TMI Tax Updates - e-Newsletter
October 28, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Provisional attachment of Bank Accounts - time period of one year is over - as contemplated in section 83 of the CGST Act, the provisional attachment of the seven bank accounts out of total nine bank accounts, gets automatically come to an end - In respect of the two bank accounts where the fresh orders of provisional attachment are passed, it will give fresh cause of action in accordance with law - HC
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GST:
Cancellation of GST registration of the petitioner - If it is the stand of the petitioner assessee that they are willing to file the returns as well as pay all the required dues including the interests and the penalties, we are of the view that it would be an appropriate case for the respondent authorities to consider any such proposal that may be made by the petitioner and also to give a reasoned consideration on their claim for revocation of the cancellation of the registration. - HC
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GST:
Levy of 100% penalty - larger part of transitional credit was allowed - only minor part of the credit was disallowed - The penalty on the balance amount would not be covered under Section 74 of the Act since there was no attempt to defraud the revenue or mislead it or any suppression of material facts. Indeed, since there is no failure to pay any amount, in the strict sense, in this case as the show-cause notice only pertained to a claim that had been made to which the assessee was not entitled, this would not be an appropriate case for imposing any penalty. - HC
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GST:
Taxability - amount written off in the books of account of the applicant as creditors balance - there are no services received or provided by the applicant company in this situations/transactions. So, this transaction of writing off unclaimed amount of the contractors/other creditors is basically an income and not a supply, hence outside the purview of scope of supply under the GST Act - not taxable under GST - AAR
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Income Tax:
Exemption u/s 11 - scope and amplitude of the definition “charitable purpose” - the change intended by Parliament through the amendment of Section 2(15) was sought to be emphasised and clarified by the amendment of Section 10(23C) and the insertion of Section 13(8). This was Parliaments’ emphatic way of saying that generally no commercial or business or trading activity ought to be engaged by GPU charities but that in the course of their functioning of carrying out activities of general public utility, they can in a limited manner do so, provided the receipts are within the limit spelt out in Clause (ii) of the proviso to Section 2(15). - SC
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Income Tax:
Addition on account of unaccounted production and stock - Estimation of wastage generated in the production unit - The method adopted by assessee is more scientific as it takes into consideration all the factors affecting the consumption in a year. Further by taking yearly average, the fact of fluctuation is diluted and it gives a more scientific picture of state of affairs. The Assessing officer adopted only onemonth average, which does not represent a proper sample for working out of consumption for whole year. - AT
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Income Tax:
Penalty levied u/s. 271B - failure to get accounts audited - determination of turnover - accommodation entries - it is seen that the explanations offered by the assessee have been ignored by the Assessing Officer as well as CIT(A) and levied penalty u/s. 271B of the Act. The discretion available u/s. 273B is not exercised by the Lower Authorities. - No penalty - AT
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Income Tax:
Deduction u/s. 54F - the amendment in the provisions of s. 54(1) replacing the word “a residential house” by “one residential house” was brought in Finance (No.2) Act, 2014 w.e.f 01.04.2014 and will apply for A.Y 2015-16. The relevant assessment year before us is 2013-14 and hence, the assessee is eligible for claim of deduction u/s. 54F though there may be multiple units. - AT
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Income Tax:
Penalty levied u/s. 271(1)(c) - mere treatment of an amount as revenue (by the AO) instead of capital (by the taxpayer) - The rejection of such a claim by the Appellate Tribunal does not amount to furnishing inaccurate particulars of income, thereby levying penalty u/s. 271(1)(c) - AT
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Corporate Law:
Jurisdiction of Court to entertain the writ petition - The Petitioners have specifically averred that the Petitioner No.1 would be able to trade with the shares in Mumbai and therefore, impugned order of ROC has affected Petitioners’ rights in Mumbai. The said averments have remained uncontroverted. Thus, it is clear that the consequence of the impugned order fell on the Petitioner at Mumbai where atleast the cause of the action in part has taken place - HC
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Corporate Law:
Right of the Shareholder / Member of Company - The right of a transferee of a share is only to call upon the company to register his name and no more. No rights arise till such registration takes place. The completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made. The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable. - Tri
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Indian Laws:
Seeking appointment of a sole arbitrator to adjudicate upon the disputes - Doctrine of separability - doctrine of kompetenz-kompetenz encompassed in the arbitration jurisprudence - it does not lie in the mouth of the respondent to say that the petitions seeking appointment of a sole arbitrator should not be entertained, as the matter with regard to the determination of requisite stamp duty under the Maharashtra Stamp Duty Act on the two agreements is pending before the Collector. - SC
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Indian Laws:
Dishonor of Cheque - vicarious liability of the Director - In the case in hand the petitioner No.2 had not issued any cheque. There is no averment in the complaint petitions as to how and in what manner the petitioner No.2 was responsible for the conduct of the business of the Company or otherwise responsible to it in regard to its functioning, though an omnibus statement is made in paragraph No.2 of the complaint that he and the accused No.3 and 4 are the person responsible for conduct of the business of the company. How he is responsible for dishonour of the cheque has also not been stated - Relief granted- HC
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IBC:
CIRP - Removal of the Leasehold Land from the pull of Assets of the Corporate Debtor - right to terminate the Lease Deed - the Appellant has never initiated any proceedings or chosen to exercise their rights to invoke any of the Clauses of the Lease Deed for cancellation of the subject Deed - the Leasehold Right is an Intangible Asset of the Corporate Debtor and that the Resolution Professional is empowered under Section 18(f) of the Code to take control and custody of any Asset over which the ‘Corporate Debtor’ has the Ownership Right. - AT
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Service Tax:
Levy of service tax - Investment or Management Service under ULIP - Policy Administration Charges - Front End Load - Switching Charges - amount collected by the appellant – Revenue cannot be permitted to be taken u-turn in the light of the Board’s Circular. Further, Board circular are binding on the officers of the Revenue Department. - AT
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Central Excise:
Settlement of a case - The Settlement Commission has grossly misdirected itself in not taking into account/ examining the case of the appellant which is impossibility and not improbability or difficulty in producing the quantum which is arrived at on the basis of the second report. - HC
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Central Excise:
Levy of penalty under Section 11AC - Once the appellant have obtained the NOC and unit was debonded, they intentionally avoided the payment of short duty. It is only on pointing out by the audit they have paid the duty, this fact clearly shows that the appellant knowing that before debonding, on all the goods lying in the factory they are required to pay the duty but they consciously not paid the duty which amounts to suppression of fact on their part. - Penalty confirmed - AT
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Central Excise:
Validity of SCN issued - price escalation during GST era for goods supplied pre GST era - levy of duty of excise or GST - supplies made during September 2016 to November 2016 - The show cause notice is bad as it has been issued ignoring the provisions of Section 142 (2) (a) of the CGST Act, which is a provision to remove such difficulties for the transitional period- AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2022 (10) TMI 952
Provisional attachment of Bank Accounts - respondent fairly admitted that time period of one year is over - section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- as contemplated in section 83 of the CGST Act, the provisional attachment of the seven bank accounts out of total nine bank accounts, gets automatically come to an end. Learned advocate for the petitioners makes a grievance that despite one year is over, the banks are not intimated about the seizing of the provisional attachment - the respondents stated that the authorities will intimate the banks concerned in this regard to enable the operation of the bank accounts by the petitioners within one week from today. In respect of the two bank accounts where the fresh orders of provisional attachment are passed, it will give fresh cause of action in accordance with law - the petitions are disposed of.
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2022 (10) TMI 951
Cancellation of GST registration of the petitioner - maintainability of appeal under Section 107 is to be made within a period of three months from the date of the order impugned - HELD THAT:- It is an admitted position of the petitioner assessee that they have failed to file the returns from the year 2018 up-to the year 2021 meaning thereby that the required amount of GST was also not paid for the aforesaid period. It is also noted that the provisions of Section 29 of the AGST Act, 2017 which provides that if an assessee fails to furnish returns for three consecutive tax periods, it may be a good reason for cancellation of the registration of the assessee concerned. From such point of view, if the petitioner had not submitted the returns for three consecutive tax periods, the act on the part of the departmental authorities in cancelling the registration cannot prima facie be faulted with. In the circumstance where the petitioner assessee is willing to file the returns and also pay all the tax dues including the interests and penalties etc. that may be leviable, the petitioner may have invoked a wrong provisions of filing an appeal under Section 107 of the AGST Act, 2017 - As the petitioner had acted diligently in seeking to avail the remedy under the law which although it may not have been the appropriate remedy under the circumstance, it would be a good cause for the respondents to consider as to whether the delay in making such application can be suitable condoned. Petition disposed off.
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2022 (10) TMI 950
Levy of 100% penalty - larger part of transitional credit was allowed - only minor part of the credit was disallowed - transitional period of switching over from the previous sales tax regime to the GST regime - carry forward of credit in terms of Section 140 of CGST Act 2017 - HELD THAT:- There is no doubt that since the larger part of the claim in excess of Rs.6 crore has been upheld in favour of the assessee, the imposition of penalty for the corresponding amount will no longer apply. But the issue now arises as to whether the 100 per cent penalty imposed for the remainder of the claim, to the extent of Rs.30,73,908/-, should also be interfered with. The assessee refers to Sections 73 and 74 of the Act of 2017. The assessee brings out the distinction between Section 73 and the strict applicability of Section 74 when there is an attempt by the assessee to defraud the revenue by making any misrepresentation or by suppression of material facts - The assessee suggests that since it was a huge sum which had been lost to the assessee, the assessee merely invoked the discretion of the Department in allowing the claim at a later stage since the assessee had not availed of it, whether by mistake or oversight, at the time of claiming refund for the month of June, 2017. Since the claim of the assessee to the extent of Rs.6,55,99,154/- has been upheld, no question arises of any penalty or interest or other charge being imposed in respect of such amount. The penalty on the balance amount would not be covered under Section 74 of the Act since there was no attempt to defraud the revenue or mislead it or any suppression of material facts. Indeed, since there is no failure to pay any amount, in the strict sense, in this case as the show-cause notice only pertained to a claim that had been made to which the assessee was not entitled, this would not be an appropriate case for imposing any penalty. Petition is allowed by setting aside the appellate order to the extent that it disallowed the petitioning assessee s claim of Rs.6,55,99,154/- and by upholding the appellate order to the extent that it rejected the balance claim of Rs.30,73,908/-. Further, the penalty imposed by the appellate order is set aside in its entirety.
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2022 (10) TMI 949
Supply or not - Levy of GST - rate of GST - amount collected by the Applicant company as Notice Pay Recovery from the outgoing employee - amount of Surety Bond forfeited/encashed by the Applicant company from the outgoing contractual employee - nominal subsidized recoveries made by the Applicant from its employees towards provision of canteen facility by 3 rd party service provider to Applicant's employees - amount collected by the Applicant company from its employees in lieu of providing a new identity card (ID Card) - amount collected by the Applicant as liquidated damages for non performance/short-performance/delay in performance - amount forfeited by the Applicant company pertaining to Earnes Money, Security Deposit Bank Guarantee - amount of Creditors balance unclaimed/untraceable and written off by the Applicant by way of crediting P L Account. Notice pay recovery - surety bond forfeiture - HELD THAT:- The amount received as notice pay recovery by the applicant from the employees who leave the applicant company without serving mandatory notice period mentioned in the employment contract is not a consideration for any supply or services. Similarly, the action of surety bond forfeiture by the applicant (which is furnished by the contractual employee at the time of joining) of the employees who leave the company without serving minimum contract period as per the employment contract is also not a consideration per se. These amounts are covered under Schedule HIM and not clause 5(e) of schedule II appended with the CGST Act, 2017. So, it is outside the scope of supply because the said amount recovered by the applicant is in lieu of un-served notice period/non serving the contract period by the employees. It cannot be regarded as a consideration which has been defined in the section 2(31) of the Act - both are excluded from the definition of Supply under the GST Act. Provision of the canteen facility at its premises by the applicant company for its employees - HELD THAT:- The facility of canteen is being provided by the companies to its employees under the Factory Act, 1948 wherein it is mandatory to the applicant to make provisions of the canteen facility to its employees. There is no independent contract between the applicant and the employees for setting up the canteen facility at the company's premises. It is being undertaken on account of the legal obligation case upon the applicant. So, it is concluded that the said transaction of recovering the part payment of the meals from the staff by the applicant is outside the purview of scope of supply. Whether the charges for re-issuance of ID card to the employees by the applicant company is an taxable event under the GST Act? - HELD THAT:- It is noticed that the applicant uses the in-house printing facility for the services i.e. re-issuance of identity cards to the employees. Fee of Rs. 100 per card is charged for re-issuance by the applicant form its respective employee for issuance the new identity card. No third party contractor is availed for the printing of Id-cards. The Id-card is reissued in case of loss of the same or the card is in non serviceable condition - the authority is of view that this transaction does not fall under the taxable event under the GST as it's covered under the schedule III(1) appended with the CGST Act, 2017. Taxability - transaction of liquidated damage charged due to delay in completion of work and forfeiture of Earnest Money/ Bank Guarantee /Security Deposit - HELD THAT:- The authority is of view that the matter stands clarified in the circular dated 03.08.2022 of the Board - the amount received as a compensation due to delay in completion of work will not be taxable due to the reason that it is not recovered on account of any services rendered to another person and instead, is claimed towards damages incurred on account of delay/any other reason as stipulated in the agreement. Amount forfeited by the Applicant company pertaining to Earnest Money, Security Deposit Bank Guarantee - HELD THAT:- The forfeiture of amount received as Earnest Money/Security Deposit or release/forfeiture of Bank Guarantee cannot be chargeable - The nature of Earnest Money is equivalent to penalty charged by the tenderer which is similar to the nature of 'liquidated damages' and therefore, cannot be treated to be 'consideration' - The Security Deposit is collected by the Applicant for the reason that if there is any break, deface, injure or destroy any part of building in which they may be working, or any building, road, road kerb, fence, enclosure, water pipe, cables, drains, electric or telephone post or wires, trees, grass or grassland. etc, the same may be adjusted and the balance shall be refunded back to the contractor - Bank Guarantee is also forfeited for the same reasons as Security Deposit is forfeited - thus not taxable. Taxability - amount written off in the books of account of the applicant as creditors balance - HELD THAT:- The authority is of view that there are no services received or provided by the applicant company in this situations/transactions. So, this transaction of writing off unclaimed amount of the contractors/other creditors is basically an income and not a supply, hence outside the purview of scope of supply under the GST Act - not taxable.
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Income Tax
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2022 (10) TMI 948
Exemption u/s 11 - scope and amplitude of the definition charitable purpose - primary question which falls for consideration is the correct interpretation of the proviso to Section 2(15) charitable purpose includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility - Interpretation of the changed definition of charitable purpose (w.e.f. 01.04.2009), as well as the later amendments, and other related provisions of the IT Act - Distinction between business held under Trust [Section 11(4)] and Trust carrying on business [Section 11(4A)] - HELD THAT:- To summarise on the legal position on this - if a property is held under trust, and such property is a business, the case would fall under Section 11(4) and not under Section 11(4A) of the Act. Section 11(4A) of the Act, would apply only to a case where the business is not held under trust. There is a difference between a property or business held under trust and a business carried on by or on behalf of the trust. This distinction was recognized in Surat Art Silk [ 1979 (11) TMI 1 - SUPREME COURT] which observed that if a business undertaking is held under trust for a charitable purpose, the income from it would be entitled to exemption under Section 11(1) of the Act. Pure charity in the sense that the performance of an activity without any consideration is not envisioned under the Act. If one keeps this in mind, what Section 2(15) emphasizes is that so long as a GPU s charity s object involves activities which also generates profits (incidental, or in other words, while actually carrying out the objectives of GPU, if some profit is generated), it can be granted exemption provided the quantitative limit (of not exceeding 20%) under second proviso to Section 2(15) for receipts from such profits, is adhered to. The insertion of Section 13(8)144, the seventeenth proviso to Section 10(23C) and third proviso to Section 143(3) (all of which were inserted by Finance Act, 2012, but w.r.e.f. 01.04.2009), further reinforces the interpretation of this Court, of charitable purpose . These provisions, form the machinery to control the conditions under which income is exempt. The effect of the seventeenth proviso to Section 10(23C) is to impose the same condition i.e., that that the trade, commerce or business activity or service relating to trade, business or commerce, should be part of the GPU s activities, to achieve its object of advancing general public utility. The other condition which is drawn in as part of the exemption condition, is that if such trading or commercial activity takes place the receipts should be confined to a prescribed percentage of the overall receipts. Section 13(8) too reinforces the same condition. In the opinion of this court, the change intended by Parliament through the amendment of Section 2(15) was sought to be emphasised and clarified by the amendment of Section 10(23C) and the insertion of Section 13(8). This was Parliaments emphatic way of saying that generally no commercial or business or trading activity ought to be engaged by GPU charities but that in the course of their functioning of carrying out activities of general public utility, they can in a limited manner do so, provided the receipts are within the limit spelt out in Clause (ii) of the proviso to Section 2(15). General test under Section 2(15) - As clarified that an assessee advancing general public utility cannot engage itself in any trade, commerce or business, or provide service in relation thereto for any consideration ( cess, or fee, or any other consideration ). In the course of achieving the object of general public utility, the concerned trust, society, or other such organization, can carry on trade, commerce or business or provide services in relation thereto for consideration, provided that (i) the activities of trade, commerce or business are connected ( actual carrying out inserted w.e.f. 01.04.2016) to the achievement of its objects of GPU; and (ii) the receipt from such business or commercial activity or service in relation thereto, does not exceed the quantified limit, as amended over the years (Rs. 10 lakhs w.e.f. 01.04.2009; then Rs. 25 lakhs w.e.f. 01.04.2012; and now 20% of total receipts of the previous year, w.e.f. 01.04.2016); Generally, the charging of any amount towards consideration for such an activity (advancing general public utility), which is on cost-basis or nominally above cost, cannot be considered to be trade, commerce, or business or any services in relation thereto. It is only when the charges are markedly or significantly above the cost incurred by the assessee in question, that they would fall within the mischief of cess, or fee, or any other consideration towards trade, commerce or business . In this regard, the Court has clarified through illustrations what kind of services or goods provided on cost or nominal basis would normally be excluded from the mischief of trade, commerce, or business, in the body of the judgment. Section 11(4A) must be interpreted harmoniously with Section 2(15), with which there is no conflict. Carrying out activity in the nature of trade, commerce or business, or service in relation to such activities, should be conducted in the course of achieving the GPU object, and the income, profit or surplus or gains must, therefore, be incidental. The requirement in Section 11(4A) of maintaining separate books of account is also in line with the necessity of demonstrating that the quantitative limit prescribed in the proviso to Section 2(15), has not been breached. Similarly, the insertion of Section 13(8), seventeenth proviso to Section 10(23C) and third proviso to Section 143(3) (all w.r.e.f. 01.04.2009), reaffirm this interpretation and bring uniformity across the statutory provisions. Authorities, corporations, or bodies established by statute - In clause (b) of Section 10(46) of the IT Act, commercial has the same meaning as trade, commerce, business in Section 2(15) of the IT Act. Therefore, sums charged by such notified body, authority, Board, Trust or Commission (by whatever name called) will require similar consideration i.e., whether it is at cost with a nominal mark-up or significantly higher, to determine if it falls within the mischief of commercial activity . However, in the case of such notified bodies, there is no quantified limit in Section 10(46). Therefore, the Central Government would have to decide on a case-by-case basis whether and to what extent, exemption can be awarded to bodies that are notified under Section 10(46). For the period 01.04.2003 to 01.04.2011, a statutory corporation could claim the benefit of Section 2(15) having regard to the judgment of this Court in the Gujarat Maritime Board case[ 2007 (12) TMI 7 - SUPREME COURT] Likewise, the denial of benefit under Section 10(46) after 01.04.2011 does not preclude a statutory corporation, board, or whatever such body may be called, from claiming that it is set up for a charitable purpose and seeking exemption under Section 10(23C) or other provisions of the Act. Statutory regulators - The income and receipts of statutory regulatory bodies which are for instance, tasked with exclusive duties of prescribing curriculum, disciplining professionals and prescribing standards of professional conduct, are prima facie not business or commercial receipts. However, this is subject to the caveat that if the assessing authorities discern that certain kinds of activities carried out by such regulatory body involved charging of fees that are significantly higher than the cost incurred (with a nominal mark-up) or providing other facilities or services such as admission forms, coaching classes, registration processing fees, etc., at markedly higher prices, those would constitute commercial or business receipts. In that event, the overall quantitative limit prescribed in the proviso to Section 2(15) (as amended from time to time) has to be complied with, if the regulatory body is to be considered as one with charitable purpose eligible for exemption under the IT Act. Like statutory authorities which regulate professions, statutory bodies which certify products (such as seeds) based on standards for qualification, etc. will also be treated similarly. Trade promotion bodies - Bodies involved in trade promotion (such as AEPC), or set up with the objects of purely advocating for, coordinating and assisting trading organisations, can be said to be involved in advancement of objects of general public utility. However, if such organisations provide additional services such as courses meant to skill personnel, providing private rental spaces in fairs or trade shows, consulting services, etc. then income or receipts from such activities, would be business or commercial in nature. In that event, the claim for tax exemption would have to be again subjected to the rigors of the proviso to Section 2(15) of the IT Act. Non-statutory bodies - In the present batch of cases, non-statutory bodies performing public functions, such as ERNET and NIXI are engaged in important public purposes. The materials on record show that fees or consideration charged by them for the purposes provided are nominal. In the circumstances, it is held that the said two assessees are driven by charitable purposes. However, the claims of such non-statutory organisations performing public functions, will have to be ascertained on a yearly basis, and the tax authorities must discern from the records, whether the fees charged are nominally above the cost, or have been increased to much higher levels. It is held that though GS1 India is in fact, involved in advancement of general public utility, its services are for the benefit of trade and business, from which they receive significantly high receipts. In the circumstances, its claim for exemption cannot succeed having regard to amended Section 2(15). However, the Court does not rule out any future claim made and being independently assessed, if GS1 is able to satisfy that what it provides to its customers is charged on cost-basis with at the most, a nominal markup. Sports associations - So far as the state cricket associations are concerned (Saurashtra, Gujarat, Rajasthan, Baroda, and Rajkot), this Court is of the opinion that the matter requires further scrutiny, in light of the discussion in paragraphs 228-238 of the judgment. Accordingly, a direction is issued that the AO shall adjudicate the matter afresh after issuing notice to the concerned assessees and examining the relevant material indicated in the previous paragraphs of this judgment. Furthermore, if any consequential order needs to be issued, the same shall be done and resulting actions, including assessment orders shall be passed in accordance with the law under relevant provisions of the IT Act. Private Trusts - So far as the appeal by assessee-Tribune Trust is concerned, it has been held that despite advancing general public utility, the Trust cannot benefit from exemption offered to entities covered by Section 2(15) as the records reveal that income received from advertisements, constituted business or commercial receipts. Consequently, the limit prescribed in the proviso to Section 2(15) has to be adhered to for the Trust s claim of being as a charity eligible for exemption, to succeed. Therefore, despite differing reasoning, this court has held that the impugned judgment of the High Court does not call for interference. Application of interpretation - As noted that the conclusions arrived at by way of this judgment, neither precludes any of the assessees (whether statutory, or non-statutory) advancing objects of general public utility, from claiming exemption, nor the taxing authorities from denying exemption, in the future, if the receipts of the relevant year exceed the quantitative limit. The assessing authorities must on a yearly basis, scrutinize the record to discern whether the nature of the assessee s activities amount to trade, commerce or business based on its receipts and income (i.e., whether the amounts charged are on cost-basis, or significantly higher). If it is found that they are in the nature of trade, commerce or business , then it must be examined whether the quantified limit (as amended from time to time) in proviso to Section 2(15), has been breached, thus disentitling them to exemption.
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2022 (10) TMI 947
Addition on account of unaccounted production and stock - AO rejected the books of accounts of the assessee and estimated the wastage in production in both the units of the assessee - C.I.T. (A) holding that 'the action of the A.O. of rejecting the books of account without taking into consideration all the facts and figures is not correct - AO find various discrepancies with regard to consumption of raw material used for production of tiles and noted that the assessee has not shown the correct figure in its books of account and assessee has not made available the correct data of production of tiles - AO rejected the books of accounts of assessee by taking view that assessee failed to show actual per square meter consumption of raw material and failed to disclose actual per square meter consumption of raw material in its account, therefore, correct profit cannot be deduced from the books of account - HELD THAT:- AO estimated average wastage @ 3% and 2% of gross consumption of raw material for Dora unit and Hoskote unit respectively. Assessing officer adopted average wastage on ad hoc basis without any justification nor any comparable stances was brought on record to adopt such wastage. The Assessing Officer failed to provide any material supporting the working of average rate for both the units. Further, we find that the Assessing officer made addition by computing the revised production by adopting lowest value of consumption ratio as based so as to arrive at a greater production quantity and on such basis worked out the suppressed production of 3348104 square meters from the books of account. AO applied average rate of closing stock of Rs. 138.10 square meter and computed value of suppressed production of Rs.46,23,73,162/-. We also noted that suppressed production computed by Assessing Officer is without any basis as he adopted ad hoc wastage rate to compute net consumption as against the wastage rate of 4.54% and 4.48% shown by the assessee. And further in order to maximise the value of revised production, the assessing officer arbitrarily adopted the lowest consumption ratio of January, 2009 for Dora unit and February 2009 for Hoskote unit. Assessing Officer has failed to bring any material to support his working that ratio of waste material, adopted by him is appropriate for taking such base. Thus, working adopted by the Assessing Officer is not only erroneous being not based on scientific basis as he had adopted lowest consumption ratio for the purpose of making addition. We find merit in the submissions of assessee that even if slight changes in the consumption ratio is made, the entire addition made by AO would be nil as per the working given - We are also in agreement with the submissions of assessee that if the average consumption of all the months is taken and substitute the figures in the working of the AO accepting the wastage ratio used by the AO, the entire addition would be deleted. In such circumstances, we find merit in the submissions of assessee that the method adopted by assessee is more scientific as it takes into consideration all the factors affecting the consumption in a year. Further by taking yearly average, the fact of fluctuation is diluted and it gives a more scientific picture of state of affairs. The Assessing officer adopted only onemonth average, which does not represent a proper sample for working out of consumption for whole year. We do not find any merits in the grounds of appeal raised by the revenue, and thus, we affirm the order of ld CIT(A), with our additional findings. Grounds of appeals raised by the revenue is dismissed.
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2022 (10) TMI 946
Reopening of assessment u/s 147 - validity of reopening of assessment - addition u/s 68 - notice after expiry of 4 years from the end of the relevant assessment year - HELD THAT:- We find no merit in the submission of learned DR that allegation of failure to disclose fully and truly all material facts can be reasonably inferred from the perusal of reasons recorded for reopening the assessment, when the said allegation was nowhere made by the AO in the said reasons. We find that in appeal before the CIT(A), the assessee specifically raised grounds challenging initiation of reassessment proceedings. CIT(A), during the course of appellate proceedings, sought remand report from the AO and only after consideration of said report and assessee s reply thereto, adjudicated on the ground challenging the reassessment proceedings. Once initiation of reassessment proceedings has been challenged by the assessee, all the grounds incidental thereto are available to the assessee to challenge the validity of impugned reassessment proceedings. Therefore, respectfully following the aforesaid decision [ 2004 (2) TMI 41 - BOMBAY HIGH COURT] we are of the considered view that reassessment proceedings initiated by the AO are not in conformity with the provisions of 1st proviso to section 147 of the Act. Where 4 years, but not more than 6 years, have elapsed, no notice under section 148 can be issued unless the income chargeable to tax which has escaped assessment is Rs. 1 lakh or more. We find that while dealing with the issue whether failure on the part of the AO to mention the amount of income which has escaped assessment will result in nullifying the notice issued under 148 of the Act, the Hon‟ble Karnataka High Court in Novo Nordisk India (P) Ltd [ 2018 (9) TMI 352 - KARNATAKA HIGH COURT] as held material aspect for invoking the extended period of limitation under Section 149 (1)(b) not being forthcoming, further proceedings in pursuance to the said notice cannot be sustained. The notice issued being not in conformity with the provisions of the Act, it being the base or the foundation, edifice built upon it, has to fall. As noted above, it is for the AO to record the reasons clearly and unambiguously and no inference can be drawn there from, thus, respectfully following the aforesaid decisions, we are of the considered view that the impugned reassessment proceedings are also not in conformity with the provisions of section 149(1)(b) of the Act. Since the requirement of provisions of 1st proviso to section 147 as well as section 149(1)(b) of the Act are not fulfilled in the present case, therefore, the reassessment proceedings under section 147 of the Act are set aside being bad in law. Accordingly, the impugned order passed by the learned CIT(A), inter-alia, upholding the order passed under section 143(3) r/w section 147 of the Act is set aside. As relief has been granted to the assessee on above aspects, other submissions made by learned AR, pertaining to this ground, are rendered academic in nature. As a result, ground no.1 raised in assessee s appeal is allowed.
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2022 (10) TMI 945
Denial of exemption u/s 11 for want of registration u/s 12A/12AA - Whether CIT(A) has erred in confirming the action of assessing officer in not allowing the exemption claimed by the assessee u/s 11 by wrongly considering the assessee as not registered u/s 12AA of the I.T. Act.? - HELD THAT:- From the third proviso of sub-section (2) of section 12A, it is vivid that when trust is refused for registration then in that situation the trust cannot claim benefit of first proviso to sub-section (2) of section 12A - In the assessee`s case under consideration, the assessee was refused for registration in the year 2012-13 hence assessee is not entitled to claim benefit of first proviso to subsection (2) of section 12A therefore the plea taken by the ld Counsel is not acceptable. Also argued before us that if exemption is not granted under section 11 of the Act, then in that event the income of the assessee-trust should be computed on commercial principles bases, that is net profit should be taxable. We find merit in the contention of the assessee and noted that net profit of the assessee should be taxable, as if the assessee is doing business in the capacity of association of person (AOP). The said lis should be remitted back to the file of the assessing officer to examine income and expenditure of assessee. Hence, we set aside the order of ld CIT(A) and remit this issue back to the file of the assessing officer with the direction to examine the Profit and loss account/or income and expenditure account of the assessee and compute the net taxable profit by applying the commercial principles. The assessee is also directed to submit before the assessing officer the Profit and loss account/or income and expenditure account, with supporting evidences and documents. Appeal of the assessee is treated to be allowed for statistical purposes.
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2022 (10) TMI 944
Penalty levied u/s. 271B - failure to get accounts audited - determination of turnover - accommodation entries - reasonable cause for the said failure - assessee had turnover which exceed the limit as per the provisions of Section 44AB but not the commission income - HELD THAT:- Parliament has used the words may and not shall , thereby making their intention clear in as much as that levy of penalty is discretionary and not automatic. The said conclusion is further justified by Section 273B namely penalty not to be imposed in certain cases . A careful reading of Section 273B encompasses that certain penalties shall be imposed in cases where reasonable cause is successfully pleaded. It is seen that penalty imposable u/s 271B is also included therein. By the said provisions, the Parliament has unambiguously made it clear that no penalty shall be imposed, if the assessee proves that there was a reasonable cause for the said failure . As noticed, if the statutory provision shows that the word shall has been used in Section 271B, then the imposition of penalty would have been mandatory. Section 271B as extracted above further throws light on the legislative intent as it specifically provides that no penalty shall be imposed if the assessee proves that there was reasonable cause for the said failure . In the facts of the present case, it is seen that the explanations offered by the assessee have been ignored by the Assessing Officer as well as CIT(A) and levied penalty u/s. 271B of the Act. The discretion available u/s. 273B is not exercised by the Lower Authorities. For the reasons stated in the previous paragraph, we have no hesitation in deleting the penalty levied u/s. 271B of the Act. Grounds raised by the Assessee is allowed.
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2022 (10) TMI 943
Estimation of income - bogus purchases - HELD THAT:- We note that the issue is squarely covered by the decision in the case of Pankaj K. Choudhary [ 2019 (8) TMI 1769 - ITAT SURAT] and there is no change in facts and law, therefore respectfully following the binding precedent, we direct the AO to sustain the addition at the rate of 6% of bogus purchases. Hence, we dismiss the appeal of the assessee and we allow the appeals of the Revenues partly.
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2022 (10) TMI 942
Disallowance of deduction u/s 80IB - want of filing the audit report in Form No.10CCB electronically/online - claim denied for non-filing of the audit report in Form No.10CCB electronically - whether filing of the audit report in Form No.10CCB electronically is not mandatory but directory? - HELD THAT:- Outcome of the denial of deduction under section 80IB of the Act, on the ground of late filing of the return of income, would not be more than the disallowance of deduction made by the AO and consequently it is not the case of enhancement of the assessment, but the disallowance of deduction as made by the Assessing Officer has been further strengthened by the CIT(A) by taking the issue of late filing of the return of income. In any case, since the CIT(A) has not issued any show cause notice to the assessee before taking up this issue and passed the order on the same, therefore, it is a clear case of violation of the principles of natural justice, which renders the impugned order of the ld. CIT(A) not sustainable. Accordingly, the order of the ld. CIT(A) to the extent of taking up the fresh issue and deciding the same against the assessee is set aside and the matter is remanded to the record of the CIT(A) for deciding the same after giving an opportunity of hearing to the assessee on this issue. It is clarified that the issue with respect to the late filing of the return of income is remanded to the record of the ld. CIT(A) and the remand proceedings before the ld. CIT(A) are confined only on the said issue. Appeal of the assessee is partly allowed.
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2022 (10) TMI 941
Rectification of mistake - rectification or the typographical error in the assessment order - Unexplained cash deposits - estimation of GP - doctrine of merger - AR also submitted that the order passed by the Assessing Officer u/s 143(3) of the Act got merged with the order passed after giving effect to the rectification order passed - case was selected for Scrutiny through CASS for examining the issue i.e. High risk transactions (PAN reported in STR) - whether appeal filed by the appellant as not maintainable despite the fact that the appeal was filed as a common appeal against both the orders u/s 154 as well as u/s 143(3) ? - HELD THAT:- Once the assessee has challenged the order of the Assessing Officer in the appellate proceedings, the pedantic hyper-technical approach of the Revenue Officer is required to be rejected as it is an admitted position that the assessment proceedings are not adversarial litigation. Further, the doctrine of merger will go into play for the rescue of the assessee. Once law has given a right to the assessee to challenge the order of the Assessing Officer by following consolidated appeal whereby the assessee can challenge the assessment order and the rectification order then the assessee cannot be non-suited merely because he had only challenged the orders u/s 154. Though the AO had only made an addition to the returned income of the assessee as against the cash deposit during the demonetization period, however, still the assessee chooses to challenge the meagre addition on the above said technical ground, we are of the opinion that the order of the learned CIT(A) is required to be quashed, and the case is remanded back to the file of the AO with a direction to pass the order on merit after treating the appeal of the assessee as an appeal challenging the order u/s 143(3) r.w.s. 154. Needless to say, while exercising power, the learned CIT(A) may use all his powers vested under the Act, including the power to enhance / reduce / confirm the order passed by the Assessing Officer.
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2022 (10) TMI 940
Deduction u/s. 54F - Disallowance of claim on the reason as assessee earned only one residential house - scope of Amendment in the provisions of s. 54(1) - HELD THAT:- Assessee first of all stated that Plot No.6 at Ganesh Nagar is a vacant plot and not a house. He stated that the entire revenue records proved it that this is a plot, but he stated that the amendment brought in by the Finance (No.2) Act, 2014 in s. 54(1) of the Act by which words a residential house were replaced by one residential house was applicable from A.Y 2014-15 and assessee can claim reinvestment exemption from multiple units. Assessee stated that this issue is decided in the case of CIT vs. Gunmanmal Jain [ 2017 (3) TMI 394 - MADRAS HIGH COURT] wherein it was held that amendment was made to s. 54F of the Act with regard to word a by Finance (No.2) Act, 2014 with effect only from 01.04.2015 withdrawing deduction for more than one flat (residential house). Prior to said amendment, a residential house would multiple flats/residential units. We are of the view that the amendment in the provisions of s. 54(1) replacing the word a residential house by one residential house was brought in Finance (No.2) Act, 2014 w.e.f 01.04.2014 and will apply for A.Y 2015-16. The relevant assessment year before us is 2013-14 and hence, the assessee is eligible for claim of deduction u/s. 54F though there may be multiple units. Accordingly, the appeal of the Revenue is dismissed.
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2022 (10) TMI 939
Delayed payment of employees contribution to ESI and Provident Fund u/s. 43B r.w.s. 36(1)(va) - HELD THAT:- We notice that the Hon ble Supreme Court in the case of Checkmate Services [ 2022 (10) TMI 617 - SUPREME COURT] has considered the issue of whether the employees contribution paid before due date for filing the return of income u/s.139(1) whether otherwise allowable u/s.43B, putting to rest the contradicting decisions of various High Court. We hold that the employees contribution to PF and ESI should be remitted before the due date as per explanation to section 36(1)(va) i.e. on or before the due date under the relevant employee welfare legislation like PF Act, ESI Act etc., for the same to be otherwise allowable u/s.43B. We therefore see no reason to interfere with the order of the CIT(Appeals). The grounds taken by the assessee on this issue is dismissed.
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2022 (10) TMI 938
Revision u/s 263 by CIT - HELD THAT:- It is known fact that the assessee preferred appeal against the consequential order passed by the AO u/s 143(3) r.w.s. 263 before CIT(A) and the CIT(A) after considering the submissions of the assessee, has rightly allowed the appeal of the assessee on merit and legal grounds, relying on the decision of the Tribunal in assessee s own case [ 2022 (6) TMI 350 - ITAT VISAKHAPATNAM] Thus hold that the Ld.CIT(A) has rightly followed the decision of the Tribunal as the consequential order passed by the AO has no locus standi and allowed the appeal of the assessee. Therefore, we are not inclined to interfere with the order passed by the Ld.CIT(A) and dismiss the appeal of the revenue.
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2022 (10) TMI 937
Penalty levied u/s. 271(1)(c) - mere treatment of an amount as revenue (by the AO) instead of capital (by the taxpayer) - HELD THAT:- Revenue should prove that the claim made was not sustainable in law and also the assessee had concealed the particulars of income. In order to expose the assessee to penalty, the Revenue should show that there was contumacious conduct on the part of the assessee in suppressing the income in the return. The rejection of such a claim by the Appellate Tribunal does not amount to furnishing inaccurate particulars of income, thereby levying penalty u/s. 271(1)(c) of the Act as held by the Hon ble Supreme Court in the case of Reliance Petroproducts (P.) Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] Since the quantum appeal of the assessee is now pending before the Hon ble High Court, it is appropriate to rely upon the Hon ble Delhi High Court judgment in the case of PCIT, Central-11, vs. Harsh International Pvt. Ltd. [ 2020 (12) TMI 1082 - DELHI HIGH COURT] . The Judicial discipline demand that until and unless the judgment of the Hon ble Jurisdictional High Court is reversed. It has to be respected and followed by the Tribunal functioning under the jurisdiction of that Court. Penalty levied u/s. 271(1)(c) for furnishing inaccurate particulars of income is hereby deleted.
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Customs
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2022 (10) TMI 936
Recovery of adjudged dues - as per resolution plan approved by NCLT, no dues exists against the applicant - continuance of proceeding as per Rule 22 of the CESTAT Procedure Rules, 1982 - HELD THAT:- The NCLT has passed an order by approving resolution plan of the company M/s. Binani Cement Limited in favor of M/s. Ultratech Nathdwara Cement Limited, who is the resolution applicant. As regard the submission made by learned AR that the applicant has not filed an application for continuance of the proceeding in terms of Rule 22 of the CESTAT Procedure Rules, 1982, after careful reading of the said rule, it is held that Rule 22 is applicable only in case when the assessee is adjudicated as insolvent or in the case of a company when it is wound up - In the present case, the applicant being a company has not been wound up whereas, the same was revived under Insolvency Resolution process as per NCLT order. Moreover, in the present case, there is only change of name of the company from M/s. Binani Cement Limited to M/s. Ultratech Nathdwara Cement Limited in terms of certificate of incorporation pursuant to change of name issued by RoC therefore, the company has not been wound up and it is on going company, hence, rule 22 is not applicable. As per the resolution plan approved by the NCLT and in the light of Hon ble Supreme Court judgment in the case of GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR ORS. [ 2021 (4) TMI 613 - SUPREME COURT] , it prima facie appears that the adjudged dues cannot be recovered by the department however, this issue has to be decided by the department and not by this tribunal - This tribunal being creature under the Customs Act, even though the Insolvency and Bankruptcy Code have over riding effect over all the other acts in absence of any explicit provision under the Customs/Central Excise Act, this tribunal cannot decide finally whether the adjudged amount can be recovered by the department or otherwise. This issue has to be resolved by the respondent. The appeal is dismissed as infructuous.
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Corporate Laws
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2022 (10) TMI 935
Jurisdiction of Court to entertain the writ petition - Jurisdiction of ROC to deal with complaint - effect of the pending Commercial Suit No.584 of 2017 on the complaint - Non-issuance of duplicate certificate - non-payment of dividend - non-receipt of notice for general meeting - dispute sub-judice before the High Court of Judicature at Bombay - HELD THAT:- In case of Damomal Kausomal Raisinghani vs. Union of India Ors. [ 1965 (12) TMI 154 - BOMBAY HIGH COURT] , a co-ordinate Bench of this Court held that the place where the consequences of the impugned order fell on the Petitioner would be a place where at least the cause of action in part would arise. The Petitioners have specifically averred that the Petitioner No.1 would be able to trade with the shares in Mumbai and therefore, impugned order of ROC has affected Petitioners rights in Mumbai. The said averments have remained uncontroverted. Thus, it is clear that the consequence of the impugned order fell on the Petitioner at Mumbai where atleast the cause of the action in part has taken place - there is no substance in the contention raised by the Respondents that this Court has no jurisdiction to deal with this Writ Petition. Whether ROC has jurisdiction to deal with complaint dated 1st December 2015 filed by the Petitioner No.1? - What is the effect of pending Commercial Suit No.584 of 2017 on the said complaint dated 1st December 2015. 20? - HELD THAT:- The factual position on record clearly show that although Petitioner No.1 remained absent when the hearing of the said complaint was scheduled on 28th November 2018 as they have not been served with the notice of hearing but all along they requested for another date of hearing and without granting hearing, order was passed. It is further significant to note that this is not a case where after 28th November 2018 i.e. after scheduled date of hearing the ROC has immediately passed the impugned order. In fact, the impugned order has been passed after a period of four months after the said scheduled date of hearing. Thus, there was no impediment for ROC to grant hearing to the Petitioner No.1. It is clear that the impugned order is passed without giving hearing to the Petitioner No. 1 and without following principles of natural justice. The Petitioner has requested for fresh hearing and Petitioner No.1 has given valid reason for the absence. The factual position on record clearly demonstrates that the Petitioner No.1 from time to time requested for hearing even prior to 28th November 2018 and immediately after 28th November 2018 also. Thus, the impugned order is liable to be quashed and set aside on this ground alone. The impugned order is liable to be quashed and set aside - Petition disposed off.
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2022 (10) TMI 934
Right of the Shareholder / Member of Company - it is alleged that the main petition do not possess the minimum qualification criteria prescribed under Section 244 of the Companies Act for filing the main CP and none of the prayers sought for by the Respondents 1 to 4 falls under the ambit of Section 241 of the Companies Act. Whether the Company Petitioners are not the members of the 1st respondent? - If so, whether the Company Petition filed by them u/s. 241 of the Companies Act is not maintainable under law? HELD THAT:- Since it is settled law that a shareholder who is not a member cannot maintain an application under section 241 of the Companies Act 2013, it is imperative for the company petitioners to establish that they are the members of the 1st respondent Company as on the date of filing this Company Petition. In so far as the case on hand is concerned the Company Petitioners have claimed that the respondents 2 3 in Company Petition have agreed to sell Rs. 9,68,500/- fully paid-up equity shares of Rs. 10/- each, aggregating 76.09% of the respondent company to the 1st petitioner under the sale purchase agreement dated 18.05.2010. The mandatory compliances for transfer of such shares, namely, executing share transfer form, entering names of the transferees in the share register and then applying to the company to register the name in place of the previous holder of the share has neither been pleaded nor any record of such actions action been placed. The right of a transferee of a share is only to call upon the company to register his name and no more. No rights arise till such registration takes place. The completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made. The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable. Admittedly, no record showing the names of the Company Petitioner in the Registers of the company or pendency of such request before the concerned authority or Tribunal has been placed in the impugned order - the status of the petitioners as members of the respondent Company remains un-established. Being a non-member, the respondents in this IA have no local standi, to maintain a Petition under section 241 of the Companies Act 2013. The Company Petitioners have no local standi to maintain the Petition u/s. 241 of the Companies Act - Application allowed.
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Insolvency & Bankruptcy
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2022 (10) TMI 933
Seeking Liquidation of Corporate Debtor - section 33 of IBC - HELD THAT:- From the facts and sequence of events, it is clear that Liquidator conducted seven E-Auction for sale of the Corporate Debtor. Last Attempt being made on 26th February, 2021. Liquidator unable to obtain any bid in the e-Auction, decided to conduct private sale as permissible under the Liquidation Regulation 33 read with Schedule I. There can be no quarrel to the submissions that if there is conflict between the auction process document and the Code or the Liquidation Process Regulations, the provision of the Code and Liquidation Regulations shall prevail. Whether the requirement contained in the process document as well as Letter of Intent are in conflict with the provisions of the Code or Liquidation Regulations? - HELD THAT:- The Process Information Document having been issued by the Liquidator which reflects the requirement of approval of the sale by the NCLT which is part of the sale, there is no occasion to question the requirement in the Process Information Document. Even if under Regulation 33 (2) proviso, no prior permission is required for sale in question, there was no prohibition from including such terms of the sale. The reason for containing such terms for sale is not far to seek. Looking to the enormous value of the assets of the corporate debtor and further that e- Auction did not succeed, in event the Liquidator has put a condition for requiring approval of the sale from NCLT, no exception can be taken to the terms of the sale. It is such condition which ensures the transparency and protects the liquidator as well. It is true that if any e-Auction Process a person does not participate, he has no right to make any offer and his Application subsequently to make higher offer has to be rejected but present being case of a private sale and the terms and conditions stipulated approval of the NCLT, the Adjudicating Authority did not commit any error in taking note of the offer made by the Respondent No. 1 who made an offer of initial Rs. 190 Crores and revised offer was Rs. 201 Crores i.e. much higher than the one on which Appellant was declared successful bidder - Present is a case where the Adjudicating Authority has proceeded to pass order relying on the terms of the sale as well as to obtain the object of maximization of the assets of the Corporate Debtor. The exercise of jurisdiction by the Adjudicating Authority in the Impugned Order can not be said to be reliance on any equity jurisdiction. The Adjudicating Authority did not commit any error in passing the Impugned Order. The Impugned Order gives an opportunity to both Appellants and Respondent-Jindal Stainless Limited and other two bidders to participate and Adjudicating Authority has also put condition to deposit Rs. 50 Crores by the Jindal Stainless Limited to ensure the bona fide as a pre deposit of the Jindal Stainless Limited, there are no good ground found to interfere with the Impugned Order in exercise of our Appellate Jurisdiction. Appeal dismissed.
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2022 (10) TMI 932
Direction to hand over the vehicle i.e. Mercedes Benz GL 350 CDI EXE, Chassis No. WDC 1668236M007698 Engine No. 64282641701034 with Registration No. HR26CQ0196 within a week to the Resolution Professional - vehicle was taken on loan, and claim of bank is admitted by Resolution Professional - HELD THAT:- In view of the admitted facts that the vehicle in question was taken on loan granted by HDFC Bank - Respondent No. 1 by Corporate Debtor - Homestead Infrastructure Development Pvt. Ltd. and said vehicle used by the Appellant and further taking into fact that the loan amounting of Rs. 25,84,123/- has not been paid and the claim of the Bank - Respondent No. 1 which is admitted by the Resolution Professional - Respondent No. 2, therefore, the Adjudicating Authority has rightly passed the impugned order. The impugned order passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Court-II) is hereby affirmed - Appeal dismissed.
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2022 (10) TMI 931
Removal of the Leasehold Land from the pull of Assets of the Corporate Debtor - right to terminate the Lease Deed - Section 61 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In the instant case, Noida has never taken any steps to revoke the lease. It was vehemently argued by the Learned Counsel for the Respondent that it was never the case of the Corporate Debtor that it had Ownership Right over the said Plot. It is only their case that if the Plot along with the development which has taken place thereon is a right to be taken out of pool of Assets of the Corporate Debtor, it would amount to violation of Section 14(1)d of the Code - In the present case, Leasehold Rights have already been created under the Lease Deed in favour of the Corporate Debtor by the Appellant as per the mandate of Section 14 of the Code. The Learned Adjudicating Authority in the Impugned Order has observed that the Assets referred to in the explanation given to Section 18 of the Code, are only Assets of such kind, which had come to the Corporate Debtor for rendering some services. It is significant to mention that the Hon ble Supreme Court in a catena of Judgements has held that Lease Rentals arising out of the execution of such Lease Deeds, are not Financial Leases, but in fact, the amount claimed under such leases would construe Operational Debt and not Financial Debt - the Leasehold Rights is an Asset under Intangible Assets falling within the ambit of Section 18(f)(iv). It is the consistent stand of the Respondent that the said Plot is not owned by the Corporate Debtor, but it has only Leasehold Rights over it. The Leasehold Rights accrued to the Corporate Debtor vide the Lease Deed, is a right vested with the Corporate Debtor and is an Intangible Assets and the ownership is only to the extent of these Leasehold Rights based on which the Corporate Debtor can be continued as a Going Concern. It is also significant to mention that the Appellant has never initiated any proceedings or chosen to exercise their rights to invoke any of the Clauses of the Lease Deed for cancellation of the subject Deed - the Leasehold Right is an Intangible Asset of the Corporate Debtor and that the Resolution Professional is empowered under Section 18(f) of the Code to take control and custody of any Asset over which the Corporate Debtor has the Ownership Right. Appeal disposed off.
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2022 (10) TMI 930
Approval of Resolution Plan - grievance of the Petitioner / Appellant / Resolution Applicant is that the Adjudicating Authority was misled by the Resolution Professional and the Resolution Plan, submitted by the Resolution Applicant was not placed before the Committee of Creditors or the Tribunal - HELD THAT:- On going through, the contents of the Minutes of the Meeting of the Committee of Creditors (M/s. Bhuwalka Steel Industries Limited dated 18.02.2020), is of the considered view that the Resolution Plan furnished by the Petitioner / Appellant / Resolution Applicant was given necessary consideration during numerous Committee of Creditors Meetings and that, the Respondent Nos. 1 and 2 gave adequate opportunity to the Petitioner / Appellant / Resolution Applicant, to present its Proposal to the Committee and after elaborate negotiations, the Committee had considered the Resolution Plan, submitted by the Successful Resolution Applicant Viz. Starteck Finance Limited, as a viable one. In the teeth of Lack of Bonafide, on the part of the Petitioner / Appellant, the leave sought in Company appeal, in preferring the instant Appeal sans merits - appeal dismissed.
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2022 (10) TMI 929
Recovery of dues - onus on the Applicant to satisfy that there is pre-existing dispute or not - various meetings between both parties were held, to arrive at amicable settlement, but respondent has not filed reply - HELD THAT:- In reality, the established fact is that, the Respondent had filed a Reply, before the Adjudicating Authority, to the main Petition and apart from that, the Learned Counsel was heard at the time of Reserving the Orders, in the main Petition. When the fact situation is that, the Respondent had filed its Counter/ Reply / Response, before the Adjudicating Authority, to the main Petition, the Contra observation made by the Adjudicating Authority, Viz., that the Respondent had not filed its Reply is clearly an erroneous one, and there appears to be a Costly Lapse / Omission, on the part of the Adjudicating Authority in not noticing the filing of Counter / Reply, in a proper and real perspective. Therefore, this Tribunal, without going in to the merits of the Controversies/ Disputes, between the respective Parties and not delving deep in to the same, without any Haziness, simpliciter comes to an inevitable, inescapable and irresistible conclusion that the Adjudicating Authority (National Company Law Tribunal, Division Bench II, Chennai), had committed a serious Material Irregularity and Patent Illegality in passing the impugned order and this Appellate Tribunal, to prevent an Aberration of Justice and in furtherance of Substantial Cause of Justice, sets aside. The matter is remitted back to the Adjudicating Authority (National Company Law Tribunal, Division Bench II, Chennai) to restore application filed by the Appellant / Operational Creditor / Petitioner, to its file, within two weeks from the date of pronouncement of Judgment.
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2022 (10) TMI 928
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Hon ble Supreme Court in Mobilox [ 2017 (9) TMI 1270 - SUPREME COURT ] has also observed that all that the Adjudicating Authority has to see at the stage of Admission is whether there is a plausible contention which requires further investigation and that the Dispute is not a patently feeble legal argument or an assertion of fact or a moonshine defence unsupported by tangible materials/evidence. It is pertinent to mention that the disputes raised by the Corporate Debtor are not spurious or plainly frivolous or vexatious - Petition dismissed.
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2022 (10) TMI 927
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantor of the Corporate Debtor - existence of debt and dispute or not - Section 95 of IBC, 2016 - HELD THAT:- What the Creditor has to serve is the copy of the application made under sub-section (1) to the Debtor. Reading Rule 7(2) with Rule 3 shows that the application filed under sub-section (1) of Section 95 shall be submitted in Form - C and the Creditor will serve forthwith a copy of the application to the Guarantor and the Corporate Debtor for whom the Guarantor is a Personal Guarantor. Thus, what has to be served is the copy of application which has been submitted . What is contemplated is that the application in Form C should be submitted and then the Creditor should serve forthwith a copy of the application to the Guarantor and the Corporate Debtor for whom the Guarantor is a Personal Guarantor. The procedure thus prescribed will give the Personal Guarantor, notice of the application already filed before the Adjudicating Authority. Section 95(5) requires the Creditor to provide a copy of the application made under sub-section (1) , to the Debtor. Thus, serving advance copy is not contemplated. Section 99(4) of IBC, empowers the Resolution Professional to seek further information or explanation in connection with the application as may be required from the Debtor or the Creditor or any other person, who, in the opinion of the Resolution Professional, may provide such information. Hence it is not as if, the Debtor is not provided an audience before the submission of the report - in the present case, there is no violation of principles of natural justice by not giving an opportunity to the Debtor for making his submissions before the appointment of IRP - no notice is required for the Respondent at the stage of appointment of IRP. This Tribunal is of the considered opinion that there is no hurdle to entertain this application under Section 95 of IBC, 2016, since the application is found to be complete. Petition admitted - moratorium declared.
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2022 (10) TMI 926
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantor of the Corporate Debtor - existence of debt and dispute or not - HELD THAT:- What the Creditor has to serve is the copy of the application made under sub-section (1) to the Debtor. Reading Rule 7(2) with Rule 3 shows that the application filed under sub-section (1) of Section 95 shall be submitted in Form-C and the Creditor will serve forthwith a copy of the application to the Guarantor and the Corporate Debtor for whom the Guarantor is a Personal Guarantor. Thus, what has to be served is the copy of application which has been submitted . What is contemplated is that the application in Form C should be submitted and then the Creditor should serve forthwith a copy of the application to the Guarantor and the Corporate Debtor for whom the Guarantor is a Personal Guarantor. The procedure thus prescribed will give the Personal Guarantor, notice of the application already filed before the Adjudicating Authority. Section 95(5) requires the Creditor to provide a copy of the application made under sub-section (1) , to the Debtor. Thus, serving advance copy is not contemplated. The arguments that Section 98 provides for replacement of the Resolution Professional and hence the Guarantor should have an opportunity to seek replacement of Resolution Professional and hence he should be heard before appointment of IRP was also considered and held that going through Section 98 of IBC, 2016, it is found that Section 98 is not stage specific. Section 98 itself shows that the section could be resorted to even at stages like implementation of repayment plan which would be a stage beyond Section 116, where implementation and supervision of repayment plan is provided for. It was held that the argument, that before report of Resolution Professional the Debtor must get a chance to seek replacement of Resolution Professional and thus notice was required to be given, has no substance. It is clearly held that, it is only after the Resolution Professional is appointed by the Adjudicating Authority under Section 97(5), that the step under Section 98 is contemplated - Also there is no violation of principles of natural justice by not giving an opportunity to the Debtor for making his submissions before the appointment of IRP. This Tribunal is of the considered opinion that there is no hurdle to entertain this application under Section 95 of IBC, 2016, since the application is found to be complete - Petition admitted - moratorium declared.
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2022 (10) TMI 925
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - hardship to MSME Operational Creditor from Mumbai who also attended the physical hearings in 2019 at NCLT, Hyderabad - Existence of debt and dispute or not - HELD THAT:- The Operational Creditor has filed various documents in proof of claim and default. The demand notice is shown at page Nos. 33 to 35 of the application. The demand notice was served on Corporate Debtor and received by them. The case of the Operational Creditor is that it had supplied printing ink material to the Corporate Debtor. The Tax Invoices are shown at page Nos. 26 and 33 of the additional documents filed by the operational creditor. According to the Operational Creditor, an amount of Rs. 1,00,000/- was paid by the Corporate Debtor on 23.10.2018. It is pertinent to note that the Corporate Debtor has never raised any dispute in regard to defective material. Thus, this is not a matter where existence of a pre-existing dispute is pleaded. In so far as the prayer for costs claimed by the Operational Creditor on the plea that the operational creditor was put to hardship and inconvenience by the Corporate Debtor besides the travelling cost incurred by the Operational Creditor for traveling from Mumbai to Hyderabad for attending the physical hearings before the NCLT, Hyderabad is concerned, liberty is given to the Operational Creditor to make a claim before the IRP and IRP to consider the same as per the rules. Petition admitted - moratorium declared.
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Service Tax
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2022 (10) TMI 924
Jurisdiction - appropriate forum - High Court or Supreme Court - Classification of services - Erection, Commissioning or installation Service or not - laying, connecting, joining pipeline for water supply project - entitlement for abatement under N/N.1 of 2006, dated 1 st March 2006 - HELD THAT:- Sub-section (2) to section 35L was inserted with effect from 6th August 2014, i.e., prior to the passing of the order impugned in the present appeal by the CESTAT. Even otherwise, this Court in the case of THE COMMISSIONER OF CENTRAL EXCISE MUMBAI V COMMISSIONERATE VERSUS M/S. RELIANCE MEDIA WORKS LTD. (FORMERLY KNOWN AS M/S. ADLABS FILMS LTD.) , SHRI VASANJI ASARIA MAMANIA, SHRI SATYAJEET MUKHERJEE [ 2019 (12) TMI 392 - BOMBAY HIGH COURT] has held that insertion of sub-section (2) to section 35L was clarificatory, and therefore, the issue of taxability and excisability would be an issue relating to rate of duty of excise/services for the purpose of assessment for which an appeal from the order of the Tribunal could be entertained only by the Hon ble Supreme Court and not by the High Court in terms of sections 35G of the Excise Act. In view of the clear mandate, sub-section (2) of section 35L of the Excise Act, since the issue involved in the present appeal pertains to whether the service rendered by the assessee is a taxable service or not, this Court would have no jurisdiction to entertain the appeal. The present appeal is not maintainable before this Court leaving it free to the appellant to avail its remedies under law - Appeal dismissed.
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2022 (10) TMI 923
Levy of service tax - Investment or Management Service under ULIP - Policy Administration Charges - Front End Load - Switching Charges - amount collected by the appellant Insurer, from the Policy holders - period 1.7.2010 to 30.04.2011 - barred by time limitation or not - HELD THAT:- The issue is no longer res integra and has been allowed in favour of the Insurance Company under the similar facts and circumstances in the case of M/S SAHARA INDIA LIFE INSURANCE CO. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, LUCKNOW (VICE-VERSA) [ 2018 (5) TMI 1217 - CESTAT ALLAHABAD ], wherein by a Coordinate Bench (of which one of us Member (Judicial) was a Member of the Division Bench), wherein it has been categorically held that prior to 1.5.2011, policy administration charges, etc. are not chargeable to service tax. Further, in view of the clarification by the Board vide TRU Circular No. DOF/334/1/2010 dated 26.02.2010, that such policy administration charges are chargeable to tax under Section 65(105)(zx). Thus, Revenue cannot be permitted to be taken u-turn in the light of the Board s Circular. Further, Board circular are binding on the officers of the Revenue Department. The ground of limitation is left open - appeal allowed.
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Central Excise
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2022 (10) TMI 922
Settlement Application filed by the appellant under Section 32 L of the Central Excise Act, 1944 dismissed - alleged non-cooperation by the appellant - HELD THAT:- Neither parties have questioned the 1st Report (legality). Admittedly, the 1st Report was made at the request of the appellant herein to the Respondent Commission to investigate the production capacity of the Plant pursuant to the order of this Court whereby, the order of the Settlement Commission dated 18.05.2011 rejecting the application on the ground of non-disclosure of true facts and non-cooperation was set aside. We intend to make it clear that we are not testing the legality of the 1st Report as neither parties to the Writ appeal have challenged the same and also the Report is stated to be made pursuant to and on the basis of the orders of this Court. Legality of the 2nd Report - HELD THAT:- As seen from the analysis of Section 32 F(4) of the Act normally the power to call for additional information/enquiry/Report is postulated on receipt of a Report from the Principal Commissioner and within the timelines setout therein and the said power can be exercised once and on such exercise the power would get exhausted. However in the instant case the 1st Report is stated to be made in view of the direction of this Court in W.P.No.13754 of 2011 dated 14.11.2011, the same having been furnished on 24.05.2012, it appears that the power of the Respondent Commission to call for a Report stood exhausted. Assuming that powers to call for the 2nd Report is available with the Respondent Commission we shall test the 2nd Report as one which the Commission can call for under Section 32 F (4) of the Act - the order of the 2nd investigation was made by the 1st Respondent Commission only on 21.06.2013 i.e., after more than one year and 45 days. It thus seems doubtful, if any reliance can be placed upon the 2nd Report, since the 2nd Report is clearly barred in terms of the timelines prescribed under Section 32(F)(4) of the Central Excise Act. Whether the timelines are mandatory or directory? - HELD THAT:- It has been consistently held that one of the test for determining whether a provision is mandatory or directory is to examine if the legislature provides for the consequences, which it does in the present case by requiring the Commission to proceed to dispose all the matters in terms of Section 32 F (5) if the Report is not received within the timelines prescribed. It is trite law that when consequences of failure to comply with a prescribed requirement is provided by the statute itself, there can be no manner of doubt that such statutory requirement must be interpreted as mandatory - The periods prescribed in the Schedule to the Indian Limitation Act, 1908, for bringing a legal proceeding are mandatory as the consequence of the expiry of the period of limitation is provided by Section 3 of the Act in that the court is enjoined to dismiss a legal proceeding instituted after expiry of the prescribed period. The order of the 1st Respondent Commission is vulnerable to challenge as prima-facie it appears to be in conflict with and disregard to the directions of this Court, wherein, the Commissioner was directed to examine the matter on merits. The Settlement Commission has grossly misdirected itself in not taking into account/ examining the case of the appellant which is impossibility and not improbability or difficulty in producing the quantum which is arrived at on the basis of the second report. The matter remanded back to the Respondent Commission to examine the matter and pass orders afresh in accordance with law - appeal disposed off.
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2022 (10) TMI 921
Recovery of MODVAT Credit - procurement of welding electrode - recovery of the credit premised on the definition therein having excluded consumables, which the impugned goods were held to be, from the enumeration therein - whether welding electrodes are consumables as held by the original authority or are used in the manufacture of excisable goods and, therefore, eligible for MODVAT credit as claimed by the assessee? HELD THAT:- There is no doubt that welding electrodes deplete by usage but with the material in the electrodes transferred to the liner and the restoration renders it fit for continued production of cement. MODVAT credit is available on procurement of goods that are inputs with capital goods being entitled to the extent of conformity with Explanation of that expression in rule 57Q of Central Excise Rules, 1944. Doubtlessly, there is no mention of consumables in the said Explanation but neither is it certain that that consumables has little to do with manufacturing process for depriving eligibility for MODVAT credit - Absence of welding electrodes for deployment on liners, which are capital goods, impedes production and, therefore, its use is essential for production. Proceedings of the original authority, based on the finding that the impugned goods are consumables for the reasons stated therein, have ignored that the characteristics of consumables does not attach to welding electrodes, and, therefore, the consequential recovery of MODVAT credit in the impugned order is incorrect - Appeal allowed - decided in favor of appellant.
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2022 (10) TMI 920
Levy of penalty under Section 11AC - suppression of fact or any mala fide intention on the part of the appellant or not - Debonding of unit - HELD THAT:- There is no dispute about the duty and interest which were already paid by the appellant on pointing out by the audit - From the bare reading of the Section 11AC prevalent at the relevant time, it is found that in the section an exception is provided if any duty is paid within one year from the due date or the show cause notice issued covers normal period of one year, the ingredients for imposing penalty under Section 11AC is only that if the duty was not paid by reason of fraud or collusion or willful mis-statement or suppression of fact or in contravention of any of the provision of this act or rules made therein with intent to evade payment of duty. The appellant was very conscious while debonding of the unit and duty so payable on the stock of the goods as on 03.01.2008 was calculated and paid the duty on that basis. The departmental officers have issue NOC enabling the appellant to exit from EOU status however, there are some transaction of the goods from 03.01.2008 till 28.01.2008 on which also the duty by EOU was supposed to be paid. The appellant was well aware that the duty due on the stock was required to be paid for debonding of the EOU. Though, the appellant have paid the duty on the stock as on 03.01.2008 but knowing that some goods were lying from 03.01.2008 to 28.01.2008 but have not paid the duty. Once the appellant have obtained the NOC and unit was debonded, they intentionally avoided the payment of short duty. It is only on pointing out by the audit they have paid the duty, this fact clearly shows that the appellant knowing that before debonding, on all the goods lying in the factory they are required to pay the duty but they consciously not paid the duty which amounts to suppression of fact on their part. There are no infirmity in the impugned order upholding the penalty under Section 11AC therefore, the same is upheld - appeal dismissed.
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2022 (10) TMI 919
Validity of SCN issued - price escalation during GST era for goods supplied pre GST era - levy of duty of excise or GST - Demand of differential excise duty alongwith interest and penalty under Section 11A(4) - supplies made during September 2016 to November 2016 - upward revision of price - provisions of Section 142 (2) (a) of the CGST Act ignored. The Commissioner (Appeals) also rejected the appeal on the ground that under Section 142(2)(a) of CGST Act, the GST can be paid only in case where the price of any goods or service or both was revised upward on or after the appointed day. In this case the Commissioner (Appeal) has not treated it as upward revision of price but held that the 10% of the amount had already formed the part of the assessable value and was not a result of upward revision of price. Hence, it was held by the Commissioner (Appeals) that the amount paid by M/s IOCL in the month of April, 2018 was leviable to Central Excise duty and not GST. HELD THAT:- The show cause notice is bad as it has been issued ignoring the provisions of Section 142 (2) (a) of the CGST Act, which is a provision to remove such difficulties for the transitional period - Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2022 (10) TMI 918
Revision of order of assessment - Section 34 of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- The order was sought to be revised under Section 34 of the Act by the first respondent, by issuing a notice dated 10.02.1998. By the impugned order, the order of the Appellate Commissioner was revised by holding that the petitioner had subsequently accounted the transactions and modified the accounts and therefore, there was a case for imposing penalty and also restoring the order of the original authority. There are no reason to sustain the impugned order - This writ petition is allowed.
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Indian Laws
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2022 (10) TMI 917
Seeking appointment of a sole arbitrator to adjudicate upon the disputes arising out of the three agreements executed between the parties, being intrinsically connected with each other - Doctrine of separability - doctrine of kompetenz-kompetenz encompassed in the arbitration jurisprudence - Section 11(6) read with Section 11(12) of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Recently a three-judge Bench of this Court in case of Intercontinental Hotels Group (India) Pvt. Ltd. Anr. Vs. Waterline Hotels Private Limited [ 2022 (1) TMI 1171 - SUPREME COURT] while dealing with an application filed under Section 11(6) read with Section 11(12)(e) of the Arbitration Act for appointment of a sole arbitrator on the basis of an arbitration clause contained in the agreement which was unstamped document, took notice of the earlier decisions as also the issue referred to the Constitution Bench and observed that Although we agree that there is a need to constitute a larger Bench to settle the jurisprudence, we are also cognizant of time-sensitivity when dealing with arbitration issues. All these matters are still at a pre-appointment stage, and we cannot leave them hanging until the larger Bench settles the issue. In view of the same, this Court-until the larger Bench decides on the interplay between Sections 11(6) and 16-should ensure that arbitrations are carried on, unless the issue before the Court patently indicates existence of deadwood. If the facts of the present petitions are examined, it deserves to be noted that the execution of three agreements, namely, Onshore Service Agreement, Lease Agreement and Drilling Service Agreement between the petitioner and the respondent has not been disputed. The identical clause-23 for Arbitration contained in all the three agreements has also not been disputed - The efforts to amicably resolve the disputes through Mediation having failed, the petitioner thereafter also agreed vide letter dated 1st September, 2021 to consolidate the disputes under the three agreements to be heard by a sole arbitrator in one single arbitration, as proposed by the respondent. The petitioner also proposed the names of the arbitrators, however, the said names were not agreeable to the respondent. The respondent also failed to propose any names for the appointment of a sole arbitrator. Since the arbitration agreements contained in all the three agreements namely, Onshore Service Agreement, Lease Agreement and Drilling Service Agreement were not disputed by the respondent, and since the respondent itself had proposed to consolidate the disputes under the said agreements and to refer them to a sole arbitrator in one single arbitration, the court is of the opinion that now it does not lie in the mouth of the respondent to say that the petitions seeking appointment of a sole arbitrator should not be entertained, as the matter with regard to the determination of requisite stamp duty under the Maharashtra Stamp Duty Act on the two agreements is pending before the Collector. Since the respondent had proposed and the petitioner had agreed to consolidate all the disputes arising out of the three agreements, namely, Onshore Service Agreement, Lease Agreement and Drilling Service Agreement, and to refer them to a sole arbitrator in a single arbitration for adjudication, it is ordered as such. Petition allowed.
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2022 (10) TMI 916
Dishonor of Cheque - proceeds against a company which has already been sold out - vicarious liability of the Director - Whether the petitioner No.2, being the Managing Director of the company is responsible as per provision of section 141 N.I. Act, while he had not issued the cheques in question? - HELD THAT:- There is no quarrel at the Bar that before issuing cheques in question, the company has been sold out. Despite the cheques were issued by the accused, which returned unpaid on presentation to the banker due to not availability of the fund in the account of the accused. There is nothing on the record to show that the company was legally forbidden from making payment of the cheque amounts on account of the same being sold out. This being the position the accused persons cannot be allowed to escape from the penal liability and to seek the shield that the company being sold out. In the case in hand the petitioner No.2 had not issued any cheque. There is no averment in the complaint petitions as to how and in what manner the petitioner No.2 was responsible for the conduct of the business of the Company or otherwise responsible to it in regard to its functioning, though an omnibus statement is made in paragraph No.2 of the complaint that he and the accused No.3 and 4 are the person responsible for conduct of the business of the company. How he is responsible for dishonour of the cheque has also not been stated. Nothing is averred in the said Affidavit against the petitioner No. 2 - Shri Shiv Kumar Kanoi, let alone any averment that he was the person responsible for day to day conduct of the affairs of the company. As stated herein, the complainant had made averment against one Joydev Kumar Kanoi as Director the company in the Affidavit. Thus, the bald assertion made in paragraph 2 of the complaint do not satisfy the requirements of Section 141 of the Act. In Pooja Ravinder Devidasani Vs. State of Maharashtra and another, [ 2014 (12) TMI 1070 - SUPREME COURT ] , Hon'ble Supreme Court held that putting criminal law into motion is not a matter of course. A Magistrate taking cognizance of an offence under Section 138/141 of the N.I. Act, making a person vicariously liable has to ensure strict compliance of the statutory requirements. The impugned order of taking cognizance against the petitioner No.2 by the learned Addl. Chief Judicial Magistrate, Dibrugarh, under section 138 N.I. Act, dated 30.04.2016, stands set aside and quashed - petition allowed in part.
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