TMI Tax Updates - e-Newsletter
February 15, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Provisional Attachment of property - Blocking of Electronic Credit Ledger (ECL) - The petitioner maintains that the procedure prescribed in rule 86-A, however, was not followed. - exercise of power under rule 86-A made by respondent no.1 was not because she was independently satisfied about the need for blocking the ECL but, was due to the fact that she felt compelled to obey the command of her superior - the order was passed virtually by respondent no.3. This is not the manner in which the law expects the power under rule 86-A to be exercised. When a thing is directed to be done in a particular manner, it must be done in that manner or not at all is the well established principle of administrative law which has not been followed here - the impugned order is arbitrary and illegal. - HC
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Income Tax:
Computation of capital gains - benefit of indexation - cost to the previous owner - inherited property under will and again by will - Based on the Scheme of the Act, as provided in Section 49(1)(ii), clauses (29A) and (42A) of Section 2 and Section 55(2)(b)(ii) of the Act, indexation of the cost of acquisition under the second proviso to Section 48 should be available from the financial year 1981-1982. Therefore, on this ground alone, we will have to grant prayer clause (a) as quoted earlier. - HC
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Income Tax:
Addition u/s 69C on account of unexplained expenditure - benefit of telescoping - The assessee can get the telescoping benefit for addition on account of bogus purchases in his case only and cannot get the telescoping benefit on account of the cash generated out of such bogus purchases in other group concerns for meeting the expenditure towards acquisition of gold coins - AT
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Income Tax:
TDS u/s 195 - Disallowance u/s.40(a)(i) - As the case is admittedly covered u/s.9(1)(vi) of the Act and also found to be covered by Article 12 of the amended DTAA, we hold that the amount paid by the assessee is chargeable to tax in the hands of the Netherlands entity. Failure of the assessee to deduct tax at source from payment made to the Netherlands entity clearly magnetizes section 40(a)(i) of the Act. - AT
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Income Tax:
Income from undisclosed sources - All deposits in the bank account cannot be treated as income of the assessee. During the assessment proceedings, the learned AO came to know that assessee is working as shroff which means commission agent. After going through the bank statement, it was revealed that cash deposited and withdrawals were made regularly during the year under consideration. We do not find any ambiguity in the order passed by the learned CIT(A) and he has rightly directed the learned AO to compute the commission income @ 0.25 paise per lakh deposited in the bank account. - AT
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Income Tax:
Reopening of assessment u/s 147 - concept of change of opinion - In cases where the return of an assessee is accepted without scrutiny, the assessing officer enjoys a greater latitude to reopen the assessment. - AO had sufficient material at his command to form a belief that the income chargeable to tax has escaped assessment. There is a clear link between the information available with the assessing officer and his formation of belief that the income chargeable to tax has escaped assessment. - HC
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Service Tax:
Whether the petitioner could have filed a declaration under SVLDR Scheme under the category of ‘arrears’ on the basis of the liability determined by the respondent no.2 in Order-in Original - The impugned order is contrary to the object, the purpose and the intent of the Central Government to frame the said scheme as one time measure for liquidation of past disputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration and the basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty and deserves to be quashed and set aside - HC
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Service Tax:
SVLDRS - petitioner failed to pay the declared amount within 30 days from the date of issue of notice - The prayers made in this writ petition cannot be granted for consideration of the case of the petitioner for paying the service tax under the Scheme as the Court cannot make operational the SVLDRS, 2019, especially when the petitioner has approached this Court belatedly after 1 year and 3 months from the last date of payment of determined amount of tax under the SVLDRS, 2019 - HC
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Service Tax:
Seeking refund of unutilized credit - Export - Development of Computer Software - In the present case, the availment of credit is not contested by the Revenue and the appellants having exported the services cannot be disentitled to refund under Rule 5 on the ground that the exported services are exempt - AT
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Central Excise:
Payment of duty from inadmissible CENVAT credit availed - If a person deposits such sum under mistake he may also claim refund thereof and if Government of India intends to withhold the same, the same may be branded as withholding the amount without authority of law. However in the present case the situation is different. The amount was not deposited in cash but by encashing CENVAT credit. - It is an instance of depositing certain sum with Government of India which was not payable. We therefore are in agreement with the view of appellate and revisional authorities that by this means the petitioner cannot claim refund of the amount which was offered through CENVAT credit. - HC
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Central Excise:
Clandestine removal - vanaspati - Seeking for keeping in abeyance the further proceeding pending in the court of the learned Addl. Chief Judicial Magistrate (Special Court), Cuttack till disposal of the Adjudication Proceedings under the Central Excise Act, 1944, in an another case - Whether the allegation in the adjudication proceeding and the proceeding for prosecution is identical? - The CRLMC stands allowed directing the further proceeding of the Complaint to be kept in abeyance pending disposal of the Department adjudication proceedings started under the Central Excise Act, 1944 and the Rules thereunder - HC
Articles
Notifications
Companies Law-
S.O. 623 (E) - dated
11-2-2022
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Co. Law
Delegations of Powers to Regional Directors under section 458 of Companies Act, 2013
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S.O. 622 (E) - dated
11-2-2022
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Co. Law
Central Government appoints the Registrar of Companies as adjudicating officers
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G.S.R. 110 (E) - dated
11-2-2022
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Co. Law
Modification of sections 90, 164, 165, 167, sub-section (5) of section 206, sub-section (3) of section 207, 252 and section 439 of the Companies Act,2013 (18 of 2013)
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G.S.R. 107 (E) - dated
11-2-2022
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Co. Law
Companies (Accounts) Amendment Rules, 2022
Customs-
16/2022 - dated
12-2-2022
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Cus
Seeks to amend Notification Nos. 48/2021-Customs, dated the 13th October, 2021 and 49/2021-Customs, dated the 13th October, 2021
GST - States-
17/2021 – State Tax (Rate) - dated
2-2-2022
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Jharkhand SGST
Amendment in Notification No. 17/2017- State Tax (Rate), dated the 29th June, 2017
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16/2021 – State Tax (Rate) - dated
2-2-2022
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Jharkhand SGST
Amendment in Notification No. 12/2017- State Tax (Rate), dated the 29th June, 2017
LLP-
S.O. 621 (E) - dated
11-2-2022
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LLP
Seeks to bring in force provisions of sections 1 to 29 of the Limited Liability Partnership (Amendment) Act, 2021
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G.S.R. 109 (E) - dated
11-2-2022
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LLP
Limited Liability Partnership (Amendment) Rules, 2022
News
Case Laws:
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GST
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2022 (2) TMI 569
Provisional Attachment of property - Blocking of Electronic Credit Ledger (ECL) - The petitioner maintains that the procedure prescribed in rule 86-A, however, was not followed. - petitioner has raised an issue of jurisdiction contending that the impugned order of blocking the ECL could not have been passed by an authority like the Deputy Commissioner i.e. respondent no.1 and ought to have been passed, if at all, by the Commissioner as per rule 86-A. HELD THAT:- There are no merit in the contention as this rule itself shows that the power can be exercised not only by the Commissioner but also by an officer authorised by him in this behalf and only restriction is that the delegate of the Commissioner cannot be an officer who is below the rank of an Assistant Commissioner. In this case, there is no dispute about the fact that respondent no.1, a Deputy Commissioner holding the rank above an Assistant Commissioner, was duly authorised by the Commissioner to initiate action under section 86-A of the CGST Act. The contention is, therefore, rejected. Whether blocking of Electronic Credit Ledger (ECL) under Rule 86-A of the Central Goods and Services Tax Rules, 2017 amounts to provisional attachment of property under section 83 of the Central Goods and Services Act, 2017 and if so, whether it could have been done without following conditions and procedure prescribed in section 83 of the Central Goods and Services Tax Act, 2017? - HELD THAT:- The power of provisional attachment of the property under section 83 of the CGST Act can be exercised only after initiation of any proceeding under Chapters XII, XIV and XV, which relate to assessment, inspection, search, seizure, arrest and demands and recovery of tax not paid or shortly paid or erroneously paid. For invoking the power under rule 86-A, it is not necessary that proceeding under any of the said Chapters is initiated and it can be exercised, when conditions prescribed therein are met. It is thus clear that the power under rule 86-A is quite distinct from the power under section 83 and, therefore, any order passed under rule 86-A cannot be treated as the order amounting to the provisional attachment of property under section 83 of CGST Act. The argument made by learned counsel for the petitioner that the impugned order is no less than an order for provisional attachment under section 83 is rejected and the question is answered in terms that the impugned order could not be understood as the order amounting to provisional attachment of property under section 83 of the CGST Act and, therefore, further question regarding following of the procedure prescribed in section 83 would not arise. Whether rule 86-A of Rules, 2017 permits blocking of the ECL, and if yes, to what extent? - HELD THAT:- There is no specific mention therein about the blocking of the ECL and what is stated is that the Competent Authority may not allow debit of an amount equivalent to an amount determined or found to be fraudulently or wrongly shown as credit available in the ECL for discharge of any liability under Section 49 or any equivalent refund of an unutilised amount of credit in the ECL. Disallowing debit of an amount to the ECL is nothing but blocking of the ECL. But, such blocking of the ECL cannot be for an amount which is more than the amount found to be fraudulently or wrongly availed of - rule 86-A of Rules, 2017 does permit dis-allowance of debit of an amount to the electronic credit ledger only to the extent of fraudulent or wrong availment of credit in the ECL and such disallowance can be done through blocking of the ECL to the extent of the amount fraudulently or wrongly shown as lying in credit in the ECL. Whether the order of blocking of Electronic Credit Ledger (ECL) is arbitrary and illegal? - HELD THAT:- In the reply filed by respondent no.1, it is admitted that the blocking of ECL was done by her because there was direction received by her from respondent no.3 via respondent no.4 regarding blocking of the ECL as per rule 86-A. This admission shows that there was an abdication of authority conferred upon respondent no.1 regarding exercise of power under rule 86-A which ought to have been exercised by her after applying her mind independently in the matter, but that was not to be. The surrender of the authority made by her was in favour of respondent no.3, although respondent no.3, on its part had only recommended for blocking of the ECL. This shows that exercise of power under rule 86-A made by respondent no.1 was not because she was independently satisfied about the need for blocking the ECL but, was due to the fact that she felt compelled to obey the command of her superior - the order was passed virtually by respondent no.3. This is not the manner in which the law expects the power under rule 86-A to be exercised. When a thing is directed to be done in a particular manner, it must be done in that manner or not at all is the well established principle of administrative law which has not been followed here - the impugned order is arbitrary and illegal. Whether, in the facts and circumstances of this case, the respondents are justified in blocking Electronic Credit Ledger (ECL) under rule 86-A of Central Goods and Services Tax Rules, 2017? - HELD THAT:- Rule 86-A has been adequately framed by the rule making authority so as to take care of any possible misuse of the power. The authority has ensured that sufficient safeguards against the misuse of power are embedded in rule 86-A itself and accordingly the rule has been framed. It is already explained in detail the meaning, extent, necessity and manner of operation of these safeguards and, therefore, there are nothing more here that is required to be done. The impugned order of blocking of the ECL of the petitioner is hereby quashed and set aside - Petition allowed in part.
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Income Tax
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2022 (2) TMI 582
Review petition - excess expenditure incurred by the trust/charitable institution in earlier assessment year could be allowed to be set off against income of subsequent years by invoking Section 11 - HELD THAT:- Delay of 862 days in filing the review petition is condoned. We have carefully gone through the review petition and the connected papers. We find no merit in the review petition and the same is, accordingly, dismissed.
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2022 (2) TMI 581
Computation of capital gains - benefit of indexation - cost to the previous owner - inherited property under will and again by will - According to petitioner, indexation should be granted from financial year 1981-82 as a previous owner, who had acquired the property by any means other than those specified in Section 49 was late predecessor, who had acquired her share in the said property in the year 1972, i.e., before 1981, while, respondent No.1 has granted such indexation from financial year 1992-93 - HELD THAT:- The cost of acquisition of the said property in the hands of seller is deemed to be the cost for which the said property was acquired by late Mrs. Dolly Jehangir Gazdar and the period of holding of late Mrs. Dolly Jehangir Gazdar, Mrs. Rhoda Rustom Framjee and Mr. Rustom Framjee are also to be included in the period of holding of seller for ascertaining the period for which the property was held by the seller. Based on the Scheme of the Act, as provided in Section 49(1)(ii), clauses (29A) and (42A) of Section 2 and Section 55(2)(b)(ii) of the Act, indexation of the cost of acquisition under the second proviso to Section 48 should be available from the financial year 1981-1982. Therefore, on this ground alone, we will have to grant prayer clause (a) as quoted earlier. Refund of excess tax paid - From the assessment order annexed to the affidavit in rejoinder, it does appear that the Revenue had selected the return of the seller for scrutiny and an assessment order dated 24th February 2014 under Section 143(3) of the Act has been passed. In the said order, department has accepted the capital gains at ₹ 3,85,613/-, and in the absence of any claim of TDS of ₹ 28,74,100/-, has not allowed any credit or refund of the same. In fact, the department has raised the demand of ₹ 91,360/- as seller s tax along with interest under Section 234B of the Act. There is no sur-rejoinder filed by department to this affidavit in rejoinder, denying any of the averments in the affidavit though more than four years have passed since rejoinder was filed in the Court on 15th December, 2017 when time was granted on that date to respondents to consider the affidavit in rejoinder. It is not clear whether the seller has paid the tax amount of ₹ 91,360/- demanded from him pursuant to the assessment order dated 24th February, 2014. At this point of time, we would, therefore, permit the department to retain this amount (₹ 91,360/-) and return the balance out of ₹ 28,74,100/-. The department will also refund the proportionate interest of ₹ 43,112/- after recalculating, by taking capital gains that should have been deposited at ₹ 3,85,613/- and not ₹ 1,39,51,463/-. Interest on refund and the date from which the interest has to be paid - HELD THAT:- As relying on M/S TATA CHEMICALS LTD. [ 2014 (3) TMI 610 - SUPREME COURT] interest shall be paid at the rate prescribed under Section 244A(1)(b) for the period from the date of payment of tax, i.e., 7th January, 2011.
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2022 (2) TMI 580
Allocable expenditure between the 10A Unit and non-exempt unit - Determination of expenditure on Software Technology Park and Non-Software Technology Park on the basis of gross Profit and not on the basis of turn over - HELD THAT:- First question of law raised in this appeal has already been considered and decided by this Court in favour of the Assessee in the case of Commissioner of Income Tax Vs. Pentasoft Technologies Ltd. [ 2013 (11) TMI 1057 - MADRAS HIGH COURT] .as held revenue does not dispute the fact that the major portion of the expenditure incurred by both the units are detectable from the accounts maintained. Only in respect of such of those issues where the expenditure could not be deducted the commissioner upheld the contention of the assessee. Revenue has not placed any material to show how this working would distort the allocable expenditure on the STP unit. Depreciation on Intellectual Property rights and Non-Compete fee treated as intangible assets - HELD THAT:- Second substantial question of law raised in this appeal has already been considered and decided by this Court in favour of the Assessee in the case of Pentasoft Technologies Ltd [ 2013 (11) TMI 1057 - MADRAS HIGH COURT] wherein as analysed the agreement and also in the previous portion of this order elaborated upon the various terms and conditions, which bind the parties had observed that the earlier transfer of the trade mark, patents and other rights in favour of the assessee was undoubtedly the transfer of intangible assets, which in terms of section 32(1)(ii) of the Act would be a capital asset entitled to depreciation. Decided in favour of the Assessee
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2022 (2) TMI 579
Deduction u/s. 80IA(4) - Assessee claimed that the activities of operating the Container Freight Station qualifies as a Port which is one of the infrastructure facilities for the purpose of section 80IA - HELD THAT:- Hon ble High Court of Bombay in assessee s own case for A.Y. 2008-09 [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] discussed the issue in detail confirmed the order of Tribunal in holding that the Container Freight Station (CFS) is infrastructure facility eligible for deduction under Subsection (4) of Section 80IA. Thus we held that the assessee is eligible for claim of deduction u/s. 80IA(4) of the Act in terms of decision of Hon ble High Court of Bombay in assessee s own case - Decided in favour of assessee.
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2022 (2) TMI 578
Addition of bogus purchases - CIT - A confirmed addition being 25% - HELD THAT:- The books of account were also audited and auditors have not given any adverse remarks. All the payments have been made through banking channels. The assessee had produced the stock register showing relevant entries of the items purchased and issued for consumption in job work and the items were tallying and no discrepancy in the stock was found at the time of survey. Disallowance of 20% of the purchases appears to be on the higher side especially when some of the parties to whom letters were issued were served and the payments have been made through banking channel - disallowance of 2% of the total purchases under the facts and circumstances of the case, in our opinion, will meet the ends of justice. We hold and direct accordingly. The A.O. shall do the re-computation. Accordingly the order of the Ld. CIT(A) is modified on this issue and the grounds raised by the assessee on this issue are partly allowed. Addition on account of commission expenses - HELD THAT:- Since we have held that entire purchases cannot be considered as bogus since the sales have not been disturbed and some of the parties to whom letters were issued are existing in the given address and no discrepancy was found in the stock at the time of survey and the stock register was tallying with quantitative details, therefore, estimation of commission for the entire purchases, in our opinion, is not justified. At the same time, the conduct of the assessee is not above board. Considering the totality of the facts and circumstances of the case, we are of the considered opinion that lump sum addition of ₹ 50,000/- on estimate basis under the facts and circumstances of the instant case will meet the ends of justice. We hold and direct accordingly. Grounds of appeal number.9 of the assessee is accordingly partly allowed. Addition u/s 69C on account of unexplained expenditure - It is the submission for the Assessee that benefit of telescoping should be available to the assessee on account of addition, if any, in the case of other group concerns as a whole - HELD THAT:- The plea of the assessee, in our opinion, is not acceptable. The assessee can get the telescoping benefit for addition on account of bogus purchases in his case only and cannot get the telescoping benefit on account of the cash generated out of such bogus purchases in other group concerns for meeting the expenditure towards acquisition of gold coins amounting to ₹ 6,41,725/- for this year. The ground raised by the assessee is accordingly partly allowed for statistical purposes.
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2022 (2) TMI 577
Assessment u/s 153A v/s 153C - Addition on the basis of unsecured loans appearing in the balance-sheet - Validity of search proceedings - CIT(A) upheld the action of the A.O.- HELD THAT:- Admittedly, no search has taken place at the premises of the assessee. The seized documents relating to the assessee-company were found from 17/6, Hansapal Industrial Complex. Mathura Road, Faridabad which belong to LV Rustore Appliations Pvt. Ltd., R R Carwell Pvt. Ltd., and Elvi Bardahl India Pvt. Ltd. Therefore, assumption of jurisdiction under section 153A instead of 153C, in our opinion, vitiates the entire assessment proceedings. Addition in the instant case has been made on the basis of the entries already appearing in the balance-sheet under the Head Unsecured loans and the said addition is not made on the basis of any incriminating material found during the course of search. We further find the period for issue of notice under section 143(2) expired and the assessment had attained finality. Therefore, by following the decision of Singhad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] and Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] the addition made by the A.O. and sustained by the Ld. CIT(A), in our opinion, is not in accordance with Law. We, therefore, allow the additional grounds raised by the assessee and quash the assessment proceedings initiated under section 153A instead of provisions of Section 153C - Decided in favour of assessee.
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2022 (2) TMI 576
TDS u/s 195 - Disallowance u/s.40(a)(i) - whether or not the amount paid by the assessee is chargeable to tax in the hands of Netherlands entity? - India and Netherlands DTAA - HELD THAT:- As per definition of the term `Royalties makes it patent that the hitherto content of para 4 of Article 12 comprising of copyright royalty cases only became subject matter of sub-para (a) of the amended para 4 of Article 12. In addition, para 4(b) also came to be added, which deals exclusively with industrial royalty cases, thereby enveloping, consideration for the use of or the right to use industrial, commercial or scientific equipment, subject to certain exceptions, which are not applicable to the case under consideration. Thus, it is manifest that India and Netherlands have agreed to bring industrial royalty, of the nature as obtaining in the present appeal, within the scope of Article 12 of the DTAA w.e.f. 30-08-1999. The assessment year under consideration is 2012-13. As such, it would only be the amended definition of the term `Royalties in the DTAA, which will prevail. Since para 4(b) of Article 12 of the DTAA specifically covers consideration for use of any industrial or commercial equipment, the payment made by the assessee for use of the overall ICT Infrastructure set up by its Netherlands entity would fall within the term `Royalties under the DTAA. As the case is admittedly covered u/s.9(1)(vi) of the Act and also found to be covered by Article 12 of the amended DTAA, we hold that the amount paid by the assessee is chargeable to tax in the hands of the Netherlands entity. Failure of the assessee to deduct tax at source from payment made to the Netherlands entity clearly magnetizes section 40(a)(i) of the Act. We, therefore, accord our imprimatur to the view canvassed by the authorities in making and sustaining the disallowance. Assessee appeal dismissed.
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2022 (2) TMI 575
Disallowance of interest expense holding it as prior period expense - Assessee submitted the fact that actual credit and payment of this interest amount and TDS relating thereto occurred in A.Y. 2013-14 i.e. the assessment year under consideration - HELD THAT:- In the given facts and circumstances where the assessee has not claimed interest expenses in the preceding years and the loan creditor IBFSL has also not recognized the corresponding interest income in the preceding years, it will not be justified to disallow the claim of interest expense in the hands of the assessee when it remained contingent in the preceding years and which devolved and crystallized only during the relevant year under consideration before us, owing to realization of its dues by IBFSL in one shot from the assessee. It is not a case as if the Revenue has been deprived of any tax. In fact, by not claiming interest expense in the earlier years, assessee has reported higher amounts of total income. Hence, there is no loss of tax to the Revenue. We are of the considered view that Ld. CIT(A) was not justified in sustaining the disallowance of interest expense claimed by the assessee in his profit and loss account when the documentary evidence to substantiate the claim were placed on record. We accordingly set aside the finding given by the Ld. CIT(A). Consequently, addition made by the Ld. AO by making a disallowance as arrears interest is deleted. - Decided in favour of assessee.
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2022 (2) TMI 574
Income from undisclosed sources - whether cash deposits made in his A/c.belongs to the Ceramic Industries/Tiles Manufacturing Companies of Morbi who are the clients of Shaileshbhai Marvania or not? - AO has mentioned in the assessment order that while recording statement on oath the assessee has deposed that he was receiving commission: @ 0.25 per 1 lac whereas in his submission he stated that he was receiving commission @ 0.025 per 1 lac and thus the contradictory statement leads to believe that the intention of assessee is not bonafide - HELD THAT:- In this case, assessee is working as a shroff and as per CIT(A) it is not a disputed fact. The shroff acts as a channel between two parties. It is apparent from the bank account in question that the cash were deposited and withdrawn from time to time. During the proceedings, the assessee recorded his statement and categorically explained the nature of transaction that he is getting a commission at ₹ 0.25 paise on transaction of Rs. one lakh. All deposits in the bank account cannot be treated as income of the assessee. During the assessment proceedings, the learned AO came to know that assessee is working as shroff which means commission agent. After going through the bank statement, it was revealed that cash deposited and withdrawals were made regularly during the year under consideration. We do not find any ambiguity in the order passed by the learned CIT(A) and he has rightly directed the learned AO to compute the commission income @ 0.25 paise per lakh deposited in the bank account. Appeal of the Revenue is dismissed.
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2022 (2) TMI 573
Disallowing interest claimed u/s. 36(1)iii) for giving interest free funds to sister concerns - HELD THAT:- For the interest bearing funds diverted towards interest free loans advanced to sister concerns the assessee explained that the assessee has cash accruals in the shape of depreciation and cash equivalent at the end of the year. According to him, this is sufficient to meet the interest free loans advanced to sister concerns and these are not out of interest bearing loan funds on which expenditure is being claimed. When these facts were confronted to ld. Senior DR, he could not controvert the factual situation. We noted that the assessee is able to explain that interest free loans advanced to sister concerns are not diverted out of interest bearing loans rather accrual of interest free funds, which is enough to meet out the same. Hence, we are of the view that this disallowance deserves to be deleted. We delete the disallowance and direct the AO accordingly. - Decided in favour of assessee.
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2022 (2) TMI 572
Employees' share of contribution to ESI to the extent not paid on or before the due date as mentioned in Sec 36(1)(va) - HELD THAT:- In the case of Essae Teraoka Pvt. Ltd.[ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] has taken the view that employee's contribution under section 36(1)(va) of the Act would also be covered under section 43B of the Act and therefore if the share of the employee's share of contribution is made on or before due date for furnishing the return of income under section 139(1) of the Act, then the assessee would be entitled to claim deduction. Therefore, the issue is covered by the decision of the Hon'ble Karnataka High Court. In this case there is no dispute that the assessee made payment of the Employees share of PF/ESI on or before the due date for filing return of income for AY 2017-18 u/s. 139(1) of the Act. Whether the amendment to the provisions to section 43B and 36(1)(va) of the Act by the Finance Act, 2021, has to be construed as retrospective and applicable for the period prior to 01.04.2021 also ? - On this aspect, we find that the explanatory memorandum to the Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable only from 01.04.2021. These provisions impose a liability on an assessee and therefore cannot be construed as applicable with retrospective effect unless the legislature specifically says so. In the decisions referred to by us in the earlier paragraph of this order on identical issue the tribunal has taken a view that the aforesaid amendment is applicable only prospectively i.e., from 1.4.2021. We are therefore of the view that the impugned additions made under section 36(1)(va) of the Act, deserves to be deleted. - Decided in favour of assessee.
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2022 (2) TMI 571
Unexplained bank deposits - Seeking full relief as the CIT(A) has allowed only partial relief to the assessee is that the money was received through banking channels - HELD THAT:- While allowing relief to the assessee the learned CIT(A) did not consider the findings of the AO and allowed substantial relief of ₹ 10 lac just by holding that the assessee had received the payments through banking channels. None of the findings of the Assessing Officer have been negated by CIT(A) nor before us the counsel has filed any evidence in the form of paper book regarding the genuineness of receipt of agriculture income and other documentary evidence to justify agricultural income. Therefore, no justification in the appeal of the assessee on this issue. Accordingly, the addition sustained by CIT(A) is upheld and on this ground, the appeal of the assessee is dismissed. Unexplained cash deposit in the bank account - AO had noted in his order that such deposits were made in the bank account during the demonetization period. Still out of the total deposits, the Assessing Officer made addition of ₹ 2,04,000/- only and the learned CIT(A) restricted the addition to ₹ 50,000/- only. I find that before learned CIT(A), it was submitted that there was cash in hand available as on 08/11/2016 amounting to ₹ 38,44,795/- out of which the assessee had made total deposits to the tune of ₹ 38,06,500/- which is less than the opening cash in hand and therefore, restricting the addition to ₹ 50,000/- is not justified and hence it is deleted. In view of the above, the second grievance is decided in favour of the assessee.
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2022 (2) TMI 570
Delayed employees' contribution to PF - amount not paid before the due date as provided u/s. 36(1)(va) - HELD THAT:- The issue has been settled that if the assessee has paid the PF and ESI payments before the due date of filing of return income u/s. 139(1) of the Act, no disallowance is warranted as held in case of VALUE MOMENTUM SOFTWARE SERVICES PRIVATE LIMITED [ 2021 (5) TMI 989 - ITAT HYDERABAD] . Thus we direct the AO to delete the addition made towards employees PF contribution and confirmed by the ld. CIT (A) on this issue and accordingly, the grounds raised by the assessee on this issue is allowed.
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2022 (2) TMI 568
Reopening of assessment u/s 147 - concept of change of opinion - HELD THAT:- The return filed by the petitioner was accepted under Section 143(1) of the Act. This was done without scrutiny. Under such circumstances, the assessing officer had not formed any opinion and, therefore, the concept of change of opinion while seeking to reopen the assessment would not apply. In cases where the return of an assessee is accepted without scrutiny, the assessing officer enjoys a greater latitude to reopen the assessment. This aspect has been elaborated by the Supreme Court in the case of Rajesh Jhaveri Stock Brokers P. Ltd. [ 2007 (5) TMI 197 - SUPREME COURT ] and later on it was reiterated in the case of Deputy Commissioner of Income Tax and another vs. Zuari Estate Development and Investment Company Limited [ 2015 (8) TMI 480 - SUPREME COURT ] Reasons recorded by AO are not reflecting the live link or connection for formation of the belief that the income chargeable to tax has escaped assessment - If we peruse the detailed reasons recorded by the assessing officer, we find that he was having information indicating that certain operators, syndicate members and brokers were indulging in providing accommodation entries, often times creating penny stock companies and using them as conduit for converting untaxed income by bringing them on record by paying no tax claiming it to be long term capital gain, tax on sale of shares which was at the relevant time exempted. One such company found to be indulging in such activities was Life Line Drugs and Pharma Limited. The assessee, during the period relevant to the assessment year 2015-2016, had purchased shares in the said company at the very low price. After that, the price of these shares had risen phenomenally and they were sold at high price. AO had sufficient material at his command to form a belief that the income chargeable to tax has escaped assessment. There is a clear link between the information available with the assessing officer and his formation of belief that the income chargeable to tax has escaped assessment. The judgments relied by the learned counsel for the petitioner rest on the individual facts. - Decided against assessee.
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Customs
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2022 (2) TMI 567
Smuggling - foreign mark gold on large scale - failure to produce any documentary evidence as regards legal import of such gold nor could produce any purchase vouchers showing the legal acquisition of the same - scope in Acquittal Appeals - HELD THAT:- It is well settled in catena of decisions that an appellate Court has full Power to review, re-appreciate and consider the Evidence upon which the Order of Acquittal is founded. However, the Appellate Court must bear in mind that in case of Acquittal, there is prejudice in favour of the Accused, firstly, the presumption of innocence is available to him 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 his Acquittal, the presumption of his innocence is further reaffirmed and strengthened by the trial Court. On perusal of the evidence on record, it appears that the accused Daud Jusab died during the pendency of the trial and hence the case qua him came to be abated. It is pertinent to note Daud Jusab from whom the gold was found, has died and the charge against the other respondents accused is of abetment - Even there is no evidence that the accused Daud Jusub, from whom the gold was recovered was going to handover the gold to Nazir Noormohmed who stayed at Uttam Guest house. On perusal of overall evidence on record, it can be safely said that there is no admissible evidence against the respondents accused and the prosecution has failed to prove the case against the respondents accused beyond reasonable doubt - It may be noted that as per the settled legal position, when two views are possible, the judgment and order of acquittal passed by the trial Court should not be interfered with by the Appellate Court unless for the special reasons. The Criminal Appeal being devoid of merits is dismissed.
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2022 (2) TMI 566
Delay in the investigation conducted by Respondent No. 1 - country wide export ban - issuance of LC s involving a huge sum of money - allegation against the petitioner is that it indulged in backdating, forgery and manipulation of the LC s to circumvent the export ban on pulses which was imposed vide notification dated 27.06.2006 read with notification dated 04.07.2006 for irrevocable LC s issued on or after 22.06.2006 - HELD THAT:- It is well settled that a realistic and practical approach should be made having regard to all attending circumstances including the nature of offence. Each case has to be considered on its own facts and circumstances with respect to being mechanically persuaded by the Courts merely because delay was occasioned during investigation. In the present matter, it is imperative to look into the reason behind the prolonged investigation. The LC s in question were issued by a foreign bank, and therefore, a Letter Rogatory [hereinafter LR ] had to be issued by the Chief Metropolitan Magistrate under Section 166 CrPC to New Zealand through the Interpol to investigate and unearth the facts and circumstances underlying the issuance of the LC s. These were in relation to the procedure for opening of LC s in WSBC Bank, identifying the persons involved, determining as to how the amended LC was issued, mode of dispatching the LC s, collection of documents and examination of witnesses - Since the proposed agreement was in the nature of a bilateral agreement between the two countries, the concurrence of the MEA and the Department of Legal Affairs (DoLA) was required. However, a lot of time was taken in receiving the requisite clearance from the Ministries despite regular follow ups made by the Respondent No. 1 at various levels. The final draft was approved on 06.07.2017. It is clarified that the stance of the petitioner that it is only a beneficiary who does not have the duty to check the authenticity of the LC s cannot preclude the Respondent No. 1 from interrogating the petitioner regarding the export made by the company and asking for the relevant documents in furtherance of the investigation. The further allegation that the bank advising the exporter and the bank advising the importer which have opened the LC and the importer have no quarrel with the LC and, therefore, no case is made out at all cannot be accepted. The allegation is that the LCs have been fabricated and back-dated in order to circumvent the Government's notification banning exports. Obviously, no one else will have a grievance over the transaction. It is the duty of the CBI who has received information regarding the manipulation of the LC's to investigate into the crime which has a serious effect on the economy of the country - It is clear that despite periodic reminders, there have been administrative and systemic delays over which the Respondent No. 1 had no control. It is also pertinent to note that there has been no substantial prejudice caused to the petitioner herein. The petitioner has also not been able to show any tangible loss in its trading activities. Considering the fact that the present matter deals with a country wide export ban and the issuance of LC s involving a huge sum of money and the fact that the investigation is in its crucial stage, the balance tilts towards having a fair investigation even if it is facing considerable time. Therefore, this court is not inclined to quash the complaint at this juncture - CBI is directed to conclude the investigation as expeditiously as possible. Petition disposed off.
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Corporate Laws
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2022 (2) TMI 565
Seeking to withdraw the Scheme of Amalgamation proposed by the First Respondent with its creditors - Rule 11 of National Company Law Appellate Tribunal Rules, 2016 - HELD THAT:- The Scheme stands rejected by majority of the creditors of the First Respondent and the said Company is also undergoing Insolvency proceedings, the relief prayed for in the present Application, be allowed. Application allowed.
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Insolvency & Bankruptcy
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2022 (2) TMI 564
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- In the present case, the occurrence of default is evidenced by the details furnished by the Petitioner - the Petition filed in the prescribed Form No. 1 is found to be complete. The present Petition being complete and having established the default in payment of the Financial Debt for the default amount is being above ₹ 1,00,000/-, the Petition is admitted in terms of Section 7(5) of the IBC and accordingly, moratorium is declared in terms of Section 14 of the Code - Petition admitted - moratorium declared.
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2022 (2) TMI 563
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - entire amount of dues paid by respondent or not - it is the specific case of the Respondent that it has paid the entire value of ₹ 1,20,76,611/- to the Petitioner and hence there is nothing to pay further - HELD THAT:- It is seen from the record that the Respondent has paid the entire cost of the supplies made by the Petitioner. The Petitioner while not denying the same, however submits that, out of the total amount of ₹ 1,20,76,611/-, it has adjusted only ₹ 73,93,203/- towards the liability of the Respondent and whereas the balance amount was adjusted against the liabilities of a Partnership Firm by name, M/s. RMM Food Products, in which Mr. R.M. Shadab Hussain who is the Director of the Respondent/Corporate Debtor is also a Partner and it was done as per the understanding between the parties at the appropriate time. Once the Respondent is able to prove with the support of the Bank Statements and other record that the value of the supplies made by the Petitioner were paid back, there are no merit in the contention of the Petitioner. The Petitioner failed to substantiate its contention with regard to any understanding between the parties that it can adjust certain amount out of the payments made by the Respondent towards the payments required to be made by another legal entity which is a Firm by the name, M/s. RMM Food Products. This Adjudicating Authority, in a summary procedure like the CIRP under the IBC, 2016 cannot conduct a trial into these disputed issues. Petition dismissed.
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2022 (2) TMI 562
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is the matter of record that vide order dated 13.03.2020 the counsel for the Operational Creditor submitted that the parties have entered into settlement and a part payment of ₹ 2,00,000/- (Rupees two lakh only) has been received by the Operational Creditor. However, on 18.02.2021, after the settlement was entered into, the Corporate Debtor has failed to adhere to and comply with the settlement of payment and the remaining amount has not yet been paid - From the records it is apparent that the goods were supplied and delivered and a debt towards it is due and payable in favour of the Operational Creditor. The petition made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of the minimum amount of one lakh rupees as stipulated under section 4(1) of the Code at the relevant time. There is no defence from the side of the Corporate Debtor. Therefore, the default stands established and there is no reason to deny the admission of the petition - this Adjudicating Authority admits this petition and orders initiation of CIRP against the Corporate Debtor. Petition allowed - moratorium declared.
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Service Tax
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2022 (2) TMI 561
Seeking a writ of mandamus, directing the Designated Committee under SVLDR Scheme to consider the tax dues of demand confirmed, in the Order-inOriginal and declared in the SVLDRS-1 and compute an amount as the estimated/determined amount payable - applying 40% under Section 124(c)(i) of the Finance (No.2) Act, 2019 on the said dues - apparent mismatch in the payment of Service Tax and the turnover of the assessee - Scope of the word 'arrears' and 'litigation'. Whether the petitioner could have filed a declaration under SVLDR Scheme under the category of arrears on the basis of the liability determined by the respondent no.2 in Order-in Original dated 23rd December, 2019 or the petitioner ought to have filed the said declaration under the SVLDR Scheme under the category litigation under the provisions of the said SVLDR Scheme on the basis of show cause notice? HELD THAT:- The conjoint reading of show cause notice dated 24th April, 2019 and the said Order-in Original dated 23rd December, 2019 indicates that the amount of service tax worked out by the petitioner in response to the said show cause notice was accepted as worked out at ₹ 39,47,420/-. Though the said assessment order was passed on 23rd December, 2019, the respondents did not pass any additional order demanding the additional amount being the differential amount arising out of the financial year 2014-15 to 2017-18 (upto June 2017) till SVLDR -3 form was issued by the respondent no.2 placing the declaration form submitted by the petitioner under litigation category i.e. on 4th March, 2020. The petitioner had already availed of the said scheme by filing SVLDR-1 on 31st December, 2019. In our view, the petitioner has rightly filed the declaration form i.e. SVLDR-1 by placing the said declaration under arrears category. There is no substance in the submission made by the learned counsel for the respondents that the show cause notice issued by the respondent no.2 having been pending in the circumstances set out in the earlier paragraphs of this order, the petitioner could not have classified its case under arrears category though the assessment order passed by the respondent no.2 on 23rd December, 2019 was passed after considering the show cause notice dated 24th April, 2019. The petitioner has rightly filed the said declaration form under the arrears category and was not required to file the said form under the litigation category in view of the tax dues already having been assessed and quantified before the date of the petitioner filing the said SVLDRS declaration form. A reply to the question no.1 of Frequently Asked Questions (FAQs) would clearly indicate that the person who has recoverable arrears pending is entitled to file a declaration under the said scheme subject to other conditions, under the said scheme. This Court in case of JYOTI PLASTIC WORKS PVT. LTD., JAI PLASTICS, N.D. PATEL VERSUS UNION OF INDIA [ 2020 (11) TMI 156 - BOMBAY HIGH COURT] after adverting the judgment of this Court in case of THOUGHT BLURB VERSUS UNION OF INDIA AND ORS. [ 2020 (10) TMI 1135 - BOMBAY HIGH COURT] considered a situation where the total demand of ₹ 94,90,264/made in the show cause-cum-demand notice, had been substantially reduced to ₹ 18,93,585/- in the Order-in Original with corresponding reduction of demand vis-a-vis each of the petitioners. It is held that had the petitioner accepted the order dated 29th March, 2006 like the respondents had accepted and had the petitioner not preferred appeals before the CESTAT, ₹ 18,93,585/- would have been the determined tax dues of the petitioner. This Court held that having regard to the objective of the scheme, in a case of this nature, a reasonable and pragmatic approach has to be adopted so that a declarant can avail the benefits of the scheme; a declarant who seeks benefit under the scheme cannot be put in a worse off condition than he was before making declaration under the scheme. That would defeat the very purpose of the scheme - This Court in case of Thought Blurb has considered the entire scheme SVLDRS threadbare and has also considered the objects, purpose and intent for framing the said scheme by the Central Government. This Court has considered the declaration made by the Hon ble Finance Minister clearly deducible from the statement of object and reasons, the scheme as one time measure for liquidation of past disputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty. The focus is to unload this baggage of pre-GST regime and allow business to move ahead. The impugned order is contrary to the object, the purpose and the intent of the Central Government to frame the said scheme as one time measure for liquidation of past disputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration and the basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty and deserves to be quashed and set aside - the petitioner had rightly filed the said declaration form considering the tax dues as ₹ 39,47,420/- i.e. the amount of demand confirmed in the Order-in Original dated 23rd December, 2019 and had rightly computed an amount of ₹ 15,78,968/as estimated/determined amount payable i.e. by applying 40% under section 124(c)(i) Finance (No.2) Act, 2019 on the said dues of ₹ 39,47,420/-. Petition allowed.
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2022 (2) TMI 560
Sabkas Vishwas (Legacy Dispute Resolution) Scheme, 2019 - petitioner failed to pay the declared amount within 30 days from the date of issue of notice and further did not pay the same within the extended due date on 30.06.2020 - whether the SVLDRS, 2019 can be made operational by the Court beyond the period for which it was formulated? - HELD THAT:- The overwhelming view taken by the various High Courts is that time for availing of the benefit of the Scheme cannot be extended as a matter of course, especially beyond the period it was promulgated. The prayers made in this writ petition cannot be granted for consideration of the case of the petitioner for paying the service tax under the Scheme as the Court cannot make operational the SVLDRS, 2019, especially when the petitioner has approached this Court belatedly after 1 year and 3 months from the last date of payment of determined amount of tax under the SVLDRS, 2019 - Petition dismissed.
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2022 (2) TMI 559
Seeking refund of unutilized credit - Development of Computer Software - rejection of refund on the ground that it was export of non-taxable services - services not qualifying as exports under Export of Services Rules, 2005 or otherwise? - HELD THAT:- Tribunal has taken a similar view in AXA BUSINESS SERVICES PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX [ 2016 (12) TMI 1524 - CESTAT BANGALORE] and REPRO INDIA LTD. VERSUS UNION OF INDIA [ 2007 (12) TMI 209 - BOMBAY HIGH COURT] where it was held that Once credit was admissible and unless there was no nexus between the output service exported and input services were used when credit was taken, the refund of the same also could not have been denied since the substantive ground of taking CENVAT credit in the first place being correct would lead to the obvious conclusion that ultimately if it gets accumulated the refund has to be sanctioned. In the present case, the availment of credit is not contested by the Revenue and the appellants having exported the services cannot be disentitled to refund under Rule 5 on the ground that the exported services are exempt - there is no substance in the submissions of the learned authorized representative as far as interest on delayed payment is concerned - appeal allowed - decided in favor of appellant.
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Central Excise
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2022 (2) TMI 558
Rebate u/r 18 of CER - Payment of duty from inadmissible CENVAT credit availed - Advance Authorisation scheme - benefits of duty free imports - petitioner had obtained advance authorisations and imported goods without payment of duty in terms of notification dated 11.09.2009 - HELD THAT:- It appears quite undisputable that the petitioner had availed the facility of importing goods under advance licences without payment of duty. In some cases such advance licence were invalidated in order to procure raw material duty free from local manufacturers. Raw materials so procured were utilised for manufacturing the export goods. At that time the petitioner availed the CENVAT credit and later on claimed the rebate under rule 18. As is well known, the rules of 2002 recognise two regimes for equalising excise duty element on raw material used for export of course subject to the conditions specified by the Government of India. Under rule 18 the Central Government may by notification grant rebate on duty paid on excisable goods which are used for production of export goods. Under rule 19 a manufacturer can procure such goods without payment of duty on a condition that same would be used for manufacture of goods which would be exported. Both these rules 18 and 19 of the rules of 2002 concern payment of duty. Under Rule 18 there would be rebate of duty paid. Under rule 19 the duty which is otherwise payable is waived subject to condition of using raw material for manufacturing export goods. The amount was not deposited in cash but by encashing CENVAT credit. Various judgments have made observations to the effect that payment of duty through CENVAT facility is as good as duty paid. However as observed earlier, it is not an instance of duty being paid. It is an instance of depositing certain sum with Government of India which was not payable. We therefore are in agreement with the view of appellate and revisional authorities that by this means the petitioner cannot claim refund of the amount which was offered through CENVAT credit. As is well known unused CENVAT credit can be encashed subject to certain terms and conditions. The petitioner cannot encash the CENVAT credit without following the procedure for making application and inviting a scrutiny whether the terms and conditions under which such unused CENVAT credit can be encashed are satisfied. Petition dismissed.
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2022 (2) TMI 557
Clandestine removal - vanaspati - Seeking for keeping in abeyance the further proceeding pending in the court of the learned Addl. Chief Judicial Magistrate (Special Court), Cuttack till disposal of the Adjudication Proceedings under the Central Excise Act, 1944, in an another case - Whether the allegation in the adjudication proceeding and the proceeding for prosecution is identical? - HELD THAT:- There appears to be no dispute before this Court that the facts giving rise to the allegations are identical in both the proceedings and the documents / materials relied on by the Department / Complainant are also the same. The learned counsel for the opposite party has placed reliance on a decision of the Apex Court in the case of ADALAT PRASAD VERSUS ROOPLAL JINDAL OTHERS [ 2004 (8) TMI 647 - SUPREME COURT] reported in (2004) 29 OCR (SC) 264 which does not apply to the fact situation of the present case. Similarly, the case of STATE OF KARNATAKA VERSUS SIR JANAKUSA JEEVANSA BAKALE [ 1999 (4) TMI 85 - SC ORDER] cited by the opposite party which affirms the legality of institution of a criminal proceeding during pendency of confiscation proceeding, is not applicable to the case at hand, inasmuch as here the challenge is not to the launching of the criminal prosecution. Regard being had to the position of law and in the facts and circumstances involved in the case at hand, this Court finds merit in the CRLMC. Decisions in the case of VIDEOCON INDUSTRIES LTD. [ 2016 (6) TMI 341 - SUPREME COURT] and RADHESHYAM KEJRIWAL [ 2011 (2) TMI 154 - SUPREME COURT] followed. The CRLMC stands allowed directing the further proceeding of the Complaint Case No.2(C) C.C. 57 of 2003 to be kept in abeyance pending disposal of the Department adjudication proceedings started under the Central Excise Act, 1944 and the Rules thereunder - Application allowed.
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CST, VAT & Sales Tax
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2022 (2) TMI 556
Levy of tax - works contract - receipts by the petitioner from their customers, represent the sale value of mosaic tiles or the works contract executed by the petitioner for laying and polishing the mosaic tiles, which are outside the purview of the TNGST Act, 1959, as it existed during the assessment year 1985-86 - HELD THAT:- Admittedly, the petitioner is a mosaic tiles works contractor and the dispute pertains to the assessment year 1985-86. It is also not in dispute that tax is levied on the sale of goods involved in works contract only with effect from 26.06.1986. Thus, it may be relevant to note that if the receipts were to constitute works contract, then, there may not be any liability to tax under TNGST Act, 1959, inasmuch as works contract which was deemed to be a sale pursuant to the 46th Amendment to the Constitution of India, was made liable to tax under TNGST Act, 1959, by introduction of Section 3B of the TNGST Act, 1959, which created a charge on works contract with effect from 26.06.1986. All the lower authorities have treated the receipts to be relating to regular/conventional sale of mosaic tiles on the premise that the petitioner had not come forward with any material whatsoever in support of their stand that the receipts represented works contract, including copies of contract entered into between the petitioner and its customers; and accordingly, they have held that the said receipts are liable to tax under the TNGST Act, 1959. In the absence of any supportive document produced on the side of the petitioner, we do not find any reason to differ with the conclusion so arrived at or interfere with the findings so rendered by the Tribunal. The writ petition is liable to be dismissed, as there is no infirmity or perversity in the order of the Tribunal, warranting interference by this court - Petition dismissed.
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Indian Laws
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2022 (2) TMI 555
Dishonor of Cheque - settlement arrived at between parties - Section 138 of the Negotiable Instruments Act - HELD THAT:- The revision application is required to be allowed and the parties be permitted to compound the offence - it appears that the dispute is settled between the parties. The judgment and order passed by learned 2nd Additional Chief Judicial Magistrate, Surat as well as order dated 30.4.2021 passed in Criminal Appeal No. 118 of 2018 by learned 17th Additional Sessions Judge, Surat stand quashed and set aside. The applicant-accused is acquitted of the charge under Section 138 of the Negotiable Instruments Act except he is not convicted in connection with any other offence - the revision application is allowed. Learned advocate for the applicant requests to permit the applicant to withdraw the amount deposited by the applicant - Applicant is hereby permitted to withdraw the amount deposited by him before the trial Court.
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