mere delay on the part of the developer to hand over the possession of the flat would not vitiate the claim of the assessee since it would be beyond the control of the assessee to ensure timely acquisition of the flat. The provisions of Sec.54F are beneficial provisions and the same should be given effect to in full and could not be denied to the assessee on such technicalities. Therefore, we would hold that the assessee would be eligible for deduction u/s 54F. we direct Ld. AO to allow deduction u/s 54F on 7 flats acquired by the assessee under Joint Development Agreement. The corresponding ground raised by the assessee stand allowed. Unexplained cash credit - HELD THAT:- AR pleaded for another opportunity to the assessee to substantiate source of cash deposit. The Ld. AR submitted that the deposits were out of past savings, cash withdrawals and out of sale proceeds of old jewellery as well as flat. The requisite details have been placed on record. Considering the same, this issue stands restored back to the file of Ld. AO for fresh consideration with a direction to the assessee to substantiate its case. The appeal stands partly allowed for statistical purposes. 2022 (12) TMI 1347 Unexplained cash credit u/s. 68 - Bogus LTCG - penny stock Transaction - set off of short term capital loss from long term capital gain from the sale of shares - HELD THAT:- We find that the assessee has shown long term capital gain on sale of shares from M/s Unishire Urban Infra Ltd.and also short term capital loss from sale of shares of M/s SRK Industries Ltd. According to AO, both these shares are penny stocks. We find that the AO added the entire sale consideration realized from sale of shares of M/s Unishire Urban Infra Ltd. while the entire loss sustained on sale of shares of M/s SRK Industries ltd. was treated as bogus and no set off was allowed. In our considered view, though the case of the assessee falls within the ambit of the ratio laid down by the Hon ble Calcutta High Court in the case of Swati Bajaj ( 2022 (6) TMI 670 - CALCUTTA HIGH COURT] that the gains on the penny stocks are taxed and no exemption is available u/s 10(38) of the Act however the long term capital gain has to be computed in totality on all the shares as a whole and should be brought to tax accordingly. In our considered view, the authorities below cannot be allowed to treat one transaction as income and reject on the other on the ground that it has incurred loss and is bogus and suspicious. Accordingly we set aside the order of Ld. CIT(A) and direct the AO to allow the set off of short term capital loss from long term capital gain from the sale of shares of M/s Unishire Urban Infra Ltd. and tax the net income from capital gain which is also in accordance with the provisions of Section 70(3) - Appeal of the assessee is allowed. 2022 (12) TMI 1346 Penalty u/s 271(1)(c) - Addition by way of Trading addition as (undisclosed profit on sales out of books) and addition made u/s 69A - HELD THAT:- We do not have the benefit of examination of the factual and legal submissions of the assessee side by the Assessing Officer and by the learned CIT(A). Further, we find that assessee has expressed the grievance that reasonable opportunities were not provided by the learned CIT(A) and by the AO which was not disputed by the learned Sr. DR for Revenue. We set aside the impugned appellate order dated 29/03/2016 of the learned CIT(A) and we restore all the issues in dispute in the present appeal before us, to the file of the AO, with the direction to pass denovo order in accordance with law, after providing reasonable opportunity to the assessee. All the grounds of appeal are treated as disposed of in accordance with aforesaid directions. Assessee appeal is partly allowed. 2022 (12) TMI 1345 Validity of reopening of assessment u/s 147 - Unexplained source of the cash deposits in the bank accounts - HELD THAT:- It is evident, in the year under consideration, the assessee has deposited cash amounting to Rs.58,86,000 in two bank accounts standing in his name. It is a fact on record that the assessee did not file any return of income u/s 139(1). The fact relating to cash deposit made by the assessee came to the notice of the Assessing Officer from the individual transaction statement available with the department. Thus, in absence of any return of income filed by the assessee, the Assessing Officer had no other information to suggest that the cash deposits reflected in the individual transaction statement has been offered to tax by the assessee. Therefore, while reopening the assessment under Section 147 of the Act, the Assessing Officer had tangible material in his possession to form belief that income has escaped assessment. Therefore, he has validly initiated proceedings under Section 147 of the Act. Validity of approval granted under Section 151 - We do not find any deficiency in such approval. Therefore, no merit in ground no.2. Accordingly, the ground is dismissed. 2022 (12) TMI 1344 Revision u/s 263 by CIT - addition were made u/s 69 and 69C - AP applied the rate of tax u/s 115BBE @30% instead of @60% - HELD THAT:- We find that in the present case, the AO has determined the assessee s income under section 69C of the Act read with section 115BBE of the Act and while determining the rate of tax, has been apparently guided by the pre-amended law where the rate of tax was 30% as against rate of tax of 60% as per the amended law which was applicable for the impugned assessment year 2017-18. Therefore, we find that the issue is not really about the applicability of section 115BBE rather the real issue is about the rate of tax as per section 115BBE - Where the ld PCIT has stated that the AO has not applied the rate of tax as per section 115BBE, what he meant was rate of tax of 60% given that the AO has already applied rate of tax of 30% as so submitted by the assessee. It is not the case of the assessee that the amended law is not applicable in its facts and circumstances of the case for the impugned assessment year 2017-18. It is therefore a case where the AO has erred in not applying the rate of tax as per the amended law as applicable for the impugned assessment year and the order so passed is therefore rightly held by the ld PCIT as erroneous in so far as prejudicial to the interest of the Revenue. We therefore didn t find any justifiable basis to interfere with the order of the ld PCIT who has rightly exercise his revisional jurisdiction u/s 263 by setting aside the order of the AO to the extent of applying the rate of tax as per amended Section 115BBE for the impugned assessment year on the quantum of additions made and sustained u/s 69C of the Act. We sustain the order of the Ld. PCIT(C) in light of aforesaid directions and the appeal of the assessee is dismissed. 2022 (12) TMI 1343 Deduction u/s 54 - deemed investment in the proposed flat - HELD THAT:- Upon perusal of above assessment orders, it could thus be seen that Ld. AO has accepted the declared sale consideration in case of Smt. Mini Pillai whereas it has rejected the sale consideration in the case of Smt. Sharda Menon. Both the assessment, prima-facie, has attained finality. Therefore, considering the same, the adoption of value of Rs.182.76 Lacs in the case of assessee before us stand confirmed. The corresponding grounds thus raised stand dismissed. Having said so, the present assessee would logically be eligible to claim deduction u/s 54 for deemed investment in the proposed flat to the extent of Rs.107.76 Lacs as similar deduction has been granted to both the other co-owners also. Regarding the revenue s plea that deduction u/s 54 was not to be granted for more than one property, we find that the ratio of decision of CIT V/s Gumanmal Jain [ 2017 (3) TMI 394 - MADRAS HIGH COURT] would apply. This decision considers catena of judicial decisions as well as amendment made by Finance Act, 2014 and finally held that the assessee would be eligible to claim deduction for more than one property. Following the same, Ld. AO is directed to adopt sale consideration and grant additional deduction u/s 54- We order so. The corresponding ground stand allowed. 2022 (12) TMI 1342 Denying deduction u/s. 36(1)(va) r.w.s. 43B - amount deposited towards employees contribution to provident fund - HELD THAT:- As the facts and the issue involved in the aforesaid order of the Tribunal in the case of Ind Synergy Lyd. [ 2022 (4) TMI 36 - ITAT RAIPUR] remains the same as are there before us in the case of the present assessee, therefore, we respectfully follow the same. We, thus, in terms of our aforesaid observations set-aside the order of the CIT(Appeals) and direct the AO to vacate the disallowance made by him u/s.36(1)(va) of the Act qua the delayed deposit of the employees share of contribution of EPF - Appeal of the assessee is allowed. Customs 2022 (12) TMI 1341 Levy of penalty u/s 114 of Customs Act - Garments made of inferior quality fabric but, declared to be made of Corduroy/Denim/Viscose fabric to fraudulently avail duty free import credit - whether there are corroborative evidences like statements of the co-noticees, recovering of large sum of money by the Enforcement Directorate from the premises of co-noticee, who is close associate of the respondent and recorded perverse findings? HELD THAT:- In ROMESH CHANDRA MEHTA VERSUS STATE OF WEST BENGAL [ 1968 (10) TMI 50 - SUPREME COURT] , it is held that a Customs Officer under the Act is not a police officer within the meaning of Section 25 of the Evidence Act and the statements made before him by a person who is arrested or against whom an inquiry is made are not covered by Section 25 of the Indian Evidence Act. It is further held that a statement under Section 108 of the Act is not a statement made by a person accused of an offence, and the person who gives the statement does not stand in the character of an accused person - it is clear that the statements of a person made under Section 108 of the Act 1962 should not and cannot be construed as a statement of a co-accused, for when a Customs Officer records a statement under that sections of the Act, he does not act as a Police Officer, but he merely acts as a Revenue Officer, whose duty is to find out whether or not there is an evasion of customs duty in a particular transaction. The statements made by Suresh Prabhu should be considered not as a confessional statement of a co-accused, but as an independent piece of evidence. It is thus evident from his statements that the respondent was involved in the offence. Hence the contention of Shri Phanindra that other independent evidence is required, is untenable and liable to be rejected. Whether the Tribunal was justified in dropping the penalty? - HELD THAT:- The findings of the DRI and statement made by the co-noticees, it is clear that the respondent had received and made payments for the illegal exports. Without his involvement, the chain of circumstances leading to the commission offence would be incomplete. In our view, respondent has aided in making remittance from Dubai which amounts to abetment. Thus, Respondent has played a major role in the commission of the offence - the abetment by the respondent, adjudicating Authority vide order No.01029/2014 was justified in imposing a penalty under Section 114 of the Act and the view taken by the CESTAT and dropping the penalty is perverse. Applicability of the Customs Act, 1962 - HELD THAT:- In the instant case, as per the statements of Suresh Prabhu, payments were sent to India by respondent and excess payment was also collected by him through people known to him. The illegal goods were detained in the Mangalore port. A major part of the offence has taken place in India. Therefore, in our view, the provisions of Customs Act are applicable. 2022 (12) TMI 1340 Levy of Customs Duty - pilfered goods or not - loss of the cargo on account of the super cyclone - cargo covered by Bills of Entry (B/E) but not cleared by M/s. MESCO Steel - penalty as assessed in terms of Section 114A read with Section 117 of the Act? - HELD THAT:- It has not been able to be disputed by the Customs Authorities that goods stored in open spaces, stocking yards remained at owner s risk. Section 42(2) of the MPT Act clearly states that the Port Authority would not be responsible for any pilferage or damage or loss. This was also incorporated in the license issued to MESCO as a condition. The Customs Authorities, also have not been able to dispute the fact that although MESCO sent a letter on 1st April, 2000 informing them of the loss of cargo in the super cyclone, no action was taken till the issuance of SCN three years later on 18th July, 2003. This delay has not been explained. If the goods themselves were not available on account of the super cyclone, it is inconceivable how the PPT could be made liable to pay customs duty on such goods under Section 45(3) of the Act which applies only in a situation where imported goods are pilfered after unloading . There is absolutely no material to come to the conclusion that the aforementioned goods not cleared by MESCO were pilfered . There cannot be any presumption on this score as has been done in the adjudication order and the appellate orders. The three orders run contrary to the factual position regarding loss of the cargo on account of the super cyclone as informed by MESCO to the Customs Authorities on 1st April, 2000 itself. The case on hand is on an even better footing. As far as the present case is concerned, there is sufficient material available on record to show that the goods in question were in fact lost in the super cyclone. Therefore, any attempt to fasten liability on PPT i.e. the Port Authority under Section 45(3) of the Act would not only be misconceived but legally unsustainable. This Court has no hesitation in setting aside the adjudication order, and the Appellate Orders of the Commissioner (Appeals) and CESTAT affirming such order has been entirely without legal basis - Appeal allowed. 2022 (12) TMI 1339 Classification of imported goods - Aluminium Profile - to be classified under CTH 76042990 or CTH 76109030? - Confiscation - redemption fine - penalty - HELD THAT:- The facts are not under dispute that the description of the goods namely Aluminium Profiles indicated in the import documents was the same as declared by the appellants in Bills of entry filed before the authorities at the port of import. Insofar as change in classification of the product in question is concerned, the appellants bonafidely believed that the product should appropriately be classified under 76042990 and accordingly, filed the Bills of entry classifying the product under the said CTH. It is not the case of Revenue that the appellants had mis-declared the goods with an intent to evade payment of duty. Since, Section 111(m) ibid provides for confiscation of the goods in the eventuality of misdeclaration of the goods, which are absent in the present case, the redemption fine and penalty cannot be imposed on the appellants. Confiscation of goods, imposition of redemption fine and penalty - HELD THAT:- The Hon ble Supreme Court in the case of NORTHERN PLASTIC LTD. VERSUS COLLECTOR OF CUSTOMS CENTRAL EXCISE [ 1998 (7) TMI 91 - SUPREME COURT ] have held that when the description of goods have been correctly furnished in the Bills of entry, the said statutory provisions do not apply for penalizing the importer-appellants. Appeal allowed. 2022 (12) TMI 1338 Valuation of imported goods - it is alleged that the declared value of the goods was lower than the values in the contemporaneous data of the similar goods imported - contemporaneous data of imports - rejection of declared value - opportunity was granted to the appellant for hearing or not - HELD THAT:- If the transaction value is rejected under rule 12 then the value of identical goods must be considered and if it is not available and the value of similar goods must be considered and if the value of identical or similar goods were both not available then the value can be deducted by considering the price at which such goods are sold in wholesale and after certain deductions. If such prices are also not available then the value can be computed by considering the cost of raw-material and fabrication cost plus other expenses. If none of these methods are possible then the residual method can be followed based on the above principles. In this case all the four Bills of Entry based on which the declared values were rejected were imported or the Bills of Entry were filed more than a month after the disputed Bill of Entry. From the Table we cannot make out as to which Customs House the goods in these Bills of Entry were imported from and in what quantities and from which country. Further, we find that the assessable value in these Bills of Entry were given in Rupees whereas the declared values in the Bill of Entry are in US dollars. It is not clear of what rate of exchange is applied to convert rupees into dollars to re-determine the assessable value under Rule 5. The rejection of the transaction value by the Deputy Commissioner is not in accordance with law. Consequently, its re-determination under Rule 5 cannot also sustain - in the impugned order the Commissioner (Appeals) did not discuss any issue related to rejection of transaction value and re-determination of the values - appeal allowed. Corporate Laws 2022 (12) TMI 1337 Jurisdiction of civil court - Rejection of plaint of appellant under Order VII Rule 11(d) of Code of Civil Procedure, 1908 - rejection on the ground that the civil suit was barred by virtue of Section 430 of the Companies Act, 2013 as the appropriate forum for the adjudication of the disputes involved is the National Company Law Tribunal - applicability of Companies Act, 1956 or the Companies Act, 2013? - reliability on decisions of on Jai Mahal Hotels Pvt. Ltd. [ 2015 (10) TMI 265 - SUPREME COURT] and Standard Chartered Bank [ 2006 (5) TMI 185 - SUPREME COURT] - bar on the jurisdiction of civil courts - applicability of bar under Section 430 - liquidation of TCL have an impact on the outcome of the instant appeal? Whether the instant suit is governed by the Companies Act, 1956 or the Companies Act, 2013? - Can the Appellants in the facts and circumstance of the present case rely on Jai Mahal Hotels Pvt. Ltd. and Standard Chartered Bank? - HELD THAT:- I am in agreement that with the findings recorded by the learned trial Court inasmuch as the bulk of the provisions of the Companies Act, 2013 relevant to the present controversy was notified on 30th August 2018 and with Section 46 dealing with Certificate of Shares was notified on 1st April 2014. The ratio of Jai Mahal Hotels Pvt. Ltd. and Standard Chartered Bank is of no help to the plaintiff companies as the same were decided in the context of the Companies Act, 1956 and hence, are not applicable to the facts and circumstances of the present case. Even otherwise, this Court is afraid that such a plea taken by the learned senior counsel cannot be sustained particularly in view of Section 465 of the Act, 2013 which deals with Repeal of certain enactments and savings as well as the judgment of the Hon ble Supreme Court in Shashi Prakash Khemkha (D) Through LRs vs. NEPC Micon, [ 2019 (2) TMI 971 - SUPREME COURT] wherein the Hon ble Supreme Court being confronted with an identical plea, held that We are conscious of the fact that in the present case, the cause of action has arisen at a stage prior to this enactment. However, we are of the view that relegating the parties to civil suit now would not be the appropriate remedy, especially considering the manner in which Section 430 of the Act is widely worded. There are no merit in the contentions of the learned senior counsel and hence, the present case will be governed by the provisions of the Companies Act, 2013 and not Companies Act, 1956. The instant issue is answered accordingly. How is a bar on the jurisdiction of civil courts to be inferred? - Whether in the facts and circumstances of the present case bar under Section 430 is attracted? - Does liquidation of TCL have an impact on the outcome of the instant appeal? - HELD THAT:- On bare perusal of section 9 of the code, it is found that there are two types of exceptions which are canvassed in Section 9, first, exceptions under the Code of Civil Procedure itself which is apparent from the use of subject to the provisions herein contained and secondly, exceptions which are not covered under the Code of Civil Procedure which is apparent from the use of excepting suits of which their cognizance is either expressly or impliedly barred . In the present case we are concerned with the latter exception which can further be divided into two types, first, jurisdiction expressly barred and secondly, jurisdiction impliedly barred. Considering the language of Section 430 of the Act, 2013, the analysis in the present judgment pertains to jurisdiction expressly barred. A suit is said to be expressly barred when it is barred by any enactment for the time being in force. Indisputably, it is open for a competent legislature to bar the jurisdiction of civil Courts in respect of a particular class of suits of a civil nature, provided that in doing so it acts within the four corners of the legislative powers conferred upon it and does not violate the letter and spirit of the Constitutional provisions. It is a settled proposition that every presumption should be made in favour of the jurisdiction of a civil Court and the provisions of exclusion of jurisdiction of a Court must be strictly construed - The NCLT is a specialised agency created for the purpose of a speedier and efficient regulation of the management of a company. Its powers are much broader than what are vested in the civil courts by virtue of Section 9 of the Code. The bulk of the dispute between the parties pertain to the ownership of the 50.21% shareholding in TCL and the validity of the meeting of the board of directors which is alleged to have taken place on 27th August 2013. Having perused the scheme of the Act, 2013, on the first sight though it appears that the disputes at hand between the parties can be adjudicated by the NCLT but in my opinion, such a decision would render the Appellants herein remediless as TCL has been dissolved and is no more in existence. The fundamental principle behind the bar on the jurisdiction of the civil court is that the there must adequacy of remedy being available to the parties who are relegated out of the civil Courts and they must not be rendered remediless. This Court does not find any merit in the objection of the Respondents that the subsequent liquidation of TCL will have no bearing on the present case. No corporate entity now exists in the form of TCL which may be governed by the provisions of the Companies Act, 2013. Hence, it cannot be said that the suit filed by the plaintiff companies was barred under Section 430 of the Companies Act, 2013. There is an inherent right in every person as per Section 9 of the Code to bring a civil suit setting forth as to how the plaintiff s legal rights have been violated for which he/she is seeking the indulgence of the Court and every interpretation must be made by which the jurisdiction of the civil Court is not readily ousted. Further, in case of suspicion, an interpretation should be made which leans in favour of the jurisdiction of the civil Court - this Court is of the considered opinion that the trial court has erred in rejecting the plaint as being barred by Order VII Rule 11(d) of the Code inasmuch as the suit was not barred under Section 430 of the Act, 2013. Appeal allowed. Service Tax 2022 (12) TMI 1336 Exemption from Service Tax - work contract service other than those which are commercial in nature rendered to the Central / State Government, Local Statutory Authorities etc. - Entry 12(a), (c) (f) in Mega Exemption Notification No.25/2012-Service Tax, dated 20.06.2012 - validity of Notification No.6/2015-Service Tax, dated 01.03.2015 - HELD THAT:- Chapter-V of the Finance Act, 1994 contains the provisions for levy and collection of service tax on services. There was no standalone enactment for levy of service tax all through of its period of existence. Since its introduction, it was under Chapter V of the Finance Act, 1994 - Service Tax was chargeable at the rates prescribed under Section 66 of the Finance Act, 1994 on the taxable value under Section 67 of the Finance Act, 1994. Upto 30.06.2012, there were specific definitions for various services and taxable services in Chapter V of the Finance Act, 1994. Service tax on Works Contract Service was introduced in the Finance Act, 1994 with effect from 11.05.2007 and made liable to tax with effect from 01.06.2007 vide Notification No.23/2007-ST dated 22.05.2007 after Section 65(105)(zzzza) came to be introduced in the Finance Act, 1994 vide the Finance Act of 2007. Thus, for the period starting from 01.06.2007 to 30.06.2012, the respective petitioners may have been liable to service tax for the services rendered by them in relation to works contract - In fact, prior to that, a confusion existed in view of levy of service tax on construction service vide Finance (No.2) Act, 2004 with effect from 10.09.2004 as in Section 65(105)(zzzza) read with Section 65(25b) 65(30a) and Section 65(105)(zzzh) read with Section 65(91a) of the Finance Act, 1994 (Chapter V of the Finance Act, 1994). The Hon ble Supreme Court has clarified the position in its judgment in M/S. KONE ELEVATOR INDIA PVT. LTD. VERSUS STATE OF TAMIL NADU AND OTHERS [ 2014 (5) TMI 265 - SUPREME COURT] that the services provided under works contracts was liable to service tax only with effect from 01.06.2007. Services provided by these petitioners were declared services . Thus, the services provided by these petitioners would have been liable tax at 12% on the taxable value and later at 14% vide Notification No.14/2015-ST, dated 19.05.2015 with effect from 01.06.2015 but for the exemption vide Entry 12(a), (c) (f) to Mega Exemption Notification No.25/2012-ST, dated 20.06.2012 - services provided by these petitioners were exempted from payment of service tax vide Entry 12(a), (c) (f) to the Mega Exemption Notification No.25/2012-ST dated 20.06.2012. The exemption under the Mega Exemption Notification No.25/2012-Service Tax, dated 20.06.2012 which was granted in the exercise of power under Section 93(1) (2) of the Finance Act, 1994 (Chapter V of the Finance Act, 1994) was withdrawn vide the impugned Notification No.6/2015-Service Tax, dated 01.03.2015 with effect from 01.04.2015. The exemption which was earlier granted in the public interest was withdrawn in the public interest - Whether public interest existed or not in withdrawing the exemption is not justiciable unless it is found that such withdrawal was vitiated on account of malafide, extraneous consideration or arbitration. High Court while exercising its jurisdiction under Article 226 of the Constitution of India does not sit in appeal over the decision of the Government to withdraw a Notification or an exemption. It is further a policy decision of the Government to withdraw the exemption. The prayer for a direction to refund of tax already paid by the petitioner also cannot be countenanced as these petitioners are liable to tax. Therefore, wherever the Orders-in-Original have been passed, the respective petitioners are given liberty to file statutory appeal before the Appellate Authority subject to the compliance of the other requirements of pre-deposit the amount as is contemplated under Section 35F of the Central Excise Act, 1944 as made applicable to the Finance Act, 1994, within a period of thirty (30) days from the date of receipt of a copy of this order. Petition dismissed. 2022 (12) TMI 1335 Rejection of refund claim - section 11B of the Excise Act - finalization of provisional assessment - principles of unjust enrichment - HELD THAT:- In the present case, it is not in dispute that the appellant had made a request for provisional assessment in terms of rule 6(4) of the 1994 Rules and such permission was granted to the appellant. It filed returns on provisional basis and, thereafter, the assessment was finalized by the department on 21.06.2011, raising a demand of Rs. 8,71,249/- as the tax liability was found to be more than what was covered by the amount reflected in the challans. The department has calculated the period of one year from which the refund claim could have been filed under section 11B of the Excise Act from the date of finalization of the assessment i.e. 21.06.2011, in terms of clause B(eb) of the Explanation to section 11B of the Excise Act. According to the appellant, refund could not have been claimed on the basis of this finalization of the assessment on 21.06.2011, as it was the appellant which had to pay an excess amount of Rs. 8,71,249/- towards the tax. Against the finalization of the assessment carried out on 21.06.2011, the appellant had filed an appeal before the Commissioner (Appeals) and this appeal was allowed by order dated 17.10.2012. The demand of service tax was set aside for the reason that the appellant had deposited more tax as the chart indicated that the appellant had paid an excess amount of Rs. 71,88,504/- towards the tax liability. The Adjudicating Authority and the Commissioner (Appeals) both calculated the limitation of one year for filing the refund claim under section 11B of the Excise Act from the date of final assessment i.e. 13.07.2011 and, accordingly, rejected the refund claim. Clearly an error was committed in arriving at such a conclusion for no refund could have been claimed by the appellant pursuant to the final assessment made on 13.07.2011 and it is only when the Commissioner (Appeals) passed the order on 17.10.2012 that the refund could be claimed by the appellant. The provisions of clause B (ec) and not (eb) of the Explanation to section 11B of the Excise Act would be attracted to the facts of the present case - the assessment can be said to have been finalized only when the Commissioner (Appeals) passed the order and for this reason also the relevant date would be 17.10.2012 and not 13.07.2012. Principles of unjust enrichment - HELD THAT:- It is not possible to accept the reasoning given by the Commissioner (Appeals). As noted above, the appellant was discharging its service tax liability on provisional basis, in terms of rule 6(4) of the 1994 Rules by computing the tax liability on the projected receipts for each month. It was, however, found that the actual premium collected was lower than the amount of taxable value assessed in the provisional return. Refund of tax would accrue in such a situation. There can be no question of passing the tax burden to the customers as tax was paid on a higher value and it is the balance amount of tax that was claimed by the appellant in the refund application. It cannot, therefore, be urged that the burden of tax had been passed to a third person. The order passed by the Commissioner (Appeals) rejecting the refund claim cannot be sustained and is set aside. The appellant is entitled to refund of an amount of Rs. 71,88,504/- with interest, which shall be calculated in accordance with law - Appeal allowed. 2022 (12) TMI 1334 Imposition of penalty under Section 76,77 and 78 of the Finance Act, 1994 - benefit of Section 80 of FA - HELD THAT- It is seen that the Hon ble High Court of Punjab Haryana in the case of CCE VERSUS FIRST FLIGHT COURIER LTD. [ 2011 (1) TMI 52 - PUNJAB AND HARYANA HIGH COURT] has observed that Section 76 provides for penalty for failure to pay the amount while Section 78 provides for penalty for suppressing the taxable value. Section 78 is, thus, more comprehensive and provides for higher amount. Even if technically, the scope of sections 76 and 78 is different, penalty under Section 76 may not be justified if penalty had already been imposed under Section 78. In view of that penalty under both Section 76 and Section 78 cannot be imposed simultaneously. Moreover, it is seen that the penalty under section 77 has been imposed for an offence pertaining largely to period prior to removal of limit of Rs one thousand from Section 77 (w.e.f 10.05.2008. In view of this respect the penalty under section 77 is also not sustainable. It is also noticed that the appellant has paid service tax before issue of SCN. The issue of taxability of stadium under CICS The matter of dispute at the material time. Keeping in view the above facts invoking Section 80, the impugned penalty under section 76,77 and 78 are set aside - appeal allowed. 2022 (12) TMI 1333 Refund of excess Service tax paid - rejection on the ground of limitation that the refund claim was filed on 07.2.2019 consequent to the OIA dated 13.10.2017 - HELD THAT:- The letter dated 15.1.2019 filed by the appellant is admittedly not a refund claim whereas, the refund claim was filed on 24.8.2016 which was well within time. Since the refund was rejected, the appellant has taken the matter upto the learned Commissioner (Appeals) and it is that refund which was to be decided by learned Commissioner (Appeals). The refund was supposed to be given by the department on the basis of learned Commissioner (Appeals) order. Even the letter from the appellant was not required moreover, the letter dated 29.1.2019 is not a refund application therefore, the entire basis for rejecting the refund claim being time barred is devoid of merit and fact. Since the appellant is legally entitle for refund on the basis of OIA dated 13.10.2017, the appellant s refund claim is not time barred. Appeal is allowed. Central Excise 2022 (12) TMI 1332 Recovery of Central Excise Duty alongwith interest and penalty - landowners - manufacture of excisable items or not - HELD THAT:- Though the petitioners became owners of the subject land, they cannot be construed as manufacturers of the excisable goods in the plant and machinery which belonged to respondent No.4 out of which the excise duty arose. This issue is squarely covered by the decision of the Supreme Court in M/S. RANA GIRDERS LTD. VERSUS UNION OF INDIA OTHERS [ 2013 (8) TMI 540 - SUPREME COURT] . That was a case where land belonging to the manufacturer was purchased in auction sale. When similar demand notice was issued, the same came to be challenged by the auction purchaser. Notice was issued to the auction purchaser because the borrower had failed to discharge the excise duty liability. In Rana Girders Ltd, Supreme Court had considered two earlier decisions in MACSON MARBLES PVT. LTD. VERSUS UNION OF INDIA [ 2003 (11) TMI 71 - SUPREME COURT] and UNION OF INDIA VERSUS SICOM LTD. [ 2008 (12) TMI 53 - SUPREME COURT] and thereafter held UPFC being a secured creditor had priority over the excise dues. We further hold that since the appellant had not purchased the entire unit as a business, as per the statutory framework, he was not liable for discharging the dues of the Excise Department. Statutory liabilities arising out of the land and building could be in the form of the property tax or other types of cess relating to property, etc. Likewise, statutory liability arising out of the plant and machinery could be the sales tax, etc. payable on the said machinery. As far as dues of the Central Excise are concerned, they were not related to the said plant and machinery or the land and building and thus did not arise out of those properties. Dues of the Excise Department became payable on the manufacturing of excisable items by the erstwhile owner, therefore, these statutory dues are in respect of those items produced and not the plant and machinery which was used for the purposes of manufacture. Following the decision of the Supreme Court in M/S. RANA GIRDERS LTD. VERSUS UNION OF INDIA OTHERS [ 2013 (8) TMI 540 - SUPREME COURT] as well as of this Court in GOPAL AGARWAL VERSUS THE COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, HYDERABAD [ 2015 (2) TMI 607 - ANDHRA PRADESH HIGH COURT] , impugned notice dated 02.11.2004 issued by respondent No.3 is hereby set aside. However, it would be open to respondents No.1, 2 and 3 to take such steps as may be permissible in law for recovery of outstanding excise duty from respondent No.4 (M/s. Chemo Steels Private Limited). Petition allowed. 2022 (12) TMI 1331 Constitutional Validity of provisions of Rule 5 of the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 - ultra vires the provisions of Section 3A of the Central Excise and Salt Act, 1944 or not - violative of Article 14 of the Constitution of India or not - HELD THAT:- It has been brought to the notice of this Court that the issue involved in the present writ petition is covered by the decision of the Supreme Court in COMMISSIONER OF C. EX. CUSTOMS VERSUS VENUS CASTINGS (P) LTD. [ 2000 (4) TMI 37 - SUPREME COURT ] where it was held that If the entire enactment is read as a whole indicates the purpose and that purpose is carried out by the rules, the same cannot be stated to be ultra vires of the provisions of the enactment. Therefore, it is made clear that the manufacturers, if they have availed of the procedure under Rule 96ZO(3) at their option, cannot claim the benefit of determination of production capacity under Section 3A(4) of the Act which is specifically excluded. The present writ petition is disposed off. 2022 (12) TMI 1330 CENVAT Credit - ammonia, intermediate products - common inputs/ input services used in manufacture of exempted and dutiable goods - non-maintenance of separate records - reversal of proportionate credit under rule 6(3A) of the CENVAT Credit Rules, 2004 - HELD THAT:- The issue in M/S CHAMBAL FERTILISERS AND CHEMICALS LIMITED VERSUS THE COMMISSIONER, CENTRAL EXCISE AND CENTRAL GOODS SERVICE TAX, UDAIPUR (RAJASTHAN) [ 2022 (11) TMI 644 - CESTAT NEW DELHI ] arose out of two show cause notices for issued the previous period on the same ground that the appellant had availed excess CENVAT credit by including the value of urea and single super phosphate while computing proportionate credit. It was held in the case that we find that the appellant has correctly reversed proportionate amount of Cenvat credit reckoning the value of the urea removed instead of reckoning the intermediate product ammonia which has gone into the manufacture of such urea. The appellant had correctly reversed the proportionate amount of CENVAT credit - Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2022 (12) TMI 1329 Classification of goods - rate of GST - denatured Anhydrous alcohol is a kind of Ethyl alcohol or not - HELD THAT:- Section 3 of the KTEG Act deals with levy of tax and it specifies that tax shall be levied and collected on the entry of any goods specified in the First Schedule into a local area for consumption, use or sale therein at such rates not exceeding 5% of the value of the goods as may be specified retrospectively or prospectively by the State Government by Notification, and different dates and different rates may be specified in respect of different goods or different classes of goods of different local areas . In other words, the tax can be levied only by issuing a notification and not otherwise. The notification dated 30.04.1992 issued by the Government of Karnataka in exercise of powers conferred under section 3(1) of KTEG Act, tax was levied at the rate of 2% on denatured spirit, rectified spirit and ethyl alcohol. The notification dated 31.03.1997 provided for levy tax on denatured spirit at the rate of 4%. Thereafter, a notification dated 15.02.2001 was issued exempting payment of tax on denatured spirit and also in the subsequent notification dated 30.03.2002. These notifications are not disputed by the State Government which provides for exemption from payment of tax on denatured spirit under notification dated 30.03.2002 issued in exercise of powers under section 3(1) of the KTEG Act. The levy of tax on denatured spirit have been omitted and the petitioner is not liable to pay tax for the period 2007-08 and 2008-09 and levy or payment of tax on denatured spirit is exempted. The levy of tax is for the period 2007-08 and 2008-09 and for the said period, there was no notification issued under section 3(1) of the KTEG Act levying entry tax on the denatured spirit. Hence, the petitioner is not entitled to pay the entry tax on the denatured spirit for having purchased, manufactured or supplied it to the various petroleum companies for the said period. Accordingly, the writ petition is allowed and the clarification dated 10.02.2009 issued by the respondent No.2 at Annexure-C is hereby quashed. Petition disposed off. 2022 (12) TMI 1328 Jurisdiction - time limitation - whether the contention of petitioner that as second respondent has already exercised the suo motu powers of revision under Section 32(2) of the VAT Act, exercise of such powers again by the first respondent, is permissible under law? - HELD THAT:- A plain reading of Section 32(1) of the VAT Act shows that the Commissioner may suo moto call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to him under the provisions of the Act, including sub-section (2), if such order or proceeding is prejudicial to the interests of the revenue. Further, a reading of same also shows that in Section 32(2) of the VAT Act, the powers of revision are also conferred on Additional Commissioner, Joint Commissioner, Deputy Commissioner and Assistant Commissioner in case of orders passed or proceedings recorded by the authorities, officers or persons subordinate to them. The powers under Section 32(2) are to be exercised by the subordinates to the Commissioner. The exercise of powers under Section 32(2) are no other than the revisional powers akin to the powers conferred on the Commissioner. There is no denial of the fact that the authorities under the VAT Act are vested with the powers to make assessment etc. Whether the VAT dealer transferred the right to use the vehicles of him to the oil company or not is a question of fact and if the petitioner has suffered with any adverse findings in the impugned order, he ought to have challenged these factual aspects by filing an Appeal before the appellate authority but not by way of this Writ Petition under Article 226 of Constitution of India. Apart from that, the first respondent in the impugned order opined that the self serving certificate issued by the Oil Company, as regards collection of service tax cannot be taken as a valid document, when the same is disputed by the respondents. Hence, the petitioner cannot rely upon the above to support his contention. In RASHTRIYA ISPAT NIGAM LTD. VERSUS COMMERCIAL TAX OFFICER, COMPANY CIRCLE, VISAKHAPATNAM [ 1989 (12) TMI 325 - ANDHRA PRADESH HIGH COURT] , it was held that the agreement has to be read as a whole in order to determine the nature of the transaction to ascertain the effective control of the machinery was in the use of the contractor or that of the company. The proper remedy for the petitioner would be to avail the remedy of Appeal in terms of Section 33 of the VAT Act. The material on record shows that the petitioner did not file the Appeal on the ground that filing of Appeal would make him to deposit 25% of the disputed tax. This cannot be a ground to file a Writ Petition under Article 226 of the Constitution, before this Court. The Hon'ble Apex Court in SETH CHAND RATAN VERSUS PANDIT DURGA PRASAD (D) BY LRS. ORS. [ 2003 (3) TMI 703 - SUPREME COURT] , while dealing with scope of Article 226 of the Constitution of India held that when a right or liability is created by a statue, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before seeking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is no doubt a rule of policy, convenience and discretion and the Court may in exceptional cases issue a discretionary writ of certiorari, where there is complete lack of jurisdiction for the officer or authority or Tribunal to take the action or there has been a contravention of fundamental rights or there has been a violation of principles of natural justice or where the Tribunal acted under a provision of law, which are ultra vires. Then notwithstanding the existence of an alternative remedy, the High Court can exercise its jurisdiction to grant relief. Petition dismissed. Indian Laws 2022 (12) TMI 1327 Enhancement to property tax in terms of the Chennai City Municipal Corporation Act,1919 and the Coimbatore City Municipal Corporation Act, 1981 - HELD THAT:- The efforts to rationalize property tax assessment continued and G.O.Ms.No.11 dated 04.01.1983 considered a situation that rent may be removed from the ambit of the enactment and that the mode of assessment may be shifted wholesale to a new basis, such as value of land, plinth area, location and usage after dividing the area into various zones and sub-zones. Following this methodology will obviate the necessity for arriving at a annual rental value or fair rent method. After examining the proposal from the Vice Chairman, Madras Metropolitan Development Authority under cover of his letter dated 30.03.1982, the Commissioner, Corporation of Madras was directed to undertake studies in this regard to be carried out by the Operations Research Group (ORG) of the Madras Metropolitan Development Authority under World Bank Systems for rationalization of property tax assessment. The records reveal notes written in hand, calling for the report of the ORG and Annexure VIII of compilation filed by the Greater Chennai Corporation on 21.09.2022 contains a report of the study submitted during September, 1985. Property taxes are a major source of revenue to the State and the report of the Committee as well as the analysis of data supplied by the respondents reveal more than adequately, that this source of revenue was not being deployed effectively. Non-deployment of revenue sources only leads to the denial of proper infrastructure and facilities to the citizens and the enhancement in property tax rates is only a move forward in that direction - the present impugned enhancement is not vitiated simply by virtue of the recommendations made by the Finance Commission. At best, it is an exercise in collaboration by the Union and State in the best interests of the Country. This argument is answered accordingly. The impugned G.O. cannot be considered as a diktat. It does precede the CRs and is couched in affirmative terms, indicating that changes are strongly urged in the property tax regime. However in conclusion, it advises, rather urges, that the Corporations take note of, and address the issues raised effectively, in the best interests of the State/District. The impugned GO, CR and Notification do make reference to the recommendations of the Central Finance Commission. However, such references do not, in my considered view, dilute the proposal for enhancement as the need for such enhancement has been made out by the State, de hors the recommendations of the Central Finance Commission. The admitted position that there has been no enhancement of property tax for the last nearly three decades would itself suffice to justify a proposal for enhancement now - the challenge to the impugned G.O. and CR on these grounds, stands rejected. Arbitrary and illegal procedure followed in enhancement - violation of principles of natural justice - HELD THAT:- In the present case, public notice has admittedly been issued and objections have, admittedly, been called for from the taxpayers falling within the jurisdiction of both the Chennai and Coimbatore Corporations. In the former, there are 13 lakhs/approx. assessees. The information relating to the number of assessees in Coimbatore has not been supplied by the Coimbatore Corporation. From among approximately 13 lakhs, 30 objections have been received. The disposal of the objections is merely by way of reiteration of the Council Resolution and Notification - the objections been dealt with in a serious manner as would behove the respondents, there would have been no necessity for the present Writ Petitions, since complete clarity could be provided by the Corporations even at that stage. The State would be well advised to put in place proper machinery in this regard and to ensure that future modifications, including enhancements, are made in accordance with fairness, transparency and following a fair and transparent procedure for dealing with tax payer queries, grievances and objections - Though an infirmity, it has been cured by virtue of the efforts taken by the City Corporation pendente lite, where efforts do appear to have been taken to enable the infrastructure, both physical as well as by use of technology, to provide services in method of computation, provision of grievance resolution centres, facilitation counters and an easy-to-use website, to ease the burden upon the taxpayers. Basis of enhancement is arbitrary and contrary to the provisions of the Act or not - HELD THAT:- In the present case, there is no doubt that the respondents have complied with the procedure for enhancement, though as noted in the paragraphs above, the entirety of the procedure followed appears to be rather farcical. However, there is no dispute on the position that the impugned/offending orders have been placed in public domain and objections called for and disposed - In PATEL GORDHANDAS HARGOVINDAS VERSUS MUNICIPAL COMMISSIONER, AHMEDABAD [ 1963 (3) TMI 53 - SUPREME COURT] , a Constitutional Bench of the Hon ble Supreme Court considered an appeal on certificate granted by the Bombay High Court challenging imposition of a rate by the Municipal Commissioner, Ahmedabad, on vacant lands. The levy of rate was under Section 73 of the Bombay Municipal Boroughs Act, 1925. The provisions of the Hyderabad Municipal Corporations Act, 1955 and the relevant rules in the Hyderabad Municipal Corporations (Assessment of Property Tax) Rules, 1990 provided that tax shall be levied at such percentages of rateable value as may be fixed by the Commissioner. It also provided for the method and manner of determination of such rateable value which is the annual rental value of the property - there was a complete scheme of assessment of tax that is inbuilt in that Statute and in the Rules. Neither the Act nor the Rules provide for a fair rent under the Rent Control Act to be binding upon the Commissioner and the Court lauded this discretion, since they noted that determination of annual rental value depended on several criteria that may expand beyond the criteria set out under the Rent Control Act. Admittedly, there is no restriction on the methodology as to how ALV is to be determined and thus there is substantial play in the joints that has been afforded to the respondents in this regard - This issue is thus held in favour of the respondents. Whether the slab rate provided within the BSR is permissible? - HELD THAT:- Evidently, and as the respondents have also pointed out, the fixation of slabs is intended as a benefit extended to owners of properties graded on the basis of size. The factorial for properties admeasuring less than 600 sq. ft., has been enhanced from 1.25 to 1.50, for properties between 601 to 1200 from 1.50 to 1.75, for properties between 1201 to 1800 the factorial stands enhanced from 1.75 to 2.00. In all situations, there is an enhancement of .5 percentage of the rate previously applicable. Properties admeasuring above 1801 sq. ft. stands enhanced to 2.00 from 1.50 as it was previously - The respondents project as though the slab system existed even earlier and the tabulation extracted above reveals the slabs fixed in 2011. However, no document has been produced by the Corporation/State in support of the existence of slab rates prior to the present impugned proceedings. This point has not been argued by the petitioners. Petition dismissed.
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