TMI Tax Updates - e-Newsletter
May 11, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Restoration / Revocation of cancellation of GST registration - Recovery of GST - Attachment of Bank Accounts and finished goods - whether the department should be asked to inform all the 47 debtors of the writ applicant to start making payment towards the contract so that the amount which the debtors have to pay to the writ applicant can come to the bank accounts. - Detailed directions issued: - HC
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GST:
Exemption from GST - Pure Service - Providing Project Management Consultancy services - regulatory bodies and other autonomous entities would not be regarded as the “government” for the purposes of the GST Acts. - Holding of equity control of RUDSICO by Jaipur Development Authority and Rajasthan Housing Board cannot be treated as holding of equity control by government. Accordingly, we hold that RUDSICO is not a Governmental Authority. - AAAR
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GST:
Levy of GST - Valuation - determination of margin - old and used motor vehicles - claim of deduction of cost incurred on refurbishment from the margin - It is noticed that the explanation (ii) to the notification No. 8/2018 clearly used the word ‘purchase price’ not the ‘purchase cost’ of the goods. It means only the amount paid at the time of purchase of used and old cars can be considered as `purchase price’ for the purpose of this notification. - AAAR
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GST:
Demand of advertisement tax post the enactment of the GST Act - power of Municipal Corporation to levy advertisement tax/fee - case of petitioners is that on the enactment of the Goods and Service Tax Act (GST Act), the authority of the respondents to either levy or collect advertisement tax is ousted - Petition dismissed - HC
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GST:
Valuation - Constitutional Validity - supply of construction service - Exclusion of value of land - a mandatory fixed rate of deduction of 1/3rd of total consideration towards the value of land is ultra-vires the provisions as well as the scheme of the GST Acts. Application of such mandatory uniform rate of deduction is discriminatory, arbitrary and violative of Article 14 of the Constitution of India. - HC
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Income Tax:
Seeks to amend Notification No. 30/2021 dated 1st April, 2021 - CBDT authorizes the Director of Income Tax(Centralized Processing Centre) for specified purposes - Notification
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Income Tax:
Amends Form 3CF, Form 10A, Form 10AB, Form 10BD and Form 10BE - Income-tax (Fourteenth Amendment) Rules, 2022 - Notification
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Income Tax:
Guidelines under clause (23FE) of section 10 of the Income-tax Act, 1961 - Circular
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Income Tax:
Taxability of income in India - the profit derived from providing baggage screening services and aircraft handling services to various other airlines in India will not be taxable in India under Article 8(1) read with Article 8(4) of the India-USA Tax Treaty. Therefore, the additions made in different assessment years under dispute are hereby deleted. - AT
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Customs:
Duty Drawback - petitioner is unable to produce export realization within 6 months from the date of export - In case export proceeds are realized within extended period, the petitioner is entitled to have favorable decision - This writ petition is dsiposed off by remitting the case back to the 3rd respondent/the Assistant Commissioner of Customs, to take note of Rule 16A(4) of the Customs, Central Exercise Duties and Service Tax Drawback Rules, 1995 and to dispose of the same on merits - HC
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Customs:
Smuggling - foreign origin gold - In respect of the seizure of gold bar with foreign marking, undoubtedly it is a town seizure. The assessee-appellant has nowhere offered any explanation as to the source of the same and hence, the same is liable for absolute confiscation - These aspects have not at all been considered and discussed in the orders of the lower authorities and hence, to this extent, the Order-in-Original is a non-speaking order. - AT
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DGFT:
Amendment in Export Policy of Guar Gum - The Export of Guar Gum to European Union and UK will now be allowed subject to issuance of Official Certificate in place of Health Certificate with immediate effect. - Notification
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Corporate Law:
Clarification of holding of Annual General Meeting (AGM) through Video Conference (VC) or Other Audio Visual Means (OAVM) - Circular
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Corporate Law:
Clarification on passing of Ordinary and Special resolutions by the companies under the Companies Act, 2013 read with rules made thereunder on account of COVID-19-Extention of timeline - Circular
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Indian Laws:
Dishonor of Cheque - Funds Insufficient/Dormant Account - the present petition has been filed after a delay of 1 year and 3 months from the date of the summoning order after non-bailable warrants were issued against the petitioner. - This Court is of the view that the argument raised by the learned counsel for the petitioner to the effect that the complaint as instituted on 21.10.2020 was premature, is meritless and deserves to be rejected. - Petition dismissed - HC
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IBC:
Transfer Appeal - Territorial Jurisdiction to initiate CIRP against Corporate Debtor - Conferment of Jurisdiction - A person who is not vigilant and has been duly served will not be qualified to pray for a second opportunity. A Court of Law is not under an obligation to issue Fresh Notic to the parties concerned when a party does not appear before the Court on the day of posting. - AT
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IBC:
Appointment of the same resolution professional - it is submitted that, the resolution professional is appointed by the creditor and no person can be a judge in on own case. - The contention of the petitioner that subsequent appointment of the same resolution professional is arbitrary cannot be accepted. The procedure prescribed under the provisions is fair, rational and reasonable and same cannot be termed to be violative of Article 14. - HC
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IBC:
Initiation of CIRP - Time and again, it has been expressed and explained by this Court that the provisions of the Code are essentially intended to bring the corporate debtor to its feet and are not of money recovery proceedings as such. The intent of the appellant had only been to invoke the provisions of the Code so as to enforce recovery against the corporate debtor. We find no fault in the Tribunal and the Appellate Tribunal having declined the prayer of the appellant. - SC
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VAT:
Classification of goods - unclassified goods - manufacturing of chemical in the brand name of ‘AT-PLAST’ - The Tribunal while coming to the conclusion has held that the goods manufactured and sold by the revisionist are used as building material and therefore justified the order passed by the Commissioner under Section 59 of the Act. The Tribunal being the last Court of fact ought to have considered various evidences as well as materials referred by the revisionist with regard to the chemical analysis report for chemical used in the manufacture of its product but had failed to do so. - HC
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VAT:
Attachment of Bank Accounts - It could be said that the impugned action is essentially in exercise of powers under Section-45 of the Act. Section-45 only talks about provisional attachment. Provisional attachment is permissible only during the pendency of the proceedings of assessment or reassessment. In the case on hand, the writ-applicant has traveled much beyond the proceedings of assessment. - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2022 (5) TMI 407
Classification of services - Hostel Accomodation services - composite supply - caritable activitties or not - Whether Hostel facility which includes Lodging and Boarding service provided by appellant to the students of MUST having value of service upto Rs.1000/- per day would be eligible for exemption under entry no. 14 of the notification 12/2017 CTR Dt. 28-06-2017? - applicability of N/N. 12/2017-CT (Rate) - HELD THAT:- As per Section 2 (74) of the CGST Act the term mixed supply means two or more individual supplies of goods or services, or any combination thereof made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. In the instant case the appellant is supplying services of food along with Hostel Accommodation service. In view of the discussion, it is held that supply of food with Hostel Accommodation service is not naturally bundled in normal course of business. It has been also informed by the appellant that a cafeteria (canteen) has been provided for day scholars, in which they can optionally take snacks and F B as per their choice. In the present case, others services being provided by the Appellant are not naturally bundled or ancillary to Hostel service as the inhabitants of Hostel seats can avail these services from any other source. In fact the inhabitants have been restricted from sourcing these other services from any other person. Consequently, the inhabitants have to avail these services from the Appellant. In such situations, the other services are not ancillary to or bundled with the Hostel service. The word per unit of accommodation should be understood as per general practice adopted by large number of service provider in similar business model. In hotels, generally it fixes per room, per suit whereas in hostels, inns and dharmshalas, it fixes per room, per bed, per seat and per person. From the facts mentioned by the appellant, it would emerge that they provides accommodation service in hostel and fix the tariff on the basis of hostel seat, therefore the contention of appellant is agreed upon and it is found that hostel seat should be considered as a unit of accommodation. Appeal disposed off.
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2022 (5) TMI 406
Restoration / Revocation of cancellation of GST registration - Recovery of GST - Attachment of Bank Accounts and finished goods - whether the department should be asked to inform all the 47 debtors of the writ applicant to start making payment towards the contract so that the amount which the debtors have to pay to the writ applicant can come to the bank accounts. - HELD THAT:- Direction issued: The department shall at the earliest inform/intimate all the 47 debtors that they should make the necessary payments in accordance with the contracts in favour of the writ applicant and the requisite amount shall be credited to the Current Account maintained by the writ applicant with the respondent No.3 Bank Once the amounts start getting credited in the Current Account of the writ applicant, a requisite amount may be transferred by the respondent No.3- Bank to the Cash Credit Account of the writ applicant to save the account from being declared as NPA. We make it clear that whatever is the liability of the writ applicant towards the respondent No.3- Bank with respect to the Cash Credit Account, may be discharged from the amount that may be transferred. This is a one time arrangement. We direct the department to permit the writ applicant to supply the finished goods lying at the factory premises to the public sector entities such as BHEL, Indian Railways etc.. The department shall also permit the writ applicant to supply the finished goods to the two foreign companies at Sri Lanka and United Kingdom in accordance with the contract. Regarding restoration of registration - HELD THAT:- In this regard, we may only say that as the writ applicant has already filed an application for revocation of the cancellation of registration in physical form, as an exceptional case, let this application filed by the writ applicant in physical form be processed and appropriate order be passed. The department may not insist for applying online at the GST common portal as it may create some technical problems
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2022 (5) TMI 405
Revocation of cancellation of Registration - continuously for six months or more, the petitioner has not filed return - HELD THAT:- the benefit extended by this Court in the earlier orders referred to above both in Suguna Cutpiece Centre [ 2022 (2) TMI 933 - MADRAS HIGH COURT] as well as Tvl.Ram International [ 2022 (4) TMI 979 - MADRAS HIGH COURT] - this Writ Petition is ordered on the same term mentioned in Paragraph 229 of the order of Suguna Cutpiece Centre [ 2022 (2) TMI 933 - MADRAS HIGH COURT] . First two direction are as follows: The petitioners are directed to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid. It is made clear that such payment of Tax, Interest, fine / fee and etc. shall not be allowed to be made or adjusted from and out of any Input Tax Credit which may be lying unutilized or unclaimed in the hands of these petitioners.
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2022 (5) TMI 404
Provisional release of goods - Seizer and detention of goods in transit - goods are accompanied by a lawful e-way bill, invoices - HELD THAT:- the additional facts which has emerged on record is that final order in FORM GST MOV-11 has been issued in the case of writ applicant vide order dated 19.01.2022, whereas the amendment has come into effect from 1.1.2022. Moreover, admittedly the writ applicant is not a registered dealer. This Court may not have entertain this petition solely on the ground of availability of efficacious alternative remedy under section 107 of the Act, 2017. However, since similar question of law has been raised, we direct this matter to be heard with Special Civil Application no. 7425 of 2022 and Special Civil Application no. 7426 of 2022.
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2022 (5) TMI 403
Exemption from GST - Pure Service - Providing Project Management Consultancy services - local authority / Governmental Authority or not - services provided to Rajasthan Urban Drinking Water Sewerage and Infrastructure Corporation (RUDSICO) - HELD THAT:- a statutory body, corporation or an authority created by the Parliament or a State Legislature is neither 'Government' nor a 'local authority'. Such statutory bodies, corporations or authorities are normally created by the Parliament or a State Legislature in exercise of the powers conferred under article 53 (3) (b) and article 154 (2) (b) of the Constitution respectively. Hon'ble supreme court in the case Agarwal Vs. Hindustan Steel AIR 1970 Supreme Court 1150 has held that, the corporation which is Hindustan Steel Limited in this case is not a department of the Government nor are the servants of it holding posts under the State. It has its independent existence and by law relating to Corporations, it is distinct even from its members. Such a statutory body, corporation or an authority as a judicial entity is separate from the State and cannot be regarded as the Central or a State Government and also does not fall in the definition of 'local authority'. Thus, regulatory bodies and other autonomous entities would not be regarded as the government for the purposes of the GST Acts. Holding of equity control of RUDSICO by Jaipur Development Authority and Rajasthan Housing Board cannot be treated as holding of equity control by government. Accordingly, we hold that RUDSICO is not a Governmental Authority.
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2022 (5) TMI 402
Levy of GST - Valuation - determination of margin - activity of purchase of old and used motor vehicles and then sale of these motor vehicles after refurbishment - claim of deduction of cost incurred on refurbishment from the margin - AAR rejected the argument of the appellant - Notification No. 8/2018-CT (Rate) dated 25-01-2018 - HELD THAT:- The appellant s main thrust is that to calculate margin, purchase cost should be treated as purchase price. We observe that our legislature has wisely used the word purchase price to calculate the margin as benefit of notification will not be available, if the appellant has availed input tax credit. We find that the availment of this notification No. 8/2018 -Central Tax (Rate) dated 25th January, 2018 is optional. If the appellant wishes to avail input tax credit on the components used in the refurbishment of the old and used car, they can very well avail the same without availing benefits of the said notification. However, if the benefit of the notification No. 8/2018 -Central Tax (Rate) dated 25th January, 2018 is to be availed, then the conditions for the same have to be followed. From the plain reading of the explanation (ii) to the notification No. 8/2018 -Central Tax (Rate) dated 25th January, 2018, it is noticed that the explanation (ii) clearly used the word purchase price not the purchase cost of the goods. It means only the amount paid at the time of purchase of used and old cars can be considered as `purchase price for the purpose of this notification.
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2022 (5) TMI 401
Demand of advertisement tax post the enactment of the GST Act - power of Municipal Corporation to levy advertisement tax/fee - case of petitioners is that on the enactment of the Goods and Service Tax Act (GST Act), the authority of the respondents to either levy or collect advertisement tax is ousted - HELD THAT:- In the present case, there is no challenge either to Section 134 of the Karnataka Municipal Corporations Act nor is there a challenge made to GST Act. The only reliefs which have been sought for are for setting aside the impugned demand notice at Annexure-A and a writ of prohibition directing the respondents not to meddle with the advertisement display and the hoardings of the petitioners. Petition dismissed.
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2022 (5) TMI 397
Valuation - Constitutional Validity - supply of construction service - Exclusion of value of land - whether the impugned notification providing for 1/3rd deduction with respect to land or undivided share of land in cases of construction contracts involving element of land is ultra-vires the provisions of the GST Acts and/or violative Article 14 of the Constitution of India? - Constitutional Validity of Entry 3(if) of Notification No. 11/2017-Central Tax (Rate) as well as Entry 3(if) of Notification No. 11/2017 State Tax (Rate) - vires of Section 7(2) of the GST Acts read with Entry No. 5 of Schedule III to the GST Acts as well as ultra-vires Section 9(1) and Section 15 of the GST acts HELD THAT:- Supply includes all forms of supply made or agreed to be made for a consideration by a person in the course or furtherance of business. If a transaction qualifies as supply then it shall be treated as supply of goods or services as referred to in the Schedule II. If the activities or transactions are specified in the Schedule III or if they are notified as such by the Government, then they shall be treated as neither supply of goods nor supply of services. It is not in dispute that the sale of land and building are not liable to tax under the GST Acts. However, as the exclusion of sale of building from the tax net is subject to clause (b) of paragraph 5 of Schedule II, the transaction with respect to the sale of building is taxable qua the construction services unless the entire consideration is received by the supplier after the receipt of completion certificate or first occupation whichever is earlier - The applicable rate of tax for all supply of services is stipulated by the Notification No. 11/2017-Central Tax (Rate). The rate of tax for construction services is provided in the Entry 3 of the said notification. It is thus provided by way of notification that in so far as the construction services involving transfer of land or undivided share of land are concerned, the deduction for such transfer of land or undivided share of land will be given to the extent of one-third of the total consideration charged for the entire transaction. In other words the value towards the transfer of land or undivided share in land is deemed to be one-third of the total consideration - It is the validity of such mandatory deeming fiction sought to be imposed by way of delegated legislation which is being tested by this Court vis- -vis the provisions of the CGST Act as well as the Constitution of India. What is sought to be taxed by the Parliament/State Legislatures? - HELD THAT:- It is not as if the very base of the levy was sought to be changed under the CGST Act. While earlier VAT and service tax were imposed on tripartite agreements, such taxes were sought to be consolidated under the CGST Act with a specific exclusion of land element. In other words the construction which was carried out by the developer in accordance with the agreement with the prospective buyer, which was earlier taxable under the Vat/service tax law is now sought to be taxed under the CGST Act and therefore deduction is given for sale of land - Even otherwise supply under Section 7 of the CGST Act includes supply of goods or services made or agreed to be made for a consideration. Thus the factum of supply would be initiated only once the agreement is entered into between the supplier and recipient and such agreement is for consideration Thus the legislative intent is to impose tax on construction activity undertaken by a supplier at the behest of or pursuant to contract with the recipient. There is no intention to impose tax on supply of land in any form and it is for this reason that it is provided in the Schedule III to the GST Acts that the supply of land will be neither supply of goods nor supply of services. Relevance of developed vis-a-vis undeveloped land - HELD THAT:- n the present case what is sought to be argued by the revenue is that the exclusion of sale of land will not be available since the land is a developed piece of land. It is difficult for us to accept such argument as at the point of time when the buyer entered into the picture, the land was already developed. Thus, even without going to Schedule III, the only service which is supplied by the supplier to the recipient is the construction undertaken for the buyer and it is such supply alone which can be taxed. Hence the fact that the land is not a plain parcel of land but a developed land cannot be a ground for imposing tax on the sale of such land - It is not as if deduction is not granted if land is not developed. Deduction is granted for any transfer of land. Mr. Vyas has also not contended that the deduction of 1/3rd as stipulated in the notification is not available to the writ applicants. Thus sale of land under Schedule III to the GST Acts covers sale of developed land even as per the impugned notification. Hence the only question which is to be determined is whether such artificial deeming fiction of 1/3rd deduction is ultra-vires the provisions of the CGST Act or the Constitution. Measure of Tax - HELD THAT:- When the statutory provision requires valuation in accordance with the actual price paid and payable for the service and where such actual price is available, then tax has to be imposed on such actual value. Deeming fiction can be applied only where actual value is not ascertainable - the mandatory application of deeming fiction of 1/3rd of total agreement value towards land even though the actual value of land is ascertainable is clearly contrary to the provisions and scheme of the CGST Act and therefore ultra-vires the statutory provisions. Arbitrariness of the deeming fiction by the impugned notification - HELD THAT:- If the 14th GST Council meeting minutes which led to the insertion of the impugned Notification is perused, it becomes clear that the deduction was contemplated only in the context of flats wherein it was difficult to ascertain the value of the undivided share of land. However when it came to actual issuance of Notification, a standard rate of deduction came to be provided irrespective of the nature of the transaction or whether it is a case involving transfer of land itself or undivided share in land. Moreover the discussion in the GST council meeting minutes which is part of the record would show that there was an apprehension that a standard rate of deduction for land may not withstand judicial scrutiny. Interestingly, this was in fact mentioned by the Deputy Chief Minister of the State of Gujarat. This was even when the discussion was in respect of flats while the ultimate notification was issued and made applicable even to other transactions such as sale of land with construction of bungalow - Such deeming fiction which leads to arbitrary and discriminatory consequences could be clearly said to be violative of Article 14 of the Constitution of India which guarantees equality to all and also frowns upon arbitrariness in law. Arbitrary deeming fiction has led to measure of tax having no nexus with charge - HELD THAT:- The arbitrary deeming fiction by way of delegated legislation has led to a situation whereby the measure of tax imposed has no nexus with the charge of tax which is on supply of construction service. It is well established that the measure of tax should have nexus with the charge of tax. Section 15(5) does not further the case of the respondents - HELD THAT:- The prescription under Section 15(5) of the CGST Act has to be by rules and not by notification. Be that as it may, wherever a delegated legislation is challenged as being ultra-vires the provisions of the CGST Act as well as violating Article 14 of the Constitution of India, the same cannot be defended merely on the ground that the Government had competence to issue such delegated piece of legislation. Even if it is presumed that the Government had the competence to fix a deemed value for supplies, if the deeming fiction is found to be arbitrary and contrary to the scheme of the statute, then it can be definitely held to be ultra-vires. What if the supplier artificially inflates the price of land thereby deflating the value of constuction service? - HELD THAT:- Valuation by adding 10% profit to cost of production or manufacture or the cost of acquisition of goods or cost of provision of services is a statutorily accepted method of valuation. Even if such cost based valuation is not possible then the residual method is provided under Rule 31 of the GST Rules which also provides for using reasonable means consistent with the principles and general provisions of Section 15 as well as valuation rules - the revenue is not remediless even in a case where it doubts the correctness of the value assigned in the contract towards construction. If it is established that such value was not the sole consideration for the service, then resort can be had to the valuation rules and value can be derived by applying the cost plus profit method or a reasonable value consistent with the principles and provisions of the Statute - When such detailed statutory mechanism for determination of value is available then the impugned deeming fiction cannot be justified on the basis that it is meant to curb avoidance of tax when in fact such fiction is leading to arbitrary consequences. Already similar mechanism existed under service law which is not required to be deviated from? - HELD THAT:- When such workable mechanism for deduction of land was already in force under the service tax regime, the same ought to have been continued. Instead, the Government has chosen to fix a standard rate of deduction without any regard to different possible factual scenarios which is completely arbitrary and violating Article 14 of the Constitution of India. Entry No. 5(b) of schedule II relevant for determining validity of impugned notification or not? - HELD THAT:- Entry 5(b) of Schedule II is not relevant for deciding the present controversy which has more to do with valuation rather than chargeability to tax. It is not in dispute that construction of building is a taxable service unless the entire consideration is received after issuance of completion certificate. However the question is that if the transaction is taxable then what should be the value of service and whether deduction towards land value can be stipulated by way of uniform rate of 1/3rd. Detailed reasons have been given to show how such deeming fiction is not only contrary to the scheme of the GST Acts but also it is grossly arbitrary and violating Article 14 of the Constitution. Applicability of decision in the case of VKC Footsteps [ 2021 (9) TMI 626 - SUPREME COURT ] - HELD THAT:- The reliance placed by the learned ASG on the decision of the Supreme Court in the case of VKC Footsteps Pvt. Ltd. is misplaced. In that case the Supreme Court came to a conclusion that Rule 89(5) of the GST Rules was not in conflict with Section 54(3) of the CGST Act. Thereafter it was observed that once the rule was valid, minor defects in the formula would not invalidate the rule itself and therefore the assessees were relegated to make representation before the GST Council. However, in the present case, it is found that the impugned notification to be contrary to the provisions and scheme of the GST Acts as well as arbitrary and violative of Article 14 of the Constitution of India. Applicability of decision in the case of Narne Construction [ 2013 (2) TMI 298 - SUPREME COURT ] - HELD THAT:- The reliance placed by the revenue on the decision of the Apex Court in the case of Narne Construction Pvt. Ltd is completely misplaced. The said judgement was in the context of the Consumer Protection Act, 1986 and is thus as such inapplicable while interpreting a taxing statute. In any case it was categorically observed by the Supreme Court that the development of land was assured to the buyers. We have already observed that in a given case there may be tax liability if the development of land is undertaken pursuant to contract with buyer. However, if the land is already developed and thereafter agreement is entered into with the buyer for sale of such developed land, then it would not involve any service. Application disposed off.
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Income Tax
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2022 (5) TMI 418
Assessment u/s 153A - Addition u/s 68 - addition based on seized material or not? - HELD THAT:- Admittedly, the present case is covered by the decision of the Division Bench in CIT vs Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] as the additions were not based on the seized material. It is settled law that the issue of jurisdiction goes to the roots of the cause and such an issue can be raised at any belated stage of the proceeding including appeal. (See: Kanwar Singh Saini vs High Court of Delhi [ 2011 (9) TMI 960 - SUPREME COURT] And M/s Mavany Brothers vs. CIT [ 2015 (10) TMI 1093 - BOMBAY HIGH COURT] Consequently, this Court is of the view that no substantial question of law arises for consideration in the present appeal.
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2022 (5) TMI 417
Stay petition - recovery proceedings - relief claimed by the petitioner is for a direction to consider the stay petition in a time bound manner - HELD THAT:- Having regard to the fact that the stay petition cannot be uploaded in pending appeals as per the present Faceless Appeal regime, the assessees are put to great difficulty. Obviously it was in such circumstances that petitioner has preferred Ext.P5 stay petition to the Commissioner of Income Tax (Appeals), Kozhikode, though addressed to the National Faceless Appeal Centre. In few similar cases, this Court had directed the Faceless Appeal Centre of the Income Tax Department to provide links to appellants to upload the stay petitions in pending appeals and had even observed that, absence of such uploading facility in pending appeals is prejudicial to the principles of Rule of Law. Since the petitioner is also faced with a similar difficulty, it is necessary that despite Ext.P5 stay petition having been preferred before the Commissioner of Income Tax (Appeals), Kozhikode, the petitioner be granted an opportunity to file a stay petition in a time bound manner, in the pending appeal before the 3 rd respondent. Accordingly, there will be a direction to the 3rd respondent to provide a link to upload the stay petition in the pending appeal within a period of one month from the date of receipt of a copy of this judgment. If the petitioner uploads the stay petition within two weeks from the date of receipt of the link to upload the stay petition, the 3rd respondent shall consider the said stay petition, as expeditiously as possible, at any rate, within a period of four weeks from the date of uploading of the stay petition and after hearing the petitioner
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2022 (5) TMI 416
Violation of Principles of Natural Justice - despite request of the petitioner, the petitioner was called for a personal hearing - HELD THAT:- Referring to arguments advanced by the learned counsel for the petitioner and the learned Junior Standing Counsel for the respondents and the additional documents filed by the respondents to state that indeed a personal hearing was granted to the petitioner vide communication dated 28.09.2021 but the petitioner failed to avail an opportunity of personal hearing. However, the said intimation was few hours before the personal hearing. The time granted by the respondents to the petitioner for appearing through personal hearing at about 5.00 p.m. on the same date by issuing a notice at about 13.39 hours hardly gave enough time to the petitioner to get ready for the personal hearing. Considering the same, we are inclined to set aside the Impugned Order and remit the case back to the respondents, to pass a speaking order preferably within a period of sixty days from the date of receipt of a copy of this order, after considering the petitioner's reply/representation dated 29.09.2021. Needless, to state that the petitioner shall also be heard before a fresh Assessment Order passed by the respondents. The respondents are therefore directed to issue suitable instruction to the Administrator of the Income Tax Web Portal to facilitate the petitioner to participate through Video Conferencing in the proposed personal hearing.
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2022 (5) TMI 415
Assessment u/s 153A - addition made towards sub-contract expenses - CIT-A deleted the addition on the ground that the addition can only be made on the basis of material seized during Search - whether Assessing Officer has brought out in the Assessment Order that some of the sub-contractors who were examined have stated that they have not done, any sub-contract work for the assessee company? - HELD THAT:- We note with the able assistance of both the parties that the CIT(A) has quashed the impugned assessment itself as not based on any incriminating material found or seized during the course of the search. CIT-DIR vehemently contended during the course of hearing that hon ble jurisdictional high court s decision in Gopal Lal Bhadruka [ 2012 (6) TMI 657 - ANDHRA PRADESH HIGH COURT] supports the Revenue s case that a search assessment could very well be framed on altogether a new material which sees light of the day in the corresponding proceedings. We find no merit in the Revenue s arguments as their lordships decision is only applicable in a case wherein the department indeed comes across incriminating material at the time of search than in absence of any such material. We thus place our reliance on the case law considered in the CIT(A) s order (supra) to affirm the lower appellate findings under challenge. - Revenue appeal dismissed.
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2022 (5) TMI 414
Reopening of assessment u/s 147 - notice issued time barred - HELD THAT:- Prima facie, it appears that the notice dated 31.03.2021 under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2013-14 was issued to the petitioner on 01.04.2021 and thus, it was time barred as evident from Annexure-2 to the writ petition. Learned standing counsel prays for and is granted a week's time to obtain instructions or to file a counter affidavit within three days. Put up as a fresh case before the appropriate bench on 28.03.2022.
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2022 (5) TMI 413
Revision u/s 263 - deduction u/s 80P(2)(a)(i) - HELD THAT:- As relying on M/S. KAKKABE VSSN BANK LTD. VERSUS THE PRINCIPAL COMMISSIONER OF INCOME-TAX, MYSORE [ 2022 (2) TMI 1230 - ITAT BANGALORE] we remand the case back to the AO to carry out de novo verification on the issues considered by the PCIT in the impugned order in the light of the principle laid down by the Hon ble Supreme Court in the case of Mavilayi Services Cooperative Bank Ltd., [ 2021 (1) TMI 488 - SUPREME COURT] and provide reasonable opportunity of being heard to the assessee . The assessee is directed to file the required documents before the AO and extend full cooperation to the AO. Appeal by the assessee is allowed for statistical purpose.
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2022 (5) TMI 412
Taxability of income in India - income derived from baggage screening services and aircraft handling services provided to other airlines, being ancillary and incidental to its main activities of transportation of passengers, goods etc. by air - Article 8(2)(b) of India-USA Tax Treaty - HELD THAT:- The profit derived by the assessee from baggage screening services and aircraft handling services provided to other airlines is in no way connected to assessee's activity of transportation of passengers, mail, livestock or goods etc. by air in its own aircrafts. In fact, if the assessee does not provide such services to other airlines, in no manner, assessee's activity of transportation of passenger, mail, goods, livestock etc. would be affected. In fact, the assessee itself has stated that when not required by the assessee for its own transportation activity, for optimum use of the equipments and manpower deployed at IGI airport, the services are provided to other airlines. These facts make it clear that, either provision or non provision of certain services to other airlines will not at all have any impact on assessee's activity of transportation of passenger, mail, goods, livestock etc. That being the case, in our considered opinion, the profit derived by the assessee from baggage screening services and aircraft handling services provided to other airlines will not come within the ambit of 'other activity directly connected to such transport' as provided under Article 8(2)(b) of India-USA Tax Treaty. Hence, would not be covered under Article 8(1) of the Tax Treaty. Thus, assessee's claim under Article 8(1) read with Article 8(2)(b) must fail. On a reading of Article 8(4), we are unable to find any restrictive covenant indicating that the reciprocity in services must be in the same country. Therefore, once the assessee derives profit from participating in a pool on reciprocal basis, in terms of Article 8(4), such profit can only be taxed in the country of residence of the enterprise, in the present case USA. Also in case of Air France Vs. ACIT . [ 2020 (6) TMI 1 - ITAT DELHI] the Bench has gone a step further by holding that services provided and received from non-IATP members will also come within the ambit of Article 8. Thus, the materials on record not only demonstrate the existence of a pool in terms of Article 8(4), i.e., IATP pool but they also demonstrate that the assessee is a member of the pool and being a member has provided and received services from airlines on reciprocal basis. Thus, in our considered opinion, the profit derived from providing baggage screening services and aircraft handling services to other airlines as a participant of IATP pool would be covered under Article 8(1) read with Article 8(4) of India-USA Tax Treaty. The ratio laid down in the decisions relied upon by leaned counsel for the assessee, particularly, the decision of Hon'ble Jurisdictional High Court in case of DIT Vs. KLM Royal Dutch Airlines [ 2017 (2) TMI 157 - DELHI HIGH COURT] clearly support this view. Thus we hold that the profit derived from providing baggage screening services and aircraft handling services to various other airlines in India will not be taxable in India under Article 8(1) read with Article 8(4) of the India-USA Tax Treaty. Therefore, the additions made in different assessment years under dispute are hereby deleted. Assessee's claim of exemption under Article 8(1) read with Article 8(2)(b) is rejected. Whereas, its claim under Article 8(1) read with Article 8(4) is allowed. Levy of interest under section 234B - HELD THAT:- As no interest under section 234B can be levied as the liability is on the payer to deduct tax at source and not on the assessee to pay the advance tax. This is so, in view of the ratio laid down by the Hon'ble Supreme Court in case of DIT Mitsubishi Corporation [ 2021 (9) TMI 875 - SUPREME COURT] Penalty u/s 271(1)(c) - Addition of income received from baggage screening and aircraft handling services from other airlines - HELD THAT:- While deciding this particular issue in quantum appeals, we have held that the income is not taxable in India, in terms of Article 8(1) read with Article 8(4) of India-USA Tax Treaty. In view of our aforesaid decision in the quantum appeals, penalty imposed under section 271(1)(c) of the Act in all these assessment years cannot survive. Accordingly, for this very reason, we delete the penalty imposed in all the assessment years under dispute. Even, otherwise also, the income from baggage screening services and aircraft handling services received from other airlines, whether, would be covered under Article 8 of India-USA DTAA is a highly debatable issue on which more than one view is possible. Therefore, consequent to additions made on such a debatable issue, no penalty under section 271(1)(c) of the Act can be imposed, alleging furnishing of inaccurate particulars of income. For this reason also, penalty imposed under Section 271(1)(c) of the Act needs to be deleted. Assessee appeal allowed.
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Customs
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2022 (5) TMI 396
Advance Authorisation Scheme - Right of applicant to apply for a license to import the raw materials from any foreign country for the purpose of manufacture of the goods in India and thereafter, export the same - applicant has been placed in the Denied Entity List (DEL) - HELD THAT:- In the case of MESSRS MAXIM TUBES COMPANY PVT LTD. VERSUS UNION OF INDIA [ 2019 (2) TMI 1445 - GUJARAT HIGH COURT] the Pre-import condition laid down under the Notification No. 18/2015-Cus. w.e.f. 30.10.2017 and also in Paragraph 4.14 of the Foreign Trade Policy, 2015-20 was declared to be ultra vires the Advance Authorisation Scheme as contained in the Foreign Trade Policy, 2015-20 as well as the provisions of the Handbook of Procedures. Although an attempt was made by Mr. Raval to persuade this Court that this litigation is not squarely covered by the judgment of this Court in the case of M/s. Maxim Tubes Company Pvt. Ltd., yet it is concluded that this matter should be admitted the interim relief to be granted. Rule returnable on 29.06.2022.
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2022 (5) TMI 395
Duty Drawback - petitioner is unable to produce export realization within 6 months from the date of export - Rule 16A(4) of the Customs, Central Exercise Duties and Service Tax Drawback Rules, 1995 - HELD THAT:- The petitioner has made exports during December 2007 ie., on 28.12.2007. The petitioner was granted duty drawback, which is an export incentive under Section 75 of the Customs Act on 09.01.2008. No doubt the petitioner was required to produce export realization within 6 months from the date of export ie., on or before 28.06.2008. The fact remains that the petitioner has produced the documents to substantiate that there was indeed an export realization on 22.09.2009. A reading of the above provision seems to indicate that where the sale proceeds are realized by the exporter after the amount of drawback has been recovered from him under sub-rule(2) or sub-rule (3) and the exporter produces evidence about such realization within one year from the date of such recovery of the amount of drawback, the amount of drawback so recovered shall be repaid by the Assistant Commissioner of Customs of Deputy Commissioner of Customs to the claimant - In this case, the recovery has been made long after the export realization. Considering the same and considering the fact that there is indeed an export realization, the case of the petitioner deserves a favorable disposal by the respondents. This writ petition is dsiposed off by remitting the case back to the 3rd respondent/the Assistant Commissioner of Customs, to take note of Rule 16A(4) of the Customs, Central Exercise Duties and Service Tax Drawback Rules, 1995 and to dispose of the same on merits - petition disposed off.
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2022 (5) TMI 394
Advance Authorization Scheme - Rejection of refund claim - refund rejected on the ground that there is no excess payment and that the duty liability arose on account of non-fulfillment of the conditions of the license - inputsd used in the manufacture of export goods or not - HELD THAT:- According to the appellant, they have paid duty as per TR6 challan and could not avail the credit of IGST paid as part of the duty liability. In the present case, it has to be noted that the duty was paid as the appellants were not able to fulfill the export obligation as per the Advance Authorization license. It then becomes clear that the inputs have not been used in the manufacture of final products for export. The Tribunal in the case of M/S. SERVO PACKAGING LIMITED VERSUS COMMISSIONER OF G.S.T. AND CENTRAL EXCISE, PUDUCHERRY [ 2020 (2) TMI 353 - CESTAT CHENNAI] had occasion to consider a similar issue and held that the refund is not eligible. There are no reasons to take a different view from the decision of the Tribunal in the case of Servo Packaging Ltd. - appeal dismissed.
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2022 (5) TMI 393
Reduction of redemption fine and penalty - Smuggling - foreign origin gold - dismantled power tools such as Ryobi brand 6 Orbittal Buffer car cleaning machine, steel measuring tapes, etc. - confiscation made on the basis of voluntary statements of the assessees - proper verification not carried out - non-speaking order - HELD THAT:- It is clear that judgements are available which are supporting the counter-stand of both the parties. This makes it clear that the applicability of the judgements would depend on the facts of each case and hence, it is essential that proper facts be brought on record in the first place, to apply the judgements. When the assessee-appellant himself admits that the gold pieces given by the customers were being melted and converted into gold rings, there should be some documentary evidence, at least identifying the owner of such gold pieces, but apparently no such attempt seems to be made to place on record any such vital documentary evidence. This minimum effort having not been done, mere reliance on the voluntary statement is not justified - further it is found from the records that the Revenue had entertained a doubt that the assessee-appellant had improperly imported gold into India. Section 11 of the Customs Act, 1962 deals with the power to prohibit importation or exportation of goods; (2) (f) thereunder prohibits uncontrolled import and export of gold or silver. Section 101 ibid. empowers the Revenue to search suspected persons in certain cases. It is for the assessee-appellant, who has canvassed to having retracted his statement recorded under Section 108 ibid., to explain before the Revenue authorities as to the source of the gold in question, including the names and addresses of its customers. The same would also apply to the half cut piece of gold bar with the marking Cambi, Suisse 100 gm Gold 999.9 , since the initial burden, within the meaning of Section 123 ibid., is always on the person from whose possession the gold, including the one with foreign marking, is seized, to prove that none of the seized gold was smuggled. The retraction statement does not deny the seizure of gold through the Mahazar and in the said retraction, he has clearly admitted, voluntarily, that the gold in question belonged to his customers - It is well-settled that when a retraction is made, then both the original statement as well as the retraction statement have to be looked into very carefully and hence, once a retraction is made, the burden is more on the appellant to place on record the identity of his customers since he had only admitted that the gold seized belonged to them. In the Order-in-Original, apparently, the so-called retraction is not considered; as admitted in the said retraction, if the first assessee-appellant is able to place on record the details of his customers, who are the owners of the seized gold, then, the situation may be different, in which event, perhaps, the order of confiscation may vary - In respect of the seizure of gold bar with foreign marking, undoubtedly it is a town seizure. The assessee-appellant has nowhere offered any explanation as to the source of the same and hence, the same is liable for absolute confiscation - These aspects have not at all been considered and discussed in the orders of the lower authorities and hence, to this extent, the Order-in-Original is a non-speaking order. The First Appellate Authority has also not considered these aspects, including the contentions of the assessee-appellant as to retraction and hence, to this extent, the impugned order is also a non-speaking order. The matter is remanded to the file of the Adjudicating Authority. The Adjudicating Authority shall consider the retraction statement in the light of the discussions contained hereinabove and the requirement of law - Appeal allowed by way of remand.
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2022 (5) TMI 384
Right to apply for a license to import the raw materials from any foreign country for the purpose of manufacture of the goods in India and thereafter, export the same - applicant has been placed in the Denied Entity List (DEL) - HELD THAT:- If the matter is taken up for hearing by the Supreme Court and is decided then that would enable this Court to accordingly proceed further in this matter. For the time being, post this matter on 21.04.2022 on top of the Board.
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Corporate Laws
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2022 (5) TMI 392
Seeking for extension time by 60 days, to comply with the orders - seeking condonation of delay of 451 days in complying with the said orders - by the said order the amalgamation scheme was approved and direction regarding completion of post merger activities was issued - HELD THAT:- The Applicant's Counsel put forth the reasons for not being able to comply with the orders which were stated in the application and contended that there is no willful default on the part of the Applicant in not complying with the orders dated 25.09.2019 and 20.07.2020. From the events narrated by the Applicant it can be understood that the Applicant was prevented from complying with the order by valid reasons which are not within his control and hence, the Applicationis allowed and the reliefs granted as sought for. Delay of 451 days is condoned and time for complying with the order extended by 60 days starting from 21.04.2022 and ending by 19.06.2022 - Application allowed.
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Insolvency & Bankruptcy
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2022 (5) TMI 411
Transfer Appeal - Territorial Jurisdiction to initiate CIRP against Corporate Debtor - Conferment of Jurisdiction - HELD THAT:- The Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench) after satisfying itself that the 1st Respondent/Bank had satisfied with the requirements as enunciated under the I B Code, 2016 had admitted the main CP(IB) No. 374/7/HDB/2019 on 27.09.2019 and appointed an Insolvency Professional as an Interim Resolution Professional, as proposed by the ₹ 1st Respondent/Financial Creditor. It is not out of place this Tribunal to make a pertinent mention that a Registered Office of the Company determines the Domicile of a company for all purposes. It cannot be brushed aside that the parties submitting to the jurisdiction of the Court even arguing at a later stage would not be permitted to assail the issue of jurisdiction, unless a failure of justice had been caused due to a wrong trial of a case in a Court which had no territorial jurisdiction no interference can be made on merits - A person who is not vigilant and has been duly served will not be qualified to pray for a second opportunity. A Court of Law is not under an obligation to issue Fresh Notic to the parties concerned when a party does not appear before the Court on the day of posting. It cannot be gainsaid that every cause pleaded by a person or party cannot be accepted where he is negligent slept over his rights. Before passing Exparte Orders, a Court of Law must be satisfied of Due Service as opined by this Tribunal. A Substituted Service should be effected as a last resort, when ordinary steps for Service prove futile. Filing of appeals before Appellate Authority - HELD THAT:- It cannot be ignored that in the present case, when the main CP (IB)/374/7/HDB/2019 was adjourned and listed on 08.08.2019 and on that day, the Appellant s Counsel had not appeared on account of Viral Fever. It comes to be known that the main Company Petition was heard and orders were reserved on 26.08.2019 and further, that the Appellant had not made any arrangements for advancing arguments on 26.08.2019 and later the Petition was admitted for CIRP on 27.09.2019 by the Adjudicating Authority. In the present case, despite the fact that the Appellant has come out with the issue of Territorial Jurisdiction, which was not projected at the earliest point of time, before the Adjudicating Authority on the side of the Corporate Debtor, considering the fact that one Mr. Sunil, Director of the Corporate Debtor had presented himself before the Adjudicating Authority on 18.07.2019 and sought time to engage an Advocate and later, the Corporate Debtor had not acted in a diligent manner by not taking adequate steps to advance arguments on 26.08.2019 when orders were reserved by the Adjudicating Authority in the main petition and later, on 29.07.2019, when the main Company Petition was admitted and the CIRP commenced against the Corporate Debtor, this Tribunal comes to a resultant conclusion that the Corporate Debtor through its Director Mr. Sunil had submitted to the Jurisdiction of the Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench) and the aforesaid Director had failed to avail the opportunity to put forth the objections of the Corporate Debtor. Suffice it for this Tribunal to make a pertinent mention that there is no rule enjoined in NCLT Rules, 2016, to file any Review Petition as against the Original / Final Order passed by an Adjudicating Authority (National Company Law Tribunal) and equally there is no power showered upon the Adjudicating Authority to Recall its own Original / Final Order. Looking at from any angle, the Appellant has not exhibited or shown or made out any Sufficient Cause or Good Cause (to the subjective satisfaction of this Tribunal) in respect of all stages of the proceedings. Appeal dismissed.
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2022 (5) TMI 410
Seeking voluntary liquidation of the Petitioner/Corporate Person - section 59 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- On perusal of the documents annexed to the petition, it appears that the affairs of the Corporate Person have been completely wound up and its assets have been completely liquidated. No liabilities have been left unsatisfied. It is satisfying from the documents on record that the voluntary liquidation is not with the intent to defraud any person. The Corporate Person is required to be dissolved and it is ordered accordingly - Liquidator of the Corporate Person is further directed to serve a copy of this order upon the Registrar of Companies (RoC), West Bengal immediately and, in any case, within fourteen days of receipt of this order - Petition allowed.
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2022 (5) TMI 400
Appointment of the same resolution professional - it is submitted that, the resolution professional is appointed by the creditor and no person can be a judge in on own case. - Constitutional Validity of Section 95(1), 99 and 100 of the Insolvency and Bankruptcy Code, 2016 - ultra vires Article 14 of the Constitution of India or not - subsequent appointment of the same resolution professional - HELD THAT:- The contention raised by the petitioner that the impugned provisions are arbitrary as no person can be allowed to be a judge in his own case is misconceived. The Supreme Court in GUJARAT URJA VIKAS NIGAM LIMITED VERSUS MR. AMIT GUPTA AND ORS. [ 2021 (3) TMI 340 - SUPREME COURT] has negative the contention of the petitioner and has held that the role of Adjudicating Authority is that of a rubber stamp in the context of Section 95, 97, 99 and 100 of the Code. It has further been held by the Supreme Court that Section 95, 97, 99 and 100 of the Code do not suffer from any illegality or any unconstitutionality. As per the procedure prescribed under Section 95 to 100 of the Code, the role of resolution professional is limited to make the appropriate recommendation to the Adjudicating Authority and the final decision of the admission or rejection of the application referred to under Section 95 solely lies with the Adjudicating Authority. It is also pertinent to note that Section 5(27) of the Code read with the Insolvency and Bankruptcy Board of India (Insolvency Professional) Regulations, 2016 defines the expression resolution professional . The contention of the petitioner that subsequent appointment of the same resolution professional is arbitrary cannot be accepted. The procedure prescribed under the provisions is fair, rational and reasonable and same cannot be termed to be violative of Article 14. The challenge made to the validity of the provisions as contained in Section 95 to 100 of the Code is hereby repelled - Petition dismissed.
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2022 (5) TMI 399
Order of provisional attachment binding on the Corporate Debtor or not - HELD THAT:- The issue which has been raised before us is covered by Three Member Bench Judgment in KIRAN SHAH, RESOLUTION PROFESSIONAL OF KSL AND INDUSTRIES LTD VERSUS ENFORCEMENT DIRECTORATE, KOLKATA THROUGH SHRI SHEO DAYAL CHAND, JOINT DIRECTOR GOVT OF INDIA [ 2022 (2) TMI 583 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] . Submissions which are sought to be raised by the Counsel for the Appellant were noticed and answered by Three Member Bench - It was held in the case that this Tribunal makes it candidly clear that filing of Application under Section 60(5) of the I B Code is not an all pervasive one, thereby conferring Jurisdiction to an Adjudicating Authority (NCLT) to determine any question/issue of priorities, question of Law or Facts pertaining to the Corporate Debtor when in reality in Law, the Adjudicating Authority (NCLT) is not empowered to deal with the matters falling under the purview of another authority under PMLA. The Adjudicating Authority did not commit any error in rejecting the application filed by the Resolution Professional challenging the order passed by the PMLA Court - appeal dismissed.
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2022 (5) TMI 398
Maintainability of application - initiation of CIRP - Personal Guarantors to Corporate Debtor failed to make repayment of its dues - Financial Creditors - HELD THAT:- The personal guarantor viz Smt. Niharika Devi Dinodiya, has executed personal guarantee from time to time, lastly on 31/03/2013 in favour of the Applicant to secure the repayment of the principal amount of the Credit Facilities together with all interest, additional interest, liquidated damages, premium on repayments, reimbursement of all costs, charges and expenses and all other obligations payable by ROTL in respect of the Facility Agreements. The Applicant has issued a Demand Notice in Form B on 06/07/2021 under Rule 7(1) of the IB Rules, 2019. However, the respondent-Personal Guarantor has not paid the amount recalled by the applicant/Financial Creditor as set out in the demand notice dated 06/07/2021 - In this factual conspectus, the applicant prays for initiation of insolvency resolution process, against the respondent/guarantor. It is made known to everyone that on filing this Application by the Applicant/Creditor the interim-moratorium commences in terms of section 96(1)(a) of IBC, 2016 - Application admitted - moratorium declared.
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2022 (5) TMI 391
Initiation of CIRP - Corporate Debtor has failed to make repayment of its dues - Financial Creditors - time limitation - NCLT and NCLAT rejected the application - HELD THAT:- The National Company Law Tribunal, Chandigarh Bench, Chandigarh and thereafter, the National Company Law Appellate Tribunal, Principal Bench, New Delhi have rightly taken the view that the application as moved by the present appellant under Section 7 of the Insolvency and Bankruptcy Code, 2016 ( the Code ) was barred by limitation. Time and again, it has been expressed and explained by this Court that the provisions of the Code are essentially intended to bring the corporate debtor to its feet and are not of money recovery proceedings as such. The intent of the appellant had only been to invoke the provisions of the Code so as to enforce recovery against the corporate debtor. We find no fault in the Tribunal and the Appellate Tribunal having declined the prayer of the appellant. However, in the interest of justice, it does appear appropriate and hence observed that if any other proceedings have been or are taken up by the appellant, the same shall be dealt with and proceeded on their own merits and in accordance with law - Appeal dismissed.
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Central Excise
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2022 (5) TMI 390
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - seeking to manually process the payments of the Petitioner and issue Discharge Certificate under section 127 (8) of the Scheme - opportunity of grant of personal hearing - HELD THAT:- A direction needs to be issued to the Designated Committee i.e., respondent no.2 and/or any other appropriate authority appointed for processing the petitioner s application (Appropriate Authority) under the Scheme, manually. The authorised representative (AR) of the petitioner will appear before the Designated Committee and/or the Appropriate Authority on 19.05.2022, at 11:00 A.M. - In case, for any given reason, the Designated Committee and/or the Appropriate Authority cannot entertain the AR of the petitioner on the given date and time, it shall serve a notice in writing on the petitioner, indicating a fresh date and time for processing the application manually - In case the petitioner s application is found in order by the Designated Committee and/or the Appropriate Authority, the next steps will be taken immediately thereafter, which will include the issuance of the discharge certificate. Petition disposed off.
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2022 (5) TMI 389
Reversal of CENVAT Credit in respect of SAD - Removal of inputs as such or transfer by sale covered under Rule 10 of CENVAT Credit Rules, 2004? - case of appellant is that the reversal took place but they cannot substantiate it as adjudication has taken place after a delay of 10 years from the date of issuance of SCN - Extended period of limitation - HELD THAT:- he Show Cause Notice dated 23.11.2011 has been adjudicated vide order impugned herein dated 21.9.2021. There is a delay of 10 years in adjudicating the matter. It is seen that the appellant had replied to the Show Cause Notice on 31.5.2012. The original authority has dropped demand of Rs.5,63,42,519/- with regard to the slum sales to Mobis India Ltd. Only a demand of Rs.28,17,475/- has been confirmed alleging that the appellant has not reversed the credit in respect of the SAD. When the appellants have given detail reply to the Show Cause Notice and also filed ER-1 returns reflecting the reversal of credit made by them, the confirmation of demand after a period of 10 years alleging that the appellants have not been able to establish the reversal by producing sufficient document is indeed not fair to the appellant. The observation made by the adjudicating authority for confirming the demand is that the appellants have not provided any evidence to show that they have reversed the SAD in respect of the imported materials cleared as such. The Hon'ble High Court of Bombay in the case of PARLE INTERNATIONAL LIMITED VERSUS UNION OF INDIA AND OTHERS [ 2020 (11) TMI 842 - BOMBAY HIGH COURT] held that the inordinate delay of 13 years in adjudicating the Show Cause Notice is untenable. It has merely stated that the fact of non-payment would not come to notice but for the verification of the audit department. In the absence of any specific allegation and proof that the appellant has suppressed facts, the extended period cannot be invoked. There is no evidence adduced by the department that the appellant has suppressed facts with intent to evade payment of duty. The decisions relied by the learned counsel in the case of KAUR SINGH VERSUS COLLECTOR OF CENTRAL EXCISE, NEW DELHI [ 1996 (11) TMI 84 - SUPREME COURT] apply to the facts of this case, where it was held that Which ground is alleged against the assessee must be made known to him, and there is no scope for assuming that the ground is implicit in the issuance of the show cause notice. The appellant succeeds on the ground of limitation. The demand is held to be time-barred - Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 383
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - case of petitioner is that the requisite tax was attempted to be deposited before the cut-off date i.e., 30.06.2020 - despite several attempts, the transaction could not go through, as there was a mismatch between the amount - applicability of Instruction No.1/2021-CX dated 17.03.2021 - HELD THAT:- Issue notice. List the above-captioned matter on 04.05.2022.
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CST, VAT & Sales Tax
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2022 (5) TMI 388
Classification of goods - unclassified goods - manufacturing of chemical in the brand name of AT-PLAST - whether material produced by the Chemical process, and which is used in Chemistry? - whether Commercial Tax Tribunal was justified to hold that the production of the applicant / revisionist AT-PLAST is used with the building material and therefore, cannot be said that it is chemical, despite the fact the Commissioner has not disputed that it is not a chemical admixture? - HELD THAT:- Admittedly, the revisionist manufactured AT-PLAST which are being used in mixing of ready mix concrete / concrete and it has been averred by the revisionist that the said product are being used along with concrete for reducing the uses of water, delay the time of freezing as well as strengthening the concrete - On close scrutiny of the impugned order, it reveals that the Tribunal has neither referred the chemical used in manufacturing of said product nor has given any reference thereof. The Tribunal while coming to the conclusion has held that the goods manufactured and sold by the revisionist are used as building material and therefore justified the order passed by the Commissioner under Section 59 of the Act. The Tribunal being the last Court of fact ought to have considered various evidences as well as materials referred by the revisionist with regard to the chemical analysis report for chemical used in the manufacture of its product but had failed to do so. In the case in hand, none of the authorities have discussed raw material / chemicals used in manufacturing of AT-PLAST or the chemical analysis report as furnished by the revisionist in support of its case but had decided the issue, which cannot be justified in the eyes of law. The matter is remanded to the Tribunal for deciding the issue afresh - revision is allowed.
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2022 (5) TMI 387
Validity of re-assessment order - applicability of Doctrine of Necessity - whether the proceeding in Second Appeal is not vitiated on account of association and/or order being passed by Accounts Members-I who earlier had passed an order in the self same case in Revision? - HELD THAT:- The issue is about likelihood of bias and not actual bias. As explained in J. MOHAPATRA CO. VERSUS STATE OF ORISSA [ 1984 (8) TMI 350 - SUPREME COURT] the governing rule as explained in AK. KRAIPAK ORS. ETC. VERSUS UNION OF INDIA ORS. [ 1969 (4) TMI 103 - SUPREME COURT] is that no man should be a judge in his own cause. The only exception is the doctrine of necessity which does not exist in the present case. The question framed is answered in favour of the Assessee-Dealer (Petitioner) in the affirmative by holding that the proceedings in the second appeal stood vitiated on account of the Accounts Member-I, who had earlier passed an order in the same case at the interlocutory stage being a member of the Tribunal - The revision petition is disposed of.
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2022 (5) TMI 386
Maintainability of application - Rectification application still pending - Section 84 of the TNVAT Act - HELD THAT:- The respondent is directed to consider the application submitted by the petitioner dated 21.12.2020 under Section 84 of the TNVAT Act for rectification of the assessment order dated 21.02.2020 for the Assessment Year 2012-13 under the TNVAT Act and pass orders thereon on merits and in accordance with law, after giving an opportunity of being heard to the petitioner within a period of four weeks from the date of receipt of a copy of this order. Till such time, the impugned demand notice shall be kept in abeyance. It is made clear that, once the rectification application is disposed of on merits, depending upon the outcome of the same, further course of action to be pursued or not of the impugned order can be taken by the Revenue. Petition disposed off.
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2022 (5) TMI 385
Attachment of Bank Accounts - whether the State Tax Officer could have proceeded to instruct the I.D.B.I. Bank not to permit the writ-applicant to operate its current bank account on the ground that the writ-applicant Company has incurred a liability under the Act, 2003? - HELD THAT:- While the Second Appeal is pending before the Tribunal, and the Tribunal has yet to look into even the interim application filed by the writ-applicant in the Second Appeal seeking appropriate relief, the State Tax Officer could not have proceeded to direct the bank not to allow the writ-applicant to operate its current account. In the case on hand, indisputably there has been no notice of demand as contemplated under Section-42 of the Act. It is within the knowledge of the authority that the writ-applicant is before the Tribunal in a Second Appeal. The Tribunal for the purpose of entertaining the second appeal may put the writ-applicant to some conditions like pre-deposit etc. The Second Appeal is yet to be heard on merits - pending the Second Appeal before the Tribunal, the impugned action on the part of the State Tax Officer is not sustainable in law. It could be said that the impugned action is essentially in exercise of powers under Section-45 of the Act. Section-45 only talks about provisional attachment. Provisional attachment is permissible only during the pendency of the proceedings of assessment or reassessment. In the case on hand, the writ-applicant has traveled much beyond the proceedings of assessment. The impugned order dated 04.01.2022 at Annexure-A to this writ-application purported to have been passed under Section-44 of the Act 2003 is hereby quashed and set aside - Applicartion allowed.
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2022 (5) TMI 382
Validity of assessment order - validity of notices issued and approvals granted - Section 21 of the UP Trade Tax Act, 1948 - HELD THAT:- The materials available in the hard-disk revealed purchases of scrap by the petitioners from various dealers and sale of ingots to various local dealers and also to some Firms of Uttarakhand. It also came to light on the basis of materials available in the hands of the respondents that the petitioners made undisclosed purchases during the Assessment Year 2003-04 from M/s Kamakhya Steels Pvt. Ltd., Bijnore (658.28 MT). These details of evaded purchases/ sales which have been extracted above from the impugned notices under Section 21(1) of the Act, 1948. Evaded transactions in some greater detail are mentioned in the impugned notices. The impugned order granting permission under the proviso to Section 21(2) of the Act, 1948 for the Assessment Year 2005-06 was passed by the Additional Commissioner, Trade Tax on the basis of information received which revealed evaded/ unaccounted purchases/ sales of about Rs.2,31,81,000/- as evident from the Sale Ledger Account and other particulars available in the hard-disk and CD/ soft copy received from the Deputy Commissioner (SIB), Second Unit, Ghaziabad vide letter No.663, dated 27.03.2010, which is based on the report/ materials received from the Director General of Central Excise Intelligence, New Delhi. It is settled principles of law that proceedings under Section 21 of the Act, 1948 can be initiated if the material on which the Assessing Authority bases its opinion, is not arbitrary, irrational, vague, distant or irrelevant. There must be some rational basis for the assessing authority to form the belief that the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax for some year. If such a basis exists, the assessing authority can proceed in the manner laid down in Section 21 of the Act, 1948. If the grounds are of an extraneous character, the same would not warrant initiation of proceedings under the above section - The question as to whether that material in sufficient for making assessment or re-assessment under section 21 of the Act would be gone into after notice is issued to the dealer and he has been heard in the matter or given an opportunity for that purpose. The assessing authority would then decide the matter in the light of material already in its possession as well as fresh material procured as a result of the enquiry which may be considered necessary. Thus, the Assessing Authority was having relevant material in his hands on the basis of which he had reason to believe that for the Assessment Years in question, the petitioners have evaded tax on undisclosed sales and made huge transactions of purchases and sales out of the Books of Account. Therefore, the permission under the proviso to sub-Section (2) of Section 21 of the Act, 1948 for the Assessment Years in question have been lawfully granted by the concerned Additional Commissioner, Trade Tax and the notices under Section 21(1) of the Act, 1948 have been lawfully issued by the concerned Assessing Authorities to the petitioners for the Assessment Years in question. There are no merits in the petition - petition dismissed.
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Indian Laws
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2022 (5) TMI 409
Age of superannuation/retirement of appellant-teacher - Appellant serving in 1OO% government aided private educational institution - whether, the appellant teacher is entitled to get the benefits of enhanced age of superannuation of 65 years at par with his counterpart teachers serving in Government Colleges and Universities? - HELD THAT:- Considering the various orders passed by the High Court, by which in similar facts and situation and not accepting the submission on behalf of the State that on the principle of 'no work no pay' the teachers are not entitled to any monetary benefits for the intervening period between 62 years and 65 years of age, we are of the opinion that appellant shall be entitled to all consequential and monetary benefits including the arrears of salaries and allowances for the intervening period, as if he would have been retired at the age of 65 years. The appellant being similarly situated teacher cannot be singled out. It is held that the appellant herein is entitled to the benefit of enhanced age of superannuation i.e., 65 years. He shall be entitled to all the consequential and monetary benefits including arrears of salaries and etc., as if, he would have been continued up to the age of 65 years. The arrears etc., shall be paid to the appellant within a period of six weeks' from today. However, considering the fact that there was a huge delay in preferring the appeal, which has been condoned by this Court, the appellant shall not be entitled to any interest on the arrears for the period between 09.05.2017 till the filing of the present appeal. Appeal allowed.
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2022 (5) TMI 408
Dishonor of Cheque - Funds Insufficient/Dormant Account - seeking exclusion of period from 15.03.2020 till 14.03.2021 in computing the period under proviso (b) and (c) of Section 138 of the Act of 1881 and any other law, on account of COVID-19 pandemic - Section 138 read with Section 142 of the Negotiable Instruments Act, 1881 - HELD THAT:- The present petitioner apparently only wants to delay the final adjudication of the proceedings under Section 138 of the Act of 1881, as neither the petitioner has raised any ground to the effect that the cheque in question was not issued by the petitioner nor is the petitioner ready to honour the cheque even now and even in case, the sole argument raised by the learned counsel for the petitioner is accepted then also, at best, the present proceedings would be set aside and the complainant would be given the liberty to file a fresh complaint and it is not that the petitioner would be absolved of his liability under Section 138 of the Act of 1881. Moreover, the present petition has been filed after a delay of 1 year and 3 months from the date of the summoning order after non-bailable warrants were issued against the petitioner. This Court is of the view that the argument raised by the learned counsel for the petitioner to the effect that the complaint as instituted on 21.10.2020 was premature, is meritless and deserves to be rejected. Thus, the point as to whether the orders of the Hon ble Supreme Court passed in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2022 (1) TMI 385 - SC ORDER ] are for the benefit of the complainant or for the benefit of the accused person is answered in favour of the complainant and against the petitioner/accused person. This Court is of the opinion that in case, this Court was to entertain the present petition, it would be doing injustice to the complainant, who has been vigilant of its rights and had instituted the complaint under Section 138 with respect to the dishonour of the cheque, in accordance with the provisions of the Act of 1881 - A perusal of the complaint would show that the ingredients of Section 138 of the Act of 1881 are, prima facie, made out. No argument has been raised challenging the said aspect. Petition dismissed.
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