TMI Tax Updates - e-Newsletter
October 16, 2021

Case Laws in this Newsletter:

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

Articles

1. Key recent developments under GST – A bird’s eye view

   By: Amazon India

2. Litigation: An undisclosed levy for the State

   By: Salil Arora

News

1. APEDA signs MoU with GB Pant University of Agriculture and Technology, Pantnagar for boosting agri-exports from Uttarakhand

2. Over 2 crore Income Tax Returns filed on the e-Filing portal of the Income Tax Department

3. Index Numbers of Wholesale Price in India for the month of September, 2021(Base Year: 2011-12)

4. INDIA’S FOREIGN TRADE: SEPTEMBER 2021

5. Finance Minister Smt. Nirmala Sitharaman attends 4th G20 Finance Ministers and Central Bank Governors (FMCBG) Meeting in Washington D.C.

Notifications

Customs

1. 60/2021 - dated 14-10-2021 - ADD

Seeks to levy of ADD on “Aceto Acetyl Derivatives of aromatic or hetrocyclic compounds also known as Arylides” originating in or imported from China PR.

Income Tax

2. 121/2021 - dated 13-10-2021 - IT

U/s 10(46) of IT Act 1961 - Central Government notifies ‘Punjab State Electricity Regulatory Commission’ in respect of the specified income arising to that Commission

3. 120/2021 - dated 13-10-2021 - IT

Relaxation of Validation (section 119 of the Finance Act, 2012) Rules, 2021.

SEZ

4. S.O. 4255(E) - dated 12-10-2021 - SEZ

Central Government rescinds Notification Number S.O.1130(E) dated 31st March, 2017

5. S.O. 4254(E) - dated 12-10-2021 - SEZ

Central Government rescinds the Notification Number S.O.1131(E) dated 31st March, 2017

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/OIAE/IGRD/CIR/P/2021/642 - dated 14-10-2021

Streamlining issuance of SCORES Authentication for companies intending to list their securities on SEBI recognized stock exchanges

2. SEBI/HO/DDHS/CIR/2021/0000000638 - dated 14-10-2021

Revised Formats for Limited Review/ Audit Report for issuers of nonconvertible securities

Highlights / Catch Notes

GST

• High Court Grants Refund of Unutilized ITC for Goods Exported at NIL Duty Rate u/s 54(3) CGST/SGST Act.

  Case-Laws - HC : Refund of unutilized ITC - exports of goods which are having NIL rate of export duty - first proviso to section 54(3) of CGST/ SGST Act - The circular dated 20.09.2021, clarifies certain GST related issues - the aforesaid clarification settles the issues raised in this Petition in favour of the petitioner herein. - Refund to be granted in accordance with the clarification / circular - HC
  Visit to Get Source

  ---

• Court Denies Default Bail; Interim Bail Not Considered Constructive Custody; No Relief for Petitioner on Charge Sheet Claim.

  Case-Laws - HC : Grant of default bail - constructive custody or not - The submission of the petitioner that the petitioner despite being on interim bail shall be treated in constructive custody of the court, cannot be agreed upon. For the purposes of bail, petitioner cannot be treated in constructive custody. - Merely, on account of averments made in para 13, it cannot be said that incomplete charge sheet has been submitted by the prosecuting agency. - no relief can be granted to the petitioner - HC
  Visit to Get Source

  ---

• Court Rules Section 83 CGST Act Orders Invalid Due to Non-Compliance with Legal Requirements for Property Attachment.

  Case-Laws - HC : Provisional attachments of property - Section 83 of CGST Act - None of the stipulations specified in the aforesaid judgment are evident in the orders impugned in this writ petition. Thus there is non-application of mind to the purport of power exercisable by the second respondent under Section 83 of the CGST Act. - HC
  Visit to Get Source

  ---

• Court Rules Incorrect Interpretation of Section 54 and Rule 89 in SEZ Unit's Input Tax Credit Refund Case.

  Case-Laws - HC : SEZ unit - Refund of unutilized Input Tax Credit - entity to seek a refund - On a combined reading of Section 54 and Rule 89, the restriction which has been read into the provision by the Revenue is, in my view, misplaced. In fact, the Officer in the impugned order proceeds on the basis that the second proviso to Rule 89 deploys the word 'only', which is not found in the second proviso. It is a settled position that there can be no insertion of a word or phrase in a statutory provision or in a Rule which must be read and applied, as framed. - HC
  Visit to Get Source

  ---

• Job Work Services for Polyester Film Conversion Classified Under Heading 9988 by AAR.

  Case-Laws - AAR : Classification of services - Job-work or not - processing and conversion of Plain Polyester Film into processed All Types of Polyester films - the impugned services supplied by the applicant to GPL are in the nature of job work services, classifiable under Entry at item (id) under heading 9988 - AAR
  Visit to Get Source

  ---

• GST Exemption Granted for Panchayat and Municipality Functions Under Articles 243G and 243W of the Constitution.

  Case-Laws - AAR : Exemption from payment of GST - various activities performed by the applicant - activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or to a Municipality under article 243 W of the Constitution, is applicable or not? - Held Yes - The Applicant is entitled to exemption from payment of GST - AAR
  Visit to Get Source

  ---

• Turbilatex CRP and HbA1c Infinite Goods Classified Under Schedule II, Attract 12% GST Rate per Notification 1/2017.

  Case-Laws - AAR : Classification of goods - rate of GST - HSN code - Turbilatex C-reactive protein (CRP) infinite - HbA1c infinite - The subject goods are covered under Schedule II Serial No.80 heading 3822 of Notification No.1/2017, as amended attracting GST @ 12%. - AAR
  Visit to Get Source

  ---

• Premium CED, Powder, and Metal Finishing Coatings Classified as Job Work under Heading 9988 Regulations.

  Case-Laws - AAR : Classification of services - Job Work - rendering of premium CED Coating, Powder Coating and metal finishing coating services - The activity of the Applicant fits the definition of Job work under the present law. - the activity is covered under Entry at item (id) under heading 9988 - AAR
  Visit to Get Source

  ---

• Hospital Payments Taxable u/s 15 of CGST Act: Wages, Salaries, EPF, and ESI Reimbursements Included in GST Valuation.

  Case-Laws - AAR : Valuation - inclusion of amount reimbursed by the client - amount of wages / salaries, EPF/ ESI etc. - deductions available under Section 15 of the CGST Act do not include the amounts pertaining to EPF, ESI, Salary, or Wages - The applicant is liable to tax on all the amounts received from the Hospital. - AAR
  Visit to Get Source

  ---

• GST Exemption for PMAY Scheme: Notification No. 01/2018 Applies to Credit-Linked Subsidy Scheme Under PMAY (Urban) Conditions.

  Case-Laws - AAR : Exemption from GST - amount received from the customers claiming the benefit of PMAY scheme - Applicability of Notification No. 01/2018 of central tax (rate) - Yes the notification is applicable if the condition of credit linked subsidy scheme is availed under PMAY(Urban) - AAR
  Visit to Get Source

  ---

Income Tax

• Assessing Officer's Taxation of Undisclosed Income Without Evidence Deemed Unsustainable; Legal Principles Contradicted.

  Case-Laws - AT : Undisclosed income - addition on the basis of amount reflected in Form No.26AS - No dispute with regard to the fact that the AO taxed the entire difference of receipts - undisputedly, there is no finding by the AO or any material placed on record, suggesting that the assessee had made investment out of undisclosed source for earning of gross receipts. AO simply added the difference of receipts as recorded in Form 26AS and as disclosed by the assessee firm in its P&L A/c. This action of the Assessing Officer is contrary to the settled principle of law. Therefore, such action could not be sustained.- AT
  Visit to Get Source

  ---

• TPO's Transfer Pricing Method Flawed: Assessee in Limited Risk Role Should Get Assured Return, Not FOB Cost Base.

  Case-Laws - AT : TP Adjustment - risk based assessment and selection of comparable - The glaring fallacy in the approach of the TPO lies on the fact that he has adopted FOB cost of goods procured from India by the AEs through the assessee as cost base. In our considered view, this approach of the TPO is in complete disregard to the functional profile of the assessee. The assessee operates in a limited risk environment providing routine support services to group entities and accordingly, entitled to be remunerated based on assured return. - AT
  Visit to Get Source

  ---

• Reassessment Invalid Without Section 143(2) Notice: AO Must Notify Taxpayer for Scrutiny u/s 147.

  Case-Laws - AT : Validity of reopening of assessment u/s 147 - AO did not issue the notice under section 143(2) - It is the discretion of the Assessing Officer to accept the return of income of assessee as it is, or to proceed further with the assessment of income, once the Assessing Officer decided to proceeds he has to issue notice under section 143(2) to make the assessee aware that his return of income has been selected for scrutiny assessment. - This default of non-issue of notice u/s 143(2) of the Act is fatal to the order of re-assessment and have rendered the whole reassessment proceeding void-ab-initio being without jurisdiction - AT
  Visit to Get Source

  ---

• Appeal in Deceased Individual's Name Reconsidered; Legal Heir Allowed to File Electronically; CIT(A) to Condoned Delays.

  Case-Laws - AT : Maintainability of appeal in the name of a dead person - We deem it proper to restore the issue to the file of the CIT(A) with a direction to grant one more opportunity to the assessee to file the appeal electronically by the Legal-Heir of the deceased person. CIT(A) shall condone the delay, if any, and admit the appeal and decide the issue on merit, after giving due opportunity of being heard to the assessee - AT
  Visit to Get Source

  ---

Customs

• DRI Ludhiana Officer Not Authorized to Issue Show Cause Notice u/s 28(4) of Customs Act, 1962.

  Case-Laws - AT : Jurisdiction - power of Additional Director General (DRI) to issue SCN - proper Officer - The Additional Director General, DRI, Ludhiana is not a proper Officer to issue Show Cause Notice under Section 28 (4) read with Section 2 (34) of Customs Act, 1962 - - AT
  Visit to Get Source

  ---

Corporate Law

• Tribunal Supports Special Officer's Independent Valuation Decision Despite Contempt Application by Appellants.

  Case-Laws - AT : Oppression and Mismanagement - The appellants are critical of the Special Officer appointed by the learned National Company Law Tribunal (who was appointed to ensure smooth holding of board meetings) and took opportunity to file even against such Special Officer a contempt application. The impugned order shows that when the original respondents did not co-operate in naming a valuer the Special Officer selected a name and got the valuation done. The respondents have been agitating over this claiming that the Special Officer could not have on his own gone ahead to appoint a valuer and should have moved the National Company Law Tribunal for modification. The learned National Company Law Tribunal does not appear to have found fault with such procedure adopted by the Special Officer. - The impugned order as has been passed should not be interfered with - AT
  Visit to Get Source

  ---

Service Tax

• Refund Claim Remanded: Insufficient CA Certificate as Evidence for Service Tax Refund; Second Chance Granted for Proper Documentation.

  Case-Laws - AT : Refund of service tax paid as pre-deposit - duty paid under protest - The CA certificate is only a self serving document which cannot be considered as a conclusive proof to decide the issue. Law provides permissible documentary evidences that are accepted by the sanctioning authority and apparently, no effort seems to have been made by the appellant in this regard. - the appellant deserves a second chance - Matter restored back - AT
  Visit to Get Source

  ---

Central Excise

• Revenue Authorities Can't Selectively Challenge Unjust Enrichment in Similar Assessment Years; Credit Notes Acknowledged as Discounts.

  Case-Laws - HC : Refund - Applicability of doctrine of unjust enrichment - Revenue cannot pick and choose the assessment years for challenging the orders having similar effect. Moreover, as observed by the First Appellate Authority, the issue of unjust enrichment has been raised for the first time on the sanction of refund order consequent on finalization of provisional assessment. The authorities have admitted that the credit notes were issued by the assessee to their dealer representing various discounts which have been actually passed on, in accordance with marketing circulars/policies. - HC
  Visit to Get Source

  ---

• Evidence from Dealers and Transporters Unreliable Without Cross-Examination: Central Excise Act Section 9 Compliance Essential.

  Case-Laws - AT : Clandestine Removal - threshold limit of SSI Exemption - third party evidences reliable or not - It is settled that statements of dealers and transporters and the documents recovered from them cannot be relied upon as evidence since, no cross examination have been carried out by the adjudicating authority from the dealers and transporters as mandated under Section 9 of the Central Excise Act therefore, without cross examination neither the statements nor the documents recovered from transporter and dealers can be relied upon - Demand with penalties set aside - AT
  Visit to Get Source

  ---

VAT

• High Court Invalidates UPVAT on ENA, Rectified Spirit, and SDS; Lacks Legislative Competence After 101st Amendment.

  Case-Laws - HC : Constitutional validity of levy of VAT on Extra Neutral Alcohol (ENA) - post GST regime - alcoholic liquor not for human consumption or industrial alcohol or non-potable alcohol, is subject to GST laws, only - the State lost its legislative competence to enact laws, to impose tax on sales of ENA, upon the enactment of the 101st Constitution Amendment. Consequently, and upon considering Section 174(1)(i) of UPGST Act, 2017, the impugned Notification dated 17.12.2019, insofar as it seeks to impose UPVAT on ENA, Rectified Spirit and SDS, is ultra vires, both on account of lack of (i) legislative competence and (ii) valid delegation - HC
  Visit to Get Source

  ---

Case Laws:

• GST

• 2021 (10) TMI 636
  Refund of unutilized ITC - exports of goods which are having NIL rate of export duty - first proviso to section 54(3) of CGST/ SGST Act - HELD THAT:- Circular dated 20.09.2021 clarifies that only those goods which are actually subjected to export duty i.e., on which some export duty has to be paid at the time of export, will be covered under the restriction imposed under section 54(3) from availment of refund of accumulated ITC. Goods, which are not subject to any export duty and in respect of which either NIL rate is specified in Second Schedule to the Customs Tariff Act, 1975 or which are fully exempted from payment of export duty by virtue of any customs notification or which are not covered under Second Schedule to the Customs Tariff Act, 1975, would not be covered by the restriction imposed under the first proviso to section 54(3) of the CGST Act for the purpose of availment of refund of accumulated ITC. The respondents are directed to process the case of the petitioner herein having regard to the aforesaid clarification - petition allowed.

  ---

• 2021 (10) TMI 635
  Levy of GST - Classification of services - HSN Code - rate of GST - proposed receipt of money in case of Arbitration claims awarded for works contract completed in the Pre-GST regime - Unpaid amounts including escalation of price for works executed in pre-GST period - Refund of excess deductions made - Interest on delayed payments of interim payment certificates - Cost of Arbitration - Liquidated damages - Interest on Arbitration Amount. Unpaid amounts including escalation of price for works executed in pre-GST period - time of supply of services - HELD THAT:- The time of supply of service according to Section 13(2) is the earliest of the date on which invoice is issued or date of provision of service or date of receipt of payment or date on which recipient shows the receipt of services in his books. As seen from the averments of the applicant the supply was made prior to introduction of GST. Therefore it is not covered by Section 13(2) of the CGST/SGST Acts. Hence the amounts claimed pertaining to the works executed earlier to introduction of GST are not taxable under CGST/SGST Acts. Refund of excess deductions made - HELD THAT:- The refund of excess deductions both statutory and non-statutory made against the bills raised for the works completed in pre-GST period do not constitute consideration for supplies made under GST period. Therefore these amounts are not taxable under CGST/SGST Acts. Interest on delayed payments of interim payment certificates - HELD THAT:- In the present case, Arbitration as service was supplied independently after the introduction of GST i.e., the tribunal was constituted conclusively on 20.11.2017 and rendered its orders on 09.05.2019 and therefore this supply is liable to tax on reverse charge basis under GST. Liquidated damages - HELD THAT:- The time of supply of the service of tolerance is the time when such determination takes place. However, the contractee/employer has not determined the cost of delay prior to arbitration award. It was determined only by arbitration award on 09.05.2019. Therefore the time of supply of this service as per Section 13 of the CGST Act is 09.05.2019. The Consideration received for such forbearace is taxable under CGST and SGSt @9%. Each under the chapter head 9997 at serial no. 35 of Notification No.11/2017- Central/State tax rate. Interest on Arbitration Amount - HELD THAT:- The applicant is claiming interest on the amounts determined by the arbitrary tribunal under various heads. Under Section 15(2)(d) of the CGST/SGST Acts interest for delayed payment against a supply is consideration which is taxable under CGST/SGST Acts. Therefore the interest on amounts exigible to tax under CGST/SGST forms part of value of taxable supply.

  ---

• 2021 (10) TMI 634
  Grant of default bail - constructive custody or not - complete charge sheet has not been filed by the investigating officer in the matter - submission of petitioner is that although petitioner has been released on interim bail in compliance of directions issued by High Power Committee but he shall be deemed to be in constructive custody of the Court - HELD THAT:- Custody means when a police officer arrests a person, produces him before the Magistrate and gets a remand to judicial or other custody, he can be stated in judicial custody when he surrender before the court and submits to its directions. As petitioner has been released on interim bail, so he cannot be treated in constructive custody, as his movements are not restricted as per directions of the Court - If a person who has been released on bail is treated in custody, then it will be mockery of justice. Bail always presupposes custody. Bail can be granted only when a person is detained. The submission of the petitioner that the petitioner despite being on interim bail shall be treated in constructive custody of the court, cannot be agreed upon. For the purposes of bail, petitioner cannot be treated in constructive custody. Grant of default bail - filing of incomplete charge sheet - HELD THAT:- It is admitted position of the parties, petitioner was arrested on 28.01.2021, charge sheet was submitted on 26.03.2021 and he was released on interim bail on 26.05.2021 - In case, after submission of charge sheet, or during trial any evidence comes in light, it can be filed in Court to do justice between the parties. Merely, on account of averments made in para 13, it cannot be said that incomplete charge sheet has been submitted by the prosecuting agency. Petition dismissed.

  ---

• 2021 (10) TMI 633
  Provisional attachments of property - Section 83 of CGST Act - HELD THAT:- In the decision in Radha Krishan Industries v. State of Himachal Pradesh and Ors. [ 2021 (4) TMI 837 - SUPREME COURT ], the Hon ble Supreme Court had occasion to consider the exercise of powers under Section 83 of the CGST Act and after elaborate consideration, laid down the manner and mode in which the powers are to be exercised. None of the stipulations specified in the aforesaid judgment are evident in the orders impugned in this writ petition. Thus there is non-application of mind to the purport of power exercisable by the second respondent under Section 83 of the CGST Act. The order impugned are liable to be stayed - there will be a stay of operation of Exts.P9, P9(A) and P9(B) attachment order for a period of 8 weeks.

  ---

• 2021 (10) TMI 632
  Release of detained goods - Section 129(1) of Central Goods and Services Tax (CGST) Rules, 2017 as well as notice under Section 129(3) of the CGST act - HELD THAT:- The pendency of the writ petition is not a bar for completing the adjudication proceedings contemplated under Section 129 of the CGST act. There will be a direction to the second respondent to complete the adjudication proceedings pursuant to Ext.P8 and finalise all the proceedings at the earliest, at any rate, within a period of ten days from the date of receipt of a copy of this judgment, if not already completed - Petition disposed off.

  ---

• 2021 (10) TMI 631
  Release of detained goods - It is the case of the petitioner that he is entitled to get release of the vehicle on complying with the appropriate conditions that may be fixed by this Court - section 129(1) of the CGST Act - HELD THAT:- It is the settled position of law, especially in view of the decision in THE STATE OF UTTAR PRADESH ORS. VERSUS M/S KAY PAN FRAGRANCE PVT. LTD. [ 2019 (12) TMI 95 - SUPREME COURT] that the writ petition seeking direction to release the goods detained under section 129 of the CGST Act shall not be entertained by the High Court. This is all the more so since section 129 of the CGST Act is a complete code by itself and provides opportunity for obtaining reliefs by the assessees as specified therein. In the said circumstances, the assessee is not without any remedy. Remedy is available under the CGST Act itself. The proceedings that has now been initiated under section 129 of the CGST Act ought to culminate in a time bound manner as stipulated therein - Petition dismissed.

  ---

• 2021 (10) TMI 630
  SEZ unit - Refund of unutilized Input Tax Credit - entity to seek a refund - Rejection of the request of the SEZ/petitioner for refund of taxes paid under the Central Goods and Services Tax Act, 2017 - taxes were paid erroneously - zero rated supply - rejection on the ground that applications were deficient in some respects and deficiency memo - quantification of the amount of refund - HELD THAT:- The statutory scheme for refund under the CGST and SGST Acts, permits any entity to seek a refund of taxes or other amounts paid under the provisions of the Act, subject to satisfaction that is it so entitled, and that there is no double claim as against the same amount. Ordinarily, though zero rated supplies are not subject to the levy of taxes, the petitioner, in this case has remitted the same as raised in the invoice, albeit erroneously - the provisions of Section 54 of the CGST Act, providing for a refund, apply to any person who claims such refund and who makes an application for the grant of the same. The language of the provision is clear and does not contain, or admit of any restriction in its operation. On a combined reading of Section 54 and Rule 89, the restriction which has been read into the provision by the Revenue is, in my view, misplaced. In fact, the Officer in the impugned order proceeds on the basis that the second proviso to Rule 89 deploys the word only , which is not found in the second proviso. It is a settled position that there can be no insertion of a word or phrase in a statutory provision or in a Rule which must be read and applied, as framed. No restrictions or amplifications of the Rule are permissible by interpretation. Quantification of the refund - HELD THAT:- This is a matter of fact which the petitioner will have to establish before the respondent. This aspect of the matter finds reference in Section 54(4), extracted earlier in this order, which provides for the refund application to be comprehensive and accompanied by all relevant documentary evidence in support of the claim. The petitioner will appear before the 2nd respondent on a date to be fixed by the authority and provide all material available with it in support of its claim - petition disposed off.

  ---

• 2021 (10) TMI 629
  Classification of services - Job-work or not - processing and conversion of Plain Polyester Film into processed All Types of Polyester films - activity amounting to treatment/process or not - whether the activity falls under clause (id) Heading 9988 of N/N. 20/2019 dt 30/09/2019 or otherwise? - HELD THAT:- Since no new product comes into existence after the process conducted by the applicant on the raw materials supplied by GPL, therefore the process undertaken will come under the purview of job-work as defined under Section 2 (68) of the GST Act, 2017. Thus, in view of the applicant is only a job worker to GPL and as a job worker, carries out processes on goods i.e. Polyester Films supplied by the principal i.e, GPL. The services provided by the applicant does not fall under (i), (ia), (ib), (ic) of the above mentioned notification. It is already already found that the impugned services supplied by the applicant are in the nature of jobwork - the subject supply of services will be covered by the residuary entry. The Impugned services provided by applicant falls under clause (id) Heading 9988.

  ---

• 2021 (10) TMI 628
  Exemption from payment of GST - considerations payable to it by Mumbai Metropolitan Region Development Authority (MMRDA) in terms of Memorandum of Understanding (MOU) entered into between the MbPT (Applicant) and MMRDA - Way Leave fees Lease rent payable every year as consideration for the grant of lease and way leave permission for the plot of land and water areas required by MMRDA for the MTHL project - Compensation in lieu of demolition of 4 existing sheds at STP yard situated on the said plot of land which is licensed to MMRDA for the purpose of the MTHL project - Compensation in lieu of decommissioning of Old Pir Pan Jetty / Berth situated on the said plot of land which is licensed to MMRDA for the purpose of the MTHL project - amount equivalent to 15% of the Security Deposit, received by MbPT from MMRDA under the name of Way Lease Agreement Charges to meet the cost of execution of execution of Way lease agreement Lease Agreement - refundable Security Deposit to be returned to MMRDA only on termination of the agreement or not - refund of Refundable Security Deposit, to meet the cost of damages during the execution of work - whether entry no. (3) of Notification No. 12/2017-CTR which provides an exemption from GST in respect of pure services supplied to Governmental Authority, by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or to a Municipality under article 243 W of the Constitution, is applicable or not? Grant of a lease and way leave permission to MMRDA by the Applicant - HELD THAT:- In the instant case, the supply of leasing of immovable properties and water areas within its territory by the applicant to MMRDA is nothing but supply of services. From the submissions made by the applicant it is observed that the impugned MOU does not envisage any supply of goods whatsoever, along with the supply of leasing services and therefore we conclude that the subject activity is a supply of pure services. Supply in respect of Pure Services - HELD THAT:- The impugned MOU does not envisage any supply of goods individually or along with the supply of services in the instant case. In the instant case, pure services are supplied by the applicant to MMRDA. Thus the first part of the conditions mentioned at Sr. No. 3 above is satisfied in the subject case. Whether MMRDA can be considered as a Central Government, State government or Union territory or local authority or a Governmental authority or a Government Entity? - HELD THAT:- MMRDA is a body established by the Government of Maharashtra under Mumbai Metropolitan Region Development Authority Act, 1974 ( MMRDA Act ). As per the preamble of the Act, the MMRDA has been established for the purpose of planning, coordinating and supervising the proper, orderly and rapid development of the Mumbai Metropolitan Region (MMR); to formulate and execute plans, projects and schemes for the development of the MMR and to provide for matters connected with the purposes aforesaid. Therefore, MMRDA is seen to be under the control of the Govt, of Maharashtra - MMRDA is constituted and established by the State Government of Maharashtra with 100% participation by way of Equity or Control to carry out the function entrusted to it by the State Government viz. Preparation of Regional Development Plans, Providing financial assistance for significant regional projects, Providing help to local authorities and their infrastructure projects, coordinating execution of projects and/or schemes in MMR, etc. in the State of Maharashtra and therefore MMRDA is clearly covered under the definition of Government Entity as can be seen from the definition of a Government Entity . The applicant is supplying pure services to a Government Entity in relation to any function entrusted to a Panchayat under article 243 G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution and therefore, as per the provisions of Entry No. (3) of Notification No. 12/2017-CT(R) dated 28.06.2017, mentioned above, the said services supplied by the applicant are exempted from GST - the Way Leave Agreement charges , at the rate of 15% of security deposit payable by MMRDA to MbPT (equivalent to 12 months way leave fee/lease rent), in terms of clause 10 of the MOU, being amount received in lieu of the lease of land, etc., i.e pure services rendered by the applicants will also be exempt from payment of GST under Entry No. (3) Of Notification No. 12/2017-CT(R) dated 28.06.2017. The security deposit taken by the applicant is to secure or to act as a guarantee as per the terms of the MOU against possible damages to the properties. The fact is that the amount of deposit taken by the applicant is till the time the work has not been completed by MMRDA - in the subject case, the deposit received by the applicant cannot be treated as consideration for the supply made by the applicant and therefore they will not be liable to pay GST on such deposit amount received by them. All amounts received by the applicant are in relation to pure services rendered by the applicants to a Government Entity, and will be exempt from payment of GST under Entry No. (3) Of Notification No. 12/2017-C.T(R) dated 28.06.2017. Even the refundable security deposit received by the applicant from MMRDA, as security against possible damages during the execution of works, is in relation to pure services rendered by the applicants to a Government Entity, and will be exempt from payment of GST under Entry No. (3) Of Notification No. 12/2017-CT(R) dated 28.06.2017. Even if, at the time of completion of the lease tenure, the entire deposit or a part of it is withheld and not paid back by the applicant, as a charge against damages, etc. then also such amounts not returned back will not be liable to GST in view of Entry No. (3) Of Notification No. 12/2017-CT(R) dated 28.06.2017, being amounts received from a Government Entity in respect of an activity carried out in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243 W of the Constitution.

  ---

• 2021 (10) TMI 627
  Classification of goods - rate of GST - HSN code - Turbilatex C-reactive protein (CRP) infinite - HbA1c infinite - Applicability of N/N. 05/2021-Central Tax (Rate) New Delhi, the 14th June, 2021 G.S.R (E) - HELD THAT:- The subject goods are not agglutinating sera by themselves. Rather they are diagnostic kits which may work on the principle of agglutinating sera . The applicant has not helped their own case in as much as they have sought to reclassify their product from HSN Code 38.22 (which is used by them presently) to HSN Code 30.02 not on the basis of any actual evidence but only because some of their competitors are clearing similar goods under HSN Code 30.02. Diagnostic kits are classified here when the essential character of the kit is given by any of the products of this heading. Common reactions occurring in the use of such kits include agglutination, precipitation, neutralization, binding of complement, haemagglutination, enzyme-linked immunosorbent assay (ELISA), etc. The essential character is given by that single component which governs to the greatest extent the specificity of the test procedure - the subject product cannot be covered under Heading 30.02 of the GST Tariff as contented by the applicant. Whether the subject product can be covered under Heading 38.22 of the GST Tariff? - HELD THAT:- The reagents of heading 38.22 may also be put up in the form of kits, consisting of other components, even if one or more components when presented separately, would be classifiable under another heading. Examples of such include kits used for testing glucose in blood, etc. - the subject goods are covered under Heading 38.22 of the GST Tariff. Applicability of N/N. 05/2021-Central Tax (Rate) New Delhi, the 14th June, 2021 G.S.R (E) - HELD THAT:- It is seen from Sr. No. 18 of the said notification that the GST rate on Ambulances was reduced from 28% to 12%. Similarly as per Sr. No. 7, the GST rate on certain products, including CRP (C-Reactive Protein), falling under Heading 38.22 has been reduced to 5%. It is clear from the said notification that the rate of GST on CRP (C-Reactive Protein) was reduced to 5% for that particular period only else the rate is higher at 12%. The subject goods are covered under Schedule II Serial No.80 heading 3822 of Notification No.1/2017-Central Tax (Rate), dated 28th June, 2017, as amended attracting GST @ 12%.

  ---

• 2021 (10) TMI 626
  Classification of services - Job Work - rendering of premium CED Coating, Powder Coating and metal finishing coating services - to be treated as a Service as per Schedule II- Point No. 3 or not - N/N. 20/2019 Central Tax (Rate) New Delhi, 30th September, 2019 - GST Rate on Job work is reduced to 6% from 9% is applicable to the firm or not - HELD THAT:- Since no new product comes into existence after the process conducted by the applicant on the goods supplied by its principals, therefore the process undertaken will come under the purview of jobwork as defined under Section 2 (68) of the GST Act, 2017. Thus, the applicant is only a job worker and as a job worker, carries out processes on goods supplied by its principals. The services provided by the applicant does not fall under (i) (ia), (ib), (ic) of the notification. The impugned Services supplied by the applicant are in the nature of jobwork. Further the said services do not fall under entries at items (i), (ia), (ib) and (ic) above. Therefore the subject supply of services will be covered by the residuary entry at item (id) of the said notification, namely, Services by way of job work other than (i), (ia), (ib) and (ic). Hon ble Supreme court in the case of Maruti Suzuki Limited Vs. CCE, New Delhi, [ 2015 (3) TMI 784 - SUPREME COURT] has also held that there is a distinction between processing and manufacture and that Electro Deposition (ED) Coating of anti-rust treatment to increase shell life of various component is merely a processing activity and not a complete manufacturing activity. The activity of the Applicant fits the definition of Job work under the present law. Further in terms of the Apex court s ruling also, activity of coating is only a process undertaken on goods. Therefore the activity undertaken by the applicant is covered under the definition of Job work - the impugned services supplied by the applicant are in the nature of job work services, covered under Entry at item (id) under heading 9988 of N/N. 11/2017-Central Tax Rate dated 28.06.2017 as amended. Whether Notification No.20/2019-Central Tax (Rate) New Delhi, 30 11 September, 2019 - where GST Rate on Job work is reduced to 6% from 9% is applicable to the firm? - HELD THAT:- The service supplied by the applicant is in the form of job-work service and is covered by Entry at item (id) under heading 9988 of N/N. 20/2019-Central Tax (Rate) dt. 30.09.2019. Hence the subject notification is applicable to their case.

  ---

• 2021 (10) TMI 625
  Valuation - inclusion of amount reimbursed by the client - amount of wages / salaries, EPF/ ESI etc. - HELD THAT:- The applicant is not a pure agent under GST Law. Further the deductions available under Section 15 of the CGST Act do not include the amounts pertaining to EPF, ESI, Salary, or Wages. Therefore entire amount received from the Hospital are exigible to CGST / SGST Act 2017. The applicant is liable to tax on all the amounts received from the Hospital.

  ---

• 2021 (10) TMI 624
  Exemption from GST - amount received from the customers claiming the benefit of PMAY scheme - benefit of N/N. 01/2018 of central tax (rate) dated: 25.01.2018 - HELD THAT:- In view of the entry in N/N. 11/2017 dated: 28.06.2017, if a person is acquiring a dwelling under the credit linked subsidy scheme for economically weaker section fulfilling all the conditions and formalities from designated banks/financial institutions under such scheme then he is eligible for the concessional rate of tax under the said notification. Thus, the notification is applicable if the condition of credit linked subsidy scheme is availed under PMAY(Urban).

  ---

• Income Tax

• 2021 (10) TMI 623
  Revision u/s 264 - AO observed that the benefit of the MFN clause could not be availed by the Petitioner as Slovenia / Lithuania / Colombia were not OECD countries at the time when the India Netherlands Treaty came into effect - HELD THAT:- Issue notice. Mr.Kunal Sharma, Advocate accepts notice on behalf of the Respondent. He states that he has no objection if the Respondent is directed to dispose of the application filed by the Petitioner under Section 264 of the Act in a time bound manner. Keeping in view the limited prayer made, this Court disposes of the present writ petition directing the Respondent to decide the Petitioner s application dated 18th August, 2021 filed under Section 264 of the Act, by way of a reasoned, order in accordance with law, within eight weeks.

  ---

• 2021 (10) TMI 622
  Addition u/s 43B - Delayed payment of employees contribution to PF ESI - CIT(A) deleted the addition subject to verification of payment at the end of the A.O - HELD THAT:- Adjustment u/s 43B(b) was made by the CPC on account of belated payment of PF and ESI payment of Bonus and GST - as submission of the Assessee that the above payments were made before the due dates as prescribed under the respective Act and due to a clerical mistake in the reporting by the Auditor s the same was disallowed. Since the Ld. CIT(A) has sustained the addition merely based on the report of the Auditor, therefore, considering case in the interest of justice, restore this issue to the file of the A.O. with a direction to verify the details and if the payments are made before the specified date, then, to delete the addition. Ground of appeal No.1 of the assessee is accordingly allowed for statistical purposes.

  ---

• 2021 (10) TMI 621
  Delayed payment of employees contribution to PF ESI - As submitted assessee has deposited the employees contribution to PF ESI before the due date of filing of the income tax return - HELD THAT:- Since in the instant case the assessee admittedly has deposited the employees contribution to PF ESI before the due date of filing of the income tax return, therefore hold that the Ld. CIT(A) is not justified in sustaining the adjustment made by the A.O-CPC on account of belated payment of employees contribution to PF and ESI. See M/S. BHARAT HOTELS LTD. [ 2018 (9) TMI 798 - DELHI HIGH COURT] - Decided in favour of assessee.

  ---

• 2021 (10) TMI 620
  Delayed payment of employees contribution to PF ESI - Assessee filed rectification application u/s 154 stating that contribution has already been paid into the relevant fund account well before the due date specified for furnishing of return of income under sub-section (1) of section 139 - HELD THAT:- As in the instant case the assessee admittedly has deposited the employees contribution to PF ESI before the due date of filing of the income tax return, therefore, respectfully following the decision M/S. BHARAT HOTELS LTD. [ 2018 (9) TMI 798 - DELHI HIGH COURT] , thus hold that the Ld. CIT(A) is not justified in sustaining the adjustment made by the A.O-CPC on account of belated payment of employees contribution to PF ESI - We set aside the order of the Ld. CIT(A) and direct the A.O. to delete the disallowance. - Decided in favour of assessee.

  ---

• 2021 (10) TMI 619
  Nature of expenses - Disallowance of legal expenses and service tax paid - revenue or capital expenditure - expenditure related to stock-in-trade - HELD THAT:- On perusal of order of learned Commissioner (Appeals)-II, Bombay for assessment years 1990-91 and 1991-92, we find that the first appellate authority has very clearly and categorically held that the immovable properties located at Hyderabad are stock-in-trade of the assessee. The aforesaid decision of learned first appellate authority has also been approved by the Tribunal while dismissing revenue s appeal - Thus, once the immovable properties located at Hyderabad have been held as stock-in-trade, they cannot be treated as capital asset in terms of section 2(14)(i) - Thus, any expenditure related to stock-in-trade has to be considered as revenue expenditure. On perusal of order of Commissioner (Appeals)-II, Bombay for assessment years 1990-91 and 1991-92, we find that the first appellate authority has very clearly and categorically held that the immovable properties located at Hyderabad are stock-in-trade of the assessee. Thus, once the immovable properties located at Hyderabad have been held as stock-in-trade, they cannot be treated as capital asset in terms of section 2(14)(i) of the Act. Thus, any expenditure related to stock-in-trade has to be considered as revenue expenditure. - Decided in favour of assessee. Disallowance u/s 14A of the Act r.w.r. 8D - suo-moto disallowance made by assessee - HELD THAT:- As total administrative and management expenses claimed by the assessee is little more than Rs. 13 lakhs; whereas, the assessee has disallowed an amount of Rs. 7.84 lakhs under section 14A of the Act. Admittedly, the disallowance computed by the assessing officer only relates to administrative expenditure under rule 8D(2)(iii). Therefore, when the assessee has disallowed more than 50% of the total expenditure claimed, no further disallowance is called for. Assessee s claim that the disallowance should be restricted to Rs. 2 lakhs as held by the Tribunal in assessment year 2006-07, we are unable to accept such contention. Firstly, in assessment year 2006-07, rule 8D was not applicable. Secondly, the assessee itself has computed the disallowance at Rs. 7.84 lakhs. In fact, in assessee s own case for subsequent assessment years, i.e. assessment years 2009-10, 2011-12, 2012-13 and 2013-14, the Tribunal has consistently held that the disallowance u/s 14A r.w.r. 8D should be restricted to suo motu disallowance made by the assessee - No infirmity in the decision of learned Commissioner (Appeals) on the issue. Accordingly, ground 2 in revenue s appeal and grounds 4,5 and 6 in cross objection are dismissed. Disallowance u/s 14A r.w.r. 8D while computing the book profit u/s 115JB - HELD THAT:- As this issue is now squarely covered by the decision in case of ACIT vs Vireet Investments P Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] - Therefore, we uphold the decision of learned Commissioner (Appeals). This ground is also dismissed.

  ---

• 2021 (10) TMI 618
  Reopening of assessment u/s 147 - no notice u/s 143(2) was issued - HELD THAT:- As gone through the assessment order AO has simply stated that the notice u/s 148 was issued on 23.03.2016 after recording the reasons placed on record, consequently; notice u/s 142(1) was issued on 21.07.2016. From the assessment order, it is clear that no notice u/s 143(2) was issued which is mandatory condition for framing the assessment u/s 147 - the assessment was framed is without authority of law - therefore, hold that the assessment is bad in law and the same is hereby quashed. Have quashed the assessment order on the ground that no notice u/s 143(2) was issued, the other grounds on merit have become of academic in nature, hence not adjudicated - Appeal of the assessee is allowed.

  ---

• 2021 (10) TMI 617
  Undisclosed income - addition on the basis of amount reflected in Form No.26AS - difference in the gross receipts declared by the assessee in its P L A/c and as reflected in Form No.26AS - HELD THAT:- AO has clearly brought out that there was difference in the gross receipts declared by the assessee in its P L A/c and as reflected in Form No.26AS. AO was justified in re-opening of the assessment. Regarding merit of the addition, the contention of the assessee is that the receipt pertained to one of the partners namely, Shri Harjot Singh Anand, who confirmed this fact on duly sworn affidavit. Without prejudice to other contention, it is also stated that the entire receipts as reflected in Form 26AS only profit element embedded in such receipt could be taxed. No dispute with regard to the fact that the AO taxed the entire difference of receipts - undisputedly, there is no finding by the AO or any material placed on record, suggesting that the assessee had made investment out of undisclosed source for earning of gross receipts. AO simply added the difference of receipts as recorded in Form 26AS and as disclosed by the assessee firm in its P L A/c. This action of the Assessing Officer is contrary to the settled principle of law. Therefore, such action could not be sustained. AO ought to have taxed the only profit element embedded into such receipts. As by any stretch of imagination, the gross receipt would not partake the character of income. Respectfully following the reasoning of the Co-ordinate Bench of this Tribunal rendered in the case of Raghubir Singh [ 2019 (11) TMI 706 - ITAT DELHI] we hereby direct the Assessing Officer to apply net profit @ 8% on the difference of receipts that comes to Rs. 4,31,510/-. Hence, addition is sustained to the extent of Rs. 4,31,510/- and rest of the addition is, hereby deleted. Thus, grounds raised by the assessee are partly allowed.

  ---

• 2021 (10) TMI 616
  Addition on account of project expenses - Allowable business expenses or not? - HELD THAT:- The issue contested herein regarding the addition on account of project expenses was decided in favour of the assessee by the Tribunal in Assessment Year 2010-11 [ 2017 (9) TMI 1954 - ITAT DELHI] and 2011-12 [ 2019 (8) TMI 1767 - ITAT DELHI] . Thus the order of the CIT(A) in deleting the addition on account of the net project expenses does not require interference. The appeal of the Revenue is dismissed.

  ---

• 2021 (10) TMI 615
  Disallowance of depreciation on non-compete fees - Whether it has kind of right which could be owned or transfer to third person similar to rights of any other kind of similar nature as mentioned in section 32(1)(ii).? - HELD THAT:- We are of the considered view that non-compete fee paid by the assessee in terms of Memorandum of Understanding for acquiring trademark is nothing but an intangible asset in the nature of any other business or commercial rights of similar nature which qualifies for depreciation u/s. 32(1)(ii) of the Act. Hence, we direct the AO to delete the additions made towards disallowance of depreciation claimed on non-compete fee. Disallowance of deduction claimed u/s.35 towards expenditure incurred for Research Development (R D) purpose - assessee has claimed 100% deduction towards two motor cars purchased and given to two staffs, who are working for R D unit - AO has denied deduction claimed u/s.35 on the ground that the assessee has failed to prove exclusive use of vehicles for R D purpose - HELD THAT:- As gone through reasons given by the AO, but could not subscribe to reasons given by the AO for the simple reason that, once having accepted the fact that cars were given to staff who are working for R D unit, then the AO is erred in denial of deduction only for the reason that log book was not filed to prove use of vehicle exclusively for R D purpose, because it is irrelevant whether vehicles are exclusively used for R D purpose or other than R D purpose, but as long as the staff are working for R D unit, then it is as good as expenditure was incurred for R D purpose. Therefore, we are of the considered view that the AO as well as the ld.CIT(A) were erred in denying deduction claimed u/s.35 of the Act, towards motor cars provided to staff and hence, we direct the AO to delete addition made towards disallowance of depreciation. Deemed dividend addition u/s.2(22)(e) - assessee has received loan from its sister concern - HELD THAT:- In this case, loan was subsistence at the end of the financial year and further, the sister company s accumulated profits was over and above the amount of loan given to the assessee. Therefore, we are of the considered view that amount received by the assessee from sister concern clearly falls within the provision of section 2(22)(e) of the Act and thus, we are inclined to uphold the findings of ld.CIT(A) and reject ground taken by the assessee. Disallowance of expenditure relatable to exempt income u/s 14A - assessee has earned exempt income by way of dividend from mutual funds to the tune of Rs. 11,31,040/-, but did not made any disallowance of expenditure relatable to exempt income - AO has determined disallowance of expenditure relatable to exempt income by disallowing 5% of exempt income as expenditure relatable to exempt income - HELD THAT:- Admittedly, prior to assessment year 2008-09, the provisions of Rule 8D was not applicable for determining disallowance of expenditure u/s.14A of the Act. It is also an admitted fact that prior to assessment year 2008-09, various Courts and Tribunals have directed the AO to estimate 2 - 3% of exempt income towards expenditure relatable to exempt income u/s.14A of the Act, depending upon facts of each case - we direct the AO to restrict disallowance of expenditure relatable to exempt income u/s.14A of the Act, to the extent of 2% of exempt income earned for the year.

  ---

• 2021 (10) TMI 614
  Income accrued in India - permanent Establishment in India - Whether Freight Connections India Pvt Ltd (FCIPL) does not constitute a dependent agent PE of the assessee in India? - India-Mauritius DTAA - HELD THAT:- The Co-ordinate Bench in the case of Bay Lines (Mauritius) [ 2018 (2) TMI 1524 - ITAT MUMBAI] has held that M/s Freight Connection India Pvt. Ltd. is an agent of independent status and hence it cannot be considered as constituting Agency PE of that assessee. The decision so rendered shall also apply to the instant case and accordingly, we hold that M/s Freight Connection India P. Ltd. shall not constitute Agency PE of the assessee. The Tribunal in assessee s own case for AYs 1998-99 to 2012-13 held where a foreign enterprise carries on business in a country through an agent, the provisions of Article 5(1) relating to Fixed place PE does not come into play. The co-ordinate bench has also noted that the appeal filed by challenging the decision so rendered by the Tribunal in the case of Delmas France [ 2012 (1) TMI 9 - ITAT MUMBAI] has been dismissed [ 2014 (11) TMI 1173 - BOMBAY HIGH COURT] The facts, being identical, following the decision of the coordinate bench rendered in the case of Bay lines (Mauritius)(supra), we hold that the assessee does not have Fixed place PE in India. Appeal by the revenue stands dismissed.

  ---

• 2021 (10) TMI 613
  Reopening of assessment u/s 147 - eligibility of reasons to believe - whether Addition based on borrowed reasons? - Bogus purchases - HELD THAT:- Assessing Officer has simplictor taken the reasons recorded in another cases. In fact, from first page of the reasons it is mentioned that the information of accommodation entry includes A.Y. 2006-07. It can be further seen that there is a reference to some verification and disposing off the objections filed by most of the assessees against reopening of their cases u/s. 147. Taking the reasons as it is without verifying the assessee case, the Assessing Officer formed a belief that the assessee has also made bogus purchases and the same has to be treated as income of the assessee for assessment year 2007-08. The Assessing Officer proceeded to make opinion on the basis of borrowed reasons and there is no independent application of mind and in such circumstances and facts of the case, reopening of the assessment u/s. 147 of the Act is bad in law and is accordingly directed to be quashed - See RAJENDER PARSAD PROP. M/S. PRIYA ENTERPRISES VERSUS THE I.T.O, WARD 63 (3) , NEW DELHI [ 2018 (10) TMI 143 - ITAT DELHI] - Decided in favour of assessee.

  ---

• 2021 (10) TMI 612
  Revision u/s 263 by CIT - AO had accepted the surrendered income of the assessee without conducting any inquiry regarding their source - survey u/s 133A - HELD THAT:- What transpires from a bare reading of the statement of the assessee is that he had merely made a surrender over and above his normal income for the year. Nothing more can be read into the statement more particularly to the effect, as canvassed by assessee, that the surrender specifically was stated to be on account of his business or profession - For the sake of arguments, even if it is accepted so, the assessee cannot derive any benefit from a mere oral submission/statement made by him as the same is not sufficient to explain the source of advance. Therefore, this contention for the assessee is also rejected. Assessee that the assessee had paid advance taxes on the surrendered income at the normal rate is also of no relevance, in our view, since merely paying taxes at the normal rates on a particular income will not determine its character as being from explained sources. We are in agreement with the Ld. Pr. CIT that the AO had accepted the surrendered income of the assessee as being from the business or profession without making any enquiries regarding the same despite the fact that the documents/material found during search did not reveal the nature of the income at all and no explanation was offered by the assessee during assessment proceedings, nor in the statement recorded during search. Even before the Ld. Pr. CIT during revisionary proceedings when asked to explain the source the assessee, we find, was unable to prove the source as being business and profession - the findings of the CIT that the order passed by the AO in the light of the above facts and circumstances was erroneous and prejudicial to the interest of the Revenue, we hold is correct. The order of the Ld. Pr. CIT passed u/ s 263 of the Act is, therefore, upheld - Appeal of the assessee is dismissed.

  ---

• 2021 (10) TMI 611
  Penalty u/s. 271G - international transactions during the year with its AE and benchmarked the same using TNMM method in its Transfer Pricing Study which has been accepted by Ld. TPO - assessee did not furnish segmental profitability under the two segments owing to inherent nature of assessee s business - HELD THAT:- As practically difficult to maintain the details as called for by Ld. TPO. If the Ld. Transfer Pricing Officer was not satisfied with the benchmarking of the assessee under TNMM, nothing prevented him from rejecting assessee benchmarking and proceed to determine the ALP independently by applying any one of the prescribed methods. The blame for failure on the part of the Transfer Pricing Officer to determine the arm s length price cannot be fastened with the assessee. Similar issue of penalty u/s. 271G for diamond industry has been adjudicated in assessee s favor in various decisions of this Tribunal. The coordinate bench of Mumbai Tribunal in the case of D. Navinchandra Exports (P.) Ltd. [ 2017 (11) TMI 1307 - ITAT MUMBAI] held that considering the practical difficulties in furnishing the segment wise details of AE segment and non-AE segment transactions in diamond industry, no penalty under Sec. 271G could justifiably be imposed for failure to furnish the said information.

  ---

• 2021 (10) TMI 610
  TP Adjustment - International transaction pertaining to provision of sourcing support services to its Associated Enterprises ( AEs ) - functional profile of the Appellant - characterizing as a trader OR service provider - Whether Appellant has developed human resource and supply chain intangible for its AEs? - HELD THAT:- As entire TP approach was on the premise that the services of the appellant are akin to that of a trader and therefore, the TPO has selected the comparables identifying traders as comparables. We are of the considered view that the TPO has proceeded on an erroneous premise which has resulted into his TP adjustment erroneously. The assessee does not have any market risk, product liability risk, service liability risk, credit risk and price risk. The facts on record show that the assessee does not take part in purchase decisions. In fact, the assessee is not engaged and does not have any legal right to do so, in the activity relating to maintaining any stock of merchandise manufactured by vendors and/or reselling the same to group s retail entities on its own account. In other words, the assessee does not bear any risk associated with carrying/owing/maintaining stock of inventory. The glaring fallacy in the approach of the TPO lies on the fact that he has adopted FOB cost of goods procured from India by the AEs through the assessee as cost base. In our considered view, this approach of the TPO is in complete disregard to the functional profile of the assessee. The assessee operates in a limited risk environment providing routine support services to group entities and accordingly, entitled to be remunerated based on assured return. TPO has not accepted the decision of Li Fund [ 2014 (1) TMI 501 - DELHI HIGH COURT] solely on the ground that an appeal has been recommended before the Hon ble Apex Court. In our considered view, when the operation of the decision of the Hon ble Jurisdictional High Court has not been suspended or stayed, it was mandatory upon the TPO to follow the binding decision of the Hon ble Jurisdictional High Court. We set aside the TP adjustment made by the Assessing Officer and direct him to delete the addition - Decided in favour of assessee.

  ---

• 2021 (10) TMI 609
  Disallowance on account of contribution made by the assessee bank to LIC on account of gratuity fund - HELD THAT:- We are of the considered view that when application for granting approval for the gratuity trust with the Life Insurance Corporation of India has been filed well within time i.e. 02-01-2009, it is to be allowed from the date of application itself and not prospectively as Ld. Pr. CIT has done in this case. Following the order passed by Coordinate Bench of Tribunal, we remit this issue back to the AO to decide afresh after getting decision from the Pr. Commissioner of Income Tax on the application of the assessee. Application of the assessee is reportedly pending with Pr. CIT who shall decide the same expeditiously in accordance with law from the date of application and thereafter AO shall decide the issue afresh accordingly. Disallowance on account of dividend received by the assessee bank from UP Cooperative Federation u/s. 80P(4) of the Act - HELD THAT:- Undisputedly, assessee bank has received dividend income for the years under consideration from the investment made with UP Cooperative Federation. It is also not in dispute that assessee bank is a cooperative bank registered with Reserve Bank of India. When we peruse the provisions contained u/s. 80P(4), 80P(2)(d) of the Act, this deduction is not available to the cooperative bank.

  ---

• 2021 (10) TMI 608
  Addition on account of deferred payment guarantee commission - HELD THAT:- Both the parties mutually agreed that this issue is already covered by the order of this Tribunal in assessee s own case for A.YRs. 2001-02 and 2002-03 [ 2021 (7) TMI 1275 - ITAT MUMBAI] identical issue raised in this ground by the assessee is now settled in favour of the assessee and against the Revenue by the decisions of the Tribunal rendered in assessee s own case in as 2000-01, 1984-85, 1996-97, and 1999-2000. Consistent with the view taken therein, we set aside the impugned order passed by the learned CIT(A) by allowing the ground raised by the assessee - assessee also brought to our notice that the Assessing Officer has given effect to the order of the Tribunal and has allowed the deduction for deferred payment guarantee commission for the assessment year 1984-85 to 1989-90 and 1996-97. Consequently, the ground raised by the assessee is decided in favour of the assessee and against the Revenue. Disallowance of depreciation on securities - HELD THAT:- Ad hoc deduction could be allowed against the amount receivable on redemption of securities which had matured and become due for payment before the close of the accounting year. This ground therefore fails. Disallowance of payment made in respect of scientific research - HELD THAT:- Both the parties mutually agreed that this issue is already covered by the order of this Tribunal in assessee s own case for A.YRs. 2001-02 and 2002-03 [ 2021 (7) TMI 1275 - ITAT MUMBAI] disallowance on account payments for scientific research is decided against the assessee and in favour of the Revenue. Disallowance of expenses u/s.14A of the Act r.w.r. 8D of the Rules - HELD THAT:- Computation mechanism provided in Rule 8D which was introduced from 24/03/2008 could be made applicable only from A.Y.2008-09 and hence, the same cannot be applied for earlier years prior to A.Y.2008-09. The ld. AR fairly submitted that in order to maintain consistent stand, this Tribunal in earlier years in assessee s own case had disallowed 1% of exempt income u/s.14A of the Act as expenses attributable for earning the exempt income. DR fairly agreed that the said disallowance to be made. Accordingly, we direct the ld. AO to disallow only 1% of exempt income u/s.14A of the Act which would be in line with disallowance made in earlier years. Accordingly, the ground raised by the assessee are partly allowed Reduction in the claim of deduction made u/s.80M - HELD THAT:- We also find that this issue apparently had arose pursuant to the order passed by the ld. Administrative Commissioner of Income Tax u/s.263 of the Act wherein deduction u/s.80M of the Act was sought to be reduced. We find that assessee had preferred an appeal against the said order of the Administrative Commissioner u/s.263 of the Act before this Tribunal. This Tribunal had vide its order had set aside the order to the extent of restriction of claim of deduction of 80M of the order. Hence, the entire reduction u/s.80M of the Act which was made by the ld. AO pursuant to 263 proceedings becomes infructuous. Disallowance of depreciation on leased assets - HELD THAT:- Both the parties mutually agreed that this issue is already covered by the order of this Tribunal in assessee s own case for A.YRs. 2001-02 and 2002-03 [ 2021 (7) TMI 1275 - ITAT MUMBAI] Disallowance of broken period interest - HELD THAT:- During the course of hearing, both the leaned Counsels for the parties agreed that the identical issue raised in this ground by the assessee is now settled in favour of the assessee and against the Revenue by the decisions of the Tribunal rendered in assessee s own case in assessment years [ 2021 (7) TMI 1275 - ITAT MUMBAI] for A.Y 2001-02 and 2002-03. Write off of bad debts u/s.36(1)(vii) of the Act in respect of non-rural advances - HELD THAT:- We find that both the parties mutually agreed that this issue has already been adjudicated by this Tribunal in assessee s own case for A.Y.2008-09 [ 2020 (2) TMI 1350 - ITAT MUMBAI ] assessee is entitled to deduction under section 36(1)(vii) of the Act being the amount of bad debts written off (other than in respect of rural advances). This issue of assessee appeal is allowed. Claim of deduction for entire provision for bad and doubtful debts u/s.36(1)(viia) - HELD THAT:- Both the parties mutually agreed that this issue is already covered by the order of this Tribunal in assessee s own case for A.Y 2001-02 and 2002-03 [ 2021 (7) TMI 1275 - ITAT MUMBAI] against assessee. Interest u/s.234C of the Act should be chargeable only on the returned income and not on the assessed income. Levy of interest u/s.234D - This issue is already covered against the assessee in view of the decision of the Hon ble Jurisdictional High Court in the case of CIT vs. Indian Oil Corporation [ 2012 (9) TMI 517 - BOMBAY HIGH COURT ] Taxing the income earned from foreign branches in India - HELD THAT:- As this issue has already been adjudicated by this Tribunal in assessee s own case for A.Y 2001-02 and 2002-03 [ 2021 (7) TMI 1275 - ITAT MUMBAI] restored the issue to the file of the Assessing Officer and directed him to decide the controversy afresh by giving an opportunity of being heard to the assessee in accordance with !aw by following similar guidelines as given by the Tribunal in the aforesaid misc. application. Consistent with the view as aforesaid, we set aside the order passed by the learned Commissioner (Appeals) and restore the issue to the file of the Assessing Officer with similar direction. Write off of bad debts u/s.36(1)(vii) - HELD THAT:- All the facts necessary for adjudication of the additional ground is already on record and hence the same are hereby admitted AR before us stated that this deduction has been claimed by the assessee in respect of write off of bad debts u/s.36(1)(vii) of the Act in light of decision of the Hon ble Supreme Court in the case of Vijaya Bank [ 2010 (4) TMI 46 - SUPREME COURT ]. We find that similar issue had arose in assessee s own case for A.Y.2001-02 and 2002-03 wherein this Tribunal vide its order dated 12/07/2021 had restored the issue to the file of the ld. AO. Recovery of bad debts written off which according to the assessee should not be liable to tax in terms of Section 41(4) - HELD THAT:- All the facts necessary for adjudication of the additional ground is already on record and hence the same are hereby admitted. We find that this issue already was the subject matter of adjudication by this Tribunal in assessee s own case for A.Yrs 2001-02 and 2002-03 [ 2021 (7) TMI 1275 - ITAT MUMBAI] restored the issue to the file of the Assessing Officer and directed him to decide the controversy afresh by Giving an opportunity of being heard to the assessee in accordance with law by following similar guidelines as given by the Tribunal in the aforesaid misc. application. Consistent with the view as aforesaid, we set aside the order passed by the learned Commissioner (Appeals) and restore the issue to the file of the Assessing Officer with similar. Disallowance of staff welfare expenses incurred by the assessee for reservation of seats in the schools for the children of the bank officers - HELD THAT:- Both the parties mutually agreed that this issue is already covered by the order of this Tribunal in assessee s own case for A.YRs. 2001-02 and 2002-03 [ 2021 (7) TMI 1275 - ITAT MUMBAI] we uphold the order of the learned CIT(A) on this issue and decline to interfere in the order as such. While concluding, we place on record that the appeal filed by the Revenue in assessee s own case before the Hon ble Jurisdictional High Court for the assessment year 1996-97, the said appeal was also dismissed - Thus, ground no.1, raised by the Revenue is dismissed.

  ---

• 2021 (10) TMI 607
  Exemption u/s 11 - charitable activity u/s 2(15) - Whether activity of the trust falls under the clause education and medical relief and not the last limb of advancement of general public utility? - HELD THAT:- As decided in own case [ 2019 (9) TMI 1598 - ITAT AHMEDABAD] appellant cannot be said to be a profit making organization when the pre-activity is entirely charitable in nature which has been rightly taken care of by the Learned CIT A and hence we confirm the same. In the result revenue s appeal is dismissed. Addition of donation as application of fund - HELD THAT:- As decided in own case [ 2019 (9) TMI 1598 - ITAT AHMEDABAD] if the donations have been made from the income of the previous year and not out of the accumulation under section 11(2) then the same be eligible to be considered as application of income as long as the recipients are charitable organizations. Having regard this particular aspect of the matter the AO has been further directed by the Learned CITA to verify as to whether these trust have the status of exemption under the Income Tax Act and also whether they are charitable organisation. Subject to such verification of the objects of the recipients the Ld. AO was directed to treat the application of income of the assessee, which in our considered view is just and proper and without any ambiguity so as to warrant interference - Decided against revenue. Corpus donation receipts - HELD THAT:- As decided in own case [ 2019 (9) TMI 1598 - ITAT AHMEDABAD] CIT(A) observed that Section 2(15) r.w.r. 13(8) of the Act is not applicable to the case of the appellant and further that the appellant would eligible to claim benefit u/s. 11 and 12 of the Act including the deduction u/s. 11(1)(d) of the Act which has been confirmed by us in this appeal. The Learned CIT(A) has, therefore, directed the Learned Assessing Officer to verify whether the corpus donation were received or the voluntary donations have been received by the appellant with a specific direction taking into consideration the entire aspect of the matter, which in our considered opinion is just and proper without any infirmity so as to warrant interference. - Decided against revenue.

  ---

• 2021 (10) TMI 606
  Reopening of assessment u/s 147 - bogus purchases - Estimation of income - HELD THAT:- We find that at the stage of issue of notice, the A.O. was not sure whether the assessee availed the alleged accommodation entry of unsecured loan or of alleged bogus purchases. There has to be a reasonable material before the AO on the basis of which a reasonable person can make requisite belief. The A.O. issued notice under section 148 in absence of reasonable material to form a reasonable belief that income has escaped tax. Under the circumstances, the action of the A.O. of reopening assessment in exercise of the power under section 148 of the Act cannot be sustained. Accordingly, we quash the re-assessment proceeding initiated in the case of the assessee. As we have quashed the reassessment, therefore, adjudication on the additions have become academic. In the result the Ground No. 1 of assessee s appeal is allowed.

  ---

• 2021 (10) TMI 605
  TP Adjustment - MAM selection - payment(s) of sub-license fee for use of trade mark of Italcementi , procurement services fee, consultancy service fee and payment of consultancy fee for using EASY supply portal - transactions followed by adoption of the transactional net margin method (TNMM) as the most appropriate method MAM - as per DR lower authorities have rightly adopted a direct method i.e., CUP which carries precedence over all other indirect methods - HELD THAT:- We find no reason to accept the Revenue s instant argument more particularly in view of the fact that this is second round of consequential proceedings wherein the earlier learned co-ordinate bench had already rejected the very contentions seeking to decline both aggregation as well as TNMM. Assessee had not even furnished the relevant details having adopted aggregation as well as TNMM method in the consequential proceedings. We find no substance in the Revenue s instant last argument as well since this is once again a second round of assessment wherein no such objections had been put forth from the departmental side in the former round. Be that as it may, we therefore accept the assessee s contentions seeking to imply aggregation as well as TNMM method and leave it open for the TPO to finalize the consequential computation as per law. We further make it clear that it shall be very much open for the assessee to file on record all the necessary details pertaining to the comparable(s) list submitted in TNMM in the consequential computation.

  ---

• 2021 (10) TMI 604
  Validity of reopening of assessment u/s 147 - failure on the part of the assessee to disclose truly and fully all material fact necessary for the assessment - As argued AO has not obtained sanction from Commissioner of Income Tax before issue of notice u/s 148 of the Act as required u/s 151 - HELD THAT:- As abundantly clear that assessing officer has obtained sanction from Commissioner of Income Tax before issue of notice u/s 148 of the Act as required u/s 151 of the Act, therefore, ground raised by the assessee is hereby dismissed. Issue of jurisdiction - During the course of hearing the Bench asked ld Counsel to provide the copy of original assessment made under section 143(3) of the Act, however, ld Counsel failed to provide the copy of the original assessment framed under section 143(3) of the Act, therefore it is not possible for the Bench to examine whether all books of accounts, documents and evidences were submitted during the original assessment proceedings and assessing officer has examined these or not? Hence, plea of the ld Counsel that assessing officer cannot reopen the assessment beyond a period of four years is not tenable. Hence, according to us assessee has not disclosed all the facts necessary for making the assessment; therefore, we dismiss the ground raised by the assessee. Not only there existed new information with the AO from the credible sources, but also he had applied his mind and recorded the conclusion that the purchases claimed were non-genuine/bogus and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The requirements of section 147 r.w.s. 148 have clearly been met; and the reopening is held justified and legal. The contention of the ld Counsel that the report of the Director of Income Tax (Investigation) -II, Mumbai, cannot constitute a reason to believe within the meaning of section 147 is misplaced in law and facts. Notice u/s 143(2) issued or not? - AO did not issue the notice under section 143(2) of the Act. We note that notice under section 143(2) should be issued by the Assessing Officer to assume the jurisdiction as well as to complete the scrutiny assessment procedure. The proviso to section 143(2) puts an embarge on the Assessing Officer to exercise jurisdiction. It is the discretion of the Assessing Officer to accept the return of income of assessee as it is, or to proceed further with the assessment of income, once the Assessing Officer decided to proceeds he has to issue notice under section 143(2) to make the assessee aware that his return of income has been selected for scrutiny assessment. We note that omission on the part of the Assessing Officer to issue notice under section 143(2) cannot be a procedural irregularity and the same is not curable and therefore the requirement of notice under section 143(2) cannot be dispensed with. This default of non-issue of notice u/s 143(2) of the Act is fatal to the order of re-assessment and have rendered the whole reassessment proceeding void-ab-initio being without jurisdiction - Decided in favour of assessee.

  ---

• 2021 (10) TMI 603
  Assessment u/s 153C - jurisdictional conditions precedent to the issue of a notice u/s.153C - CIT(A) recorded that undisputedly certain documents were seized, but the contents thereof are reflected in the books of account and financial statements maintained and submitted by the assessee to the authorities and therefore, they cannot be dubbed as incriminating material? - HELD THAT:- In CIT vs. Sinhgadh Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] held that one of the jurisdictional conditions precedent to the issue of a notice u/s.153C of the Act is that money, bullion, jewellery or other valuable article or thing or any books of account or document must be seized or requisitioned for the relevant assessment year for issue of notice u/s. 153C - CIT(A), therefore, observed that in order to reopen the assessment of other person u/s. 153C of the Act for any assessment year earlier to the year of search, not only a direct corelation with the document is required, but also that such documents must be incriminating in nature, namely, such documents found as a result of search and belongs to or pertains to or relates to the assessee qua the assessment year. CIT(A) properly appreciated the effect of the documents and rightly applied the binding precedent rendered by Hon ble Apex Curt in the case of CIT vs. Sinhgadh Education Society(supra). We, therefore, do not find anything illegality or irregularity in the findings of the ld. CIT(A) and as a result, decline to interfere with the same. We, accordingly, find the grounds of appeal as devoid of merit and dismiss the same.

  ---

• 2021 (10) TMI 602
  Non Filling of E-appeal - Maintainability of appeal in the name of a dead person - CIT(A) dismissed the appeal filed by the assessee on the ground that the same was filed manually instead of electronically and further the appeal has been filed by quoting the PAN of Shri Bhupendra Kumar Bishnoi who was not alive at the time of filing of appeal and, therefore, the appeal in the name of a dead person is not maintainable - HELD THAT:- We deem it proper to restore the issue to the file of the CIT(A) with a direction to grant one more opportunity to the assessee to file the appeal electronically by the Legal-Heir of the deceased person. CIT(A) shall condone the delay, if any, and admit the appeal and decide the issue on merit, after giving due opportunity of being heard to the assessee - we hold and direct accordingly. Grounds raised by the Assessee are allowed for statistical purposes

  ---

• 2021 (10) TMI 601
  LTCG - Proof of sale transaction - assessee in substance submitted as not sold the land under consideration rather the buyer by fraudulent means has got the sale deed registered in his favour - case of the assessee is that the subject transaction has been carried out under fraudulent circumstances and on the pretext of certain promises and agreement between the parties which have not been fulfilled by the buyer - case of the Revenue is that the assessee has executed a sale deed for sale of the land which has been duly registered and has not been cancelled till date and as per sale deed, the property has been transferred and possession has been handed over to the buyer and therefore, it is clear that a transfer has taken place which is liable for capital gains - HELD THAT:- In the instant case, as we have noted above, subsequent to entering into the sale deed, the assessee has taken series of steps against the buyer from time to time by way of filing an FIR, thereafter, suit for injunction in court of civil judge, thereafter civil appeal before the Add. Judge and lastly, by way of filing a civil writ before the Hon ble Rajasthan High Court where the Hon ble Court has directed to maintain a status quo and the case of the assessee before the Hon ble Court is that the subject transaction has been carried out under fraudulent circumstances and on the pretext of certain promises and agreement between the parties which have not been fulfilled by the buyer and the Hon ble Rajasthan High Court directed to maintain status-quo as regards the possession, alienation, construction and creation of third party interest in the suit lands, pending the writ petition. The Stay application stands disposed of. In light of aforesaid discussions and in the entirety of facts and circumstances of the case and in the fitness of things, we are of the considered view that the matter need to be set-aside and remanded to the file of the Assessing officer who is hereby directed to decide the same afresh after taking into consideration the decision of the Hon ble Rajasthan High Court in the aforesaid writ petition which has a direct bearing on the matter. Determining sale consideration u/s 50C - We believe that in light of differential approach and valuation adopted by the stamp duty authorities in case of assessee and in case of brother of the assessee in respect of similar situated property as so claimed, the reference to DVO becomes imperative to take the same into consideration and determine the fair market value of the property. Given that the AO had go ahead in the matter without referring the matter to DVO, it gives rise to another reason why we are of the considered view that the matter deserve to be set-aside to the file of the Assessing officer who is hereby directed to refer the matter to DVO and decide as per law. Since we are setting aside the matter, the Assessing officer is also directed to consider other contentions raised by the ld AR regarding non-allowance of indexed cost of acquisition while determining capital gains in the hands of the assessee and decide as per law. The assessee is also hereby directed to place on record of the Assessing officer developments and status of the proceedings before the Hon ble Rajasthan High Court in the matter on regular basis and a copy of the order/directions so passed by the Hon ble Rajasthan High Court in aforesaid writ petition as soon as copy of the order is received or made available on the official website of the Hon ble Rajasthan High Court and other information/documents as so desired by the Assessing officer. Needless to say, the assessee be allowed a reasonable opportunity before deciding the matter.

  ---

• Customs

• 2021 (10) TMI 600
  Recovery of interest for drawback amount - definite stand of the petitioner is that no such order has been served on him and before which, no such proceedings or summons have been issued - principles of natural justice - HELD THAT:- An order seems to have been passed against the petitioner, which is starring at the petitioner and the same has to be challenged in the manner known to law. In order to enable the petitioner to challenge those orders, this Court feels that those orders along with the connected materials shall be furnished to the learned Counsel for the petitioner and on receipt of the same, it is open to the petitioner to challenge those orders. After challenging the main orders, depending upon the challenge, the present challenge made with regard to the consequential orders shall be maintained. The Writ Petition stands disposed of.

  ---

• 2021 (10) TMI 599
  Refund of amount deposited during the investigation by the respondent - errors apparent on the face of record or not - HELD THAT:- The grounds raised do not relate to alleged errors apparent on the face of the record, and no error, in fact, is pointed out in the judgment under review. However, from the circumstances now brought to our notice, firstly, the Department is independent and none has restricted the authority or stifled the functional duty of the Revenue to act in determining the duty/additional duty payable by the respondent against the subject import in accordance with law. It is made clear that the Revenue is independent in its authority and given liberty to proceed in accordance with law in determining the duty/additional duty, as the case may be, payable by the respondent by passing necessary orders - Petition dismissed.

  ---

• 2021 (10) TMI 598
  Jurisdiction - power of Additional Director General (DRI) to issue SCN - proper Officer to issue SCN u/s 28 (4) read with Section 2 (34) of Customs Act, 1962 or not - HELD THAT:- In the case of COMMISSIONER OF CUSTOMS, KANDLA VERSUS M/S. AGARWAL METALS AND ALLOYS [ 2021 (9) TMI 316 - SUPREME COURT] the Hon ble Apex Court has follow up the decision of M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [ 2021 (3) TMI 384 - SUPREME COURT] and it is held that the Additional Director General, DRI is not a proper Officer within the meaning of Section 28 (4) read with Section 2 (34) of Customs Act, 1962. The Additional Director General, DRI, Ludhiana is not a proper Officer to issue Show Cause Notice under Section 28 (4) read with Section 2 (34) of Customs Act, 1962 - appeal allowed - decided in favor of appellant.

  ---

• Corporate Laws

• 2021 (10) TMI 597
  Territorial Jurisdiction - Validity of continuation of EOCC.No.104/2016 now pending on the file of the learned Additional Chief Metropolitan Magistrate, Economic Offences Wing-1 at Egmore, Chennai - HELD THAT:- The privilege provided to the respondent/complainant of explaining why it was originally lodged in Chennai and if later lodged in Coimbatore, reasons for the same to be addressed to the said competent Court and the learned Magistrate may take a call on accepting or rejecting those reasons. It would be inappropriate for this Court to indicate to the respondent herein to prefer a complaint at Coimbatore. An obligation is placed on the respondent to explain the circumstances necessitating filing the complaint originally in Chennai and thereafter, shifting the said complaint to Coimbatore. Let those reasons be forwarded to the competent Court at Coimbatore, if the respondent has instructions to proceed further. The Criminal Original Petition is allowed and the proceedings in EOCC.No.104/2016 now pending on the file of the learned Additional Chief Metropolitan Magistrate / Economic Offences Wing-1, Egmore, Chennai, stands quashed.

  ---

• 2021 (10) TMI 596
  Oppression and Mismanagement - Direction to Special Officer who had been earlier appointed in the petition to appoint valuer by taking names from the petitioners as well as the respondents of their choice - HELD THAT:- The learned National Company Law Tribunal is agreed upon that it is a situation of deadlock where in view of article 53 of the articles of association of company with original petitioners being on one side and the other three brothers being on the other quorum of two-third of the directors could not be achieved except with the attendance of one of the original petitioners and considering the various litigations between the parties, the learned National Company Law Tribunal was right in observation that there was a deadlock. When the record shows that the learned National Company Law Tribunal had earlier given directions to call for valuation report of the shares, the natural corollary would be that on receipt of the report, if objections are not filed, the parties can be asked to buy out or sell out. Given the facts of the matter, what appellants of these appeals are, in the name of principles of natural justice seeking is that they should have been allowed to take their own time before National Company Law Tribunal acted upon the valuers report that had been received. The appellants are critical of the Special Officer appointed by the learned National Company Law Tribunal (who was appointed to ensure smooth holding of board meetings) and took opportunity to file even against such Special Officer a contempt application. The impugned order shows that when the original respondents did not co-operate in naming a valuer the Special Officer selected a name and got the valuation done. The respondents have been agitating over this claiming that the Special Officer could not have on his own gone ahead to appoint a valuer and should have moved the National Company Law Tribunal for modification. The learned National Company Law Tribunal does not appear to have found fault with such procedure adopted by the Special Officer. The impugned order as has been passed should not be interfered with. In the facts of the matter, it appears to be appropriate course and it is open to the parties to quote higher price for buy out/sell out as has been ordered by the learned National Company Law Tribunal. Appeal dismissed.

  ---

• Insolvency & Bankruptcy

• 2021 (10) TMI 595
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational debt or not - power of toll collection - Section 113 of the Delhi municipal Corporation Act, 1957 - existence of debt and dispute or not - HELD THAT:- Under this Agreement, toll taxes are to be collected by the Respondents from commercial vehicles entering Delhi from the 124 toll points around Delhi. This debt arises under a contract. The total amount under this contract is for a period of 5 years. The operational debt claimed by the Petitioner under Part-IV of Form 5 of the Petition is about Rs. 788,45,20,136/-. The Bench notes that it has to be demonstrated by the Petitioner that the claim is an operational debt as defined in Section 5(21) 5(21) operational debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority; - it is clear to the Bench that Petitioner is not providing any goods or services to the Respondent and to that extent is not covered under the definition of Operational Debt u/s 5(21). The Bench is also of the view that the word recoverable from any person from whom such sum is due as an arrear of tax under this Act introduces deeming fiction that the dues can be recovered as an arrear of tax to take benefit of the machinery under the DMC Act. However, this does not make a contractual due which is the case in the instant matter, as a due converted into a tax. The distinction remains between (a) dues which are recoverable as arrears of tax, and (b) dues which are tax, arising under the statute. The Bench is of the view that, what is covered under Section 5(21) is the dues which are arising under the statute and not dues which are recoverable as arrears of tax. Pre-existing disputes or not - HELD THAT:- The Bench notes that there are pre-existing ongoing disputes between the Petitioner and the Respondent pending before the Hon ble High Court at Delhi in which there are several interim orders are currently under operation. There are multiple proceedings filed by both the Petitioner and the Applicant which points towards the fact that there are pre-existing disputes which have arisen between the parties and such disputes are to be adjudicated in a Civil Court or any other forum - Even if there is nascent cross-claim on substantial grounds the same is sufficient to dismiss the Petition of any Operational Creditor. The Bench has no doubt in its mind that this Petition filed u/s 9 deserves dismissal - Petition dismissed.

  ---

• 2021 (10) TMI 594
  Seeking release of amount towards his professional fees and other expenses incurred by him during the CIRP - HELD THAT:- It is an admitted fact that the CIRP initiated against the respondent is set aside by the Hon ble NCLAT and while disposing of the appeal the Hon ble NCLAT it was observed that the Adjudicating Authority will fix the fee of IRP for the period he has functioned and in pursuance of that direction, the present application is filed. A bare perusal of the Regulation 33 shows that it is the applicant, who shall fix the expenses to be incurred on or by the IRP and if the same has not been fixed, the Adjudicating Authority shall fix the expenses and the applicant shall bear the expenses, which shall be reimbursed by the Committee (COC) to the extent it ratifies - Here in the case in hand, admittedly, there was no CoC constituted, therefore, it is directed the IBBI to examine the fee and expenses claimed by the applicant, which in its report has stated the admissible fee and expenses, which the applicant is entitled to get. It is accepted that all the recommendation of the IBBI, except towards the expenses incurred for the public announcement. Although the IBBI has rejected the claim of second public announcement, since the public announcement has been made and that has not been denied, hence it is approved/granted that the cost/expenses incurred towards the second public announcement too. The Corporate Debtor is directed to pay total amount of Rs. 6,38,470/- only towards his fee and other expenses, within a month from today - application disposed off.

  ---

• 2021 (10) TMI 593
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The documents submitted by the Financial Creditor clearly substantiate the Financial Creditor s claim that the Corporate Debtor has defaulted on repayment of loan amount. It is pertinent to mention here that, the Code requires the Adjudicating Authority to only ascertain and record satisfaction in a summary adjudication, as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent had availed the credit facilities and has committed default in repayment of the outstanding loan amount - the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt. The requirement of sub-section 5(a) of Section 7 of the Code stands satisfied as default has occurred, the present application filed under Section 7 is complete - Application admitted - moratorium declared.

  ---

• 2021 (10) TMI 592
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor in his reply to the present petition has submitted that in the present application Form-2 is not submitted with the proper disclosures as being mandatory compliance under the guidelines of Insolvency Bankruptcy Board of India . This contention of Corporate Debtor does not deserve any merit consideration as the Financial Creditor has duly submitted the Form-2 under Rule 9 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 whereby, the Proposed Interim Resolution Professional communicated its written consent. It is pertinent to mention here that, the Code requires the Adjudicating Authority to only ascertain and record satisfaction in a summary adjudication, as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent had availed the credit facilities and has committed default in repayment of the outstanding loan amount - the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt. It is thus seen that the requirement of sub-section 5 (a) of Section 7 of the code stands satisfied as default has occurred, the present application filed under Section 7 is complete - application admitted - moratorium declared.

  ---

• 2021 (10) TMI 591
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtors - existence of debt and dispute or not - HELD THAT:- It is pertinent to mention that as per part-III of Form-C, the total debt from the personal guarantor, by way of personal guarantee given to M/s. Bank of India, including interest as on 31.01.2021, amounts to Rs. 113,83,35,138.07/-. It is made known to everyone that on the date of filing this Application by the Applicant/Creditor, the interim-moratorium commences, as stipulated under Section 96(1)(a), in relation to all the debts of the personal guarantor and shall cease to have effect on the date of admission of this Application. List the matter for further proceedings in the case on 17.11.2021.

  ---

• Service Tax

• 2021 (10) TMI 590
  Principles of natural justice - seeking directions to the Respondent No. 4 to give an opportunity of hearing to the Petitioner to present its case in relation to the Second Declaration - HELD THAT:- The Respondent vide its letter dated 08th August, 2019 had pointed out that, even according to the Petitioner s own calculation, service tax liability was due and outstanding. The Petitioner was asked to deposit the balance service tax liability as calculated by the Petitioner vide the said letter. In fact, from the summons dated 20th May, 2019, it is apparent that the case was under investigation under Sections 70 and 174 of the CGST Act and the Petitioner has been asked to furnish a large number of documents including copies of challans showing its service tax liability deposited after the date of service - the said communication dated 08th August, 2019 does not indicate that the quantum of duty had either been quantified or communicated by the Respondent to the Petitioner on or before 30th June, 2019. Petition dismissed.

  ---

• 2021 (10) TMI 589
  Refund of service tax paid as pre-deposit - duty paid under protest - applicability of time limitation - HELD THAT:- Hon ble High Court of judicature at Madras in one of its decisions in the case of M/S. 3E INFOTECH VERSUS CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL, COMMISSIONER OF CENTRAL EXCISE (APPEALS-I) [ 2018 (7) TMI 276 - MADRAS HIGH COURT] has considered an almost identical issue and, has, after considering decisions of the Hon ble Apex Court as well as other High Courts, held that application under Section 11B for refund cannot be rejected on the ground that it is barred by limitation. On merits, the adjudicating authority has observed that the appellant s claim was not supported by any documentary evidences. Further, also the Chartered Accountant certificate furnished by the appellant is given in 2019 while the payments were made in the year 2008. The Chartered Accountant has specified that the said certificate was issued at the request of the appellant . Hence the certificate is only a self serving document which cannot be considered as a conclusive proof to decide the issue. Law provides permissible documentary evidences that are accepted by the sanctioning authority and apparently, no effort seems to have been made by the appellant in this regard. But considering the fact that the refund is subject to Section 11B wherein the authority has to credit the amount claimed to the welfare fund if the claimant is not entitled for the same, which having not been done, I am of the view that the appellant deserves a second chance. Case remanded back to the file of adjudicating authority before whom the appellant shall furnish necessary documentary evidences in support of its claim and the adjudicating authority shall thereafter pass a speaking order after considering all such evidences that may be furnished by the appellant in this regard - appeal allowed by way of remand.

  ---

• 2021 (10) TMI 588
  Short payment of service tax - Business Auxiliary Services - Share Transfer Agent services - Registrar to an Issue services rendered by them - appropriation of amount paid towards the demand of tax - demand of tax on Intellectual Property services received by them from foreign service providers - Manpower Recruitment or Supply agency services received by them from foreign service provider - demand of interest alongwith penalty - HELD THAT:- Undisputedly, the appellant is rendering the service of Registrar to Issue services and Share transfer agent services, both of which became chargeable to service tax w.e.f. 01 May 2006 and it has been paying service tax from that date. Reimbursable expenses recovered by the appellant from its clients - HELD THAT:- It has now been settled by the Supreme Court in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [ 2018 (3) TMI 357 - SUPREME COURT] , that no service tax can be levied on reimbursable expenses recovered by a service provider. The service tax has to be levied only for consideration received for service - the entire demand of service tax on reimbursable expenses collected from clients for the period post 1.5.2006 cannot sustain and needs to be set aside. Demand of service tax - Business Auxiliary Services on the services rendered by the appellant - period 10.09.2004 to 30.04.2006 - HELD THAT:- This issue has already been settled by the Tribunal in appellant s own case in previous name of KARVY CONSULTANTS LTD. VERSUS COMMISSIONER OF CUS. C. EX., HYDERABAD [ 2007 (12) TMI 60 - CESTAT, BANGALORE] where it was held that there is no dispute regarding the fact that the appellants are engaged in the services of share transfer agent and registrar official. They first brought into service tax net only w.e.f. 1-5-2006. The Tribunal in the case of COMMISSIONER OF C. EX., INDORE VERSUS ANKIT CONSULTANCY LTD. [ 2006 (10) TMI 61 - CESTAT, NEW DELHI] cited by the learned Advocate elaborately dealt with this issue and has given a finding that prior to this period it would not come fall within the category of Business Auxiliary Services . The current demand is for a subsequent period (10.09.2004 to 30.04.2006) and there was a change in the definition of Business Auxiliary Service . Nevertheless, it has been categorically held by the Tribunal that no service tax can be charged prior to introduction of the heads of Share Transfer Agent Service and Registrar to Issue Service from 1.5.2006. Nevertheless, the appellant paid service tax under protest during this period and thereafter claimed refund which was sanctioned by the Assistant Commissioner as per the Order of the Commissioner (Appeals). Neither the order of the Commissioner (Appeals) nor the consequential order of Assistant Commissioner sanctioning refund were assailed by the Department. Manpower Recruitment Agency Service - HELD THAT:- As per the agreement between M/s Computershare and the appellant, Ms. Kitchener was deputed/seconded to the appellant but her salary was paid by M/s Computershare and the appellant reimbursed these amount. This is not a case of Manpower Supply Agency Service rendered by Manpower Agency Service to the appellant. Therefore, the same cannot be charged to service tax under reverse charge mechanism merely because one person was sent on deputation by M/s Computershare, Australia to the appellant and the appellant had reimbursed her salary to M/s Computershare. Therefore, the demand on this count also needs to be set aside. Levy of penalty u/s 78 of FA - HELD THAT:- Firstly, the elements required for imposition of penalty under section 78 viz., fraud or collusion or wilful statement or suppression of facts have not been established in the present case. All facts were known to the Department from the beginning. The only thing which changed is that the DGCEI has chosen to take a different view from the one already taken and accepted by the Department and the learned Commissioner has chosen to agree with that view ignoring the fact that the issue was settled - Secondly, penalty under section 78 of the Finance Act is equal to the tax evaded. It is already held that the entire demand of tax in this case is not sustainable - thus, there cannot be any penalty under section 78. The impugned order is set aside. However, if any amount not payable as service tax or interest on it has already been paid by the appellant and collected from its clients, the appellant will not be entitled to refund of the same in view of section 73A of the Finance Act. Appeal allowed - decided in favor of appellant.

  ---

• 2021 (10) TMI 587
  Classification of services - Repair Maintenance or Commercial or Industrial Construction Service or Works Contract Service? - eligibility of abatement available for commercial or industrial construction service under N/N. 18/2005-ST - HELD THAT:- Reliance placed in the earlier appeal of the appellant this tribunal in M/S H KANT CO. VERSUS C.C.E. S.T. VADODARA-I [ 2019 (2) TMI 1304 - CESTAT AHMEDABAD] where Tribunal remanded the matter for verifying the fact of execution of work with material and whether the same falls under works contract. In the present case also the same fact is involved therefore, this matter also needs to be remanded for denovo adjudication to the Adjudicating Authority - Appeal is allowed by way of remand.

  ---

• Central Excise

• 2021 (10) TMI 586
  Refund - Applicability of doctrine of unjust enrichment - provisional assessments - applicability of N/N. 45/99 CE dated 25.06.1999 - refund of duty governed by the provisions contained in proviso [d] [e] of Section 11B [2] of the Central Excise Act, 1944 or not - presumption contained in Section 12B of the Central Excise Act, 1944 applies or not in case of Provisional Assessments also - HELD THAT:- Rule 9B[5] has to be read with the proviso which provides that if an assessee is entitled to refund, such refund shall not be made to him except in accordance with the procedure established under Subsection [2] of Section 11B of the Act as inserted with effect from 25.07.1999. Rule 7[6] read with the proviso provides that the duty of excise paid by the manufacturer, if he had not passed an incidence of such duty to any other person be paid to the applicant instead of crediting to the fund, the refund amount determined under Sub-rule[3]. Thus, it cannot be held that Rule 7[6] cannot be equated to Rule 9[5] inasmuch as the claim of refund is concerned. In Addison Co. Ltd., [ 2016 (8) TMI 1071 - SUPREME COURT] , the Hon ble Apex Court has held that the assessee has admitted the incidence of duty was originally passed on to the buyer. No material was placed on record to show that the buyer to whom the incidence of duty was passed on by the assessee did not pass it on to any other person. It has been thus held that the sine qua non for a claim for refund as contemplated in Section11-B of the Act is that the claimant has to establish that the amount of duty of excise in relation to which such refund is claimed was paid by him and that the incidence of such duty has not been passed on by him to any other person - the Hon ble Apex Court has observed that the refund of excess duty paid can be allowed only in cases where the burden of duty has not been passed on any other person including the ultimate customer as well and moreover Hon ble Apex Court was considering the case of normal refund and not adjustment at the time of finalization of provisional assessment. Hence, it is distinguishable. Revenue cannot pick and choose the assessment years for challenging the orders having similar effect. Moreover, as observed by the First Appellate Authority, the issue of unjust enrichment has been raised for the first time on the sanction of refund order consequent on finalization of provisional assessment. The authorities have admitted that the credit notes were issued by the assessee to their dealer representing various discounts which have been actually passed on, in accordance with marketing circulars/policies. It is also observed that on verification of sample depot invoices at the time of completion of provisional assessment, that the assessee has not issued any cenvatable invoice from the depot which are prescribed document for availment of cenvat credit under Cenvat Credit Rules, 2004. Thus, it cannot be held that the assessee has not subjected to the test of unjust enrichment. The substantial questions of law in favour of the assessee and against the Revenue - appeal dismissed.

  ---

• 2021 (10) TMI 585
  Clandestine Removal - threshold limit of SSI Exemption - third party evidences reliable or not - cross-examination of witnesses - entire case was made out mainly on the basis of diaries which is marked as A/2 A/3, said to have been recovered from the appellant s factory - Department s case is that the appellant have clandestinely removed the goods consequently the value of SSI exemption limit has exceeded and appellant is not entitle for the SSI exemption - penalty - HELD THAT:- The entries in the diaries include the entries of removal in respect of which the invoices were issued. The investigation agency have also recovered certain documents from the transporters, various statements were recorded mainly of Mr. Ashuram, Director of the appellant company and also of transporters and dealers, documents from weighbridge also recovered/withdrawn under panchnama. On the basis of these documents department has come to the conclusion that appellant have cleared the goods clandestinely. As regard the panchnama drawn in the factory for recovery of the document which included the vital documents i.e. diaries marked as A/2, and A/3, appellant have strongly submitted that it is not shown from where these diaries were recovered and from whose possession. Therefore, to this extent even the recovery of diaries marked A/2 A/3 is under suspicion. The Director has appeared before the investigation agency and given his statement. There are certain documents recovered from transporter and dealer and their statements were recorded. Since the appellant Director has categorically denied about the diaries A/2 A/3, the Adjudicating Authority was supposed to cross examine the witness such as transporters and dealers. They being a third party witness and records recovered from a third party evidence however, the Adjudicating Authority has denied the cross examination. Once the Director of the appellant company has clearly disowned the diary and contents therein, it is incumbent of the Adjudicating Authority to cross examine third party witness to bring the truth of the diary on record. However, by not allowing the cross examination, the Adjudicating Authority has violated the basic requirement of cross examination for admitting any evidence such as statement of third part. It is the settled law that in terms of section 9D, it is mandatory on the part of the Adjudicating Authority to cross examine the witness or admitting their statements as evidence. It is settled that statements of dealers and transporters and the documents recovered from them cannot be relied upon as evidence since, no cross examination have been carried out by the adjudicating authority from the dealers and transporters as mandated under Section 9 of the Central Excise Act therefore, without cross examination neither the statements nor the documents recovered from transporter and dealers can be relied upon. Since the statements on these persons have not been examined their statements cannot be relied upon. Therefore, neither the appellant s/company s name nor the full name of the director is appearing, merely because word Assu is appearing on the document cannot be concluded that this detail mentioned in the said document is related to the appellant. It is settled law that in absence of cross examination of witnesses whose statements were recorded under Section 14 of the Central Excise Act, 1944, unless and until those witnesses are cross examined, the statements given by them are not admissible evidence for deciding a case. Therefore, in the present case firstly all the evidences are third parties evidence and no cross examination in terms of Section 9D was allowed of the witnesses therefore, such evidences could not have been used for confirming the demand - the department has not further corroborated or investigated the manufacturing capacity of the plant and electricity consumption to reinforce their case that the appellant has a capacity to manufacture the quantity which was alleged to have been cleared clandestinely. For this reason also, clandestine removal is not established. The entire demand was made on the basis of documents recovered from appellant s premises, statement of director of the appellant company, document from weighbridge and documents from transport and dealers and their statements recorded under Section 14 of the Central Excise Act, 1944. The documents recovered from the appellant s premises i.e. Diaries in A/2 A/3 were not accepted by the appellant s director. The department also could not establish who is the author of that diary and no contents of the documents was revealed either by the Director of the company or any employee. Penalty - HELD THAT:- Since the charge of clandestine removal against the main appellant M/s. Meera Pipes P. Ltd. are not established, the consequential penalties imposed against various persons will also not sustain. Appeal allowed - decided in favor of appellant.

  ---

• 2021 (10) TMI 584
  CENVAT Credit - import of copper scrap, brass scrap, zinc scrap, aluminum scrap as shown received in their factories - goods was diverted in the market but availed the Cenvat Credit thereon on the strength of bills of entry - principles of natural justice - HELD THAT:- It is not only the correspondence between the appellant and DGCEI and the adjudicating authority but there are also number of letters written by the office of the adjudication authority to the DGCEI for supplying the required documents. This itself shows that the appellant have not been given all the relied upon documents at any point of time. Since, there is no dispute that the appellant were not supplied the relied upon document as mentioned by them, the adjudication should not have taken place in absence of providing the said documents to the appellant. In this fact which is not under dispute there is a gross violation of principle of natural justice on the part of the adjudicating authority. It is a settled law that principles of natural justice is the foremost requirement to be complied with before passing the adjudication order. The impugned order, since passed without observance of principles of natural justice, shall not sustain - the adjudicating authority is directed to supply all the relied upon documents to the appellants only thereafter sufficient opportunity for filing their defence and personal hearing be given before passing a denovo adjudication order - Appeal allowed by way of remand.

  ---

• CST, VAT & Sales Tax

• 2021 (10) TMI 583
  Constitutional validity of levy of VAT on Extra Neutral Alcohol (ENA) - post GST regime - Legislative competence of State legislature (of Uttar Pradesh) - imposition or levy of tax on sale of Extra Neutral Alcohol (ENA), after enactment of the 101st Constitution Amendment, with effect from 01.07.2017 - validity of N/N. KA.NI-2-1793 dated 17 December 2019, issued under Section 74 read with Section 4(4) of the Uttar Pradesh Value Added Tax Act, 2008 - HELD THAT:- Insofar as the identity of the commodity is concerned, there is no dispute between the parties. It is Extra Neutral Alcohol (ENA). While the petitioners contend; the same is alcohol of high purity, above 90%, by volume, the State does not dispute the same. In its counter affidavit, the State also makes pleadings to the same effect. Besides the admission made by the State, it is too late in the day to dispute or deliberate as to the true character or identity or contents of ENA. The Supreme Court in the case of State of Jharkhand Others Vs. Ajanta Bottlers and Blenders Private Ltd. [ 2019 (7) TMI 316 - SUPREME COURT ] had clearly opined - industrial alcohol is broadly categorised into three categories. The first being Isopropyl alcohol (or IPA or Isopropanol). It is a compound with chemical formula CH3CHOHCH3, linked to a hydroxyl group. It is the simplest example of a secondary alcohol where alcohol carbon is attached to two other carbon atoms. If consumed, Isopropanol is converted into acetone in the liver, making it extremely toxic. The second category of industrial alcohol is Methyl Alcohol or Methanol with chemical formula CH3OH. Its consumption leads to blindness and death. The third category of industrial alcohol is Ethyl Alcohol also known as Ethanol having chemical formula C2H6O which may also be written as C2H5OH or CH3CH2OH. Whether IMFL or country liquor or any other liquor that may qualify as alcoholic liquor for human consumption , it uses ENA as a raw material. ENA, in turn, is derived from Rectified Spirit. At the same time, alcoholic liquor for human consumption would not arise either if ENA is left to mature for some time or in certain conditions. Neither its alcoholic content would reduce from the range 90% - 95 % to 19% - 43% nor it would otherwise render itself fit for human consumption. In fact, the counter affidavit of the State itself indicates in no uncertain terms ENA is not for human consumption. It cannot be described as intoxicating liquor , for that reason, either. Rectified Spirit, Ethanol or Extra Neutral Alcohol (ENA) having been opined by the Constitution bench of the Supreme Court (followed, explained and applied in its later pronouncements), to be not alcoholic liquor for human consumption and, since there is no material whatsoever to take a contrary view on facts, it must be emphatically concluded, ENA continues to fall outside the phrase alcoholic liquor for human consumption , as it appears under Entry 54 of List II of the Seventh Schedule, to the Constitution of India. Both the Parliament and the State legislatures, sacrificed their pre-existing, respective legislative competence to - enact laws to impose duties of excise and to tax sales of alcoholic liquors not-for human consumption, at the high altar of the 101st Constitution Amendment, enacted to consecrate the GST laws. The express intent of that Constitutional change appears to be one to tax all alcohols except alcoholic liquor for human consumption , under the GST regime, only. Thus, alcoholic liquor not for human consumption or industrial alcohol or non-potable alcohol, is subject to GST laws, only. That Constitutional intent was unequivocally recognized by the State legislature. It resonates in perfect harmony, through the instrument of incorporation of Section 174(1)(i) to the UPGST Act 2017. The State has already charged 9 percent GST on the sale of ENA with effect from 01.07.2017. Thus, if it were to enforce the impugned Notification dated 17.12.2019, with effect from 09.12.2019, it necessarily would lead to an admission of collection (without authority of law) - of GST on ENA, by 4 to 13 percent. We do not see, what useful purpose the impugned Notification would serve if the argument of the learned AAG were to be accepted. It is declared, the State lost its legislative competence to enact laws, to impose tax on sales of ENA, upon the enactment of the 101st Constitution Amendment. Consequently, and upon considering Section 174(1)(i) of UPGST Act, 2017, the impugned Notification dated 17.12.2019, insofar as it seeks to impose UPVAT on ENA, Rectified Spirit and SDS, is ultra vires, both on account of lack of (i) legislative competence and (ii) valid delegation. It is therefore quashed. Petition allowed.

  ---

• Indian Laws

• 2021 (10) TMI 582
  Seeking grant of Regular bail - Smuggling - contraband item - 4200 Tablets of Zolpidam (1.050 Kg) - 6000 Tablets of Alprazolam (1.200Kg) - offence under section 8(c) of NDPS Act, 1985, and punishable under section 22, 25 29 of NDPS Act - HELD THAT:- In the present case, there is a recovery of commercial quantity of medicines from co-accused Dipu Singh who is also found to be delivering the medicines illegally over the orders placed through the present petitioner/accused and both accused are found to be connected through WhatsApp chat messages as well as through mobile phones. The chat conversation between the petitioner/accused and Dipu Singh reveals that they were indulging in supply of the narcotic drugs. The conduct of petitioner/accused in destroying the SIM before being interrogated by the NCB officials points towards the guilty mind. The present case is a case of commercial quantity and the rigors of Section 37 NDPS Act are applicable - The standard prescribed for the grant of bail is reasonable ground to believe that the person is not guilty of the offence. The test which is required to be applied while granting bail is whether there are reasonable grounds to believe that the accused has not committed an offence and whether he is likely to commit an offence while on bail. Given the seriousness of the offence punishable under the NDPS Act and in order to curb the menace of drug-trafficking in the country, stringent parameters for the grant of bail under the NDPS Act have been prescribed. The application lacks merit and the same is, therefore, dismissed.

  ---

• 2021 (10) TMI 581
  Dishonor of Cheque - adjudgement of testimonial worth of prosecution evidence - Existence of sufficient ground to proceed with the matter or not - HELD THAT:- The law regarding sufficiency of material which may justify the summoning of accused and also the court s decision to proceed against him in a given case is well settled. The court has to eschew itself from embarking upon a roving enquiry into the last details of the case. It is also not advisable to adjudge whether the case shall ultimately end in conviction or not. Only a prima facie satisfaction of the court about the existence of sufficient ground to proceed in the matter is required. It is directed that the accused may appear before the court below within a period of one month from today through the representing counsel and move an application seeking compounding of offence through compromise. On such application being moved the concerned court may take adequate steps in accordance with law in this regard and shall provide further opportunity to the accused which shall not exceed a maximum period of four months from today to make an endeavour in this direction. Application disposed off.

  ---