TMI Tax Updates - e-Newsletter
November 20, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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Income Tax:
Revenue recognition - AO will not be justified to work out the profit by applying percentage of completion method during the impugned year on selective basis - AT
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Income Tax:
Addition on interest accrued on sticky loans and advances - Under the mercantile system of accounting an income accrues when there is reasonable certainty for realising any receipts or revenue. Hypothetical income cannot be taken into account. - AT
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Income Tax:
Validity assessment order when the assessee has expired during the pendency of the proceedings - There is no illegality committed by the AO. He only committed an irregularity and it is settled position that wherever any irregularity crept in the proceedings, the proceedings itself cannot be declared void, rather irregularity deserves to be rectified. - AT
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Income Tax:
TDS on enhanced compensation - whether the compensation is paid for property other than agricultural land or otherwise - Since the Land Acquisition Collector had deducted the tax at source and deposited the same with the Income Tax Department, appellants asked to approach AO for refund, if eligible - SC
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Customs:
Classification - Parts of International Private Leased Circuit (IPLC) Lawful Interception Monitoring (LIM ) Networking System - the classification under CTH 85176990 is more appropriate than CTH 85437099 - AT
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VAT:
Classification of Routers and Hubs - goods sold by the assessee, namely, router, is a computer peripheral, falls under Serial No.22, Entry 68 of Part B of I Schedule of TNVAT Act, 2006. - HC
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VAT:
Input tax credit - whether the petitioner is entitled to input tax credit on the tax amount shown in the invoices issued by the sellers who have availed benefit of remission u/s 79 of the J&K VAT - Held Yes - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2017 (11) TMI 969
TDS on enhanced compensation - TDS on the amount of compensation and interest received pursuant to judgment and award of the Land Acquisition Reference - whether the compensation is paid for property other than agricultural land or otherwise and whether deduction of tax at source was permissible under any provision of law? - as decided by HC [2016 (12) TMI 1084 - GUJARAT HIGH COURT] the land of the petitioner was acquired for public purpose and he received compensation and interest under the provisions of Land Acquisition Act, the assessee was not liable to pay any tax on the aforesaid amount received by him. Held that:- We find that the issue involved in this case is squarely covered by case Union of India and Ors. v. Hari Singh and Ors [2017 (11) TMI 923 - SUPREME COURT] since the Land Acquisition Collector had already deducted tax at source and deposited with the Income Tax Department, in such circumstances, better course of action, which is in consonance with the provisions of Income Tax Act, is for the respondents to approach the concerned Assessing Officer(s) and to raise the issue that no tax is payable on the compensation/enhanced compensation which is received by them as their land was agricultural land. Once such an issue is raised before the Assessing Officer(s), it is for the Assessing Officer(s) to examine the facts of each case and then apply the law as contained in the Income Tax Act to determine the aforesaid question. Appeal disposed of with directions to AO, and Land Acquisition Collectors.
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2017 (11) TMI 968
Rectification of mistake - ITAT’s lack of findings concerning Rule 8D(2) (iii) - Held that:- This Court is of the opinion that no error of law can be attributable to the ITAT; the discussion in the main judgment of this Court of 17.12.2015 clearly shows that the entire disallowance under Section 14A was at large. No substantial question of law.
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2017 (11) TMI 967
Validity of proceedings taken against the assessee, who expired during the pendency of the proceedings - proceedings continued against legal representatives in the same capacity - Held that:- Any proceedings taken against an assessee before his death shall be deemed to have taken against the legal representatives which may be continued against the L/Rs. from the stage at which it stood on the date of the death of the assessee. A perusal of the record would indicate that a notice under section 143(2) was issued on 30.8.2010 when Shri Atulkumar M. Shah was alive. An opportunity to the assessee was given to make submission in support of his return, as required under section 143(2). This assessment proceedings was set in motion by the AO when the assessee was alive. Fact of death of the assessee was brought to the notice of the AO at the very fag end i.e. vide letter dated 23.12.2011. The AO has, though taken cognizance of this letter, but failed to issue notice to the L/Rs. so that they can put their defence before him. There is no illegality committed by the AO. He only committed an irregularity and it is settled position that wherever any irregularity crept in the proceedings, the proceedings itself cannot be declared void, rather irregularity deserves to be rectified. Considering these aspects, we allow appeal of the assessee for statistical purpose. We set aside both the impugned orders and restore all issues to the file of the AO for adjudication afresh. The ld.AO shall re-determine income of the assessee on merit after considering plea of the assessee whether loss suffered by the assessee in share trading deserves to be set off against ultimate assessed income. The ld.AO shall issue notice to the legal representatives by providing reasonable opportunity of hearing, and thereafter pass assessment order.
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2017 (11) TMI 966
Addition on interest accrued on sticky loans and advances - accrual of income - whether as assessee company follows the mercantile system of accounting and, therefore, all the incomes are mandatorily required to be included in the its total income on accrual basis? - We find that the issue involved in the present appeal is squarely covered in favour of the assessee in assessee's own case in A.Y.2000-01, 2003-04 and 2004-05 as held the assessee had not recognized the interest income on sticky loans keeping in view the mandatory guidelines of RBI in regard to NBFC. Under the mercantile system of accounting an income accrues when there is reasonable certainty for realising any receipts or revenue. Hypothetical income cannot be taken into account. In respect of sticky loans and advances, the income is recognized when interest is actually collected. Merely on the basis of accrual it cannot be recognized in the absence of any certainty of its collection. The circular of October 9, 1984, also serves another practical purpose of laying down a uniform test for the assessing authority to decide whether the interest income which is transferred to the suspense account is, in fact, arising in respect of a doubtful or “sticky” loan. This is done by providing that nonreceipt of interest on a doubtful loan. But if after three years the payment of interest is not received, from the fourth year onwards it will be treated as interest on a doubtful loan and will be added to the income only when it is actually received. There is no inconsistency or contradiction between the circular so issued and section 145 of the Income tax Act.- Decided against revenue
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2017 (11) TMI 965
Loss on sale of shares - addition u/s. 68 on account of bogus sale of shares - Held that:- AO observed that it is clear that the assessee company debited the sum of ₹ 1580705/- to the P&L account with an intention to adjust the income accrued to it from the Service Receipts during the year. AO after examination of all the facts held that the loss amounting to ₹ 15,80,705/- on the alleged sale of the shares to such farmers was booked and cash amounting to ₹ 5,60,000/- was introduced in the guise of sale consideration of the alleged shares and rightly relied decision in the case of Sumati Dayal vs. CIT (1995 (3) TMI 3 - SUPREME Court ). We further find that CIT(A) has rightly observed that the identity and creditworthiness of buyers and genuineness of the transactions were never established. The loss of ₹ 15.80 lacs claimed is not admissible also on account of provisions of Explanation to section 73. The receipts shown on sale of shares, the amount of ₹ 5,60,000/- falsely shown as sale consideration has been rightly treated as unexplained cash credit, hence, Ld. CIT(A) has rightly upheld the addition made by the AO, which does not need any interference on our part, therefore, we uphold the same and reject the ground no. 1 to 3 raised by the assessee. Addition on account of share application money - Non genuineness of transaction - Held that:- Although, the assessee has been able to indicate that M/s Silverline Appliance Ltd. had entered the transactions in its books of account, it is clear that this was a cash transaction and as indicated by the AO in his letter dated 29.10.2004, the said company had received cash to the tune of RS.6 lacs on account of share application money on different dates in September of the relevant year. The mere fact that M/s Silverline Appliance Ltd. is an income- tax assessee does not prove that this is a genuine transaction. The voucher dated 28.3.2001 through which the alleged cash of the share application money was claimed to have been returned to the appellant company does not appear to be a reliable document. There are no signatures of any person and the acknowledgment part is totally blank. The AO's conclusion that there was never a transaction and this was only a squared up cash account of unexplained cash introduced sounds totally feasible. Hence, Ld. CIT(A) felt that the genuineness of the transaction was proved and the AO has rightly treated it as unexplained cash credit and confirmed the same, which does not need any interference on our part - Decided against assessee. Disallowance u/s. 14A - method of computation of disallowance - Held that:- We note that Section 14A envisages disallowance of expenses relating to exempted income. In such a situation, a prescribed method for working out this expenditure is already on the anvil. In the absence of a specified parameter of apportionment of expenditure in such a situation, the responsibility, (fiscal and moral) of determining corresponding expenditure lies with the assessee. In the absence of any such execution of responsibility, the AO left with no choice but to apportion the expenditure on estimate basis. Therefore, in this case the AO has very reasonably and scientifically worked out the proportion of the business receipts vis-à-vis, the exempted income and then applied that ratio to the expenditure, hence, he rightly affirmed the addition, which does not need any interference on our part - Decided against assessee.
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2017 (11) TMI 964
Penalty u/s. 271(1)(C) - non recording of satisfaction by AO - Held that:- We find that the AO while passing the assessment order dated 6.6.2005 has stated that notice u/s. 271(1)© for the additions have been issued separately, without recording the satisfaction for initiation of penalty proceedings. We further find that in the penalty order dated 6.2.2007 the AO mentioned that “subsequently a show cause notice u/s. 271(1)© has been issued dated 29.11.2006 fixing date of hearing 14.12.2006, but assessee failed to make the compliance the said notice. It is therefore presumed that assessee has nothing to say in this regard. As per AO it is fit case for imposition of penalty u/s. 271(1)© of the I.T. Act. Minimum and Maximum imposable penalty comes to ₹ 4,47,900/- and ₹ 14,13,700/-. I imposed the minimum penalty of ₹ 4,47,900/- with the approval of Addl. CIT, Range-I, Meerut.”, which shows that penalty proceedings ought to fail, ambiguous and vague in as much as in the penalty order it is nowhere stated that the penalty was imposed on which account i.e. concealment of particulars of income or furnishing of inaccurate particulars. In view of the above, we are of the considered view that the entire penalty proceedings stand vitiated as the same is not in accordance with law and without recording of satisfaction. - Decided in favour of assessee.
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2017 (11) TMI 963
Addition made u/s 14A - computation of claim - Held that:- As in the case of CIT v. Srishti Securities Private Limited [2009 (1) TMI 408 - BOMBAY HIGH COURT] held that interest on funds borrowed by an investment company for making investment in shares which may be held as investment or stock in trade or for the purposes of controlling interest in other companies shall be allowed as deduction u/s 36(1)(iii). The assessee has voluntarily suo motu disallowed an interest expenditure on ICD to the tune of ₹ 3,64,34,451/- u/s 14A which disallowance was raised by the AO to ₹ 4,10,78,401/-, wherein administrative expenses were also considered by the AO for making disallowance u/s 14A r.w.r. 8D which was not considered earlier by the assessee. The matter need to be set aside and restored to the file of the AO for computing disallowance u/s 14A afresh and the ratio of aforesaid decisions of Hon‟ble Courts read with provisions of Section 14A and 36(1)(iii) shall be applied by the A.O. to factual matrix of the case while computing disallowance u/s 14A keeping also in view the claim of the assessee that it is an investment company holding more than 99% investments in subsidiaries companies/strategic investments and also that the assessee is a single segment company being an investor and dealer in shares & securities and consequently all the business expenses ought to have been incurred towards this segment under normal circumstances unless otherwise shown, which shall also be kept in view by the AO while computing disallowance. Disallowance computed under section 14A cannot be added to book profits u/s 115JB for computing Minimum alternative tax - Held that:- We answer the question referred to us in favour of assessee by holding that the computation under clause (f) of Explanation 1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A read with Rule SD of the Income-tax Rules, 1962. See ACIT v. Vireet Investment P Ltd. [2017 (6) TMI 1124 - ITAT DELHI] Addition u/s 14A - A.O invoked Rule 8D r.w.s. 14A which led to disallowance of expenses which was higher than actual expenses incurred by the assessee as debited to Profit and Loss Account which disallowance was later restricted by learned CIT(A) to actual expenditure - Held that:- The assessee is a single segment company being an investor and dealer in shares & securities and consequently all the business expenses ought to have been incurred towards this segment under normal circumstances unless otherwise shown, which shall also be kept in view by the AO while computing disallowance. The issue of disallowance u/s 14A and manner of computing disallowance is discussed by Hon'ble Supreme Court in the case of Godrej & Boyce Manufacturing Company Ltd [2017 (5) TMI 403 - SUPREME COURT OF INDIA] wherein held Sub-sections (2)and (3) of Section 14A of the Act read with Rule 8D of the Rules merely prescribe a formula for determination of expenditure incurred in relation to income which does not form part of the total income under the Act in a situation where the Assessing Officer is not satisfied with the claim of the assessee. Exclusion of diminution in the value of investments for the purposes of computation of disallowance u/s 14A - Held that:- As observed that the AO has also included diminution in the value of investments for the purpose of computing disallowance u/s. 14A, which loss has arisen because of the restructuring/amalgamation owing to loss written off of in the investment in subsidiary namely Vantech Investments Limited, which stood merged with the assessee. In our considered view, said losses being diminution in the value of investment being written off cannot be considered as an expenditure incurred for earning of exempt income for the purposes of disallowance under Section 14A as the mandate is to disallow expenditure incurred in relation to earning of an exempt income and it cannot be stretched to include losses arising due to diminution in the value of the investments due to merger/amalgamation, that certainly is not the mandate of Section 14A. We affirm the order of learned CIT(A) on this ground and dismiss the appeal of the Revenue.
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2017 (11) TMI 962
Rejection of application u/s 12AA - proof of charitable activities - Held that:- In the present case the assessee's activities are prima facie ‘educational activities‟. Further it is for the authority granting registration to give prima facie opinion with reasoning that the activities carried on by the assessee is eligible for registration u/s 12A of the Income Tax Act or not. Furthermore, while granting registration u/s 12A of the Act the registration authority is further required to look into the fact that whether the activities of the trust are genuine or not. Merely because assessee received some donation and grants from other entities its activities does not become ingenuine. As these aspects are required to be dealt with about the objects whether it is education or not and activities whether they are genuine or not, the ld CIT(E) has merely relied upon the decision of the Hon’ble Supreme Court without considering the several decisions wherein, the above decision of the Hon’ble Supreme Court has been considered. Therefore, we direct the ld CIT(E) to consider the application of the assessee by considering the above decisions and in the light of them needs to examine the object of the trust whether they are falling within the meaning of “education” or not as per section 2(15) of the Act. Appeal filed by the assessee is allowed for statistical purposes.
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2017 (11) TMI 961
Validity of reopening of assessment under section 148 - permission from non competent authority - whether notice issued under section 148 and reasons recorded by the AO for reopening of the assessment are not valid as the necessary approval was not obtained from the chief commissioner or Commissioner but the approval was obtained from Joint commissioner? - Held that:- There is no quarrel on the point that in case of reopening of assessment under section 148 after expiry of 4 years from the relevant assessment year the approval of reasons recorded by AO is required to be granted by the Commissioner or chief Commissioner as case may be as per the provisions of section 151(1) of the Income Tax Act as exist at the relevant point of time. In the case of the assessee here is no dispute about the fact that the notice under section 148 issued on 20th March 2013 was after the expiry of 4 years from the assessment year under consideration and the original assessment was also frame under section 143(3) of the Act. Therefore, on principle we find merits in the contention of the assessee however, neither this issue was raised before the authorities below nor it was adjudicated. We find that though the assessee raised an objection againstthe notice issued under section 148 of the Act and consequential reassessment completed under section 147 read with section 143(3) of the Act however, it was based on entirely a different plea and ground that the assessing officer was having no reason to believe that the income accessible to tax add escaped assessment. We further note that even no such arguments and contentions was raised by the assessee as apparent from the impugned order of CIT(appeals). There it is Apparent that assessee did not raised this particular contention and plea of invalidity of the notice issued under section 148 for want of the approval of the competent Authority under section 151(1) of the Act. Since this issue has been raised by the assessee first time before the Tribunal and goes to the root of the matter but subject to the verification of the fact that the approval was obtained from joint commissioner and not from the chief commissioner or Commissioner as provided under section 151(1) of the Act. Accordingly, in the facts and circumstances of the case and in the interest of Justice we set aside this issue to the record of the CIT(appeals) for consideration and adjudication of this ground of the assessee. - Appeal of the assessee is allowed for statistical purpose.
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2017 (11) TMI 960
Revenue recognition - application of percentage completion method or project completion method - contention of the assessee that the loss returned by the assessee in the year of completion of project stood accepted by the Department when similar method of revenue recognition, viz., Project Completion method’ was adopted and that, what led the authorities below to take a different method is not discernible from their orders - Held that:- In the instant case, the assessee has adopted the mercantile system of accounting and has adopted the project completion method for revenue recognition. From the sample copy of one of the prospective buyers as submitted it is clear that the total value of the flat/shop was quite an ascertained value and nothing sort of it is depicted there from as to which part of the receipt was not ascertainable. The assessee was also in receipt of the amounts as stipulated in the said agreement. The assessee has also incurred expenditure towards construction works and the auditor’s report categorically speaks of revenue recognition on accrual basis. However, the loss claimed by the assessee is based on application of Project completion method. In such peculiar facts, it has to be decided whether the profit earned on a particular receipt would be taxable or not during the year under consideration or not. The learned authorities below also appear to have not examined all these aspects of the case. They have also not properly examined whether there was any item of income, the quantum of which was not ascertainable during the disputed year. There is nothing on record before us to examine that the assessee has been consistently following the project completion method for revenue recognition in respect of all the projects undertaken by assessee during the years preceding to the year under consideration, as also to the subsequent projects undertaken by him. This aspect also needs examination at the stage of AO before finally deciding the issue. In case the assessee is found to have adopted consistent method of revenue recognition in preceding and subsequent projects, then the Assessing Officer will not be justified to work out the profit by applying percentage of completion method during the impugned year on selective basis. Therefore, the matter deserves to be restored back to the file of Assessing Officer to decide the issue afresh - Decided in favour of assessee for statistical purposes
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2017 (11) TMI 959
TPA - comparable selection - Held that:- The assessee was engaged in the following two segments:- i) Provision of IT-enabled back-office services (ITeS Segment) Under this segment, the assessee provides Information Technology enabled back-office services such as industry, company and financial analysis which comprise business information, data gathering, analysis and delivery etc. to Bain USA’s global operations through customized remote research and information support services. ii) Software development services – Under this segment the assessee provides contract research development services to BAIN USA for internal uses. Thus companies functionally dissimilar with that of assessee need to be deselected from final list. Treating the delay in receipt of payments from the AE to be in the nature of unsecured loan advanced to the AE and thereby charging interest - Held that:- Since the assessee is a debt free company and since it has neither received any interest from its creditors nor paid any interest to any of its debtors, it cannot be inferred that interest-bearing borrowed funds were utilised for extending any kind of loan to its AE and it cannot be reckoned that assessee has given any benefit to the AE by blocking its interest-bearing funds to the AE by extending the credit period. Accordingly, the transfer pricing adjustment, as made by the TPO, by imputing the interest on delay in receipt of payment is uncalled for on the facts of the present case and we direct that the same to be deleted.
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2017 (11) TMI 958
Addition by holding Royalty payment as revenue expenditure - whether expense incurred for royalty payment was for extension of an existing business? - CIT-A deleted the addition - Held that:- When the royalty payment has been made in accordance with the agreement for a specified period @ 3% to 5% on the manufactured items and no lump-sum payment has been made and after termination of the agreement, the assessee company was required to return all drawings and technical papers to its collaborators, no enduring benefit can be accrued to the assessee company. Furthermore on the basis of same agreement entered into between the assessee company and Toyoda Gosei Co. Ltd., similar disallowance of royalty payment for AYs 2008-09 and 2009-10 was deleted by CIT (A), against which no appeal has been filed by the Revenue before the Tribunal and all these facts have been duly elaborated in para 4.2 of the impugned order. In these circumstances, following the rule of consistency also, there is no illegality or perversity in the findings returned by ld. CIT (A) on the issue of royalty payment - Decided against revenue Depreciation @ 60% is allowable on UPS - Held that:- Identical issue has come up before the Tribunal in assessee’s own case for AY 2009-10 wherein order of CIT (A) deleting the similar addition was upheld and Tribunal by following the decision rendered by Hon’ble Delhi High Court in case of CIT vs. M/s. Bonanza Portfolio Ltd. [2011 (8) TMI 1058 - DELHI HIGH COURT]. So, following the decision rendered by coordinate Bench of the Tribunal and keeping in view the fact that the Revenue is required to follow the rule of consistency - Decided against revenue MAT computation - whether provision of section 79 will not apply for the purpose of computation of book profit u/s 115JB - addition on account of provisions for gratuity, warranty and earned leave - Held that:- Identical issue has come up before the Tribunal in assessee’s own case in AY 2009-10 the assessee has brought on record the details of carry forward profit / loss up to 31.03.2009 as per books of account, copy of actuarial valuation of the earned leave liability including compensated absence for the period from 01.04.2009 to 31.03.2010 as per AS-15 (R), copy of actuarial valuation of the gratuity liability for the period from 01.04.2009 to 31.03.2010 as per AS-15 (R) and copy of annual accounts for the period ending 31.03.2010, available at pages 46 to 72 of the paper book. We are of the considered view that all these documents are required to be verified by the AO as to the figures of brought forward business loss or depreciation, actuarial valuation of the earned leave liability and actuarial valuation of the gratuity liability to recompute the book profit u/s 115JB. So, following this, grounds determined against the Revenue
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2017 (11) TMI 957
Reopening of assessment - addition of bonus/commission paid to the directors - reopening simply on the basis of audit report in Form no.3CD - non independent application of minD by AO - Held that:- Undisputedly, in case of assessee, assessment was originally completed under section 143(3) of the Act on 30th November 2007. Assessing Officer has passed a detailed order after verifying all facts and materials brought on record and in the process has made a number of disallowances. Thus, it is not a case where the Assessing Officer has passed a cryptic assessment order accepting the returned income. Further, from the reasons recorded which is reproduced in the impugned assessment order, it is evident that the Assessing Officer on verifying the audit report in form no.3CD was of the view that the bonus / commission paid of ₹ 1.90 crore to the directors is excessive, hence, the entire amount is not allowable. Thus, as could be seen from the reasons recorded, the re–opening of assessment was simply on the basis of audit report in Form no.3CD filed by the assessee along with the return of income and was available before the Assessing Officer at the time of original assessment proceedings under section 143(3) of the Act. Thus, it is very much clear that after completion of original assessment proceedings, no fresh and tangible material has come to the possession of the Assessing Officer revealing escapement of income. Formation of belief on the basis of materials already available before the Assessing Officer and examined by him in the original assessment proceedings, amounts to change of opinion, hence, impermissible - Decided in favour of assessee.
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2017 (11) TMI 956
Eligibility to exemption u/s 10(23C)(iiiad) - whether the assessee could be treated as an educational institution? - assessee is a society imparting education in classical ballet dance, dance drama, music, choreography and related subjects, holding examinations thereon, arranging social and cultural functions, performances, promotion of the arts and culture etc - Held that:- Respectfully following the co-ordinate bench decision of this tribunal in assessee’s own case for the Asst Years 1986-87 to 1993-94 dated 11.7.2002 , which has been confirmed by the Hon’ble Jurisdictional High Court, and in view of the fact that there is no change in the facts and circumstances of the case during the years under appeal, we hold that the assessee society is an educational institution existing solely for educational purposes and not for purposes of profit entitled for exemption u/s 10(23C)(iiiad) of the Act as the aggregate annual receipts in each of the years under appeal were less than ₹ 1 crore. Accordingly, the grounds raised by the revenue for the Asst Years 2002-03 , 2003-04 , 2007-08 , 2010-11 , 2011-12 & 2012-13 , are dismissed. - Decided in favour of assessee.
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2017 (11) TMI 923
TDS on enhanced compensation - whether the compensation is paid for property other than agricultural land or otherwise and whether deduction of tax at source was permissible under any provision of law. - the Land Acquisition Collector had deducted the tax at source and deposited the same with the Income Tax Department. - Held that:- Since the Land Acquisition Collector had already deducted tax at source and deposited with the Income Tax Department, in such circumstances, better course of action, which is in consonance with the provisions of Income Tax Act, is for the respondents to approach the concerned Assessing Officer(s) and to raise the issue that no tax is payable on the compensation/enhanced compensation which is received by them as their land was agricultural land. Once such an issue is raised before the Assessing Officer(s), it is for the Assessing Officer(s) to examine the facts of each case and then apply the law as contained in the Income Tax Act to determine the aforesaid question. Appeal disposed of with directions to AO, and Land Acquisition Collectors.
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Customs
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2017 (11) TMI 955
Entitlement of interest - Section 28 of CA, 1962 - Proviso to Section 28AA - Held that: - Proviso to Section 28AA gives an opportunity to those where demand u/s 28 has already been raised, but the duty has not been paid, to pay the same within three months from the date of enforcement of Section 28AA, which comes to 26.08.1995 - In the present case, we find no error on the part of respondents in demanding interest under Section 28AA, if otherwise other conditions provided under Section 28AA are satisfied - Learned counsel for the petitioner could not show any other error in impugned demand, warranting interference. Petition dismissed - decided against petitioner.
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2017 (11) TMI 954
Maintainability of petition - alternative remedy of appeal - filing of a writ jurisdiction - whether the Writ Petition is maintainable under Article 226 of the Constitution of India, without exhausting the alternative remedy, under Section 35G of the CEA, 1944? Held that: - Lack of jurisdiction would be ground, for invoking the extraordinary remedy, under Article 226 of the Constitution of India, which is not the one pleaded in this case. In Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement [2010 (4) TMI 432 - SUPREME COURT], the exceptions carved out are, where there is a lack of jurisdiction of the tribunal to take action or there has been a violation of rules of natural justice or where the tribunal has acted under a provision of law, which is declared ultra vires and in such cases, notwithstanding the existence of such a Tribunal, the High Court can exercise its jurisdiction to grant relief - None of the exception is applicable to the case on hand. The present Writ Petition filed under Article 226 of the Constitution of India, is wholly misconceived and that the same is not maintainable - petition dismissed being not maintainable.
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2017 (11) TMI 953
Violation of actual user condition - clandestine diversion of imported goods - N/N. 43/2002-Cus dated 19.4.2002 and N/N. 50/2000-Cus dated 27.4.2000 - it was alleged that the said imported goods were not brought to the factory nor was used in the manufacture of finished goods - Held that: - Para 4.30 of the Handbook of Procedure stipulates that the advance licence holder shall maintain and preserve true and proper account of same and utilization of the duty free importd/domestically procured goods against advance licence as prescribed in the relevant Appendix underthe said provision - the ld. Commissioner (Appeals) has recorded that a feeble attempt was made by the Appellant in contending that the goods were received in the factory and utilized in the manufacture of exported goods but records were not traceable. The Appellant had not maintained any record to establish the fulfillment of the condition of Exim Policy under N/N. 43/2002-Cus. and to establish that the goods were utilized in the manufacture finished goods - there is no reason to interfere with the reasoning and conclusion recorded by the ld. Commissioner in confirming duty, interest and confiscation of the goods in absence of contrary evidence in this regard - appeal dismissed - decided against Revenue.
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2017 (11) TMI 952
Classification of imported goods - Parts of International Private Leased Circuit (IPLC) Lawful Interception Monitoring (LIM ) Networking System - whether classified under CTH 85176990 or under CTH 85437099? - Held that: - when connected to the network of voice or data transmission, these equipments are capable of receiving, recording and storing all kinds of communications, voice, image, data between the subscribers. We note the equipments enable the network operator to virtually receive all such communication by such interception and record the same for future analysis. Without reception of these signals no useful purpose can be served by these equipments. The Commissioner (Appeals) erred in factual finding. He recorded that the machines imported have no mechanism for reception of information. This is not factually correct. The equipments now under consideration are more in the nature of telecommunications, auxiliary equipments which are part and parcel of network for voice or data transmission and distribution. Accordingly, the classification as claimed i.e. under CTH 85176990 by the appellant is more appropriate than what is held by the lower authorities - appeal allowed - decided in favor of appellant.
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2017 (11) TMI 951
CVD - 30/2004-CE dated 09.07.2004 - polyester knitted fabrics - Whether the appellants are entitled for benefit of exemption from payment of CVD in terms of Notification No.30/2004-CE dated 09.07.2004 or not? - Held that: - the issue has been settled in their favor in the case of M/s. Artex Textile Pvt. Limited Versus Commissioner of Central Excise & Customs, Delhi (Faridabad) [2017 (9) TMI 1011 - CESTAT CHANDIGARH], where reliance was placed in the case of Share Medical Care vs. UOI [2007 (2) TMI 2 - SUPREME COURT OF INDIA], where it was held that even if the claim of benefit under a particular notification is not made at the initial stage, the assessee cannot be estopped from claiming such benefit at a later stage - the appellant is entitled for the benefit of payment of CVD in terms of Notification No.30/2004-CE dated 09.07.2004 on polyester knitted fabrics - decided in favor of appellant. Valuation of imported goods - On the basis of DRI alert whether the value of imported goods can be enhanced or not? - Held that: - the said issue came in the appellant’s own case for the earlier period Artex Textile Pvt. Ltd. Versus C.C., Delhi-IV [2017 (9) TMI 1166 - CESTAT CHANDIGARH], where it was held that The value of imported goods in question cannot be enhanced on the basis of DRI alert and the basis of assessed bill of entry - decided in favor of appellant. Appeal allowed - decided in favor of appellant.
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2017 (11) TMI 950
Principles of Natural Justice - whether the Department had acted fairly and properly in considering the request for re-export of goods made by the appellants? - Held that: - even if it was not expressly said so by Hon’ble High Court to grant personal hearing, the fact that the order was to be passed in accordance with law means that principles of natural justice were required to be followed by the adjudicating authority while deciding the request of re-export of goods. Even if the appellants did not ask the adjudicating authority to grant personal hearing for request for re-export, it was incumbent on the adjudicating authority to provide them an opportunity of personal hearing before deciding the matter - matter is remanded back to the adjudicating authority to decide afresh - appeal allowed by way of remand.
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2017 (11) TMI 949
Valuation - includibility - conversion cost - redemption fine - penalty - Held that: - There is no cogent and credible reason and evidence brought out to show that there was no incurring of conversion cost of the vehicle to make that right hand drive from left hand drive. The vehicle was originated in USA and to came Thailand for export. Also the import was found to have been made in violation of import licensing conditions as well as undervalued - redemption fine and penalty upheld - appeal dismissed - decided against appellant.
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2017 (11) TMI 948
Penalty - undervaluation - Whether the Tribunal erred in confirming penalty on the Appellant for undervaluation who acted as an agent for foreign supplier M/s. IJIMASIA having no role in price negotiation? - Held that: - the present Appellant was a mastermind of entire act of undervaluation done by M/s. Sachha Soudha Pedhi - he was a key person as intending agent to plan out the entire modus operandi of undervaluation in respect of goods imported from M/s. IJIMASIA Pte. Limited - The Appellant being a abettor of evasion of duty and a key person and mastermind behind undervaluation, the penalty cannot be set aside - appeal dismissed - decided against appellant.
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2017 (11) TMI 947
Compliance with pre-deposit - rectification of mistake - Held that: - in view of the fact that, the final adjudication is yet to happen, it would be appropriate to set aside such portion of the direction contained in the impugned order dated January 5, 2016 passed by CESTAT which requires the petitioner to make a pre-deposit of ₹ 50 lakhs for the adjudication proceedings to be finalized - petition disposed off.
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Corporate Laws
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2017 (11) TMI 925
Applicants as appropriate and necessary parties - Held that:- It is the settled position of law that the proper and necessary parties should be impleaded to a litigation, in order to avoid multiplicity of litigation later on with a similar prayer. Moreover, the main issue is pending from the year 2008, and if the Applicants are not permitted to add as petitioners as prayed for in the' present application, it will lead to file a separate Company Petition, which is not at all warranted, since the prayer of the Applicants in the present Company Application is already covered by the prayer in the main Company Petition 71/2008. As considered the pleadings made by both the parties along with supporting material papers. It is true that the court/Tribunal should not permit to file litigation separately for the same cause of action. The suit/Company Petition is required to be filed by impleading all proper and necessary parties to the litigation instituted in a court of law. As convinced that the applicants are appropriate and necessary parties to the main CP No. 71 of 2008, and allowing this Application would not cause any prejudice to anybody. On the other hand, it would facilitate to decide the issue by associating all the proper and necessary parties. Therefore, the Company Application deserves to be allowed.
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Insolvency & Bankruptcy
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2017 (11) TMI 946
Corporate Insolvency Resolution Process - proof of admitted dispute - Held that:- In the present matter, the corporate debtor has raised a dispute about the disputed pending tax liability in respect of the work contract which is evident from the MoU, dated 16.06.2017 in which the applicant had itself tried to settle the matter in respect of pending tax liability in a tripartite meeting. It is therefore seen that the respondent had earlier raised dispute and brought to the notice of applicant through various correspondences revealing existence of dispute between the parties much before the receipt of the demand notice issued in the present case under section 8 of the Code. Hence, the amount of claim raised by the operational creditor cannot be said to be admitted and a “dispute” existed between the parties in relation to the amount claimed. For the reasons stated above this petition fails and the same is rejected.
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2017 (11) TMI 945
Corporate Insolvency Resolution Process - Held that:- In the present case as the demand notice has been given by an advocate and there is nothing on record to suggest that the advocate in question holds any position with or in relation to the respondent – Valia & Company and the demand notice has not been issued in mandatory Form 3 or Form 4, as stipulated under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, the initiation of resolution process cannot be upheld. The case of the appellant being covered by the decision of the Uttam Galve Steels Limited (2017 (8) TMI 1198 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI) we have no other option but to set aside the impugned order. In effect, order(s) passed by Adjudicating Authority appointing any ‘Interim Resolution Professional’, declaring moratorium, freezing of account and all other order (s) passed by Adjudicating Authority pursuant to impugned order and action taken by the ‘Interim Resolution Professional’, including the advertisement, if any, published in the newspaper calling for applications all such orders and actions are declared illegal and are set aside. The application preferred by Respondent under Section 9 of the I&B Code, 2016 is dismissed.
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2017 (11) TMI 944
Corporate Insolvency Resolution Process - Held that:- We find that the application under Section 433(e)(f) read with Sections 433(i)(a) and 439(i)(b) of the Companies Act, 1956, which was transferred to the Adjudicating Authority was not complete before treating it as an application under Section 9 of the ‘I&B Code’ and admitting the case, we hold that the application was fit to be rejected. The Adjudicating Authority having failed to notice the same, we set aside the impugned order dated 16th August, 2017. In effect, order (s), if any, passed by Ld. Adjudicating Authority appointing ‘Interim Resolution Professional’, declaring moratorium, freezing of account, if any, and all other order (s) passed by Adjudicating Authority pursuant to impugned order and action, if any, taken by the ‘Interim Resolution Professional’, including the advertisement, if any, published in the newspaper calling for applications all such orders and actions are declared illegal and are set aside. The application preferred by Respondent under Section 9 of the I&B Code, 2016 is dismissed.
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2017 (11) TMI 943
Corporate Insolvency Resolution Process - authorization to advocate/lawyer for issuing notice - Held that:- In the present case as an advocate/lawyer has given notice under Section 8 and there is nothing on record to suggest that the Advocate/lawyer has been authorised by 'Board of Directors' of the Respondent - 'Sunflag Iron & Steel Co. Ltd.' to do so, and there is nothing on record to suggest that the Advocate/lawyer hold any position with or in relation with the Respondent, we hold that the notice issued by the Advocate/lawyer on behalf of the Respondent cannot be treated as a notice under section 8 of the I&B Code. For the said reason, the petition under section 9 at the instance of the Respondent against the Appellant was not maintainable. In view of the fact that notice under sub-section (1) of Section 8 was issued by an advocate and not by the Respondent and that the appellant was not given a proper opportunity by the Adjudicating Authority before passing of the impugned order and the impugned order was passed in violation of the rules of natural justice, the impugned order cannot be upheld. In the result, the appointment of Interim Resolution Professional, order declaring moratorium, freezing of account and all other order (s) passed by the Adjudicating Authority pursuant to impugned order(s) and action taken by the Interim Resolution Professional including the advertisement published in the newspaper calling for applications are declared illegal.
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2017 (11) TMI 926
Corporate insolvency resolution process - notices not issued by the 'Operational Creditor' but by the Advocates Associates, namely, 'SPS 85 Associates' - Held that:- In the present case, admittedly the notice has been given by 'Associate of Advocates' and there is nothing on the record to suggest that the 'Associate of Advocates' was authorised by the respondent-'Operational Creditor' or was holding any position with or in relation to the respondent company, the so-called notice cannot be treated as notice under Section 8 of the I & B Code. The aforesaid fact is also accepted by the learned counsel appearing on behalf of the respondent-'Operational Creditor', who submits that the due amount has already been paid by the appellants-'Corporate Debtor'.In view of the aforesaid admitted position that the notice under Section 8 was not issued in terms of the provisions of the Adjudicating Authority Rules and I & B Code, we have no option but to set aside the impugned order dated 6th July, 2017.
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2017 (11) TMI 924
Corporate Insolvency Resolution Process - eligibility of advocate/lawyer as giving notice as not authorised by 'Board of Directors' of the Respondents - Held that:- In the present case as an advocate/lawyer has given notice and there is nothing on record to suggest that the lawyer has been authorised by 'Board of Directors' of the Respondents - 'Maheshwar Textiles & Anr.' and there is nothing on record to suggest that the lawyer hold any position with or in relation with the Respondents, we hold that the notice issued by the lawyer on behalf of the Respondents cannot be treated as a notice under section 8 of the I & B Code and for that the petition under section 9 at the instance of the Respondents against the Appellant was not maintainable. For the reasons aforesaid, we set aside the impugned order passed by the Adjudicating Authority, New Delhi and allow the appeal. In the result, the appointment of Interim Resolution Professional, order declaring moratorium, freezing of account and all other order (s) passed by the Adjudicating Authority pursuant to impugned order(s) and action taken by the Interim Resolution Professional including the advertisement published in the newspaper calling for applications are declared illegal.
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PMLA
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2017 (11) TMI 942
Offence under PMLA Act - attachment of fixed deposit of the HDFC Bank - Held that:- We are inclined to exercise our jurisdiction under Article 226. The respondents adopted proceedings against the Director instead of doing so against the petitioner company. The petitioner’s Director fairly deposited the amount of Rs. 25 lacs with the respondents. The proceedings were initiated by the respondents against the Director and not against the company. The maintainability of such proceedings itself is doubtful. However, when the Director sought to appeal against the order, the appeal was dismissed on the ground that it was not maintainable. The petitioner’s application for being impleaded before the adjudicating authority was also dismissed on the ground that it was not maintainable as the adjudicating authority held that it had no power of review. Most important, there is no link between the said sum of ₹ 25 lacs and the alleged proceeds of crime namely the sum of ₹ 3.61 crores received by TI Limited from CDP Limited. In the circumstances, the petition is allowed in terms of prayer (i) The FDR shall be returned together with the accretions thereto, if any. It is clarified that in the event of any evidence being obtained by the respondents in respect of the said sum of Rs. 25 lacs, they are always at liberty to take necessary action in accordance with law.
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Service Tax
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2017 (11) TMI 941
Valuation - Abatement - Erection, Commissioning or Installation Services - on-going contracts, at the time of introduction of new tax entry as "Works Contract Service' w.e.f. 1.6.2007 - Held that: - the tax liability of appellant for the period 1.6.2007 will not arise in case of works contract. For the period post-1.6.2007, necessarily the tax liability is determined belatedly under works contract service. Hence the question of option has no relevance as neither appellant nor the Revenue classified the service at the material time under 'Works Contract Service'. The availability of composition scheme as per 2007 Rules are to be examined. The claim of the appellant that they have discharged more than the required tax on these services even if the claim of the department is taken into consideration for treating the contracts as a whole, requires re-examination - appeal allowed by way of remand.
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2017 (11) TMI 940
Refund claim - input services - export of jewellery - whether appellant are entitled to refund of input service tax on banking services claim to be utilised for the purpose of export? - Held that: - it is an admitted fact that the appellant has got only one manufacturing unit at 179, NSEZ, Noida and another unit of appellant was working as Head office at 2705, Besement, Banki Street, Karol Bagh, New Delhi - It is further admitted fact that there is no separate business activity in their Head office other than the business of manufacture and export of jewellery - the Bank Officers have certified that the services provided to the appellant, the invoice of which addressed to the Head office are actually provided to the factory located at Noida. The substantial benefit cannot be denied for mere technical or venial breach of the procedural law. Refund allowed - appeal allowed - decided in favor of appellant.
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Central Excise
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2017 (11) TMI 939
CENVAT credit - credit attributable to trading activity - Rule 6 (3) of CCR, 2004 - Held that: - there is no dispute that trading activity is having no nexus with the manufacturing activity of the appellant, therefore, the said issue is no issue matter. Whether prior to 1.4.2011, the appellant was entitled to avail cenvat credit on common input services when the appellant is involved in the activity of trading as well as manufacturing? - Held that: - for the period prior to 1.4.2011, the appellant is not required to either reverse of cenvat credit attributable to trading activity, or liable to pay @ 6 % of the value of traded goods. Therefore, the demand for the period prior to 1.4.2011 is set-aside. Whether the extended period of limitation is invokable or not? - Held that: - the appellant was filing the regular ER-1 Returns and availment of cenvat credit was in the knowledge of the department and the case of the revenue is that the revenue came to know of the fact of trading activity to their financial records which is a public records. No other positive evidence has been brought on record by the Revenue to alleged suppression of facts on the part of the appellant - extended period not invokable - penalty also not invokable. The matter is remanded back to the adjudicating authority for correct quantification of demand for the period within limitation as per formula prescribed under Rule 6 (3) of CCR, 2004 - appeal allowed by way of remand.
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2017 (11) TMI 938
Shortage of goods - The grievance of the Appellant is also that they were not allowed cross-examination of the witnesses even though specifically directed by this Tribunal in its order dated 17.11.2006 - whether there was shortages in the finished stock of goods and the raw materials of 1,60,562.51 kgs. as recorded in the panchnama dated 22.12.1998/24.12.1998? Held that: - the principle of law on admissibility of allowing cross-examination has been well settled by the Hon’ble Supreme Court in a series of cases including the violation in the case of C.C.E., Kolkata II vs. Andaman Timbers Ltd. [2015 (10) TMI 442 - SUPREME COURT] - the matters are remanded to the ld. Commissioner with the direction to allow cross-examination of witnesses as already directed by this Tribunal vide its order dated 17.11.2006 - appeal allowed by way of remand.
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2017 (11) TMI 937
Interest on delayed refund - Section 11BB of CEA, 1944 - Held that: - the issue of allowing interest under Section 11BB of CEA, 1944 on delayed refund is no more res integra in view of the judgment of the Hon’ble Supreme Court in the case of Ranbaxy Laboratories Ltd. [2011 (10) TMI 16 - Supreme Court of India], where it was held that liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made. The Appellant are entitled to interest on expiry of three months from the date of filing of refund claims - appeal allowed - decided in favor of appellant.
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2017 (11) TMI 936
Trading activity or manufacturing activity - duty has been demanded on the ground that appellant is engaged in the activity of manufacturing instead of trading - Held that: - the invoice number TR 000030 dated 03.09.2014 is of shuttering plates and invoice No.TR 000026 dated 08.05.2012 is of channels, which is a raw material of shuttering plates. The description of goods sold by the appellant clearly indicated in the invoices. As per the invoices, it is clear that some items are traded goods and some items are manufactured goods - The Revenue has failed to do such exercise to segregate the quantity of manufactured goods and traded goods - demands are not sustainable as the show cause notice has been issued on the whims and fancies of the officer issuing the SCN - appeal allowed - decided in favor of appellant.
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2017 (11) TMI 935
CENVAT credit - duty paying documents - Revenue is of the view that description of goods in the invoice not as per the purchase order - Held that: - no investigation was done at the end of the transporter to ascertain whether the goods were transported to the factory premises of the appellant. It was not investigated from where the appellant procured the HR sheets in their factory. Moreover, the goods have not been examined. Identical issue decided in the case of Omax Autos Ltd. Versus Commissioner of Central Excise, Delhi-III [2011 (7) TMI 994 - CESTAT, New Delhi], where it was held that description of the goods different but the fact is not denied, the appellants received the goods, therefore, the appellants are entitled to take credit - Merely discrepancy in the description cannot be the reason to deny the cenvat credit to the appellant in the facts and circumstances of the case. Appeal allowed - decided in favor of appellant.
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2017 (11) TMI 934
Clandestine removal - shortage of goods - Held that: - in the initial proceedings before the Commissioner (Appeals) it has been held that there is no positive evidence of clandestine removal. Moreover, it is not the case of clandestine removal, therefore, charge of clandestine removal is not sustainable against the appellant. As the demand sought to confirm on the basis of shortage found as per panchnama drawn during the course of investigation, the said panchnama has been held not admissible, in that circumstance, the show cause notice issued to the appellant is not sustainable. Appeal allowed - decided in favor of appellant.
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2017 (11) TMI 933
Area Based Exemption - N/N. 50/2003-CE dt. 26.02.2003 - clubbing of clearance of production of two different units - Held that: - reliance placed in the case of Tencon Industrial Corporation Vs. CCE, Bombay -I- [2003 (7) TMI 76 - SUPREME COURT OF INDIA] wherein it was held that where a factory produced more than one excisable goods production is by one unit and as such the clearances cannot be clubbed together - appeal dismissed - decided against Revenue.
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2017 (11) TMI 932
Maintainability of revision application - time limitation - condonation of delay in filing revision application - fault of postal authorities - Held that: - the petitioner had clearly stated that the revision application was submitted to the postal authority for being delivered at Delhi. But due to inefficiency of the postal department, the petition had reached Delhi, from Bangalore, after a delay of eight days. Once the petition was handed over to the postal department, the petition had no control over the delivery of the revision application in the office of the Under Secretary. Since the petition had been sent within the period granted by law, the petitioner had exercised due diligence. For, the petitioner cannot be blamed for the inefficiency of the postal department. Since the petition was delayed only by eight days, there was no reason for the Joint Secretary to have a pedantic view of the matter - also, since the Joint Secretary does have the power to condone the delay by further period of three months, the said power should have been invoked by the Joint Secretary; the delay of merely eight days should have been condoned by him. Delay condoned - petition allowed - decided in favor of petitioner.
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2017 (11) TMI 931
Extended period of limitation - adjudication pending - Whether in the facts and circumstances of the case and law, the Hon’ble Tribunal has committed substantial error of law in holding that the extended period of imitation could not have been invoked by the Department and the same on merits is in favor of the Respondent-Assessee? Held that: - It is reported that the proceedings before the adjudicating authority on remand are still pending. Under the circumstances, the learned Tribunal ought not to have dismissed the appeal preferred by the revenue which was preferred to enhance the amount of penalty - the proceedings before the adjudicating authority in so far as the respondent assessee are concerned, are pending pursuant to the order passed by the learned tribunal dated 24-1-2011. Therefore, the outcome of the said proceedings would have a direct bearing on the issue with respect to penalty. The impugned order passed by the learned tribunal cannot be sustained and the same deserves to be quashed and set aside and the matter is required to be remanded to the adjudicating authority to consider the issue with respect to penalty to be considered along with adjudication proceedings, which are pending before the adjudicating authority - appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2017 (11) TMI 930
Scope of SCN - case of petitioner is that the notice issued under Section 29(7) of the Act related to the assessment year 2008-09 under U.P. VAT Act is invalid as well as illegal - Held that: - for the aforesaid relief, the petitioner has already filed a Writ Petition No.44316 of 2012 which is pending consideration. We cannot pass any order in this writ petition with regard to the said claim as there are no pleadings in the present writ petition - we permit the petitioner to withdraw the appeal, if so advised, pending before the appellate authority for assessment year 2009-10 - petition disposed off.
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2017 (11) TMI 929
Classification of goods - computer peripherals - Routers and Hubs - - Clarification issued by the first respondent/Commissioner of Commercial Taxes, dated 29.07.2004 - Section 28-A of the TNGST Act, 1959 - Held that: - the impugned clarification, dated 29.07.2004 cannot be treated as superseding the clarification, dated 24.08.1998, as it does not contain any reasons to the said effect. Merely stating that the impugned clarification modifies the earlier clarification is insufficient. Even assuming that there is modification done by the Commissioner, such modification should contain reasons, as to how, the Commissioner proposes to take a different stand from that of the earlier clarification, which, in the instant case, was given, after obtaining the opinion of ELCOT, which would bind the first respondent. The appropriate classification of switches, hubs and routers dealt with by the petitioner should undoubtedly fall under Entry 18 (i) in Part B of the first schedule to the TNGST. The counter affidavit filed by the second respondent does not render much assistance to the case of the respondent/Department. One more factor, to be taken into consideration is the proceedings of the Authority for Clarification and Advance Ruling under Section 60 of the Karnataka Value Added Tax Act, 2003. Though the clarification given by the said Authority will not bind the respondent, it will be a good indicator, as to how, the products dealt with by the petitioner have been considered under the Karnataka Value Added Tax Act, 2003. The decision, in the case of C.M.C Ltd., [2015 (4) TMI 167 - MADRAS HIGH COURT] would support the petitioner's case, insofar as the the product, routers is concerned, where it was held that the goods sold by the assessee, namely, router, is a computer peripheral, falls under Serial No.22, Entry 68 of Part B of I Schedule of TNVAT Act, 2006. - petition challenging the clarification dated 29.07.2004 is allowed - petition allowed - decided in favor of petitioner.
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2017 (11) TMI 928
Penalty u/s 24 (3) of the TNGST, 1959 - Revision Petitions have been rejected only on the technical ground that, as against original assessment orders, dated 10.02.2003, the petitioner has not filed any Appeals but has preferred Revision Petitions against the orders passed by the third respondent - Held that: - Section 55 of the TNGST Act provides for a remedy for the assessee to approach the Assessing Officer for any rectification. This is precisely what the petitioner/assessee has done on receipt of assessment orders by filing the Petition before the third respondent to issue revised proceedings. It cannot be disputed that, as against an order passed under Section 55 of the TNGST Act, a Revision lies to the second respondent. Therefore, the petitioner is entitled to question the orders passed by the third respondent, dated 20.02.2003, by way of Revision Petition, hence, the impugned orders passed by the second respondent, rejecting the Revision Petitions as not maintainable are incorrect. The matters are remanded back to the second respondent, with a direction to take up the Revision Petitions filed by the petitioner u/s 55 of the TNGST Act - petition allowed by way of remand.
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2017 (11) TMI 927
Input tax credit - whether the petitioner is entitled to input tax credit on the tax amount shown in the invoices issued by the sellers who have availed benefit of remission under SRO 91 dated 16.03.2006 issued under Section 79 of the Jammu and Kashmir Value Added Tax, 2005? Held that: - It is well settled in law that circular/clarification cannot be contrary to the provisions of the Act and the Rules and by issuing subsequent circular, the department cannot incorporate new condition or restrict the scope of a notification granting exemption or whittle it down. Some purpose and policy decision is behind the notification issued by the State Government in exercise of statutory powers and therefore such benefit has to be provided to the investor/manufacturer which cannot be defeated by interpreting the notification in a different way - It is equally well settled legal proposition that once tax is paid, the assessee gets a vested right to avail the exemption/ refund as per the statutory provisions. Section 21(9)(X) restricts the benefit of input tax credit to a registered dealer who gets the benefit of tax remission. The tax remission is available under SRO 91 dated 16.03.2006 to the Industrial units that is the seller from whom petitioner has made purchases and not to the petitioner. Therefore, the restriction contained in Section 21(9)(X) does not apply to the case of the petitioner. The input tax liability of the petitioner has exceeded its tax liability, therefore, under Section 22 of the Act, the petitioner is entitled to refund of the input tax credit. The clarification dated 10.12.2007 insofar as it provides that there is no scope for allowing the refund by way of input tax credit because the benefit of remission also passes on from the manufacturer to the purchaser as he pays the tax notionally to the manufacturer by price adjustment is quashed, being contrary to the provisions of the Act - The orders of assessment passed by the assessing authority as well as the demand notices are hereby quashed - petition allowed - decided in favor of petitioner.
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