TMI Tax Updates - e-Newsletter
May 10, 2012
Case Laws in this Newsletter:
Income Tax
Corporate Laws
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
Income Tax
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Whether the period of ten consecutive assessment years is to be reckoned from the date of commencement of the manufacturing as a DTA Unit or from the date of commencement of manufacture as a EOU Unit. - AT
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Reopening assessment - notice u/s 148 - petitioner contested that he is a non-resident and had no income chargeable to tax in India other than what was declared - HC
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Interest free loan to wholly owned subsidiary - Decision in the case of S. A. Builders Ltd. v. CIT (Appeals) [2006 - TMI - 3364 - SUPREME COURT] needs reconsideration. - SC
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Punitive charges paid to Railways for overloading of the wagons is compensatory in nature, therefore, the same cannot be disallowed by invoking the provisions of Explanation to section 37(1) - AT
Customs
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Amendment in Baggage Rules, 1998. - Ntf. No. 37 /2012-Customs (N.T.) Dated: April 23, 2012
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Amends Notification No.21/2012-Customs - Exempts import of goods from additional duty leviable u/s 3(5). - Ntf. No. 32/ 2012 - Customs Dated: May 8, 2012
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Amends Notification 12/2012 – Customs - Prescribes effective rate of duty on import of goods. - Ntf. No. 31/2012-Customs Dated: May 8, 2012
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Exemption from CVD not applicable for certain goods when imported for Defence, Coast Gaurd, Deptt. of Revenue, Police Forces, HAL, specified ordnance Factories and for ATVP, IGMDP, SAMYUKTA, LCAP, SANGRAHA, DIVYA DRISHTI and DHANUSH Programmes etc. - Ntf. No. 30/2012-Customs Dated: May 8, 2012
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Enforcement of Intellectual Property Rights on imported goods - Clarification on the issue of parallel imports – regarding. - Cir. No. 13/2012-Customs Dated: May 8, 2012
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Classification – Cargo ship is specifically classified under Heading 8901 irrespective of the extent or degree of its navigability. - AT
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Refund – doctrine of unjust enrichment would not apply to fine and penalty - AT
DGFT
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Export Policy of Onions. - Ntf. No. 116 (RE – 2010)/2009-2014 Dated: May 8, 2012
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Amendment in paragraph 6.9 of FTP. - Ntf. No. 115 (RE-2010) /2009-2014 Dated: May 7, 2012
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Indo – China Border Trade. - Cir. No. 110/2009-2014 (RE-2010) Dated: May 7, 2012
FEMA
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Foreign Direct Investment (FDI) in India - Issue of equity shares under the FDI scheme allowed under the Government route. - Cir. No. 120 Dated: May 8, 2012
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Foreign investment in Commodity Exchanges and NBFC Sector - Amendment to the Foreign Direct Investment (FDI) Scheme. - Cir. No. 121 Dated: May 8, 2012
Indian Laws
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Speech of Honourable Minister of Finance - SHRI PRANAB MUKHERJEE
Wealth-tax
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Sanction for initiation of criminal proceedings - the implementation of the Tax Legislation should be tax payers friendly and at the same time the tax evaders should not be spared. Had the sanctioning authority approached the case, keeping the same in his mind, the sanctioning authority would not have granted sanction for prosecuting the petitioner under section 35-B of the Act. - HC
Service Tax
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Clarification on Rate of Tax - regarding. - Cir. No. 158/9/ 2012 – ST Dated: May 8, 2012
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Supply and installation of storage tanks, vaporizing coils, and plant & machinery for generation of gases - prima facie, activity became taxable w.e.f. 1.4.2008 under supply of "Tangible Goods Service" as defined under section 65 (105)(zzzzj). - AT
Central Excise
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Seeks to amend CENVAT credit Rules, 2004 (Fifth Amendment). - Ntf. No. 25/2012-Central Excise (N.T) Dated: May 8, 2012
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Amends notification No. 10/1996-Central Excise - Exemption to goods within the factory of their production in the manufacture of specified goods. - Ntf. No. 25/2012-Central Excise Dated: May 8, 2012
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Amends notification no. 12/2012-Central Excise - Prescribes effective rate of duty on goods falling under chapter 1 to 96. - Ntf. No. 24 /2012 –Central Excise Dated: May 8, 2012
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Exemption on Articles of jewellery from whole of Excise Duty. - Ntf. No. 23 /2012-Central Excise Dated: May 8, 2012
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Amends notification No. 15/2010-Central Excise - Exempts all items of machinery, and components, required for initial setting up of a solar power generation project or facility. - Ntf. No. 26/2012-Central Excise Dated: May 8, 2010
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Demand for interest relates to the month of June 2007, SCN was issued on 5-8-2009 without invoking extended period of limitation - AT
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Job work in textile industry – Trade Notice No. 20/2001 dated 24.03.2001 was clearly in contravention of law and against the direction of the Board issued vide Order No. 24/14/93/Cx Dated 31.12.1993- AT
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The rebate of duty paid as CVD on the Imported inputs utilized in the manufacture/processing of exported goods is admissible under Rule 18 of the Central Excise Rules, 2002 - HC
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Conversion of M.S. round bars into bright bars through an activity of pickling, cutting, drawing and polishing does not amount to manufacture. - AT
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Whether appellants are entitled to take cenvat credit on the strength of invoices where the goods described as C.R. Sheets instead of H.R. sheets or not - held yes - AT
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Whether unmachined steel castings and rough HRCS castings used for replacement of damaged parts of the cement plant and machinery are eligible for Cenvat credit - held yes - AT
VAT
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Amendment to notification dated 23.03.2012 relating to movement of specified goods. - Ntf. No. F.7(433)/Policy-II/VAT/2012/75 to 86 Dated: May 7, 2012
Articles
Notifications
Central Excise-
26/2012 - dated
8-5-2012
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CE
Amends notification No. 15/2010-Central Excise - Exempts all items of machinery, and components, required for initial setting up of a solar power generation project or facility.
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25/2012 - dated
8-5-2012
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CE
Amends notification No. 10/1996-Central Excise - Exemption to goods within the factory of their production in the manufacture of specified goods.
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24/2012 - dated
8-5-2012
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CE
Amends notification no. 12/2012-Central Excise - Prescribes effective rate of duty on goods falling under chapter 1 to 96.
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23/2012 - dated
8-5-2012
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CE
Articles of jewellery exempted from whole of Excise Duty. - PARTS OF RAILWAY OR TRAMWAY LOCOMOTIVES OR ROLLING-STOCK Exempted subjected to conditions.
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25/2012 - dated
8-5-2012
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CE (NT)
Seeks to amend CENVAT credit Rules, 2004 (Fifth Amendment). - No reversal for supplies made for setting up of solar power generation projects or facilities
Customs-
32/2012 - dated
8-5-2012
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Cus
Amends Notification No.21/2012-Customs - Exempts import of goods from additional duty leviable u/s 3(5).
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31/2012 - dated
8-5-2012
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Cus
Amends Notification 12/2012 – Customs - Prescribes effective rate of duty on import of goods.
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30/2012 - dated
8-5-2012
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Cus
Exemption from CVD not applicable for certain goods when imported for Defence, Coast Gaurd, Deptt. of Revenue, Police Forces, HAL, specified ordnance Factories and for ATVP, IGMDP, SAMYUKTA, LCAP, SANGRAHA, DIVYA DRISHTI and DHANUSH Programmes etc.
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24/2012 - dated
28-3-2012
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Cus
Seeks to amend Notification 12/2012 – Customs - Prescribes effective rate of duty on import of goods.
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37 /2012 - dated
23-4-2012
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Cus (NT)
Amendment in Baggage Rules, 1998. - Increase in limit of baggage in case of Passengers returning from countries other than Nepal, Bhutan, Myanmar or China
DGFT-
116 (RE – 2010)/2009-2014 - dated
8-5-2012
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FTP
Export Policy of Onions.
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115 (RE-2010) /2009-2014 - dated
7-5-2012
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FTP
Amendment in paragraph 6.9 of FTP.
Income Tax-
16/2012 - dated
30-4-2012
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IT
Income-tax (Fifth Amendment) Rules, 2012 - Insertion of rule 2F.
VAT - Delhi-
F.7(433)/Policy-II/VAT/2012/75 to 86 - dated
7-5-2012
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DVAT
Amendment to notification dated 23.03.2012 relating to movement of specified goods.
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2012 (5) TMI 111
Contract for ‘services for supply, installation and commissioning of 36 manometer gauges’ with ONGC - Held that:- On a proper reading of the Invitation to Tender and the contract entered into it is a contract for installation of equipment which the tenderer itself is to supply - it is an indivisible contract - the object in floating the tender is in furtherance of oil extraction - all payments received by the applicant under the composite contract with ONGC is income chargeable to tax in India - The contract cannot be treated as an independent one for offshore supply of 36 manometer gauges and another one for erection of it – against assessee. Part of the payment towards price of the manometer gauges cannot be considered divorced from the payments received for the performance of entire obligations under the contract. Payment received by the applicant for installation, erection and commissioning of the manometer gauges – Held that:- The contract of services for supply, installation and commissioning of manometer gauges is chargeable to tax under section 44BB of the Act, if it is found that the contract is for providing services or facilities in connection with prospecting for, or extraction of mineral oil – the services are rendered in connection with the prospecting and / extraction of oil by ONGC, hence section 44BB of the Act is attracted - against assessee.
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2012 (5) TMI 110
Disallowance interest expenses holding that the assessee has not commenced its business – Held that:- As per provision of section 36(1)(iii) interest paid, in respect of capital borrowed for acquisition of an asset for extension of existing business or profession; for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which such asset was first put to use, shall not be allowed as deduction. By implication this proviso is also applicable when assets are acquired for new business – against assessee. Disallowance administrative and other expense by holding that the assessee has not commenced its business – Held that:- Merely taking land on lease, by any stretch of imagination cannot be treated as the commencement / setting up of it's hotel business – against assessee. Right to transfer or sell the plot or the building constructed thereupon (as trading commodity) – assessee contested that land has been shown as stock-in-trade - Held that:- Perusal of clause 5 of the Memorandum of Association of assessee running of hotel is one of the its main objects and not its other object - the assessee can use the hotel plot leased to it only for construction and running of hotel, with no right to transfer the same - although the assessee company has shown it as a stock in its balance sheet and profit and loss account it will not alter the legal position because the substance of a transaction is important and not its entry in the books of account or its treatment by the assessee company - against assessee. Disallowed expenditure to be allowed to be capitalized - in favour of assessee.
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2012 (5) TMI 109
Levy of penalty u/s 271(1)(c) – Claim of deduction u/s 10B and 80HHE – Held that:- Not a case where the assessee has not disclosed full details at the time of filing of returns or during the course of assessment proceedings - assessee claimed that export sales of Rs.549.76 lacs were not realized before the end of six months from the end of the FY 2003-04 and that company was yet to file an application for extension of time - mere erroneous claim in the absence of any concealment or furnishing of inaccurate particulars, is no ground for levying penalty when there is nothing on record to show that the explanation offered by the assessee adverse – no levy of penalty – in favour of assessee.
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2012 (5) TMI 108
Write off of old unrecoverable earnest money deposits deductible u/s. 37(1) - appeal against disallowance of claim – Held that: - Assessee could not place on record any evidence showing that the amounts in question were given in earlier years on account of earnest money deposits to its business associates and the said parties refused to refund such amount to it - matter is restored to the file of AO to give one more opportunity to the assessee to lead evidence in support of its claim. Direction given to the AO to recompute the disallowance u/s. 14A – Held that:- Direction given to the AO by CIT(A) in conformity with the judgment of the Hon’ble jurisdictional High Court in the case of Godrej & Boyce Mfg. Co. Ltd (2010 (8) TMI 77 - BOMBAY HIGH COURT) is correct as disallowance u/s 14A. Rule 8D is not retrospective. Rule 8D applicable from Assessment Year 2008-09 – in favour of assessee. Disallowance made by the AO u/s.14A as per Rule 8D – Held that:- Disallowance u/s.14A is called for when the AO is not satisfied with the assessee’s claim of having incurred no expenditure or some amount of expenditure in relation to exempt income - satisfaction of the AO as to the incorrect claim made by the assessee in this regard is sine qua non for invoking the applicability of Rule 8D - computing disallowance u/s.14A as per Rule 8D without rendering any opinion on the correctness or otherwise of the assessee’s claim is incorrect way - restore the matter to the file of AO to re-compute disallowance - in favour of assessee.
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2012 (5) TMI 107
Search under Section 132 – Tribunal decided that name of the respondent-assessee was not mentioned in the warrant – Held that:- The original warrant of authorization has been shown mentioning the name of assessee clearly readable - it appears that these names were also mentioned on the top of the second page - in the Panchnama, the name of the respondent-assessee is clearly mentioned and the documents which were seized have also been stated - the Tribunal had recorded a wrong factual finding and incorrect observation – in favour of revenue. No addition to be made in the block assessment proceedings as the AO has not relied upon any material collected/seized during the course of search – Held that :- Tribunal have not specifically referred to and dealt with the observations and findings given by the AO - Some general observations have been made by the Tribunal which do not deal with the observations and findings of the AO which are detailed, specific and to the contrary – AO has referred to several factual aspects, documents, account statements, oral statements etc. in support of the contention - Merely stating that the papers etc. do not pertain to the assessee and the contents of the document cannot be utilized do not lead to conclusion against block assessment order - remit back to Tribunal to discuss and examine the matter afresh and decide the factual matrix in detail – in favour of revenue.
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2012 (5) TMI 106
Deemed dividend – Section 2(22) - Held that:- Out of the payment of Rs. 11 lakhs, only Rs. 4,17,600/-was refundable advance and balance Rs. 6,82,400/- was towards salary and incentives on which tax was duly deducted at source, could not be disputed by the Department - it is not fair to treat the whole amount of Rs. 11,00,000/- as deemed dividend under section 2(22)(e) – against revenue.
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2012 (5) TMI 105
Whether CIT(A) was not justified in dismissing the appeal of the assessee on the ground that assessee had not shown reasonable cause for the delay in filing the appeal – Held that:- order of the Assessing Officer u/s 154 of the Act was received by the assessee on 4.4.2011 and the appeal was filed by the assessee before the ld. CIT(A) on 26.4.2011 which was within 22 days of the receipt of the impugned order. Thus, the appeal filed by the assessee was within the period of limitation. matter remanded back to his file for deciding the appeal. appeal of the assessee is allowed
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2012 (5) TMI 104
Whether the amount received by offering subscription based service is taxable in India – social media monitoring service - . It is a platform for users to hear and engage with their customers, brand ambassadors etc. across the internet. - The applicant is wholly controlled and managed from Singapore where the company was incorporated. It was not having a permanent establishment in India. All its directors are non-residents. - Held that:- amount received from offering the particular subscription based service is taxable in India as ‘royalty’ in terms of paragraph 2 of Article 12 of the DTAC between India and Singapore Whether tax is required to be deducted from such amount by the subscribers who are resident in India – Held that:- tax is required to be deducted in terms of section 195 of the Act from the payment made to it by the subscribers who are resident in India
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2012 (5) TMI 103
Unexplained credits - Section 68 - Onus to be discharged – Held that:- amount invested by the share holder company is duly appearing in its audited balance sheets of various years as Investment in unquoted equity shares and such balance sheets were also signed by the directors of the said shareholder company including Mr. Anil Kumar Gupta. - assessees have proved the share capital with overwhelming evidence and there is no adverse legally admissible evidence in possession of Revenue. - Revenue has accepted that the investment has been made by Welcome Coir Industries Limited in the assessees which is evidence from the assessment orders of Welcome Coir Industries Limited placed in the paper book. - Decided against the revenue.
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2012 (5) TMI 100
Withdrawal of registration granted u/s 12AA – Held that:- Objectives of the institution does not fall under the provisions of section 2(15) and therefore, the assessee was entitled to registration u/s 12AA of the Act - CIT was not correct in withdrawing registration already granted by the order of the Tribunal to the Institution - if in any year, the gross receipts of the Institution exceeds Rs. 10 lakhs or Rs. 25 lakhs then in that year, the AO is empowered to examine the allowability of exemption u/s 11 but the same has no effect on granting the registration u/s 12AA of the Act – amended provisions of section 2(15) of the Act does not fall within the permissible limit of section 12AA(3)- in favour of assessee.
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2012 (5) TMI 99
Reopening assessment - petitioner contested that he is a non-resident and had no income chargeable to tax in India other than what was declared - Held that:- No merit in the writ petition - the affidavit filed by department affirmed that he had initiated proceedings for reassessment on the basis of precise information received from the Enforcement Directorate - the petitioner had undisputedly rendered services in connection for the oil under the “Oil for Food Programme” - Clause (i) of sub-section (1) of Section 9 says that all income accruing or arising, whether directly or indirectly, through or from any business connection in India shall be deemed to accrue or arise in India - several documents found by the Enforcement Directorate in the premises of Hamdaan Exports were found to have been addressed to the petitioner which indicated that the petitioner was present in India - the money had come into the bank account of Indrus evidencing to show that certain communications had been addressed to the petitioner in India, the Indian fax number of the petitioner was given in some of the letters addressed to the petitioner which indicated his presence in India – against assessee.
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2012 (5) TMI 98
Addition made for unexplained investment – Clubbing of income - Held that:- AO rejected the submitted copies of all ledger accounts from the books of husband of the assessee indicating proof of source of income in the mutual funds on the ground on doubt and suspicions - once the source of investment is explained, the capital arising thereof is taxable in the hands of the husband of the assessee and not in the hands of the assessee – in favour of assessee.
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2012 (5) TMI 97
Interest free loan to wholly owned subsidiary - Decision in the case of S. A. Builders Ltd. v. CIT (Appeals) [2006 - TMI - 3364 - SUPREME COURT] needs reconsideration.
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2012 (5) TMI 96
Treating short term capital gains in shares as Business income applying maximum marginal rate instead of concessional rate of tax of 10% as per Sec. 111A – Held that:- Where the period of holding is more than six months, the transaction will be in the nature of capital gains and where it is less than six months,it will be in the nature of business - CIT (A) treated the short term capital gains in relation to shares held by the assessee more than six months and the shares held for less than six months have been treated as business income treated not in accordance with the provisions of law - merely because the shares are sold within the short span of one to two months would not change the character of capital gains to the business income - in favour of assessee Assessing short term capital loss on transactions in commodities as Business loss on the basis of nature, volume scale and frequency of transaction – Held that:- AO has not brought any material on record to show that the shares were not held by the assessee as investment - ground in respect of delivery based share transactions, investment and capital loss in respect of commodity transactions on delivery basis both are to be held on account of short term capital gain income and short term capital loss respectively – in favour of assessee. Verify whether the interest paid amounting is compensatory or penal in nature which is not in accordance with the provisions of Section 25(1) – Held that:- Since income to be capital in nature, the direction of ld. CIT(Appeals) about verifying the payment of interest to Indiabulls Financial Services Ltd. becomes infructuous - against revenue.
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2012 (5) TMI 95
Quashing/setting aside the re-assessment proceedings on the ground that the original re-assessment proceedings had abated – Held that:- The tribunal aside the original proceedings on the technical ground and the AO thereafter had recorded fresh reasons and issued notice under Section 147/148 of the Act - the reasons to believe now recorded have to stand independently and separate from the reasons to believe, which were recorded earlier before initiation of the re-assessment proceedings, which abated – thus the said reasons to believe and issue of notice cannot be faulted and rejected on the ground that in the earlier/original assessment or re-assessment proceedings, notice under Section 143(2) was not served on the assessee within the statutory time/period - a valid ground to quash the first/original assessment/re-assessment order cannot be a ground to quash the re-assessment proceedings, which have been initiated afresh after recording reasons to believe – against assessee.
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2012 (5) TMI 94
Gains/income from sale and purchase of securities – ITAT held to be assessable under the head “capital gains” and not under the head “income from business” – Held that:- CBDT in the Circular No.4/2007 dated 15th June, 2007 has elucidated and explained the tests which are to be applied to find out when income from transactions in shares/securities should be treated as “income from business” or the gain which has to be taxed under the head “capital gains” - it is apparent that the tribunal did not examine the said relevant aspects and aceepted the explanation of the assesee that there was no difference in tax rate - an order of remit to the tribunal to examine the issue holistically keeping in mind the parameters/tests - in favour of the Revenue. Deleting disallowance made by the AO under Section 14A – Held that:- An order of remit passed as Rule 8D of the Income Tax Rules, 1962 is not retrospective, but both the direct and indirect expenses in relation to exempt income have to be disallowed under Section 14A - it has been held that no direct or indirect expenditure whatsoever were incurred in relation to tax free income, but there is no finding to the said effect - merely, because the AO was wrong in making disallowance on ad hoc basis, cannot be a ground to hold that no amount whatsoever was relatable directly or indirectly to the earning of the tax free income - in favour of the revenue.
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2012 (5) TMI 93
Rejection of the application for grant of approval under section 80G(5)(vi)– Held that:- Prior to amendment to section 80G(5)(vi)of the Act, there was a proviso which provide time limit for the approval - the approval granted on 13.8.2007 under section 80G(5)(vi) of the Act to the assessee was valid up to 31.3.2010 and the moment, the amendment to section 80G(5)(vi) has been effected, the approval available to the assessee under sec. 80G(5)(vi) of the Act would be deemed to have been intact and the assessee was not supposed to file the application for renewal - The learned Director of Income-tax (Exemption) indirectly by rejecting the application of the assessee on merit cannot withdraw the approval which is automatically renewed by virtue of Finance Act, 2009 – in favour of assessee.
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Corporate Laws
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2012 (5) TMI 102
Rejection of arbitration application - In the consent Minutes of the Order, parties have agreed to refer disputes to arbitration - Held that:- There was an agreement between the parties that the award would have to be delivered within six months, a period which came to an end on 7 September 2010, the mandate of the Arbitrator stood terminated, that however, does not preclude the Applicant from seeking recourse to its remedies under Section 11 of the Arbitration and Conciliation Act, 1996 - it is not a case where parties have agreed to a situation where there would be an arbitration only before a named individual or that in his absence there would be no arbitration at all - upon the termination of the mandate of the Arbitrator, the jurisdiction of the Court to make a fresh appointment can be invoked - in favour of assessee.
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2012 (5) TMI 92
Appeal against an order passed by CLB dismissing proceedings instituted u/s 397 and 398 of the Companies Act – assessee contested that once a statement was made in the petition asserting the requisite percentage of share-holding in the company, the petition could no longer be rejected out of hand on a point of demurrer in such regard without the appellants being permitted to explain the circumstances in which they claimed to meet the statutory benchmark - they complain that upon the petition having previously progressed to final hearing - which was completed - it was no longer open to the CLB for rejection – the CLB was of the view that the petition before it was hit by the principles of res judicata, constructive res judicata or issue estoppel and, as such, could not progress - Held that:- The impugned judgment betrays a total non-application of mind and worse - the CLB was not aware of the tools necessary for the assessment - Proceedings under Sections 397 and 398 of the Companies Act are an alternative to winding-up and are founded on the principles of justice and equity- If, according to the CLB, the issues that arose in the company petition had already been conclusively decided in previous proceedings for the principles of res judicata or constructive res judicata or issue estoppel to apply, it flies in the face of reason and logic that the CLB would still grant permission or leave to the petitioners before it to resurrect a matter that had already been previously concluded against them - The respondent no.1 will pay costs assessed at 3000 GM to the appellants - matter will now be heard by the CLB afresh open to arrive at the same conclusion as in the impugned order on the objection pertaining to the appellants' share qualification but with cogent reasons in support thereof
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Central Excise
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2012 (5) TMI 101
Demand of excise duty - compounded levy / production based duty - Pan Masala Packing Machines - stay application – Held that:- tribunal after referring to the rules 2008 has taken a view that even if a machine was not working for certain period of the month, the same shall be deemed to be operating packing machine for the entire month. On that basis coming to the said conclusion the tribunal has observed that it was not a fit case of total waiver. - The consequences of sealing of non operating machines by the department itself on a notice given by the appellant have to be looked into for determining the issue. The scope and applicability of second proviso of Sub-Section 2 of Section 3-A of the Act has also to be considered by the Tribunal to which the tribunal has not adverted. - Direction to Pre-deposit reduced from 3 crores to 2 crores.
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2012 (5) TMI 91
Applications for rebate/refund of the CVD or additional duty paid on the inputs utilized for manufacture rejected - Held that:- A harmonious and cumulative reading of provisions of Section 3 of the customs Tariff Act there was no good cause or reason why CVD paid should not be or was not intended to be included in the term “duty” in the notification No. 21/2004 - CVD which is imposed is equal to the excise duty and partakes the character of excise duty - the rebate of duty paid as CVD on the Imported inputs utilized in the manufacture/processing of exported goods is admissible under Rule 18 of the Central Excise Rules, 2002 - The amendment notification No. 12/2007 ensures that it fully applies to all cases and there is no discrimination - person who claims exemption or concession has to establish that he is entitled to the concession or exemption - once the assessee satisfies the eligibility clause/criteria, exemption therein to be construed liberally if the contextual construction does not deserve the strict meaning - in favour of assessee.
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CST, VAT & Sales Tax
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2012 (5) TMI 112
Proceedings under Article 226 – against the order of provisional attachment – Held that:- The material which has been revealed during the course of investigation suggests that the selling vendors are parties without any legitimate business or assets and have been set up only with a view to devise a scheme to defraud the Revenue - Nothing contained in this order would be regarded as the expression of a final or conclusive opinion by the Court on the issues which would arise during the course of assessment - if the entire basis of the claim of set off is found upon assessment to be bogus or fraudulent, the challenge to Section 48(5) cannot be entertained at the behest of the Petitioner - before the issue of constitutional validity is considered, the basic facts would need to be established in the course of assessment proceedings are required –assessee has also not submitted that he would be entitled to a set off even if the underlying transaction of sale is bogus or fraudulent - do not consider it appropriate to exercise the extraordinary writ jurisdiction under Article 226 as observations only prima facie, since the entire matter is still to be investigated following which a regular assessment would be framed – Writ dismissed.
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