TMI Tax Updates - e-Newsletter
December 4, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
Central Government, creation of the State Benches of the Goods and Services Tax Appellate Tribunal (GSTAT)
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GST:
Scope of Advance Ruling application - Payment of GST/tax/cess in the wrong head - applicability of interest for the intervening period - payment done under one Head i.e., Head of Cess instead of the other i.e., under the Head of CGST with a time gap of eight months between the two payments - the issue is s outside the purview of the Advance Ruling Authority as per Section 97(2) of CGST Act, 2017.
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GST:
Release of seized goods - The orders passed by the High Court which are contrary to the stated provisions shall not be given effect to by the authorities. Instead, the authorities shall process the claims of the concerned assessee afresh as per the express stipulations in Section 67 of the Act read with the relevant rules in that regard.
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GST:
Detention of goods along with vehicle - undervaluation of goods due to heavy discount - grounds are not sufficient for the purposes of detaining the goods in terms of Section 129 - Revenue directed to forthwith release the goods and the vehicle.
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Income Tax:
Additions u/s 68 - Unsecured loans from non genuine companies - upon physical verification, companies were not found at the given address - the burden shifted on the assessee to controvert the material brought on record by the AO. - Additions confirmed.
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Income Tax:
Misuse of PAN - Rival group has been using the same Permanent Account Number (PAN) - Under the Income Tax Act, 1961 only one Permanent Account Number is issued to an entity and only one return can be filed. The factual aspect with regard to which group has been issued the original PAN has to be ascertained by the Income Tax authorities. Furthermore, the Income Tax authorities may reject the returns that have been filed by the group that is not authorised to do so.
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Income Tax:
Jurisdiction of AO u/s 124 - transfer of case - The purpose of the prescribing the limitation for raising such objection u/s 124(3)(a), is to ensure that such objections are not timed in such a way as to defeat the right of the revenue to issue notice by letting time pass, and making them time barred.
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Income Tax:
Assessment u/s 144 - Addition under Section 69A -petitioner did not file any reply to the show cause notice.It is seen that the petitioner has filed a belated return where, it is stated that the petitioner has given details as to how such cash deposits were made in the Current Account. - Matter restored before AO.
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Income Tax:
Income from interest as other income or business income - proof of setting up of business - assessee was the proposed strategic investor in the rehabilitation scheme of the Duncan industries Ltd. - It was a sick industry for the revival of which the BIFR approved the scheme proposed by the assessee. - Claim of the assessee allowed.
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Income Tax:
Condonation of delay - Application for rectification of mistake - when there is no provision of condonation of delay for filing of the Miscellaneous Application then the Miscellaneous Application filed belatedly is not maintainable being barred by limitation provided u/s 254(2) and accordingly the same is dismissed.
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Customs:
Clearance of import of metal scrap - Procedure
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Customs:
Mandatory uploading of specified supporting documents and mention of document code and IRN in Bills of Entry (BoE)
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Customs:
Presumption of innocence - Smuggling - foreign currency - Baggage Rules - offences punishable under Sections 120-B of Indian Penal Code read with Section 135 (1) (a) read with section 135 (1) (ii) and 135 (1) (b) of the Customs Act 1962 - There is an acquittal and therefore, there is double presumption in favour of the accused.
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Customs:
Amendments in the Bill of Entries - fresh claim of benefit of exemption notification - he amendment claimed was not an amendment simplicitor, but was for purpose of changing the assessment order - assessment order could have been changed modified only by way of an appeal.
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DGFT:
Amendment in Policy condition No.2 (iii) to Chapter 95 of ITC (HS), 2017 - Schedule - 1 (Import Policy)
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Corporate Law:
Entitlement of sum after maturity of FDR with the respondent - section 73(4) of the Companies Act, 2013 - this Tribunal simply regularized the belated payment, which was made by the respondent to the depositors by extending the time to make the payment u/s 74(2) of the Companies Act, 2013 - this order will not debar the petitioners to get the interest after the maturity till the date of actual payment is made.
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Indian Laws:
Dishonor of Cheque - compounding of offence punishable u/s 138 of the Negotiable Instruments Act - accused stated that part amount was deposited before learned trial Court, whereas remaining amount as awarded by learned trial Court stands paid - power under S.147 of the Act ibid can be exercised even in those cases, where accused stands convicted. - order of conviction set aside.
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IBC:
Disposal of the uncleared cargo by way of auction - Right of the Customs Department - Company under Insolvency Process (CIRP) - Corporate Debtor - during the period of ‘Moratorium’, the assets of the ‘Corporate Debtor’ cannot be alienated, transferred or sold to a third party.
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Service Tax:
Condonation of delay of 1309 days in filing the appeal - DGM (Taxation) who was working with them, resigned - Delay occurred as the appellant were unable to trace out the file and that they were not aware as to whether the second appeal has been filed before the Tribunal or not - sufficient reasons foe delay present or not - it can be concluded that the reasons assigned constitutes sufficient case - Delay condoned.
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VAT:
Levy of tax and penalty on advances received by petitioner - the Explanation to Rule 3[a] to [g] of the KVAT Rules is contrary to Section 4[1][c] of the Act and Article 366[29A][b] of the Constitution of India and is hence unconstitutional - Accordingly levy of tax and penalty on advances received by the petitioner therein, was quashed.
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VAT:
Power of the State to rescind the notification with retrospective effect - doctrine of promissory estoppel - The question of future revenue loss would not arise as the industrial units established in the neighbouring States would not be eligible to avail of the rebate because of rescinding the earlier notification. - The notification dated 14th October, 2004 cannot be construed as having retrospective or retroactive effect to whittle down the accrued rights in favour of such industrial units.
Articles
Notifications
Customs-
87/2019 - dated
2-12-2019
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Cus (NT)
Notification of Vizinjham International Seaport and Muthalapozhi u/s 7(d) of the Customs Act for unloading and loading of boulders for breakwater construction.
DGFT-
33/2015-2020 - dated
2-12-2019
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FTP
Amendment in Policy condition No.2 (iii) to Chapter 95 of ITC (HS), 2017 - Schedule - 1 (Import Policy)
GST-
03/2019 - dated
29-11-2019
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CGST
Central Government, creation of the State Benches of the Goods and Services Tax Appellate Tribunal (GSTAT)
GST - States-
33/2019 (State Tax) - dated
9-10-2019
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Arunachal Pradesh SGST
Notification regarding annual return of dealers having turnover upto 2 crores
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32/2019 (State Tax) - dated
9-10-2019
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Arunachal Pradesh SGST
Seek to prescribed the due date for furnishing of return in Form GSTR 1 for registered person having turnover more than 1.5 Crore rupees for the month of OCT 2019 to march 2020
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31/2019 (State Tax) - dated
9-10-2019
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Arunachal Pradesh SGST
Seeks to prescribe the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of up to 1.5 crore rupees for the quarters from October, 2019 to March, 2020
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30/2019 (State Tax) - dated
9-10-2019
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Arunachal Pradesh SGST
Seek to prescribed due date for furnishing of returns in form GSTR-3B for the month of OCT, 2019 to march 2020
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29/2019 (State Tax) - dated
30-9-2019
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Arunachal Pradesh SGST
Amendment in Notification No. 10/2019-State Tax, dated the 7th March, 2019
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25/2019- State Tax (Rate) - dated
30-9-2019
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Arunachal Pradesh SGST
Categorization of certain activities relating to alcoholic liquor for human consumption as neither supply of goods nor supply of services
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24/2019- State Tax (Rate) - dated
30-9-2019
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Arunachal Pradesh SGST
Amendment in Notification No. 07/2019- State Tax (Rate), dated the 29th March, 2019
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23/2019- State Tax (Rate) - dated
30-9-2019
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Arunachal Pradesh SGST
Amendment in Notification No. 4/2018- State Tax (Rate), dated the 25th January, 2018
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22/2019- State Tax (Rate) - dated
30-9-2019
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Arunachal Pradesh SGST
Amendment in Notification No. 13/2017- State Tax (Rate), dated the 28th June, 2017
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21/2019- State Tax (Rate) - dated
30-9-2019
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Arunachal Pradesh SGST
Amendment in Notification No. 12/2017- State Tax (Rate), dated the 28th June, 2017
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28/2019 (State Tax) - dated
24-9-2019
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Arunachal Pradesh SGST
State Government appoints the 24th day of September, 2019, as the date on which the provisions of rules 10, 11, 12 and 26 of the Arunachal Pradesh Goods and Services Tax (Fourth Amendment) Rules, 2019 shall come into force
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2019 (12) TMI 98
Scope of Advance Ruling application - Payment of GST/tax/cess in the wrong head - interest payable from the date of payment of the wrong head and to the payment of the right head - section 97 of CGST Act - applicability of section 77(2) of the CGST Act, 2017 to section 9 of the GST compensation cess Act, 2017 (Compensation to States) in terms of payment of tax in a wrong head - HELD THAT:- The applicant sought Advance Ruling in an issue of applicability of interest for the intervening period in the context of payment done under one Head i.e., Head of Cess instead of the other i.e., under the Head of CGST with a time gap of eight months between the two payments, which is outside the purview of the Advance Ruling Authority as per Section 97(2) of CGST Act, 2017. The application is not admitted under Sec 98 (2) of CGST Act, 2017 and APGST Act, 2017.
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2019 (12) TMI 97
Permission for withdrawal of Advance ruling application - classification for the services received by M/s. Robo Silicon Private Limited from the state of Andhra Pradesh for which Royalty is being paid - whether the service can be classified under the heading 9973 specifically under 997337 as Licensing services for the right to use minerals including its exploration and evaluation or any other service under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 - rate of GST. HELD THAT:- The applicant vide their letter dated 20.03.2019 informed that they withdraw their application filed for Advance Ruling sought for; on the ground that the notification 27/2018-Central Tax (Rate) dated 31.12.2018, by amending the notification no. 11/2017-Central Tax (Rate) dated 28.06.2017, notified CGST rate at 9% w.e.f.01.01.2019. Since the applicant intended to withdraw their application, there are no reason to go into the merits of the case and accordingly the Application is disposed off.
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2019 (12) TMI 96
Permission for withdrawal of Advance Ruling application - Rate of GST - three separate contracts awarded to a contractor for establishment of a Solar Power Plant - Contract for supply of Goods - Contract for supply of Erection and Installation Services - Contract for supply of Operation and Maintenance Service for a period of 5 years after Commissioning. HELD THAT:- The prayer made by the applicant for withdrawal of the application with a declaration that fees already paid shall not be claimed as refund and the same stands as forfeited is heard - Since the applicant withdrew the application, there are no reason to go into the merits of the case and it is dismissed as withdrawn and therefore no Ruling is given.
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2019 (12) TMI 95
Release of seized goods - compliance with Section 67 (8) of the Central Goods and Services Act, 2017 and Rule 141 of the relevant Rules - HELD THAT:- There are no hesitation in observing that the High Court in all such cases ought to have relegated the assessees before the appropriate Authority for complying with the procedure prescribed in Section 67 of the Act read with Rules as applicable for release (including provisional release) of seized goods. There is no reason why any other indulgence need be shown to the assessees, who happen to be the owners of the seized goods. They must take recourse to the mechanism already provided for in the Act and the Rules for release, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum (even upto the total value of goods involved), respectively, as may be prescribed or on payment of applicable taxes, interest and penalty payable, as the case may be, as predicated in Section 67 (6) of the Act. The orders passed by the High Court which are contrary to the stated provisions shall not be given effect to by the authorities. Instead, the authorities shall process the claims of the concerned assessee afresh as per the express stipulations in Section 67 of the Act read with the relevant rules in that regard. In terms of this order, the competent authority shall call upon every assessee to complete the formality strictly as per the requirements of the stated provisions disregarding the order passed by the High Court in his case, if the same deviates from the statutory compliances. That be done within four weeks without any exception. We reiterate that any order passed by the High Court which is contrary to the stated provisions need not be given effect to in respect of all the cases referred in the affidavit by the State Government before this Court and fresh cases which may have been filed or likely to be filed before the High Court in connection with the subject matter of these appeals, by all concerned and are deemed to have been set aside/modified in terms of this order - In view of this order, all the Writ Petitions pending before the High Court, list whereof has been furnished in the affidavit are deemed to have been disposed of accordingly. Appeal disposed off.
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2019 (12) TMI 94
Detention of goods along with vehicle - undervaluation of goods due to heavy discount - alleged discrepancy noticed in respect of the Eway bill raised in connection with Ext.P1 invoice - section 129 of CGST/SGST Act - HELD THAT:- The reasons shown in Exts.P8 and P11 notices, that are impugned in this writ petition, are not sufficient for the purposes of detaining the goods in terms of Section 129 of the CGST/SGST Act - the 1st respondent is directed to forthwith release the goods and the vehicle to the petitioner on the petitioner producing a copy of this judgment before the said respondent - petition disposed off.
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2019 (12) TMI 93
Detention of goods along with conveyance - no discrepancy was found during the course of physical verification - order in Form GST MOV-06 is issued - It was submitted that the action of the respondents of issuing notice under section 130 of the CGST Act and passing an order of confiscation thereunder is contrary to the scheme of the CGST Act - HELD THAT:- Issue notice, returnable 04 th December, 2019.
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Income Tax
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2019 (12) TMI 92
Additions u/s 68 - Unsecured loans from non genuine companies - upon physical verification, companies were not found at the given address - HELD THAT:- In the present case, the appellant-assessee had explained in assessment proceedings that he had taken loan of Rupees Two Crores from TTPL and a loan of Rupees One Crore from POCPL. As during the course of assessment proceedings, it transpired that the said companies were not genuine. The Inspector, Income Tax, had made verification with regard to genuineness of creditor companies. As per the report of the Inspector, reproduced in the order dated 20.11.2017 passed by the CIT (A), Ajmer, it was found that address of both the companies was same. When the Inspector went to the disclosed addresses of the companies, it was found that the premises was a seven storied old building having many offices and residential flats. The creditor companies were not found at the disclosed addresses. No signboards or letter-boxes in the names of creditor companies were found at the given address. The room was found locked. Inspector had met various persons in the vicinity and no person could state the existence and business activities of both the companies. During the course of arguments, learned counsel for the appellant had stressed that the creditor companies were also being assessed under the Income Tax Act. The documents shown by the learned counsel for the appellant with regard to Income Tax Returns of the creditor companies, filed for the assessment year 2012-13, reveal that addresses of the companies are the same on which verification had been done by the Inspector, Income Tax. Thus, it is evident that the AO had conducted inquiry with regard to assessment proceedings and on inquiry, it transpired that the creditor companies were not genuine. Hence, the burden shifted on the assessee to controvert the material brought on record by the AO. It has been noticed by the Tribunal that the assessee had failed to produce any contrary material to controvert the evidence brought on record by the Assessment Officer. The Tribunal, after elaborately considering the material on record, has rightly dismissed the appeal filed by the appellant-assessee. The judgments relied upon by the learned counsel for the appellant-assessee fail to advance the case of the appellant-assessee as they are not applicable to the facts of the present case.
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2019 (12) TMI 91
Misuse of PAN - Rival group has been using the same Permanent Account Number (PAN) and hacking into the user name of the petitioner-society - HELD THAT:- The undisputed facts in this case are that there is a long running dispute between the petitioner and the respondent no.7 and both these groups are filing annual returns before the Registrar of Societies. It is to be noted that there is no provision under the Income Tax Act, 1961 that allows both these groups to file income tax returns for a particular financial year having same Permanent Account Number. Under the Income Tax Act, 1961 only one Permanent Account Number is issued to an entity and only one return can be filed. The factual aspect with regard to which group has been issued the original PAN has to be ascertained by the Income Tax authorities. Furthermore, the Income Tax authorities may reject the returns that have been filed by the group that is not authorised to do so. The respondent no.6 being the AO of the petitioner no.1 is directed to grant an opportunity of hearing to the petitioner and the respondent no.7, and thereafter, pass a reasoned order within a time-bound period. It is made clear that the AO shall examine the issue as to which group is authorised to file the return as per the PAN that has been issued by the Income Tax authorities. The parties shall be at liberty to produce all documents with regard to the title suits that indicate as to who is controlling the management of the society. Upon passing of the order, the AO shall cancel the PAN card issued to the unauthorised/wrong party and reject the return filed by them. The reasoned order should be communicated to both the parties within a period of two weeks from the date of passing of the reasoned order. AO is requested to complete the above proceeding within a period of eight weeks from the date of communication of this order.
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2019 (12) TMI 90
Assessment u/s 153C - additions sought to be made by the Assessing Officer - HELD THAT:- No substantial question of law arises for our consideration for the following reasons. A search was conducted at the premises of one Dinesh Kaushal and during the search, an Agreement to Sell was unearthed wherein the Respondent assessee was the seller and Dinesh Kaushal was the purchaser. The Assessing Officer assumed jurisdiction on the premise that the said document belonged to the assessee. On this aspect, the position of law is covered against the Revenue by the decision in Pepsico India Holding Pvt. Ltd v. Assistant Commissioner of Income Tax and Anr. [ 2014 (8) TMI 898 - DELHI HIGH COURT ]. On this short ground, the impugned order passed by the Tribunal is liable to be sustained. Even otherwise, we find that the Assessing Officer did not make any additions on the basis of the agreement dated 05.09.2006 attributed to the assessee. The Assessing Officer proceeded to make additions dehors the said agreement, which in any event, was not justified.
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2019 (12) TMI 89
Seeking approval to sell assets, sub-lease the land - recovery of demand and removal of provisional attachment u/s 281B - HELD THAT:- Petitioner has pointed out that the office of the Assistant Commissioner of Income Tax, Circle-18 (2), Room No. 212, C.R. Building, I.P. Estate, New Delhi-2 had issued a communication dated 21.11.2019, which is placed at page No. 72 as Annexure P-3 to the present application granting its no objection to the sale of the building, fixture and equipments as per the agreement of the parties under schedule B of the agreement for the purchase of building and assets dated 20.11.2019 between the Petitioner and Salcomp Manufacturing India Private Limited for a consideration of INR equivalent to USD 29,213,914. The department has also expressed its no objection on sub lease of land located in Nokia Telecom SEZ, SIPCOT Industrial Park, Sriperambudur, Chennai, Tamilnadu - 600 001 for consideration of INR equivalent to USD 786,086/- as per schedule C form of sub lease agreement. The said no objection is subject to the condition that the sale proceeds shall be deposited with the Income Tax Department towards meeting existing liabilities of the Petitioner- Nokia India Pvt. Ltd., in accordance with the decision of this Court dated 12.12.2013 in the present writ petition. Mr. Ruchir Bhatia learned counsel for the Respondents on instructions states that this Court may grant approval in terms of the communication dated 21.11.2019 issued by the Assistant Commissioner of Income tax with Circle 18 (2). New Delhi. Since the Income Tax Department has granted its no objection, on the conditions mentioned in the said communication, we allow the present application in terms of the said communication. The Petitioner may accordingly proceed to deal with the above mentioned properties strictly in terms of the communications 21.11.2019.
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2019 (12) TMI 88
Validity of Declaration made under Income Declaration Scheme, 2016 ( IDS ) - whether such declaration to be void for being in contravention of Section 193 of the FA, 2016 - as per petitioner no prior notice was issued to either of the Petitioners before passing the impugned order rejecting the declarations of undisclosed income under the IDA scheme - HELD THAT:- Special Leave Petitions are dismissed.
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2019 (12) TMI 87
Reopening of assessment u/s 147 - admissibility of deduction u/s 80IB(10) in respect of Tans Residency Project - AO had rejected the claim inter alia on the ground that the development and construction of housing project had commenced prior to 01.10.1998 (which was the crucial date for claiming the benefits u/s 80IB(10)) - HELD THAT:- Special Leave Petition is dismissed on the ground of low tax effect.
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2019 (12) TMI 86
Reopening of assessment u/s 147 - sanctioning/ permission to issue notice u/s 148 - notice not been granted by the Additional Commissioner of Income Tax - HELD THAT:- No reason to interfere in the matter. The special leave petition is dismissed.
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2019 (12) TMI 85
Transaction on behalf of the Government and interest accrued on the deposit - HELD THAT:- SLP Dismissed.
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2019 (12) TMI 84
Review petition - pre-emptive purchase passed by the appropriate authority u/s 269UD - HELD THAT:- In appeal before this Court, the appellants reiterated largely the same submissions which were addressed in the High Court and also put forward a few new submissions. However, this Court found no reason to accept those submissions while holding that the appropriate authority and the High Court were right in their respective approach, the reasoning and the conclusion. This Court found that a categorical finding was recorded by the appropriate authority that the fair market value of the property in question was 15% more than the apparent consideration mentioned by the parties in the agreement of sale. This Court found no reason to hold a fresh inquiry into the issues, which are largely of facts, particularly when the issues had already been examined at four stages i.e., first by the appropriate authority; then by the learned Single Judge of the High Court; further by the Division Bench of the High Court in intra-court appeal; and lastly, again by the Division Bench of the High Court in review petition. In the totality of the circumstances of the case, after having gone through the contents of the review petitions, we do not find any error apparent on the face of record so as to reconsider the matter over again; and we see no reason to interfere.
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2019 (12) TMI 83
Jurisdiction of AO u/s 124 - transfer of case - Notice for scrutiny assessment u/s 143 (2) - case of the petitioner is that an order under Section 127 was passed on 28.05.2010, whereby the jurisdiction of the petitioner s case was transferred from the Central Circle 8, New Delhi to Central Circle 33 (1), New Delhi - HELD THAT:- Firstly, we find that the petitioner has described her address falling within the area/locality of Karol Bagh , therefore, in terms of restructuring of jurisdiction of income tax in Delhi that w.e.f. 15.11.2014, the jurisdiction over the Karol Bagh area lay with the Circle 51 (1). Secondly, the objection has been raised by the petitioner clearly highly belatedly. The purpose of the prescribing the limitation for raising such objection under Section 124 (3) (a), is to ensure that such objections are not timed in such a way as to defeat the right of the revenue to issue notice by letting time pass, and making them time barred.
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2019 (12) TMI 82
Assessment u/s 144 - Addition under Section 69A - Addition on Account of Business Income - HELD THAT:- Perusal of the show cause notice clearly indicates that the only issue chosen by the AO to call upon the petitioner to show cause, was with regard to cash deposits made during the demonetization period. No doubt, it is admitted by the learned counsel for the petitioner that the petitioner did not file any reply to the show cause notice.It is seen that the petitioner has filed a belated return where, it is stated that the petitioner has given details as to how such cash deposits were made in the Current Account. In any event insofar as the second issue, namely an addition on account of business income, is concerned, admittedly, the assessment made on such issue was not preceded by any show cause notice. Therefore, this Court is of the view that it is better the matter is remitted back to the Assessing Officer for redoing the assessment once again, after getting a reply from the petitioner in respect of both the issues, apart from the belated return filed already. Since this Court has remitted the matter back to the AO for redoing the assessment once again on both the issues also by directing the petitioner to file the reply to both the issues, a fresh show cause notice need not be issued to the petitioner in respect of the second issue viz., an addition on account of business income. Accordingly, this writ petition is allowed and the impugned assessment order is set aside. Consequently, the matter is remitted back to the Assessing Officer to redo the assessment on the following terms :- (a) The petitioner shall file their reply within a period of two weeks from the date of receipt of a copy of this order in respect of both issues. (b) On receipt of such reply, the Assessing Officer shall pass fresh order of assessment on merits and in accordance with law, as this Court is not expressing any view on the merits of the assessment in respect of both the issues, since it is for the Assessing Officer to consider and decide. (c) The whole exercise shall be done by the Assessing Officer within a period of eight weeks from the date of receipt of the reply. (d) The Assessing Officer shall afford an opportunity of personal hearing to the petitioner before concluding the assessment.
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2019 (12) TMI 81
Opportunity of personal hearing - confusion in the date and time - violation of principles of natural justice - Ex-parte order passed u/s 201(1) 201(1A) - As contended that the said notice was received by the petitioner on 23.03.2019 at 3 p.m. and reference to the same is found in e-mail addressed by the petitioner to the Department on 23.03.2019 - as submitted that the appearance on 22.03.2019 as stipulated under Annexure-A was not possible - HELD THAT:- In light of the hearing itself being fixed on 22.03.2019 and petitioner himself receiving the notice on 23.03.2019 and also taking note of the said e-mail which was sent to the petitioner on 23.03.2019, the facts would make out a case that no sufficient opportunity for the petitioner to show cause as regards to the notice at Annexure-A, was afforded. Learned counsel appearing for the petitioner also submits that in light of the contradictory communication, there was confusion also as regards the date fixed, it is submitted that the said submission is made without prejudice to the other contentions raised. The facts as narrated above make out of a case of affording fresh opportunity to the petitioner and there after passing an order under Section 201(1) 201(1A). In light of violation of principles of natural justice, the order at Annexure- D is set aside with a direction to pass fresh order after affording an opportunity of hearing to the petitioner. Petitioner to submit necessary reply to the show cause notice at Annexure-A within a period of one week from the date of receipt of certified copy and avail of opportunity from the authority within a week thereafter.
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2019 (12) TMI 80
Revision u/s 263 - Deduction u/s 80P - HELD THAT:- We find that as held by the Hon'ble High Court of Bombay in the case of K. Subramanian and Anr. Vs. Siemens India Ltd. and Anr [ 1983 (4) TMI 3 - BOMBAY HIGH COURT] where there is a conflict between the decisions of non-jurisdictional High Court‟s, then a view which is in favour of the assessee is to be preferred as against that taken against him. Accordingly, taking support from the aforesaid judicial pronouncement of the Hon‟ble High Court of jurisdiction, we respectfully follow the view taken by the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society [ 2017 (7) TMI 1049 - KARNATAKA HIGH COURT] and State Bank Of India Vs. CIT [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] wherein it was observed that the interest income earned by a cooperative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. A.O while framing the assessment had taken a possible view, and therein concluded that the assessee would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income earned on its investments/deposits with co-operative banks, therefore, the Pr. CIT was in error in exercising his revisional jurisdiction u/s 263 for dislodging the same. In fact, as observed by us hereinabove, the aforesaid view taken by the A.O at the time of framing of the assessment was clearly supported by the order of the jurisdictional Tribunal in the case of Land and Cooperative Housing Society Ltd. Vs. ITO [ 2016 (2) TMI 620 - ITAT MUMBAI] Accordingly, finding no justification on the part of the Pr. CIT, who in exercise of his powers under Sec. 263, had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under Sec. 80P(2)(d), we set aside‟ his order and restore the order passed by the A.O under Sec. 143(3) - Appeal filed by the assessee is allowed.
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2019 (12) TMI 79
Deduction u/s 54EC - addition of ₹ 50 lakhs by restricting the exemption u/s 54EC up to ₹ 50 lakhs out of total claim in respect of ₹ 1 Crore on investment in Bonds made within six months of sale of property in two different financial years amounting to ₹ 50 lakhs in each financial year - HELD THAT:- As in terms of Section 54EC investment made in specified assets at any time within six months from the transfer of the original asset is entitled for deduction but the proviso to the section has restricted the investment during any financial year up to ₹ 50 lakhs only. Identical issue in dispute has been decided by the Tribunal in the case of ACIT Vs. Akshay Sobti [ 2019 (5) TMI 851 - ITAT DELHI] also TULIKA DEVI DAYAL (LEGAL HEIR) LATE MR. PREM A. DEVIDAYAL, C/O-DEVIDAYAL SALES LTD. VERSUS JCIT-17 (1) AND ACIT-20 (2) , MUMBAI [ 2018 (2) TMI 713 - ITAT MUMBAI] allowed the deduction up to ₹ 50 Lakhs in two financial years. Respectively following the finding of the Tribunal, we set aside the finding of the learned CIT(A) on the issue in dispute and direct the Assessing Officer to allow the deduction under Section 54EC of the Act for ₹ 1 crores as claimed by the assessee. The grounds of appeal of the assessee are according allowed.
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2019 (12) TMI 78
TP Adjustment - Comparable selection - HELD THAT:- Assessee is in the business of rendering Software Development Services (SWD services) and Information Technology Enabled Services (ITES) to its Associated Enterprise(AE) which is non-resident at cost plus 10% mark up. It is not in dispute that the transaction of rendering of SWD services and ITES to its AE were international transactions and in view of the provisions of sec. 92 of the Income Tax Act, 1961 (Act), income arising from such international transactions has to be determined having regard to Arms Length Price (ALP), thus companies functionally dissimilar with that of assessee need to be deselected from final list. Deduction under section 10A - CIT(A) appeal however held that whatever is excluded from export turnover should also be reduced from the total turnover while allowing deduction u/s.10A - HELD THAT:- The revenue is in appeal against the aforesaid direction of the CIT(A). It is not in dispute before us in the case of CIT Vs. Tata Elxsi Ltd. [ 2011 (8) TMI 782 - KARNATAKA HIGH COURT] has held that whatever is excluded from the export turnover should also be excluded from the total turnover while computing deduction under section 10A of the Act. This view of the Hon ble Karnataka High Court has been upheld by the Hon ble Supreme Court in the case of CIT Vs. HCL Technologies Ltd. [ 2018 (5) TMI 357 - SUPREME COURT] . We hold that telecommunication charges should be excluded both from the export turnover as well as from the total turnover and deduction under section 10A computed accordingly.
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2019 (12) TMI 77
Income from interest as other income - proof of setting up of business - income earned by the assessee on the investment - Deduction u/s 35D - finance activity of making investment in similar business does not fit in the business of the assessee of manufacture and trade of fertilisers and urea - HELD THAT:- We are at a loss to understand where from this information is gathered by the learned AO. The Revenue cannot prevent the assessee from pursuing the businesses of the choices as incorporated in the Memorandum and Articles of Association. There cannot be any stipulation that the assessee cannot do business both in manufacture and the trade of a fertilisers and urea and at the same time doing the business of finance activity. Be that as it may, as rightly argued by the assessee before the Ld. CIT(A) as well as before us that a company engaged in financial activity can invest its fund in any type of company to earn interest whereas it is not so in the case of the assessee. In case of assessee it is clearly stipulated that the investment is strictly confined in other companies having similar object including that of manufacturers, fabricators so on and so forth. It is not the case of the Revenue that the business of Duncan industries Ltd does not fit in the description given in the Main objects to be pursued by the company on its incorporation in the Memorandum of Association of the assessee. Further, it was submitted by the assessee before the AO that the investment took place in anticipation of its entrance by the major to a new group company by the name of Kanpur Fertilisers and Cement Limited (KFCL) and the assessee was the proposed strategic investor in the said rehabilitation scheme. In the absence of any rebuttal on this aspect, we do not entertain any doubt that the Duncan industries Ltd was pursuing similar objects as those of the assessee and fits into the description given by the assessee in the Memorandum of Association vide Main objects to be pursued by the company on its incorporation and by making such investment the assessee could be said to have commenced the business. In Carefour WC C India Private Limited vs. Deputy Commissioner of Income-tax TAX [ 2014 (9) TMI 793 - DELHI HIGH COURT] held that merely because actual sales and purchase of products did not happen during the subject financial year, which is not a necessary condition/activity in order to hold a business was set up, it cannot be said that business was not setup Assessment order clearly reads that the investments emanated from the order of BIFR, which was passed for the revival of Duncan Industries Ltd. It is not as though the Duncan Industries Ltd. is a new concern which has yet to commence business. It is covered by the order of BIFR for the revival of its business. BIFR approved the scheme in which the assessee company had entered into an arrangement on renovation and up-gradations of existing assets of a fertiliser unit of Duncan Industries Ltd. to Kanpur Fertiliser and Cements Ltd. for the same funds in the form of investment in shares capital were given to Jaypee Uttar Bharat Ltd. In the circumstances, it cannot be said that the Duncan Industries Ltd had not started the work till the end of the year. It was a sick industry for the revival of which the BIFR approved the scheme proposed by the assessee. We find it difficult to agree with the authorities below that the assessee did not set up business in the relevant assessment year and, therefore, the income earned by the assessee on the investment has to be treated as income from other sources. Direct the Assessing Officer to treat the income from interest as other income, and complete the assessment. In view of this finding, the alternative claim of the assessee u/s 35D becomes academic.
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2019 (12) TMI 76
Intimation u/s 143(1) on the basis of which order under section 154 was passed by the learned ACTT - HELD THAT:- As laid down by the honorable Supreme Court in Catena of judgement that the purpose of tax administration is to collect just and fair tax from the citizen and should not be an endeavor of the revenue authority to take benefit of ignorance of the citizen. In the present case the individual assessee is before us and he had wrongly included the exempted income in the total income as a result thereof there is an increasing the taxability of the assessee which resulted in issuing the tax demand by the revenue authorities. In our considered opinion the interest of justice, requires that the matter be sent back to the file of the learned CIT appeal for a fresh adjudication on merit without being influenced by the fact that the application under section 154 was filed belatedly on 30 March 2011. The delay in any filing the rectification application, stand condoned by this tribunal. In the result the appeal of the assessee is allowed our direction issued to the Commissioner appeal to decide the grounds on merit and decide whether the assessee has wrongly included the exempted income in the total income or not and shall also decide if the said accept incoming excluded from the total income then in that eventuality whether the assessee would be liable to pay any tax demand or not. Appeal of the assessee is allowed for statistical purposes.
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2019 (12) TMI 75
Condonation of delay - Miscellaneous Application for rectification of mistake filed belatedly - HELD THAT:- When the miscellaneous application is barred by limitation and following the earlier order of this Tribunal in case of ITO vs. Shri Ram Ratan Modi [ 2018 (2) TMI 589 - ITAT JAIPUR] we dismissed the miscellaneous application as not maintainable being barred by limitation. Accordingly, when there is no provision of condonation of delay for filing of the Miscellaneous Application then the Miscellaneous Application filed belatedly is not maintainable being barred by limitation provided under section 254(2) of the Act and accordingly the same is dismissed.
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Customs
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2019 (12) TMI 74
Jurisdiction - Competence of concerned authority to proceed in the matter in the context of Article 24 of the Appendix D to the Treaty dated 30.08.2009 between the Republic of India and the Association of South East Asia Countries (ASEAN) - HELD THAT:- The issue raised by the appellant(s) regarding the efficacy of Article 24 of the Appendix D to the Treaty cannot be adjudicated by the competent authority. That issue needs to be addressed by the High Court in the Writ Petition(s) filed by the concerned appellant(s). The parties are relegated before the High Court by restoring the concerned writ petition(s) to their original number(s), to be decided on their own merits in accordance with law - appeal allowed.
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2019 (12) TMI 73
Presumption of innocence - Smuggling - foreign currency - Baggage Rules - offences punishable under Sections 120-B of Indian Penal Code read with Section 135 (1) (a) read with section 135 (1) (ii) and 135 (1) (b) of the Customs Act 1962 - reliability on statements - It is the case of the prosecution that from the statement recorded under Section 108 of the Customs Act all the accused had admitted that they have visited foreign countries and they used to carry foreign currencies - HELD THAT:- There is an acquittal and therefore, there is double presumption in favour of the accused. Firstly, the presumption of innocence available to the accused under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law - Secondly, the accused having secured acquittal, the presumption of their innocence is further reinforced, reaffirmed and strengthened by the trial Court. For acquitting the accused, the Trial Court observed that the prosecution had failed to prove its case. The evidence has been common. Moreover, when the appeal against accused nos.2 3 is being dismissed, I see no reason why the appeal acquitting of accused no.1 which was separated should also not be disposed. The appeal including appeal which was separated for accused no.1 stands dismissed.
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2019 (12) TMI 72
Direction to join the authorities from the Wildlife Crime Control Bureau, Western Region, Mumbai (Maharashtra) as party respondents - investigation under Section 135 of the Customs Act, 1962 - petitioner submitted that under the provisions of Section 110 of the Customs Act, 1962, unless the petitioner is in a position to prove that he has legally imported such species to India, they are liable to confiscation under the said provisions - HELD THAT:- Admittedly, import of exotic species of birds or animals is not permitted unless it is under valid license or payment of appropriate customs duty. So far as Wildlife Protection Act is concerned, admittedly, exotic species of birds or animals are not covered under the schedule thereunder and as such, we do not find that there can be any restriction to their domestic trade, possession or keep for breeding under the said Act. It is specifically noted that simply because exotic species are those birds or animals whose origin is not placed to Indian Wildlife by itself does not mean that unless the person who is in possession of same, said birds or animals are presumed to be smuggled into India, in view of the fact that provisions of the Foreign Trade Policy are applicable only in international foreign trade and not in relation to domestic possession or trading or breeding. Perusal of the provisions of Section 123 of the Customs Act, 1962 would reveal that it has no application to the exotic species of birds and animals and thus, owners or persons claiming ownership or are in possession of such exotic species are not required to establish that they are smuggled in India. Admittedly, it is not the case of the petitioner that M/s. SRK Exotic Birds, Nagpur had imported any consignment of such species. Documents filed in support of the petition, infact, would establish that M/s. SRK Exotic Birds, Nagpur is not only engaged in keeping and trading of such birds, but are also into breeding of them irrespective of the fact that origin of such birds is not actually traced in India - there are no manner whatsoever in which exotic species in possession of any such person can be ascertained as smuggled into India or locally bred in-captivity in the absence of any statutory ban imposed upon such in-captive breeding. There are no reason to issue any directions to initiate action as prayed for under the provisions of the Customs Act, 1962 on any domestic keeper of the exotic species, as issuance of any such directions would be contrary to law, as it stands on today - The provisions of Sections 123 and 110 of the Customs Act, 1962 are clear and unambiguous and, therefore, any seizure of such exotic species from one who is in possession and acquisition of same would be contrary to the provisions of the said Act. The petition is based on mere surmises and conjectures as the petitioner failed to prove any legal support in the background of his case - Petition dismissed.
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2019 (12) TMI 71
Quantum of redemption fine and penalty - Smuggling of contraband item - Gold Biscuits - HELD THAT:- The value of the seized gold is to be seen at the time of seizure which was valued at ₹ 30,20,000/-. Further, if the market value of the impugned goods is ₹ 30,20,000/- then the imposition of fine of ₹ 21,00,000/- is on a higher side - thus, the imposition of fine of ₹ 21,00,000/- is on the higher side which is reduced to ₹ 7,50,000/- (approximately 25% of the market value of the gold). Quantum of penalty u/s 112(a) of the Customs Act, 1962 - HELD THAT:- In the first round of litigation, the Commissioner has imposed penalty of ₹ 1,00,000/- which was not challenged by the appellant and the same has become final and therefore in the De novo proceedings, imposition of penalty of ₹ 2,10,000/- is not sustainable in law. Appeal allowed in part.
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2019 (12) TMI 70
Amendments in the Bill of Entries - fresh claim of benefit of exemption notification - Section 149 of the Customs Act, 1962 - benefit of exemption under Notification No 21/2002-Cus dated 01.03.2002 (Sr No 313) - deletion of EPCG benefits from the Bills of Entry - HELD THAT:- The amendment of B/E was sought by the appellant was for claiming the benefit of exemption, which had earlier not been claimed or allowed at the time of assessment of Bill of Entry. Thus the amendment claimed was not an amendment simplicitor, but was for purpose of changing the assessment order. It is settled law that the assessment order could have been changed modified only by way of an appeal before the Commissioner (Appeal) - reliance can be placed in the case of COMMISSIONER OF CUSTOMS, TUTICORIN VERSUS THIRU AROORAN SUGARS LTD. [ 2010 (2) TMI 448 - MADRAS HIGH COURT] , PRIYA BLUE INDUSTRIES LTD. VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) [ 2004 (9) TMI 105 - SUPREME COURT] and COLLECTOR OF CENTRAL EXCISE, KANPUR VERSUS FLOCK (INDIA) PVT. LTD. [ 2000 (8) TMI 88 - SUPREME COURT] . Appeal dismissed.
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Corporate Laws
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2019 (12) TMI 54
Maintainability of petition - Entitlement of sum after maturity of FDR with the respondent - Repayment of the interest due from the date of maturity till the date of actual payment is released - section 73(4) of the Companies Act, 2013 - Case of petitioner is that the interest on her deposits after the date of maturity till the date of actual repayment of deposits, has not been paid - Whether the petitioner is entitled to get the interest at the rate of 12/12.5% p.a. from the date of maturity of the FDRs till the date of actual payment was made or not? HELD THAT:- A mere plain reading of provision of Section 74(2) of the Companies Act, 2013, shows that by exercising the power, this Tribunal allow the time as considered reasonable to the company to repay the deposit - this Tribunal simply regularized the belated payment, which was made by the respondent to the depositors by extending the time to make the payment u/s 74(2) of the Companies Act, 2013 - In my opinion, this order will not debar the petitioners to get the interest after the maturity till the date of actual payment is made. The petitioners are not entitled to get further interest, rather this Tribunal is of the considered view that petitioner are entitled to get the interest at the rate of 12/12.5% p.a. from the date of maturity till the date of actual payment is released to the depositors. Petition allowed in part.
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Insolvency & Bankruptcy
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2019 (12) TMI 52
Disposal of the uncleared cargo by way of auction - Right of Customs Department - Company under Insolvency Process (CIRP) - Corporate Debtor - It is submitted that the Corporate Debtor s ownership rights in the imported goods have been relinquished by operation of law contained in Section 48 of the Customs Act, 1962 - reliance on Section 238 of the I B Code - HELD THAT:- From section 48, it is clear that in case of non-clearance of the goods within 30 days or within extended period or if the title of any imported goods is relinquished after notice to the importer and with the permission of the proper officer, the goods can be sold by the Custom Authority - In the present case, the goods are in the custody of the Custom Authority, but the ownership remains with the Corporate Debtor , no step having taken for sale of goods in terms of Section 48 of the Customs Act, 1962 . The ownership rights of the machineries, in question, is of the Corporate Debtor and not of a third party, explanation below Section 18 (1) (f) (g) is not applicable. Therefore, the Resolution Professional has right to take control and custody of any asset, though the Customs Authority is in possession of the same for the present - during the period of Moratorium , the assets of the Corporate Debtor cannot be alienated, transferred or sold to a third party. Section 48 of the Customs Act, 1962 relates to sale of goods in the custody of the Customs (machinery in question), in the manner as prescribed therein. The order of Moratorium having passed by the Adjudicating Authority on 8th January, 2018, immediately thereafter it was not open to the Appellant, Commissioner of Customs or its authorities to issue an e-auction notice on 15th January, 2018, fixing date of auction of the goods on 19th January, 2018 - The aforesaid action on the part of the Appellant, officers of the Customs show that after their knowledge of the order of Moratorium they intended to sell the machinery, in question, though it was lying with the Customs Authority since 13th April, 2009 / 27th April, 2009. No interference is called for against the impugned order dated 3rd July, 2018 passed by the Adjudicating Authority prohibiting the Customs Authority from selling the assets of the Corporate Debtor - appeal dismissed.
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Service Tax
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2019 (12) TMI 69
Taxability - works contract on turnkey basis - composite contract or not - whether to be charged for payment of service tax under clause (1), section 65 (39)(a) in Finance Act, 1994 - There cannot be any dispute that the contract was a composite contract, found by the fact-finding Authority and law has been subsequently declared. Petition disposed off.
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2019 (12) TMI 64
CENVAT Credit - input services - Membership of Club or Association service - Convention services - credit rejected alleging that the services are primarily for personal use or consumption of their employees and are nothing but staff welfare activities - HELD THAT:- The appellant has taken membership in NASSCOM, American Chamber of Commerce and International Market Assessment India (P) Ltd. and paid charges for such membership which is actually expenses incurred by the company for being a member in such associations - as the membership helps the company to be updated with regard to market trends and also help them in augmenting their business, it cannot be said that the membership acquired by the company is for the personal use of the employees - Credit allowed. Convention services - HELD THAT:- The event that was conducted for a training programme for designing and installing automatic sprinkler systems. Thus the event is not for personal consumption of employees or food or beverages consumed by them. It is for conduct of event of training. The said service cannot be said to be an activity involving personal use or consumption of the employees - The event management service cannot fall under Out Door Catering Service and thus will not stand excluded from the definition of input services - credit allowed. Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 55
Condonation of delay of 1309 days in filing the appeal - Delay occurred as the appellant were unable to trace out the file and that they were not aware as to whether the second appeal has been filed before the Tribunal or not - sufficient reasons foe delay present or not - HELD THAT:- There are no reason to disbelieve the explanation offered by the appellants in explaining the delay of 1309 days in filing the appeal - the reasoning of the Tribunal that the reasons assigned are neither logical and reasonable nor sufficient cause has been shown, cannot be accepted. It is needless to state that matters of delay require to be considered liberally on sufficient cause being shown. On considering the reasons assigned, it can be concluded that the reasons assigned constitutes sufficient case. Delay condoned - The application seeking condonation of delay is allowed.
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Central Excise
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2019 (12) TMI 63
Area based exemption - proof of filing of declaration - exemption from payment of Central Excise under the Notification No. 50/03-CE, dated 10.06.2003 - whether the instant appeal raises a substantial question of law for adjudication by this Court? - it was held by the High Court that the appellant was obliged to establish that it had actually applied for the benefit of exemption under the Notification dated 10.06.2003 through 2nd Declaration filed on 13.04.2005 or that such a Declaration was available in the office of Assistant Commissioner, Central Excise. The appellant has miserably failed to discharge such onus. HELD THAT:- There is nothing to interfere with the impugned judgment and order passed by the High Court - SLP dismissed.
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2019 (12) TMI 62
Permission for withdrawal of petition - the petitioner(s) intend to pursue Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Process amounting to manufacture or not - manufacture of Harrison brand locks - HELD THAT:- The Special Leave Petitions and pending application(s) are dismissed as withdrawn.
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2019 (12) TMI 53
Clandestine removal of finished goods - No corroborative evidences - CENVAT credit - HELD THAT:- There is no categorical admission of clandestine removal by the Director of the appellant. This Tribunal have held that only for the shortage found at the time of physical verification, does not lead to the conclusive evidence of clandestine removal - Accordingly, the charge of clandestine removal is not sustained, there is no corroborative evidence against the appellant. CENVAT Credit - duty paying invoices - credit availed on supplementary invoices raised by South Eastern Coalfields Limited (a PSU) for supply of coal to the appellant - HELD THAT:- Credit is allowed placing reliance in the case of M/S JAYPEE REWA PLANT VERSUS CCE ST, JABALPUR [ 2018 (10) TMI 391 - CESTAT NEW DELHI ] where it was held that the appellant is entitled to take cenvat credit on the supplementary invoices - credit allowed. Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 51
CENVAT Credit - recovery pertaining to the clearance of goods effected to developers of special economic zones - exclsusions of availing CENVAT Credit - rule 6(3) of CENVAT Credit Rules, 2004 - HELD THAT:- The functioning and privileges of special economic zones are governed by the Special Economic Zones Act, 2005 which, has defined exports in section 2(m) therein to include clearances by units in the domestic tariff area to developers and units . Section 51 of Special Economic Zones Act, 2005 provides that, in the event of any inconsistency with any other law, these would prevail. Accordingly, clearances to developers in special economic zone are export and, thereby, within the exclusions prescribed in rule 6(5) of CENVAT Credit Rules, 2004. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2019 (12) TMI 68
Constitution validity of the Section 5A of the Himachal Pradesh General Sales Tax Act, 1968 - High Court had entertained the writ petition, in spite of an alternative remedy, because the constitution validity of the Section 5A of the Himachal Pradesh General Sales Tax Act, 1968 was questioned - HELD THAT:- It is directed that the appeal if so, filed within 10 weeks by the respondent shall not be dismissed on the ground of limitation and it shall be decided as early as possible in accordance with law. The instant appeal is partly allowed and disposed of.
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2019 (12) TMI 67
Applicability of Section 5(3) of the Central Sales Tax Act, 1956 - Purchase and export of Coffee Beans - HELD THAT:- The section 5(3) begins with a non-obstante clause in relation to sub-section (1) of section 5. Section 5(1) deals with a situation where the sale or purchase itself occasions such export. Obviously, what is relevant is sub-section (3) of section 5 because the export was subsequent to the purchase. Sub-section (3) of section 5 requires the assessee to produce the agreement or order for or in relation to such export. There is no material on record for us to determine the identity of the goods purchased and the goods that were exported. It is an admitted fact that the agreements under which the respondents have purchased goods from coffee growers and exports were made are not before us - The High Court appears to have decided the matter without taking into consideration the fact that agreement(s) was not before it. It is considered appropriate in the interests of justice to set aside the impugned judgment(s) and order(s) passed by the High Court and direct that the respondents shall be permitted to produce the agreement before the assessing authority at Karnataka - appeal allowed.
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2019 (12) TMI 66
Principles of natural justice - allegation that the Department had not revealed its mind as to the modification that it seeks to effect to the returned turnover - It is only in the impugned order of assessment that the Assessing Officer reveals what exactly he had in mind in regard to the proposed modification - petitioner has utilised the CPP to generate electricity, the turnover from which is exempt from tax - Applicability of provisions of Section 19(6) of TNVAT Act - HELD THAT:- In the present case, the pre-assessment notices dated 24.06.2014 and 31.07.2014 call for details of nature of capital goods purchased, date of commencement of production, location and plant where the capital goods are used and commodity code. To what use the Assessing Officer intends to put these details are unknown till the order of assessment is actually received by the assessee. Though opportunity has been extended, it can hardly be said to be effective in the present case. The prevailing position in law is to the effect that an assessee is entitled to ITC pro rata on capital goods used both in the manufacture of taxable as well as exempt commodities. This aspect of the matter requires adjudication by the Officer. The impugned assessment order is thus set aside in the light of the fact that this position has neither been effectively captured or dealt with by the Assessing Officer in the impugned order nor for the reason that the pre-assessment proposals issued prior to completion of assessment do not put this issue for rebuttal to the assessee. The assessee is directed to appear before the Assessing Officer along with written submissions and quantification of the proportionate proposed claim of ITC and all supporting details in connection therewith - petition allowed by way of remand.
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2019 (12) TMI 65
Imposition of penalty u/s 54(1)(14) of the U.P. VAT Act, 2008 - the penalty had been imposed solely on account of vital columns of Form-38 having been left blank with respect to import of floor cleaning machinery - HELD THAT:- The first appeal authority appears to have deleted the penalty and that order has been confirmed by the Tribunal on the reasoning that there was no intention to evade tax inasmuch as the said machinery was being brought inside the State only for the purpose of demonstration and not for sale. Further, explanation of the assessee that the goods were properly accounted at Haryana after being imported from Italy has also accepted. The aforesaid findings of fact recorded by the Tribunal, as to absence of intention to evade tax appear to be based on material and evidence existing on record - Revision dismissed.
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2019 (12) TMI 61
Power of the State to rescind the notification with retrospective effect - doctrine of promissory estoppel - notification providing for rebate in respect of tax payable under the Uttar Pradesh Trade Tax Act, 1948 - withdrawal of facility even in respect of industrial units, which had commenced production and had complied with the conditions for grant of such rebate in terms of Notification dated 27th February, 1998, with retrospective effect - Doctrine of Promissory Estoppel. HELD THAT:- The parties have proceeded on the premise that the State Government or the Executive is competent to rescind the earlier notification and the doctrine of promissory estoppel can be no impediment in that behalf. That, however, is hedged or laced with condition that the burden is upon the Government to show that it acted in furtherance to public interest in issuing such a notification otherwise than in accordance with the promise and that the public interest is so overwhelming that it would be inequitable to hold the Government bound by the promise. It is well established that the Court would not act on mere ipse dixit of the Government and must insist on a highly rigorous standard of proof in discharge of its burden by the Government. Resultantly, it is not necessary for us to dilate on the precedents pressed into service by the respondents on the application of doctrine of promissory estoppel of the State Government like any other private party or individual. On a bare reading of provision of Section 5 of the Uttar Pradesh Trade Tax Act, 1948, it is evident that there is no express authority given to the Executive to issue notification for withdrawing or rescinding the rebate facility from a date prior to the date of notification. Section 5(2) merely constrict that power only for allowing rebate with effect from a date prior to the date of notification. That does not include, by necessary implication or otherwise, power to withdraw or rescind the rebate from a date prior to the date of the notification - also, Section 21 of the 1904 Act, is pari materia to the above provision and will be of no avail for withdrawing the rebate from a date prior to the date of the notification. In the present case, it is not necessary to dilate further on this aspect as the plain language of the notification dated 14th October, 2004, itself expressly rescinds notification dated 27th February, 1998 with effect from 14th October, 2004. There is no express or tacit intent manifested from this notification, so as to construe it as bestowing power to withdraw the rebate facility with effect from a date prior to the date of notification as such. On this finding, nothing more is required to be said as the concomitant of this finding would necessarily be that all the industrial units set up after 27th February, 1998 and before 14th October, 2004 which had commenced commercial production, must continue to qualify for rebate for specified term mentioned in notification dated 27th February, 1998, subject to fulfilling all other conditions specified therein. The question of future revenue loss would not arise as the industrial units established in the neighbouring States would not be eligible to avail of the rebate because of rescinding the earlier notification. Suffice it to observe that the argument about future revenue loss cannot be invoked against the industrial units who had already established and commenced production after 27th February, 1998 and before 14th October, 2004. For, it can be safely presumed that the policy makers were fully conscious about the so-called loss of future revenue due to rebate to those units when they had issued notification dated 27th February, 1998. That ground cannot be set up against the industrial units who qualify in all other respect under the notification dated 27th February, 1998 and have made substantial investment running into crores much less as being supervening public interest, as is being placated by the State in these proceedings. Thus, the impugned notification dated 14th October, 2004 can have no application to the settled enforceable right accrued to industrial units who fulfill all other conditions specified in the notification dated 27th February, 1998, having commenced commercial production of the specified goods before 14th October, 2004 - the stand of the State Government about the supervening public interest qua the respondents herein and similarly placed persons, is hereby rejected. The notification dated 14th October, 2004 cannot be construed as having retrospective or retroactive effect to whittle down the accrued rights in favour of such industrial units. Appeal dismissed.
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2019 (12) TMI 58
Remand of the matter - assessment of inter-state sales - only contention raised on behalf of the petitioner/Assessee is that the Tribunal erred in partly allowing the Appeal and partly remanding back to the First Appellate Authority instead of completely remanding the case back for holding fresh enquiry so that the issues could be decided afresh by the Appellate Authority - HELD THAT:- There is considerable force in the contention raised by the learned counsel for the petitioner/Assessee. Therefore, the matter ought to have been remanded for passing denovo order by the First Appellate Authority. The matter stands restored to the concerned first appellate authority. Since, the proceedings were stayed by way of interim order of this Court and pendency of the writ petition for a long period i.e, from the year 2002, the First Appellate Authority is requested to pass orders denovo, within a period of six months from today - petition allowed.
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2019 (12) TMI 57
Rejection of books of accounts - estimation of production based on electricity consumption - sale of raw material due to low production yield - low quality of raw material - HELD THAT:- Once the Tribunal has itself recorded the finding that the entire production activity was regularly monitored by the excise authorities and that the raw material was of poor quality, there did not exist any material to reject the books of accounts of the assessee solely on account of electricity consumption appearing to be in excess - In absence of any material brought on record as may evidence sale of raw material in the same form and condition or of excess production, the conclusion drawn by the Tribunal to uphold rejection of books of accounts and to sustain the estimation of turnover to any extent is self contradicted by the Tribunal's own finding. Revision allowed - decided in favour of the assessee and against the revenue.
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2019 (12) TMI 56
Levy of tax and penalty on advances received by petitioner - Karnataka VAT Act - tax periods 2013-14 - HELD THAT:- The liability fastened on the petitioner Assessee for the advance payment received during the tax periods 2013-14 cannot be held to be justifiable, for the reason that Explanation to Rule 3 of the Rules contemplates that any amount paid as advance to a dealer as a part of consideration for transfer of property in goods [whether as goods or in some other form] involved in the execution of a works contract shall be included in his total turnover in the month in which execution of such works contract commences. The Cognate Bench of this Court in the case of NAGARJUNA CONSTRUCTION COMPANY LIMITED AND ANOTHER VERSUS STATE OF KARNATAKA AND OTHERS [ 2010 (6) TMI 737 - KARNATAKA HIGH COURT] , has observed that the Explanation to Rule 3[a] to [g] of the KVAT Rules is contrary to Section 4[1][c] of the Act and Article 366[29A][b] of the Constitution of India and is hence unconstitutional - Accordingly levy of tax and penalty on advances received by the petitioner therein, was quashed. The matter is remitted to the respondent No.2 Authority to re-consider the same and conclude the re-assessment in an expedite manner after providing an opportunity of hearing to the petitioner - petition allowed by way of remand.
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Indian Laws
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2019 (12) TMI 60
Dishonor of Cheque - offence punishable under Section 138 of the Negotiable Instruments Act - accused stated that part amount was deposited before learned trial Court, whereas remaining amount as awarded by learned trial Court stands paid - compounding of matter - HELD THAT:- When entire compensation amount has bee agreed to be paid to the complainant, this Court sees no impediment in accepting the prayer made in the instant petition especially in view of power vested in this Court under S.147 of the Act and guidelines laid down by Hon'ble Apex Court in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [2010 (5) TMI 380 - SUPREME COURT] - Needless to say, Hon'ble Apex Court in judgment (supra) has categorically held that power under S.147 of the Act ibid can be exercised even in those cases, where accused stands convicted. Impugned judgments/order of conviction and sentence passed by both the learned Courts below are quashed and set aside. Petitioner is acquitted of the offence punishable under S.138 of the Act ibid - Petition allowed.
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2019 (12) TMI 59
Dishonor of Cheque - Suit for recovery of outstanding amount - misreading and misinterpretation of the evidence and material on record or not - HELD THAT:- This Court finds no illegality and infirmity in the impugned judgments and decrees passed by learned Courts below, which otherwise appear to be based upon the proper appreciation of the evidence, be it ocular or documentary adduced on record by the respective parties. This Court is fully satisfied and convinced that both the Courts below have very meticulously dealt with each and every aspect of the matter and there is no scope of interference, whatsoever, in the present matter. Appeal dismissed.
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