TMI Tax Updates - e-Newsletter
June 23, 2023

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. Never-ending tale of “Pre–Import Condition”

   By: Navjot Singh

2. Assessee is entitled to claim ITC on vehicle modified and supplied as an ambulance

   By: Bimal jain

3. Disallowance of expenditure for Freebies to doctors provided by pharma companies – retrospective; but facts need to be weighed with MCI regulations

   By: Vivek Jalan

4. Recipient’s ITC cannot be denied in case supplier becomes non-existent or his registration cancelled retrospectively

   By: Bimal jain

News

1. Centre allocates 145 Crores rupees to Nagaland for the purpose of Unity Mall in Dimapur

Notifications

GST - States

1. S.O. 220 - dated 13-6-2023 - Bihar SGST

Seeks to amend Notification No. S.O. 110, dated the 06th May, 2020

2. 03/2023-State Tax - dated 21-6-2023 - Delhi SGST

Revocation of cancellation of registration where registration has been cancelled on or before the 31st day of December, 2022

3. G.O. Ms. No. 5 - dated 19-5-2023 - Puducherry SGST

Notification under section 128 for rationalisation of late fee for GSTR-9 and amnesty to GSTR-9 non-filers under the Puducherry Goods and Services Tax Act, 2017

4. 5/2023-Puducherry GST (Rate) - dated 19-5-2023 - Puducherry SGST

Amendment in Notification No. 11/2017-Puducherry GST (Rate), dated 29th June, 2017

Income Tax

5. 43/2023 - dated 21-6-2023 - IT

New Tax Regime u/s 115BAC in respect of Individuals, HUF and others as Amended By Finance Act, 2023 - Various changes made in corresponding rules for income taxable as Salary and for Depreciation in case of Business or Profession income - Introduction of FORM No. 10-IEA for exercising to option or withdrawing from the option u/s 115BAC - Income-tax (Tenth Amendment) Rules, 2023

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/AFD/PoD/CIR/2023/97 - dated 21-6-2023

Standardised approach to valuation of investment portfolio of Alternative Investment Funds (AIFs)

2. SEBI/HO/AFD/PoD-I/P/CIR/2023/098 - dated 21-6-2023

Modalities for launching Liquidation Scheme and for distributing the investments of Alternative Investment Funds (AIFs) in-specie

3. SEBI/HO/AFD/PoD1/CIR/2023/96 - dated 21-6-2023

Issuance of units of AIFs in dematerialised form

FEMA

4. 06 - dated 22-6-2023

Remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS)

DGFT

5. 17/2023 - dated 22-6-2023

Amendment in procedure for import of Copper products and Zinc Oxide under the Revised India Nepal Treaty of Trade

Customs

6. Public Notice No. 25/2023 - dated 2-5-2023

Changes introduced vide Finance Act 2023 in the Customs Tariff w.e.f. 01.05.2023- reg.

7. PUBLIC NOTICE NO. : 23/2023 - dated 24-4-2023

Monthly Public Notice containing therein list of EGM errors

8. Public Notice No. 19/2023-24 - dated 12-4-2023

Streamlining the work of Central Registry Unit (CRU) and creation of Central Dispatch Unit (CDU).

9. Public Notice No. 18/2023 - dated 1-4-2023

Streamlining the work of Central Registry Unit (CRU) and creation of Central Dispatch Unit (CDU).

Highlights / Catch Notes

GST

• Privileged Communication: Legal Advisor-Client Confidentiality in GST Evasion u/s 126 of the Evidence Act.

  Case-Laws - HC : Seeking information from the Advocates relating to their clients - Evasion of GST - It is a settled legal position that a communication is privileged if it is made to a legal advisor by a client after the commission of a crime and with a view to his defence, but it is not privileged if it is made before the commission of the crime or wrong and for the purpose of being guided or assisted in furthering or committing it. Thus, Section 126 of the Evidence Act is designed to abort the attempt to intrude privacy of the close preserve of the fund of information conveyed by the client closeted in confidence. - HC
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• Appeals under CGST Act Section 107(4) cannot exceed time limits; Limitation Act does not apply to extend deadlines.

  Case-Laws - HC : Can an appeal be filed beyond the time period prescribed u/s 107 (4) of the CGST Act, 2017? - The Central Goods and Services Tax Act is a special statute and a self-contained code by itself. Section 107 has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act. It is trite, that the Limitation Act will apply only if it is extended to the special statute. It is also rudimentary that the provisions of a fiscal statute have to be strictly construed and interpreted - HC
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• Court Grants Refund for GST Mistakenly Deposited Under Wrong Registration Number, Prevents Double Payment and Interest Penalty.

  Case-Laws - HC : Refund of amount deposited wrongly - GST was deposited with different / wrong registration number (GSTIN) - It is a settled law that no one cannot be made to suffer for the fault of another. Since this deposit of GST was not reflected in the account of the petitioner, therefore, a show cause notice was issued and the petitioner had to pay the GST to the department with interest again in order to avoid the cancellation of GSTIN - Refund / return allowed - HC
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• High Court Stresses Right to Personal Hearing in Tax Disputes under CGST Act Section 75 for Fair Procedure.

  Case-Laws - HC : Determination of Tax - Prescribed procedure u/s 75 of CGST Act - Violation of principles of natural justice (audi alterem partem) - Seeing as the petitioners have specifically requested for an opportunity of personal hearing, it was incumbent upon the officer to have fix the matter for hearing, heard the petitioners and thereafter determined the tax payable. - HC
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• High Court Orders Refund of Penalty for Goods Detained Due to Expired E-way Bill, Applying Division Bench Principles.

  Case-Laws - HC : Refund of penalty amount deposited in view of the subsequent decision of High Court - Detention of goods alongwith vehicle - levy of penalty - expired E-way bill - Scope of the decision in the case of PUSHPA DEVI JAIN [2023 (3) TMI 1375 - CALCUTTA HIGH COURT] - Although, the application of a judgment is prospective unless specifically made applicable retrospectively but the judgment and order of the Hon’ble Division Bench is available before me at the time of adjudicating the writ petition. The ratio Puspha Devi therefor, becomes applicable. - Refund allowed - HC
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• High Court Invalidates Assessment Order for Violating Section 75(4) CGST Act and Denying Personal Hearing Opportunity.

  Case-Laws - HC : Determination of tax - Procedure prescribed u/s 75(4) of CGST not followed - Validity of assessment order - violation of principles of natural justice - requirement of providing opportunity of personal hearing - the 1st respondent herein passed the impugned order not only in violation of mandatory provisions under sub-section (4) of Section 75 of the Act, 2017, but also in violation of the principles of natural justice. Therefore, the impugned order is liable to be set aside. - HC
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Income Tax

• Court Allows Petition Due to Insufficient Response Time to Show Cause Notice; Process to Resume from Interruption Point.

  Case-Laws - HC : Reopening of assessment - act of giving only 12 hours to file reply to the show cause notice by the respondents - When the show cause notice-cum-draft assessment order is issued to the petitioner, reasonable/adequate opportunity was required to be given to him. In the present case, adequate opportunity was not given to the petitioner and therefore only on this ground the petition deserves to be allowed. - AO may initiate any action from the stage from where it has been left - HC
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• Advances not income aren't taxed at source u/s 195; refunds for deducted tax shouldn't be denied.

  Case-Laws - HC : Grant of credit for tax deducted at source u/s 195 and surcharge - Tribunal was right in holding that the advances which are once held to be not income, could not have been subjected to tax at source u/s 195 of the Act. - Tribunal was right in concluding that the refund or grant of credit of such tax deducted at source, could not be denied. - HC
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• Court Rules Cost-to-Cost Reimbursements for Seconded EY India Employees Not Fees for Technical Services; No Double Taxation.

  Case-Laws - AT : Fees for Technical Services [FTS] - Receipt of Cost-to-cost reimbursements on account of secondment of employees - seconded personnel are employees of EY India firms - cost to cost reimbursement on account of secondment of employees cannot be treated as FTS - The income has been taxed as salary in their respective hands - Therefore, the very same amount could not, in law, be subjected twice - AT
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• Indian Software Payments Not Royalties, No TDS Liability u/s 195 of Income Tax Act.

  Case-Laws - AT : TDS u/s 195 - Withholding Tax - Purchases for copyrighted articles - Royalty - The amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India - No TDS liability - AT
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• Delay in Filing Audit Report Condoned for Tax Exemption u/s 11; Procedural Lapse Not a Barrier.

  Case-Laws - AT : Exemption u/s 11 - Condonation of delay in filing the audit report in Form 10B - non filing of Audit Report along with return of income is a procedural omission and cannot be an impediment in law in claiming the exemption, we allow this appeal condoning the delay in filing the Audit Report in Form No. 10B. - AT
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• Court Upholds Assessing Officer's Decision: Property Sale Income Classified as Long Term Capital Gains, Not Business Income u/s 263.

  Case-Laws - AT : Revision u/s 263 - LTCG on sale of properties - property had been sold in piecemeal in 14 transactions - stock-in-trade or capital asset - Whether to accept the transactions as being taxable under the Long Term Capital Gain or to reject them and tax them under the head income from business would have been duly considered by the AO at the time of assessment proceedings and the conclusion arrived at by the AO was definitely one of the plausible views - Revision order quashed - AT
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• Section 147: Reopening Assessment Void if "Reason to Believe" Fails Judicial Scrutiny, Even Without Initial Objection.

  Case-Laws - AT : Reopening of assessment u/s 147 - objections regarding reason to believe raised first time at appellate stage - If reasons recorded upon being challenged at any stage of proceedings falls to withstand the test of judicial scrutiny, in that eventuality, upon such recorded reasons no valid notice can be issued and any assessment framed consequent thereto even taking shelter of ‘no objection’ from the assessee could save the assessment from being held to be declared void-ab-initio and the objection of Revenue was rejected. - AT
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Customs

• Concerns Raised Over Arbitrary Customs Valuation of Imported Goods; Transparency Needed in NIDB/DGOV Data Process.

  Case-Laws - AT : Valuation of imported goods - Higher values available on contemporaneous imports NIDB/DGOV data on similar good - The valuation of similar goods depends on factors such as country of origin, quantity of the goods imported, produced by the same person who produced the goods being valued, quality of the goods i.e. characteristics, composition & like component material. Moreover, the NIDB data is not exhaustive in nature as it only depicts the value at which the goods are assessed but not whether such assessed value is proposed value by the importer or enhanced value buy the proper officer - the enhancement of value has been done arbitrarily. - AT
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• Supreme Court Rules Anti-Dumping Duties Cannot Be Imposed Retroactively Between Provisional and Final Stages Under Customs Tariff Act.

  Case-Laws - SC : Levy of Anti-Dumping Duty - Time gap between end of the provisional ADD and levy of Final ADD - upon a harmonious conjoint reading of Customs Rules read with Section 9 of the Customs Tariff Act, 1975 the duty for the intervening period, when the provisional duty had lapsed could not be collected retroactively. - SC
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• Tribunal Rejects Rectification of Limitation Period Error; Jurisdictional Issue Sent Back for Further Review.

  Case-Laws - SC : Rejection of application for rectification of mistake - Applicability of extended period of limitation - Tribunal did not consider the issue sought to rectified - Maybe, such a question was not raised by the appellant in the memo of appeal presented before the Tribunal in specific terms but, indisputably, this question remains a jurisdictional question because without existence of the elements specified in the said Proviso to Section 28(1), the show cause notice in question, as issued on 26.09.2006 in relation to the imports made from November, 2001 to April, 2003, could not have been maintained. - Matter restored back before the tribunal - SC
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• Education Cess Can Be Debited Using MEIS/SEIS Scrips; Cash Payment Not Required, Says Board's Circular Clause 11.

  Case-Laws - AT : Debit of Education Cess and Secondary Higher Education cess through MEIS/SEIS scrips - The issue involved herein is no more res judicata and in view of clause 11 of the Board’s circular dated 10.1.2020, which permits the payment made through debit in duty credit scrips for past cases, there is no justification for insisting in cash payment towards education cess and secondary & higher education cess and accordingly the issue is decided in favour of the appellant herein. - AT
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• Rectification Applications u/s 129B(2) of Customs Act Must Be Heard by Original Bench for Consistency.

  Case-Laws - AT : Jurisdiction of the Bench to Hear the application of Rectification of Mistake - recall of the entire order - an application for rectification of a mistake u/s129B (2) of the Customs Act shall be heard by a Bench consisting of the Members who heard the appeal giving rise to the application, unless the President directs otherwise. - Once an application for rectification of mistake had also been filed by the appellant, it was the bounden duty of the office to have listed the application before the same Bench - AT
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• Goods Classification Ruling: Menthol Supari under CTH 2106 90 30, Illaichi under CTH 2106 90 99, per Customs Tariff Act.

  Case-Laws - AAR : Classification of goods intended to be imported - Menthol Scented Sweet Supari - Flavoured and coated Illaichi - There cannot be a situation where same product is subjected to levy of basic customs duty under one CTH and levy of IGST under another CTH of the Customs Tariff Act, 1975. - The product namely Menthol Scented Sweet Supari merits classification under CTH 2106 90 30 - Flavoured and coated Illaichi merits classification under CTH 2106 90 99, of the First Schedule to the Customs Tariff Act, 1975. - AAR
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• Nokia 7210 SAS Products Eligible for Customs Duty Exemption, Says Authority for Advance Rulings; No Use-Based Differentiation.

  Case-Laws - AAR : Classification of goods proposed to be imported and benefit of exemption from Customs Duty (BCD or CVD) - Nokia 7210 SAS products - performing functions such as reception, conversion and transmission of data - The notification does not distinguish routers based on intended use or capability. It does not bar the routers used by telecom network and support service providers. - Benefit of exemption available to routers - AAR
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Direct Taxes

• High Court Rules Property Not a Benami Transaction; Son Denied One-Third Share Claim Based on Preponderance of Probability.

  Case-Laws - HC : Benami transaction - burden of proof - principle of preponderance of probability that although the suit property was purchased in name of Wife but the consideration money was paid or provided by her husband (deceased) - whether the transaction i.e. the purchase of suit property under registered deed of sale by Wife of the deceased is benami transaction? - Dispute raised by the son to claim 1/3 share in the property - HELD No - HC
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Indian Laws

• Director Liability in Cheque Dishonor Cases Requires Company as Accused u/s 141 for Vicarious Liability.

  Case-Laws - HC : Dishonour of Cheque - vicarious liability of director -Proceedings against its Director in absence of the company being joined as party respondent accused in the original complaint - there cannot be any iota of doubt for maintaining prosecution under Section 141 of the Act, the company must be joined as an accused. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. - HC
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• Court Permitted to Quash Conviction and Sentence Judgments Due to Amicable Settlement Under CRPC Section 482.

  Case-Laws - HC : Dishonour of Cheque - compounding of offences - amicable settlement arrived inter-se parties - whether this Court can quash the judgments of conviction and order of sentence recorded by the courts below on the basis of amicable settlement arrived inter-se parties while exercising power under Section 482 of CRPC or not? - Held Yes - HC
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Service Tax

• Extended Tax Limitation Requires Evidence of Intent; Late Payment Alone Isn't Suppression Under Legal Precedent.

  Case-Laws - AT : Extended Period of Limitation - Suppression etc. cannot be imputed against the appellant merely because they failed to pay the tax on time. It is settled legal position that mere allegation of suppression is not sufficient, it has to be established through some evidence as mere omission to give some information will not always be termed as suppression with intention to evade tax, something more needs to be brought on record by the department. - AT
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• Court Rules Service Tax Exemption Valid for Medicine Production; Excise Duty Non-Payment Not a Barrier.

  Case-Laws - AT : Job Work - manufacture of medicines - Exemption to taxable service of production of goods on and for behalf of a client - benefit denied on the ground that Excise Duty has neither been paid by the appellant (job worker) nor by the client (principal) - As the appellant is the manufacturer of the pharmaceutical goods, demand of Service Tax is not sustainable - AT
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• Bariatric Surgery Exempt from Service Tax; Not Cosmetic Under Finance Act Section 65(105)(zzzzk.

  Case-Laws - AT : Nature of activity - Bariatric surgery - To be classified as cosmetic surgery or plastic surgery - Bariatric surgery performed by the appellant on patients suffering from morbid obesity coupled with life-taking diseases like Type-II diabetes and Hypertension, arthritis, lipid disorder or obstructed sleep apnea or disease of a like nature, cannot not be subjected to service tax under section 65(105)(zzzzk) of the Finance Act. - AT
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VAT

• Business Relocation May Lead to Tax Compounding Cancellation if Done Without Assessing Officer's Knowledge u/s 8(f)(iv).

  Case-Laws - HC : Cancellation of the permission to pay tax on compounded basis - shifting of business premises - On applying the principle of noscitur a sociis, to determine the scope and ambit of sub clause (iv) of Section 8(f), it can be safely stated that the shifting of a place of business can be cited as a valid and sufficient reason for cancelling a permission already granted only if such shifting is without the knowledge of the Assessing Officer and thereby had an element of suppression of relevant information or failure to furnish relevant information. - HC
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Case Laws:

• GST

• 2023 (6) TMI 945
  Maintainability of petition - relegation of remedy provided under Section 159(5) of Central Goods and Services Tax Rules 2017 - provisional attachment to a cash credit account - HELD THAT:- It goes without saying that the Court has accepted the legal position which has been settled by various decisions which have been referred to in the impugned order. If such be the case, no useful purpose will be served by relegating the petitioner to avail the remedy under sub-Section 5 of Section 159 of the Rules. Therefore, the learned writ Court ought to have allowed the writ petition in its entirety instead of relegating the appellant to a remedy which is inapplicable to the cases where there is an order of provision attachment of a cash credit account. The appeal stands allowed and the order passed by the learned writ Court is set aside insofar as it directs the appellant to avail the remedy under Sub-Section 5 of Section 159 of the Rules and in other respect where the learned writ Court has rightly accepted the legal position stands confirmed - the respondents are directed to lift the order of provisional attachment of the cash credit account within 10 days from receipt of the server copy of this order. Appeal allowed.

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• 2023 (6) TMI 944
  Cancellation of registration of petitioner - manual copy of the appeal required to be filed within 7 days of e-filing, was filed with a delay of 2 days - HELD THAT:- The appeal has been filed online by the petitioner on the GST portal. The applicable provision requires the petitioner to file a manual copy of the appeal within 7 days of e-filing. Thus, when the appeal was presented before the office of the appellate authority during the 2nd week of May, 2023, the appellate authority noted that the same had been filed with a delay of 2 days and hence the same was not received for issue of necessary form in GST APL02. It is hence that this Writ Petition has come to be filed challenging the order of cancellation of registration. The delay of 2 days in filing the appeal is condoned and the challenge to the order of assessment is rejected. The petitioner is permitted to re-present the appeal papers within a period of one (1) week from today and if so re-presented, R2 shall receive the appeal without reference to limitation but ensuring compliance with all other statutory conditions, including pre-deposit, take the appeal on file, issue notice to the petitioner, hear it and dispose the same in accordance with law. Petition dismissed.

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• 2023 (6) TMI 943
  Seeking information from the Advocates relating to their clients - Evasion of GST - Maintainability of appeal - several fake companies who have illegally committed GST fraud have been unearthed and criminal proceedings and other proceedings have been initiated - HELD THAT:- The appeal is maintainable for the reason that soon after the impugned order was passed by the learned Single Bench the Anti Fraud Department of the Kolkata Police as well as the GST Department had issued a series of notice to all the learned advocates who are regularly appearing for their clients in cases pertaining to GST/WBVAT/WBST Acts and other related enactments. When this matter is brought to the notice of this Court, the authorities of the respondent were well advised that they had no jurisdiction to issue notices to the learned advocates calling for information regarding their clients as the information given by the clients is a privileged communication given to an advocate. It is a settled legal position that a communication is privileged if it is made to a legal advisor by a client after the commission of a crime and with a view to his defence, but it is not privileged if it is made before the commission of the crime or wrong and for the purpose of being guided or assisted in furthering or committing it. Thus, Section 126 of the Evidence Act is designed to abort the attempt to intrude privacy of the close preserve of the fund of information conveyed by the client closeted in confidence. In Bakaulla Mollah v. Debiruddin Mollah [ 1912 (4) TMI 4 - CALCUTTA HIGH COURT] it is held that Section 126 of the Evidence Act prohibits an attorney from disclosing an attorney-client communication without the expression concerned of the client. This appeal is maintainable. Whether the order and direction issued by the learned Single Bench has been properly understood or misconstrued by the authorities of the Anti Fraud Department? - HELD THAT:- The observation issued by the court has to be understood within the four corners of law. The police authorities have been directed to investigate and the observation of the court is to investigate about filing of fake cases. Unfortunately, the authorities of the Anti Fraud Department have misconstrued and misunderstood the scope of the direction which is clear from the notice issued under Section 160 Cr.P.C. to the Directors of various assessees - the notices issued under Section 160 Cr.P.C. which are standardize forms are set aside and we give liberty to the Police Department as well as the GST Department to conduct a proper investigation qua the assessees and not to generalize and grant all assessees throughout the State of West Bengal to be fraudsters this approach is not in accordance with law. Appeal disposed off.

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• 2023 (6) TMI 942
  Seeking release of seized vehicle alongwith goods - it is alleged that document produced against the goods intercepted i.e. second hand car bearing Registration No. AS06AE2114 appeared to be invalid and incomplete based on the discrepancies - no E-way bill - HELD THAT:- The power of inspection, search and seizure can be carried out under Chapter XIV or in case of goods in transit under Section 129. On plain reading of Section 129 can be equated with the alternative dispute redressal mechanism and provides an opportunity to the owner of the goods or any other person to pay amount as specified under Section 129 (1) (a) or (b) or (c) of the said Act. Clause 129 (1) (a) of the Act which provides for payment of penalty equal to 200% of the tax payable on such goods or penalty equal to 50% of the value of the goods, further incorporates provision for determination of quantum of penalty under Section 129 (3), thus under the Scheme of the Act, the procedure for determination of tax and penalty is contained in Chapter XV read with Section 122, 123, 125, 126, 127 and 128 of the Act and a parallel procedure is prescribed under Section 129 of the Act in case of goods which are in transit. In the present case, the respondents have proceeded to determine the tax liability as well as penalty only under the provision of Section 129 of the Act, which is not contemplated or intended. As per Section 129, there is no provision under Section 129 for determination of tax due, which can be done only by taking recourse of the provisions of Section 73 or 74 of the CGST Act as the case may be. Section 129, can be invoked by the respondent with regard to the goods in transit and the goods can be released only in the event the owner of the goods comes forward for payment of penalty as specified in Clause (a) (b) or (c) of Section 29 (1) of the Act. In the present case, the petitioner has challenged the impugned order of penalty passed under Section 129 of the Act of 2017. On considering the submissions made by the respective parties and or perusal of the contents of the writ application, the Court finds the petitioner has challenged the jurisdiction, authority and the action of the respondent no. 2. This Court finds that a pure question of law relating to interpretation of Section 129 of the Act of 2017 as well as the other provisions of the Act are involved and the issue as to whether the valuation of the goods for imposing penalty CESS could be included or the penalty amount can be imposed on the basis of the margin of sale of second-hand car is in question - This Court is of the view that the issues involved in the present writ application required final adjudication after giving an opportunity to file affidavit. This Court also satisfied that the petitioner has made out a prima facie case for interim order as prayed for. There will be an interim order to the extent that the respondent authorities shall release the vehicle of the petitioner in question on payment of the impugned demand in question excluding the CESS amount and for the CESS amount arising of the impugned demand, the petitioner shall furnish a bank guarantee subject to the satisfaction of the respondent authorities. Let the matter appear under the heading hearing on completion of six weeks before the appropriate Circuit Bench.

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• 2023 (6) TMI 941
  Maintainability of petition - time limitation - Can an appeal be filed beyond the time period prescribed u/s 107 (4) of the CGST Act, 2017? - HELD THAT:- Interpreting an analogous provision under the Central Excise Act, 1944, the Honourable Supreme Court in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] held there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period. The Central Goods and Services Tax Act is a special statute and a self-contained code by itself. Section 107 has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act. It is trite, that the Limitation Act will apply only if it is extended to the special statute. It is also rudimentary that the provisions of a fiscal statute have to be strictly construed and interpreted - On an appreciation of the language of Section 107(4) and the above analysed factual and legal background, this Court is of the view that there is no illegality in the action of the 1st respondent in rejecting the appeal as time-barred. Petition dismissed.

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• 2023 (6) TMI 940
  Refund of amount deposited wrongly - GST was deposited with different / wrong registration number (GSTIN) - whether the petitioner is liable to suffer for the fault committed by respondent No.1? - HELD THAT:- There is an admitted mistake on the part of respondent No.1 Railway that the amount of GST was deposited in wrong GST number. It is a settled law that no one cannot be made to suffer for the fault of another. Since this deposit of GST was not reflected in the account of the petitioner, therefore, a show cause notice was issued and the petitioner had to pay the GST to the department with interest again in order to avoid the cancellation of GSTIN, therefore, he is entitled to seek the return of Rs.13,38,544/- from the respondent No.1. The senior DFM / RTM sent a letter to the Commissioner GST and Excise Duty Office, Ralam and requested that if the amount of Rs.9,35,486/- has been received, the same be refunded as it was wrongly deposited. The respondent No.1 is directed to return the amount of Rs.13,38,544/- to the petitioner within 2 months from today. Respondent No.1 shall be at liberty to submit a claim before the GST department as the same has been paid by the petitioner and if such claim is submitted, the competent authority of respondent No.2 shall decide the same in accordance with the law - petition allowed.

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• 2023 (6) TMI 939
  Violation of principles of natural justice (audi alterem partem) - request for a personal hearing prior to finalization of the proceedings was ignored - HELD THAT:- The impugned orders have been passed under the provisions of Section 74 of the Act and the officer is, in passing the orders, bound by the general provisions relating to determination of tax as set out under Section 75 of the Act. Section 75(4) provides for an opportunity of hearing to be granted to an assessee where such request is received in writing from the person chargeable with tax or penalty or where any adverse decision is contemplated against the paid person. Seeing as the petitioners have specifically requested for an opportunity of personal hearing, it was incumbent upon the officer to have fix the matter for hearing, heard the petitioners and thereafter determined the tax payable. The impugned orders of assessment are set aside. The petitioners will appear before the assessing officer on 22.06.2023 at 10.30 a.m. along with all/any materials, in support of their contentions without anticipating any further notice - Petition allowed by way of remand.

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• 2023 (6) TMI 938
  Seeking grant of bail - availing fake credit fraudulently - bogus invoices without supply of goods or services - HELD THAT:- The grant or refusal to grant bail lies within the discretion of the court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him incarceration, pending the trial, and at the same time, to keep the accused constructively in the custody of the court, whether before or after conviction. Therefore, to assure that he will submit to the jurisdiction of the court and be in attendance thereon whenever his presence is required is imperative. In Y.S. JAGAN MOHAN REDDY VERSUS CENTRAL BUREAU OF INVESTIGATION [ 2013 (5) TMI 896 - SUPREME COURT ], the Hon ble Supreme Court was dealing with allegations of offences which were punishable with upto life imprisonment, but in the present case, the maximum punishment that can be imposed upon the applicant is five years imprisonment. Moreover, the offence is compoundable as per the provision contained in Section 138 of the CGST Act, sub-Section (1) whereof provides that Any offence under this Act may, either before or after the institution of prosecution, be compounded by the Commissioner on payment, by the person accused of the offence, to the Central Government or the State Government, as the case be, of such compounding amount in such manner as may be prescribed . Analyzing the facts of the case in light of the law as explained in the case of Y.S. Jagan Mohan Reddy [ 2013 (5) TMI 896 - SUPREME COURT ], Dataram Singh [ 2018 (2) TMI 410 - SUPREME COURT ] and Satender Kumar Antil [ 2022 (8) TMI 152 - SUPREME COURT ], it has to be taken into consideration that coaccused persons of the present case have already been enlarged on bail; charge-sheet/complaint has already been filed before the Trial Court; and, therefore, it cannot be said that now the applicant is in a position to influence the investigation of the case. Apart from the aforesaid facts, it is not disputed that the the applicant is languishing in jail since January, 2023 and that the maximum punishment that can be imposed upon the applicant is five years imprisonment. Let the applicant- Amit Gupta be released on bail under Section 132(1)(c), 132(1) (2) and Section 132(1)(i) of the CGST Act, 2017 read with Section 69 of CGST Act, Department DGGI, Meerut on furnishing a personal bond and two heavy sureties each in the like amount to the satisfaction of the court below, subject to the conditions imposed - application allowed.

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• 2023 (6) TMI 937
  Refund of penalty amount deposited in view of the subsequent decision of High Court - Detention of goods alongwith vehicle - levy of penalty - expired E-way bill - HELD THAT:- The Appellate Authority after considering the petitioner s case in details, by an order dated 6th March, 2023 rejected the petitioner s contention and upheld the order of imposition of penalty. The judgment and order in PUSHPA DEVI JAIN VERSUS ASSISTANT COMMISSIONER OF REVENUE, BUREAU OF INVESTIGATION, NORTH BENGAL HEADQUARTERS ORS. [ 2023 (3) TMI 1375 - CALCUTTA HIGH COURT] has been delivered subsequent to passing of the order dated 6th March, 2023 by the Appellate Authority. Although, the application of a judgment is prospective unless specifically made applicable retrospectively but the judgment and order of the Hon ble Division Bench is available before me at the time of adjudicating the writ petition. The ratio Puspha Devi therefor, becomes applicable. The petitioner is entitled to apply for refund which shall be considered by the appropriate authority within a period of 21 days from the date on which such application is made and refund be effected, if there are no other legal impediment. Petition disposed off.

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• 2023 (6) TMI 936
  Determination of tax - Procedure prescribed u/s 75(4) of CGST not followed - Validity of assessment order - violation of principles of natural justice - not providing opportunity of personal hearing - HELD THAT:- A perusal of the order impugned in the present Writ Petition discloses in unequivocal terms that the petitioner made a request to the respondents to afford an opportunity of personal hearing. The impugned order also states that vide reference 1st cited in the impugned order, notice was issued affording an opportunity of personal hearing and the petitioner failed to avail the same. However, the fact remains that the 1st reference in the impugned order is only an authorization issued by the Joint Commissioner, but not the notice said to have been issued to the petitioner, affording an opportunity of personal hearing. The above aspects drives this Court towards irresistible conclusion that the 1st respondent herein passed the impugned order not only in violation of mandatory provisions under sub-section (4) of Section 75 of the Act, 2017, but also in violation of the principles of natural justice. Therefore, the impugned order is liable to be set aside. The Writ Petition is allowed.

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• Income Tax

• 2023 (6) TMI 935
  Reopening of assessment - act of giving only 12 hours to file reply to the show cause notice by the respondents - violation of the principles of natural justice - Respondents have failed to grant adequate opportunity of hearing/ an opportunity to defend was not given to the petitioner assessee - HELD THAT:- As gone through the reply dated 29.03.2022 submitted by the petitioner, copy of which is placed on record at page 82 of the compilation. A specific request was made by the petitioner to the respondent that particular documents/details be supplied for cross verification and an opportunity to crossexamine one Mr. Saurabh Kathwadia be given to the petitioner. However, it is not in dispute that the said documents as asked for by the petitioner were not supplied to him nor any opportunity of cross-examination of the aforesaid person was granted to the petitioner. Even otherwise, within less than 12 hours, it is difficult for the petitioner to submit complete reply to the respondents. When the show cause notice-cum-draft assessment order is issued to the petitioner, reasonable/adequate opportunity was required to be given to him. In the present case, adequate opportunity was not given to the petitioner and therefore only on this ground the petition deserves to be allowed. WP allowed. Decided in favour of assessee.

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• 2023 (6) TMI 934
  Stay of demand - petitioner directed by fourth respondent to deposits 20% of the demand - discretionary power exercised by the second respondent reducing deposit 15% of the demand - HELD THAT:- The Hon ble Supreme Court has in a catena of precedents laid down the circumstances under which, this Court can interfere with orders passed by quasi-judicial authorities under Article 226 of the Constitution of India. In Sarvepalli Ramaiah v. District Collector, Chittoor and others [ 2019 (3) TMI 1690 - SUPREME COURT] has succinctly laid down the principles of judicial review of administrative decisions. As held that this Court shall interfere with administrative decisions only on grounds of perversity, patent illegality and irrationality. That is when the error of law on the face of decision goes to the root of the decision, and this Court does not sit in appeal over such decisions. A reading of Ext. P8 order demonstrates that the second respondent has very cautiously and carefully considered the matter and has passed a reasoned order, without going into the merits of the appeal. Accordingly, the second respondent has directed the petitioner to deposit 15% of the demand to stay the recovery proceedings. No manifest error or illegality in Ext. P8 order warranting interference by this Court under Article 226 of the Constitution of India.

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• 2023 (6) TMI 933
  Grant of credit for tax deducted at source u/s 195 and surcharge - ITAT allowed grant of credit of such tax deducted at source - whether tax credit could have been given qua tax deducted at source, vis- -vis advances received by the respondent/assessee, which is an entity located in Japan, from the Board against off-shore supplies made in the succeeding period i.e., FY 2006-2007 [AY 2007-2008]? - HELD THAT:- Tribunal having returned a finding of fact that there was nothing on record to suggest that any taxable income arose or accrued in India in favour of the respondent/assessee either in AY 2006-2007 or AY 2007-2008, the impugned order does not call for any interference. The reasoning set forth in the impugned order by the Tribunal is unimpeachable. Tribunal was right in holding that the advances which are once held to be not income, could not have been subjected to tax at source u/s 195 of the Act. Tribunal was right in concluding that the refund or grant of credit of such tax deducted at source, could not be denied. No substantial question of law - Decided against revenue.

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• 2023 (6) TMI 932
  Fees for Technical Services [FTS] - Receipt of Cost-to-cost reimbursements on account of secondment of employees - seconded personnel are employees of EY India firms - Whether payments received by the assessee on account seconded employees should not be taxed as FTS/Independent Personal Services [IPS] as per the treaty provisions? - whether arrangement between the assessee and Indian entities constitutes the provision of services by the assessee through seconded personnel? - HELD THAT:- EY LLP India is alone responsible for complying with the requirement of withholding of tax under the Indian Tax Laws. As in light of the deputation agreement, we are of the considered view that cost to cost reimbursement on account of secondment of employees cannot be treated as FTS as defined under Article 12 of India USA-DTAA and seconded personnel are employees of EY India firms whose income has been taxed as salary in their respective hands. Therefore, the very same amount could not, in law, be subjected twice firstly in the hands of the seconded employees working in India and secondly again the hands of the assessee. AO is accordingly, directed to delete the impugned addition.

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• 2023 (6) TMI 931
  Unexplained cash deposits - undisclosed income of the assessee - CIT-A held as cash deposit has already been added and confirmed and held that estimated addition, which is only a source based addition and gets telescoped against the application based additions of cash deposits in bank account, is not required and deleted the same - HELD THAT:- We note that there was AIR information of cash deposit - In absence of source of deposits, the authorities below have made the addition thereof. We find that the same is quite correct in view of non-cooperation and lack of details provided by the assessee. CIT (A) has been quite judicious in his approach when he deleted the addition - Hence, no infirmity in the order of the ld. CIT (A) and the same is a well-reasoned order and does not require any interference on our part. Appeal filed by the assessee is dismissed.

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• 2023 (6) TMI 930
  Addition of sundry creditors - persons to whom sum is payable on account of purchase of land - HELD THAT:- It is not the case of the AO that those parties have not sold the land to the assessee or assessee has already paid the sum to them. Amount outstanding against their names is treated as Bogus. No doubt, AO has issued enquiry letter u/s 133(6) to them but they have not replied. However, that cannot result into an addition in the hands of the assessee in view of overwhelming evidences of purchase of property. Thus, when parties are identified, transaction of purchase of land is accepted, reason for outstanding amount is explained, consideration of land is not in doubt, no evidences that parties have been paid from undisclosed sources, addition of outstanding amount treating it as bogus sundry creditors cannot be made. No reason to sustain the order of the Lower Authorities with respect to the outstanding. Accordingly, the addition to them to extent that purchase of land is deleted. Addition for creditors for various services and purchases - HELD THAT:- It is not always necessary that creditors should always remain present in the assessment of debtors. Of course, if the transaction are unusual, alarming and there are evidences that those creditors are bogus, situation may be different. Here in this case, no such abnormal circumstance are shown. Accordingly, we direct the Ld. AO to delete the addition. With respect to the balance sum AO has made the addition of sums are to be paid to the two carpenters. Naturally the nature of payment and the quantum is so small that non-receipt of confirmation from them u/s 133 (6) of the Act cannot result in addition. It is further shown that these expenses are not debited to the Profit and Loss account but are added to the fixed assets on which depreciation is claimed and allowed. This fact is not controverted by Revenue, therefore, the addition also deserves to be deleted. Decided in favour of assessee.

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• 2023 (6) TMI 929
  Estimation of income - Bogus purchases - amount already surrendered by the assessee - HELD THAT:- Assessee against the amount of bogus purchases, unutilized surrender was adjusted by the AO towards the addition, meaning thereby that the addition to that extent got confirmed and adjusted against the amount already surrendered by the assessee, leaving the net amount of disallowance. The amount of set off represents 85% of the amount of bogus purchases. AR submitted that the assessee had profit margin of 22.83%. Addition confirmed and adjusted at 85% of the bogus purchases is far in excess of the gross profit margin on such accommodation entries. This proves that the amount of addition sustained is not called for. The same is directed to be deleted. This ground is allowed.

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• 2023 (6) TMI 928
  Penalty proceedings u/s 272A(1)(d) - non compliance to the notices issued u/s 142(1) - HELD THAT:- Assessee had complied with the two notices as evidenced by the acknowledgements generated on ITBA Portal and submitted the information called for by the AO within the due date. The assessee had also filed a letter before the AO to keep in abeyance the proceedings till the disposal of appeal before the Ld.CIT(A), which was ignored by the AO and proceeded with levying penalty of Rs. 20,000/- against the notices issued, which is not correct and against law. Therefore, set aside the order passed by the Ld.CIT(A) and direct the AO to delete the penalty levied. Appeal of the assessee is allowed.

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• 2023 (6) TMI 927
  Deduction u/s 80G - CSR expenditure - assessee has not claimed the CSR expenditure u/s 37(1) and its claim is only restricted to section 80G - HELD THAT:- The claim for deduction u/s 80G of the Act in respect of CSR expenses cannot be denied. In the present case, the lower authorities denied the deduction claimed by the assessee under section 80G of the Act without verifying the conditions as laid down in the said section. As relying on Allegis Services (India) Private [ 2020 (5) TMI 378 - ITAT BANGALORE ] we remit this issue to the file of the AO to verify the conditions necessary for claiming deduction under the said section. Assessee as directed to file all the details for the purpose of claiming deduction under section 80G - direct that if the conditions as laid down in section 80G are found to be satisfied then deduction be granted to the assessee to that extent. Decided in favour of assessee for statistical purposes.

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• 2023 (6) TMI 926
  TDS u/s 195 - Income taxable in India - Royalty - payments made for purchases for copyrighted articles as per AO consideration for software constitutes Royalty under the Act and such royalty is taxable in India and hence the company was required to deduct TDS on payments made to Innovative Education Services PTE Ltd, Singapore - HELD THAT:- It is a fact that the Hon ble Supreme Court in the case of Engineering Analysis Centre of Excellence [ 2021 (3) TMI 138 - SUPREME COURT ] has settled the dispute in favour of the assessee and against the Revenue The present appellant comes under Category III [concerns cases wherein the distributor happens to be a foreign, non-resident vendor, who, after purchasing software from a foreign, non- resident seller, resells the same to resident Indian distributors or end-users] The amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 were not liable to deduct any TDS under section 195 of the Income-tax Act. Decided in favour of assessee.

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• 2023 (6) TMI 925
  Computation of LTCG - CIT(A) determining FMV of the land in question @ 150 per sq. yard in place of Rs. 60 as adopted by the AO, for working out the capital gain - HELD THAT:- Commissioner before coming to conclusion not only thoroughly considered the peculiar facts and circumstances of the case but also taken into account the rival claims of the Assessee and the AO qua Valuation Reports of Joint Sub-Registrar, Hyderabad (South) and therefore, determined the FMV @ Rs. 150 per sq. yard, which in our consideration opinion is justifiable and thus cannot be faulted with. Resultantly, we do not find any perversity, impropriety and/or illegality in determining the FMV @ Rs. 150/- by the Ld. Commissioner and consequently deleting the addition and therefore Ground no.1 of the appeal stands dismissed. Disallowance of service tax - Assessee offered the aforesaid amount of service tax on the developers qua consultancy/ advisory services rendered as the revenue receipt - entitled to get deduction of such amount while computing capital gains on the transfer of subject land under section 45 r.w.s 2(47) (v) or not? - HELD THAT:- The nomenclature of the service tax paid in this case may not be correct but its germane of sale consideration which was later on offered as part of total capital gain, therefore, if will not allow the deduction of said amount which is otherwise deposited in Govt. Account, then the same shall not only amounts to double jeopardy but shall also cause injustice. Consequently Assessee s claim qua expenditure is allowable, not being service tax paid for rendering the consultancy services as claimed but not substantiated, but infact being originated from the sale consideration which was ultimately offered to tax as LTCG by the Assessee and therefore can be construed part of total sale consideration and is allowable as deduction under section 48(i) - Ground raised by the Revenue Department is also dismissed.

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• 2023 (6) TMI 924
  Reopening of assessment u/s 147 - beyond a period of 4 years - addition of client code modification made by broker of the appellant due to punching error - HELD THAT:- AO in the assessment order has not given the specification of KETAN M. CHALISHAZAR (HUF) and KETAN M. CHALISHAZAR (INDIVIDUAL) in respect of number of trades in which client code modification has been made by the broker M/s. Affluence Shares Stock Pvt. Ltd. In fact the observations and the reproduction made by the AO is a general observations of Affluence Shares Stock Pvt. Ltd. From the perusal of the records of assessee s transaction it is the one transaction of sale of shares of 4000 and in assessee s case the transaction is supposes to take place in individual capacity and not in HUF capacity which was inadvertently done by the broker. These aspects were not analyzed by the AO as well as CIT(A). The observation of the CIT(A) that it is a mere assumption on part of the assessee appears to be not proper as the assessee has given the details related to the share transaction as well as the client code modification which clearly set out that in assessee s case it is a genuine client code modification. Therefore, the appeal of the assessee is allowed.

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• 2023 (6) TMI 923
  Exemption u/s 11 - Condonation of delay in filing the audit report in Form 10B - main contention of assessee is that the filing of Audit Report is a substantive requirement but the mode and stage of filing is a procedural one. Once it is filed under Form 10B and made available with the Assessment Officer before assessment initiates, the purpose is served - HELD THAT:- As relying on case of Association of Indian Panelboard Manufacturer [ 2023 (3) TMI 1374 - GUJARAT HIGH COURT] that non filing of Audit Report along with return of income is a procedural omission and cannot be an impediment in law in claiming the exemption, we allow this appeal condoning the delay in filing the Audit Report in Form No. 10B. However, we also upon condoning the delay, restore the matter to the file of the CIT(A) to pass order in regard to the exemption claimed by the assessee strictly in accordance with law. Assessee s appeal is allowed for statistical purposes.

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• 2023 (6) TMI 922
  Receipt of contract money and compensation on delayed payment as interest - Addition of arbitration receipts - Year of assessment - subsequent year s expenses - award amount consist of contract amount and interest - Income from other sources or business income - assessee not produced details of the expenditure incurred to support the contentions while offering the income on estimate basis - assessee has not disclosed the award amount consist of contract amount and interest in the return of income filed for the year under consideration - assessee also in response to notice u/s. 148 offered only 8 % of the amount of the contract receipts - action of the assessee is not voluntary - assessee has capitalized the entire interest receipts in his original ITR HELD THAT:- Both the learned DR and the AR before us vehemently supported the order of the authorities below as favorable to them. The bench noted that the assessee collected the demand draft on 20.11.2010 and the same was deposited in the bank account and the assessee has shown his amount in the books of account of account ended on 31.03.2011. The break up of this liability is at is appearing in the audited account of the assessee and the other related notes to the audited accounts. Assessee has even though the amount received in 2010-11 recorded the same income in the year under consideration i.e. 2011-12. Both the parties not disputed about the chargeability of the income the same is considered as chargeable to the year under consideration i.e. F.Y. 2011-12, relevant to assessment year 2012-13. The bench noted that the assessee is aware that even though the assessee facing similar dispute in the past has not shown the interest income as business receipt and has considered it as capital receipt and credited to the capital account as per note no. 5 of the audited account in Schedule-IV. The bench also noted the assessee in the profit loss account has offered only contract receipt and offered profit @ 8 % and interest amount shown as capital receipt. The income in this case is not the interest on compensation or interest on enhanced compensation chargeable to tax as per provision of section 56(2)(viii) which is chargeable to tax on receipt of such interest irrespective of method of accounting followed by the assessee. But in this case the interest is on delayed payment of the contract amount executed by the assessee and as decided by the apex court in the case of CIT Vs. Govinda Choudhury [ 1992 (4) TMI 8 - SUPREME COURT ] this interest is only an accretion to the assessee s receipts from the contracts. It is obviously attributable and incidental to the business carried on by him. In this case it is not disputed that the receipt in questions are related to A. Y. 1989-90 1990-91 wherein due to non receipt of contract amount, the assessee claimed loss which was refused in assessment proceedings and finally it has been decided for that year income @ 8.5% of the receipt in that years. AO while making the addition has broadly relied on the ITAT s order in assessee s own case for A.Y. 2006-07 where the Bench held that no claim of expenses will be allowable and the matter was pending before the Hon ble Rajasthan High Court. Subsequently, the Hon ble Rajasthan High Court held that the ld. CIT(A) has rightly held the profit rate and Tribunal committed serious error in concluding that subsequent year s expenses which are claimed ought to have been allowed in the relevant year. Thus, considering that aspect of the matter in the present case the entire receipt of contract money and compensation on delayed payment as interest covered under the award pertaining to A.Ys. 1989-90 1990-91 is required to be considered as business income only. What would be the amount to be considered as income out of the said business receipts? - Of course considering the decision of the assessee s own case wherein the A.Y. 2006-07 Bench has not accepted the profit estimate and the said finding was reversed by the jurisdictional High Court and thus, in the absence of contrary finding of challenging the order of Hon ble High Court we have to respectfully considered the findings of the Hon ble Jurisdictional High Court in assessee s own case that considering the facts of this case that originally the assessee has claimed loss in A.Y. 1989-90 1990-91 wherein the loss has been claimed for both the years, which was not considered, had it been considered the assessee would have taken as set off of the same against subsequent year income. No infirmity in the detailed finding of the ld. CIT(A). Based on these observations the appeal of the Revenue raising only one ground is dismissed.

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• 2023 (6) TMI 921
  Addition u/s 68 - LTCG on sale of shares, being held to be bogus and mere accommodation entries -primary contention of assessee that the finding of the authorities below of the transaction of sale of shares being bogus was flawed since the assessee had discharged its onus of proving the genuineness of the transactions - HELD THAT:- As noted the decision of Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT] having dealt with an identical issue of alleged bogus long term capital gain from transaction in penny stocks, dealing with all arguments as raised in the present case before us, is squarely applicable in the present cases before us. Applying the same therefore, the order of the Ld.CIT(A) confirming the addition made on account of bogus long term capital gains claimed by the assessee is upheld. Grounds raised by the assessee are dismissed.

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• 2023 (6) TMI 920
  Reopening of assessment u/s 147 - reason to believe -reopening on wrong facts - AO proceed to assess income under some other issue independently - Addition on account of increase in share capital being share capital issued by the company - HELD THAT:- AO has reopened the assessment based upon wrong facts, wrong appreciation of facts and without any application of mind, in as much as, the assessee has not taken any credit entry from White Collar Management Ltd. We find that the AO has gone one step further and has made addition being the increase in share capital from Rs. 25 lakhs to Rs. 2 crores, which has nothing to do with the reopening of the assessment, which means that on the one hand the AO has reopened the assessment on wrong facts and on the other hand, the AO has completed assessment on totally irrelevant facts which were never confronted to the assessee. A perusal of the reasons recorded, for reopening of assessment clearly shows that the AO has reasons to believe that the assessee was beneficiary of accommodation entry from White Collar Management Ltd. Strictly keeping in mind the reasons for reopening, assessment has been concluded by making addition on account of increase in share capital being share capital issued by the company to Shri Gautam Goyal, Shri Gaurav Goyal and Saraswati Properties, Goyal Investment and Shudd Edible Products Ltd. Individuals are directors of the assessee company and corporate investors are part of the group. Since the additions have been made other than the reasons recorded for reopening assessment, in our considered view, the Assessing Officer has drawn support from Explanation 3 to section 147 of the Act which was inserted by the Finance [No. 2] Act, 2009 We find that the Assessing Officer has accepted the objections of the assessee, and has not assessed or reassessed the income, which was the basis of the notice. Therefore, in light of the judgment of JET AIRWAYS (I) LTD. [ 2010 (4) TMI 431 - HIGH COURT OF BOMBAY] it would not be open to the Assessing Officer to assess income under some other issue independently. No merit in the re assessment proceedings initiated by AO on wrong facts and therefore, the said assessment order deserves to be quashed. Decided in favour of assessee.

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• 2023 (6) TMI 919
  Revision u/s 263 - assessment order framed u/s 143(3) r.w.s 147 as erroneous and prejudicial to the interest of the revenue - HELD THAT:- Assessment was reopened and reasons for reopening the assessment mentioned elsewhere were thoroughly scrutinised and examined by the AO while framing the impugned assessment order. Therefore, the observations of the PCIT that AO passed assessment order without conducting proper enquiry/verifying the facts is baseless and deserves to be set aside. By erroneous is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Where there are two possible views and the AO has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Our view is fortified by the decision of CIT vs. Nirav Modi [ 2016 (6) TMI 1004 - BOMBAY HIGH COURT] . We set aside the order of the PCIT and restore that of the Assessing Officer framed under section 143(3)/147. Decided in favour of assessee.

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• 2023 (6) TMI 918
  Revision u/s 263 - LTCG on sale of properties - property had been sold in piecemeal in 14 transactions - as per CIT properties held by the assessee were stock-in-trade and not capital asset and, therefore, benefit of indexation was not to be made available to the assessee - HELD THAT:- Just because the assessee had sold the land in piecemeal after entering into numerous transactions, it cannot be concluded that such transactions were in the nature of business and selling of immovable property. It is not in dispute that the assessee had duly filed the copies of the sale deed before the AO and, therefore, it is a logical assumption that the AO had duly examined these sale deeds before accepting the returned income of the assessee. Whether to accept the transactions as being taxable under the Long Term Capital Gain or to reject them and tax them under the head income from business would have been duly considered by the AO at the time of assessment proceedings and the conclusion arrived at by the AO was definitely one of the plausible views and, therefore, it cannot be said that the order passed by the AO was erroneous inasmuch as being prejudicial to the interest of the Revenue. We are unable to concur with the view taken by the ld. PCIT and we quash the impugned order which has been passed u/s. 263 - Decided in favour of assessee.

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• 2023 (6) TMI 917
  Reopening of assessment u/s 147 - objections regarding reason to believe raised first time at appellate stage - information available on ITS data that assessee has made cash deposit in bank account with ICICI Bank - HELD THAT:- Agra Tribunal in the case of Sapna Chauhan [ 2019 (8) TMI 227 - ITAT AGRA] while considering similar objection of revenue that if such objection was not raised before the Assessing Officer and which cannot be taken at the appellate stage, held that question of jurisdiction is not a matter of acquiescence the proprietary of notice under section 148 based upon reasons recorded is not dependent upon the objection or no objection of the assessee at the stage of assessment / re-assessment if reasons recorded, independently can withstand the test of judicial scrutiny only such reasons will confer jurisdiction to issue notice and frame assessment in pursuance thereto. If reasons recorded upon being challenged at any stage of proceedings falls to withstand the test of judicial scrutiny, in that eventuality, upon such recorded reasons no valid notice can be issued and any assessment framed consequent thereto even taking shelter of no objection from the assessee could save the assessment from being held to be declared void-ab-initio and the objection of Revenue was rejected. Thus the basis of reasons recorded is erroneous and factually wrong and not a valid reason. Thus, all subsequent action initiated thereto is void-ab- initio. Ground of assessee appeal is allowed.

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• 2023 (6) TMI 916
  Addition u/s 40A(3) - assessee failed to furnish the documentary evidence like bills or mode of payment - assessee did not furnish the bank account details relating to the direct expenses made on the purchase of construction material - CIT(A) deleted the addition on the grounds holding that the books of accounts have been produced before the AO, the payments of amounts in cash over the specified limit has not been established and there was no basis for ad-hoc disallowance of 30% - HELD THAT:- Since, the order of the ld. CIT(A) is on sound rationale, we decline to interfere with the order of the ld. CIT(A). Disallowance of Interest expenses - business nexus of interest expenses can never exist - CIT(A) deleted the addition holding that, the order of the AO is cryptic, the assessee has not purchased any property as alleged by the AO, there is no justifiable ground to disallow the interest expenses as the assessee has earned taxable income and doing regular business - HELD THAT:- There were no evidence brought on record by the AO to prove that the amount has been utilized for personal purpose and other than business purpose. Hence, we decline to interfere with the order of the ld. CIT(A). Purchase of flat in cash - HELD THAT:- Apparently, the revenue itself is not very sure of the receipt of the cash nor there was any evidence. The ld. CIT(A) deleted the addition holding that there was no basis for such allegation. Hence, we decline to interfere with the order of the ld. CIT(A). Bogus Purchases, Sundry Creditor - HELD THAT:- The books of accounts of the appellant which are audited have been duly accepted. We find that the A.O has no basis to disallow purchases made from this parties as bogus in this year, when the existence of the seller has not been denied and continuing transactions from this year have been accepted as genuine in the subsequent year. Assessee has failed to discharge the primary onus of proving the purchases as genuine against the discrepancies found out by the AO viz., the signature and mismatch of the credit balances. Hence, we remand the matter to the file of the AO to provide an opportunity to the assessee to submit the relevant documents with complete details. The appeal of the assessee on this ground is allowed for statistical purpose.

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• 2023 (6) TMI 915
  Computation of profits of the appellant s branch in India - interest payment made by the Indian branch of the appellant to its head office abroad - TDS u/s 195 - Assessee in Rule 27 has challenged the Ld. CIT(A) s action of confirming the addition made by the AO in relation to the interest income earned by the HO in the hands of the assessee Branch - HELD THAT:- As assessee Branch was under no obligation to deduct tax at source u/s 195 of the Act while remitting interest to its Head Office and therefore the Ld. CIT(A) had rightly deleted the disallowance made by the AO u/s 40(a)(i) of the Act. Also, in terms of Article 7 of the DTAA between India and Germany (which is akin to the Article 7 between India Netherlands), the interest income earned by the HO from the assessee Branch was not liable to tax in India. See ABN AMRO Bank [ 2010 (12) TMI 340 - CALCUTTA HIGH COURT] The ground raised by the assessee in Rule 27 of the Rules is allowed and the AO is directed to delete the addition of interest income. TP adjustment made to the interest expense paid to the HO - HELD THAT:- DR was unable to controvert the above findings of the Ld. CIT(A) holding that the Reuter/LIBOR rates represented the arithmetical mean of the rates of the interest offered and accepted in transaction between unrelated parties during the day, and therefore the assessee was entitled to benefit of +/-5% in terms of proviso to Section 92C(2) - No reason to interfere with the above order of the Ld. CIT(A). Accordingly, Ground No. 2 of the Revenue stands dismissed. TP Adjustment - arm s length price of the international transaction of Liaison Services rendered to the Head Office and the Overseas Branches - action of the Ld. CIT(A) in rejecting Pioneer Investcorp Ltd as a good comparable - HELD THAT:- As the assessee was providing correspondent banking services to his Head Office and Overseas Branches. These activities consist of marketing Nostro Accounts, Letter of Credit, Cheques for Collection and providing Guarantees. It is noted that the appellant did not bear any risk of loss or deficiency for rendering these services as it was being uniformly compensated for the costs incurred plus mark-up of 8%. CIT(A) however had noted that, Pioneer Investcorp Ltd. was a category-I Merchant Banker with the SEBI which was also engaged in non-fund-based activities like Merchant Banking, Debt Syndication, etc. and therefore rejected Pioneer Investcorp Ltd. as the business profile and activities of this company was not comparable to the assessee. These findings of the Ld. CIT(A) remain uncontroverted before us and therefore we do not see any reason to interfere with the same. Re-computation of profit rates of Centrum Finance Ltd. and Integrated Enterprises India Ltd. worked out by the Ld. CIT(A) - according to Revenue, the interest and other financial income and correspondingly the interest and financial charges was to be excluded as it was non-operating income/expense , and therefore not includible while computing the operating profit - We find ourselves in agreement with the Ld. CIT(A) that both M/s Centrum Finance Ltd. M/s Integrated Enterprises India Ltd being engaged in the business of providing financial services viz., financing, brokerage, debt syndication, provision of guarantee etc., both the expenditure on interest and finance charges and also the earning of interest formed integral part of its operating business and therefore the operating profit cannot be computed by excluding the same. No infirmity in the action of the Ld. CIT(A) including both the interest income as well as interest expense finance charges for computing the operating profit of these companies. TP Adjustment - arm s length price for the Agency Services for precious metal transactions rendered to its AEs - re-working re-allocation of personnel cost, administrative cost and support cost by the Ld. CIT(A) - HELD THAT:- TPO added the payment to Vijay Anand as well to the total personnel cost. Before the Ld. CIT(A), the assessee had substantiated with evidences like deal tickets etc., that the two employees, Shri Amit Juneja Shri Tarun Tandon were indeed engaged in treasury division also. CIT(A) taking note of this fact accepted the contention of the assessee that their entire 100% salary could not be allocated to the agency business but, to meet the ends of justice, he found it appropriate to hold 75% of their salaries to be allocable. We do not see any infirmity in this approach/action of the Ld. CIT(A). As far as the severance pay of Mr. Vijay Anand CIT(A) had rightly held that, as the AO had already separately disallowed the severance pay while assessing income of the assessee, no cost on this account could be allocated to the agency business. DR was also unable to controvert the same. We therefore uphold the Ld. CIT(A) s calculation of personnel cost attributable to agency business. Allocation of administrative expenses staff support expenses - As we already upheld the manner of allocation of personnel cost viz., allocation of 75% of salaries of Amit Juneja Tarun Tandon, we see no reason to interfere with their time allocation by the CIT(A) for the purposes of attribution of administrative support costs. Also, having regard to the fact that Mr. Vijay Anand had left the job in the first month of the FY 2001-02 i.e., April 2001 and his severance pay was also disallowed by the AO, we hold that the Ld. CIT(A) had rightly considered his time allocation at NIL. Consequently, the re-working of the allocation of administrative costs and support expenses by the Ld. CIT(A) does not warrant any interference. No infirmity in the order of Ld. CIT(A) determining the arm s length price of the operations of agency business at Rs. 77,39,372/-. Therefore, the Ld. CIT(A) s action of granting relief in relation to the transfer pricing adjustment made by the TPO in relation to the agency services rendered by the assessee to its AE is upheld. Ground No. 4 is accordingly dismissed.

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• Benami Property

• 2023 (6) TMI 914
  Benami transaction - burden of proof - principle of preponderance of probability that although the suit property was purchased in name of Wife but the consideration money was paid or provided by her husband (deceased) - whether the transaction i.e. the purchase of suit property under registered deed of sale by Wife is benami transaction? - Dispute raised by the son to claim 1/3 share in the property - HELD THAT:- As Court is required to bear in mind the well-settled principles to the effect that the burden of showing that a transfer is a benami transaction always lies on the person who asserts it. In the Indian society, if a husband supplies the consideration money for acquiring property in the name of his wife, such fact does not necessarily imply benami transaction. Source of money is, no doubt, an important factor but not a decisive one. The intention of the supplier of the consideration money is the vital fact to be proved by the party who asserts benami. In other words, even if it is proved that Sailendra paid the consideration money, the plaintiff must further prove that Sailendra really intended to enjoy the full benefit of the title in him alone. In the case before us, Sekhar could not bring any evidence even to show what was amount of consideration money and how the consideration money was paid and how the suit property was purchased and even he could not prove who paid the consideration money. He could not produce any document relating to the suit property. Title deed and all documents relating to the suit property were all along in the custody of Lila and Lila all along paid municipal tax and got the suit property mutated in her name and Sekhar could not bring any evidence on record to lead any prudent man to infer that his father had a motive to create benami in name of his mother or Sailendra intended to enjoy the full benefit of the title in him alone. Judgments relied upon by the appellant in spite of having unquestionable value of the proposition laid down therein, shall not come in aid of the appellant in the factual matrix of the case at hand. We are inclined to hold that learned Court below has correctly held that Sekhar has failed to discharge his burden to prove that subject sale transaction is benami transaction and we have not found any wrong in the approach and decision of the learned Court below and we are of the view that judgment and decree impugned cannot be annihilated.

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• Customs

• 2023 (6) TMI 913
  Levy of Anti-Dumping Duty - import of Compact Fluorescent Lamp (CFL) from the Peoples Republic of China and Hongkong - HELD THAT:- The assesses appeals were allowed by the judgment reported as COMMISSIONER OF CUSTOMS, BANGALORE VERSUS M/S. G.M. EXPORTS OTHERS [ 2015 (9) TMI 1162 - SUPREME COURT] . This court noted the provisions of WTO Agreement and held that upon a harmonious conjoint reading of Customs Rules read with Section 9 of the Customs Tariff Act, 1975 the duty for the intervening period, when the provisional duty had lapsed could not be collected retroactively. The present appeal also needs to be allowed following the judgment in Commissioner of Customs, Bangalore Vs. G.M. Exports Others - the appeal is alllowed.

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• 2023 (6) TMI 912
  Rejection of application for rectification of mistake - Applicability of extended period of limitation - Tribunal did not consider the issue sought to rectified - Recovery of differential duty - hydraulic pumps - same goods were imported by the sister concern of the appellant, namely, M/s Shashi Charu Hydraulics Pvt. Ltd. at a higher price, albeit directly from the manufacturer - HELD THAT:- When any duty had not been levied or had been short-levied or erroneously refunded, or when any interest payable had not been paid, part paid or erroneously refunded, the proper officer might have served show cause notice within one year in case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital; and in any other case, within six months from the relevant date. The Proviso allowed an extended period of five years when there was collusion or any wilful mis-statement or suppression of facts. The appellant brought it to the notice of the Tribunal by way of an application under Section 129-B of the Act, that the question in regard to availability of extended period for SCN in terms of Proviso to Section 28(1) of the Act had not been specifically dealt with in the order dated 06.11.2018. However, it was observed in the impugned order dated 17.07.2019 that during the course of hearing, the Tribunal was not persuaded to accept the contentions of the appellant. The Tribunal also stated that the relevant aspect had been sufficiently amplified in the principal order dated 06.11.2018. After taking note of the observations therein and the reasons that prevailed with the Tribunal, it is difficult to find if the Tribunal adverted to the question as to whether the necessary elements of the said Proviso to Section 28(1) of the Act were existing or not. Maybe, such a question was not raised by the appellant in the memo of appeal presented before the Tribunal in specific terms but, indisputably, this question remains a jurisdictional question because without existence of the elements specified in the said Proviso to Section 28(1), the show cause notice in question, as issued on 26.09.2006 in relation to the imports made from November, 2001 to April, 2003, could not have been maintained. It is deemed appropriate that the question of availability of extended period be examined by the Tribunal with reference to the facts of the case and the law applicable - It is not deemed necessary to delve into the findings of the Tribunal with reference to the fact that there was no mis-declaration so as to justify confiscation or redemption fine, because the preliminary issue herein would be as to whether the elements of the Proviso to Section 28 had been existing in the first place, which would be decided independent of the findings/observations of the Tribunal in the second impugned order dated 17.07.2019. The impugned orders are modified to the extent that Appeal No. C/1132/2007 stands restored; and the question as to whether the extended period in terms of the Proviso to Section 28(1) of the Act of 1962 is available in this matter or not is remitted for consideration of the Tribunal in accordance with law - Appeal allowed.

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• 2023 (6) TMI 911
  Debit of Education Cess and Secondary Higher Education cess through MEIS/SEIS scrips - clarification issued vide Board s Circular No.02/2020-Cus. dated 10.01.2020 - HELD THAT:- Payment of Social Welfare Charge through debiting MEIS/ SEIS scrips has been accepted by the learned Commissioner by relying upon the Board s Circular but for Education Cess and Secondary Higher Education Cess it has been held that these are not covered by the aforesaid clarification and have to be paid in cash only, whereas according to learned counsel the Hon ble High Court of Judicature at Madras on identical issue in the matter of M/S. KTV HEALTH FOOD PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS (PREVENTIVE) , TIRUCHIRAPALLI [ 2021 (10) TMI 119 - MADRAS HIGH COURT] while extending the benefit of the Board s clarification dated 10.1.2020 has held that the benefit of the Board s circular cannot be denied to the importer on the ground that Education Cess is different component from BCD. In the aforesaid decision the Hon ble High Court made it clear that benefit of the Board s circular dated 10.1.2020, which permits the payment of basic customs duty or additional customs duty through MEIS scrips by virtue of its clause 11, cannot be denied for education cess or higher and secondary education cess being a different component. The issue involved herein is no more res judicata and in view of clause 11 of the Board s circular dated 10.1.2020, which permits the payment made through debit in duty credit scrips for past cases, there is no justification for insisting in cash payment towards education cess and secondary higher education cess and accordingly the issue is decided in favour of the appellant herein. Appeal allowed.

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• 2023 (6) TMI 910
  Confiscation of imported goods - old and used worn clothing, completely fumigated - enhancement of value - imposition of redemption fine and penalty - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [ 2018 (11) TMI 625 - CESTAT MUMBAI ], wherein this Tribunal has observed The failure of the original authority to comply with the direction in remand to disclose the margin of profit that prompted the fine and penalty, the matter would normally have to be remitted back by another remand order. However, the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. The redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld - appeals filed by the Revenue are dismissed.

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• 2023 (6) TMI 909
  Valuation of imported goods - EG Defective/Secondary Sheets - rejection of declared value - enhancement of value on the basis of higher values available on contemporaneous imports NIDB/DGOV data on similar goods - HELD THAT:- Valuation of the imported goods is done as per Section 14 of the Customs Act 1962, which states that the value of the imported goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale. In the instant case, it is observed that the Respondent has imported EG Defective /Secondary Sheets from the sole representative of the manufacturer and the invoice was raised by them - it is observed that the Department has not brought in any evidence to reject the invoice value as declared by the importer. The department has resorted to rejection of the declared value and reassessment of the Bills of Entry on the basis of valuation of contemporary similar/identical goods at other ports as mentioned in NIDB/DGOV data. The EG Defective Secondary Sheets imported by the Appellant cannot be compared with similar goods. The value available in NIDB/DGOV data on similar defective goods are not comparable. The valuation of similar goods depends on factors such as country of origin, quantity of the goods imported, produced by the same person who produced the goods being valued, quality of the goods i.e. characteristics, composition like component material. Moreover, the NIDB data is not exhaustive in nature as it only depicts the value at which the goods are assessed but not whether such assessed value is proposed value by the importer or enhanced value buy the proper officer - the enhancement of value has been done arbitrarily. The department has not brought in any evidence to reject the value declared by the importer. Appeal filed by Revenue dismissed.

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• 2023 (6) TMI 908
  Jurisdiction of the Bench to Hear the application of Rectification of Mistake - recall of the entire order - Rule 31(A) of the Customs, Excise Service Tax Appellate Tribunal (Procedure) Rules, 1982 - HELD THAT:- It does not appeal to reason as to why an application for recall of the order can be placed before another Bench of the Tribunal. If this practice is permitted to continue an appellant can resort to the practice of Bench hunting by filing an application for recall of an order before another Bench even if the matter has been decided on merits. It will be appropriate to refer to Section 129B (2) of the Customs Act which provides that the Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (1). Rule 31(A) of the Customs, Excise Service Tax Appellate Tribunal (Procedure) Rules, 1982 provides that an application for rectification of a mistake under Section 129B (2) of the Customs Act shall be heard by a Bench consisting of the Members who heard the appeal giving rise to the application, unless the President directs otherwise. Under the proviso to Rule 20, it is only where an appeal is dismissed for default that the Tribunal can make an order setting aside the dismissal, and restore the appeal. In a case where the matter has been decided on merits in the absence of the appellant, an application for recall of the order would, therefore, not lie and only an application for rectification of mistake in the order can be filed. Once an application for rectification of mistake had also been filed by the appellant, it was the bounden duty of the office to have listed the application before the same Bench - the explanation offered by the office that at least one Member of the Bench was a Member of the Bench that recalled the order is only an excuse as both the Members of the Bench that had dismissed the appeal were available on that date. It is, therefore, a fit case where a strict warning should be given to the concerned Deputy Registrar responsible for the listing of the application(s) and it is, accordingly, so ordered.

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• 2023 (6) TMI 907
  Classification of goods proposed to be imported - 15 models of Data Center Switch Routers belonging to 3 different series - classifiable under the Tariff Item 8517 62 90 of the Customs Tariff of India or not - applicability of Sr. No. 13N of Notification No. 24/2005-Customs dated 01.03.2005 and Sr. No. 20 of Notification No. 50/2017-Customs, dated 30.06.2017. HELD THAT:- Sub-heading 851762 covers machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus. DCSRs are capable of performing functions such as reception, conversion and transmission of data. Further, the subheading specifically covers switching and routing apparatus. Therefore, the DCSRs performing both switching and routing functions are clearly classifiable under subheading 851762 - As the principal function of these devices is routing, they are classifiable as routers under sub-heading 85176290. Eligibility for the benefit under Sr. No. 20 of Notification No. 57/2021- Customs, dated 30.06.2017, as amended - HELD THAT:- When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must he interpreted in favour of the revenue. The notification clearly excludes carrier ethernet switches from the purview of the duty benefits. As per the technical expert TEC these goods can function as carrier-grade ethernet switches. Accordingly the benefit of Sr. No. 20 of Notification No. 57/2021 -Customs would not be available in the instant case. Notification benefit under Sr. No. 13N of Notification No. 24/2005, as amended - HELD THAT:- In the present case, the entry describes goods as Routers . It does not specify indentation, conditions or capacity and capability for such routers. It does not bar the routers used by telecom networks, support service providers and data centres. It does not exclude routers capable of performing secondary functions. The impugned goods, on the application of GIR I and Note 3 to Section XVI read with the technical opinion of the TEC merit classification as routers based on their principal function of routing. Therefore, the goods under consideration appear to be covered by the said notification. Accordingly, they are eligible to claim benefits under the above-mentioned notification. Thus, the Data Centre Switch Router models specified in para 2 are classifiable under sub-heading 85176290 of the first schedule to the Customs Tariff Act, 1975 and are eligible to avail the benefit under Sr. No. 13N of Notification No. 24/2005-Customs, as amended. However, they are not eligible to avail benefits of Sr. No. 20 of Notification No. 57/2021 -Customs, dated 30.06.2017.

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• 2023 (6) TMI 906
  Classification of goods intended to be imported - Menthol Scented Sweet Supari - Flavoured and coated Illaichi - classifiable under CTH 0802 or under CTH 2106 - HELD THAT:- By virtue of application of Section 3(7) of the Customs Tariff Act, 1975 any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty per cent as is leviable under Section 5 of the Integrated Goods and Services Tax Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (8) or sub-section (8A), as the case may be. Based on the contents of the C.B.I. C. Circular No. 163/19/2021-GST, dated 6th October, 2021, it is clear that the provision of Section 3(7) of the Customs Tariff Act, 1975 applies to scented supari classifiable under CTH 2106 90 30 and flavoured and coated illaichi classifiable under CTH 2106.90.99. In the instant case menthol scented sweet supari does not contain lime, katha (catechu) and tobacco. It will specifically contain menthol. Due to carrying out of such processes this product is not classifiable under Chapter 8 of the Customs Tariff Act, 1975. On the background of contending classifications, relevant chapter notes supplementary notes, C.B.I.C. Circular, explanations in the IGST Rate Notification amended from time to time, and the Section 3(7) of Customs Tariff Act, 1975 instant product - betel nut product known as supari - menthol scented and sweet - is more appropriately classifiable as a betel nut preparation under Chapter 21 i.e., CTH 2106 90 30 than in any of the headings under Chapter 8. C.B.I. C. circular legally supports this view. There cannot be a situation where same product is subjected to levy of basic customs duty under one CTH and levy of IGST under another CTH of the Customs Tariff Act, 1975. Hence, in view of Supplementary Note 2 of Chapter 21 of Schedule 1 of the Customs Tariff Act, 1975 read with Para 7 of the C.B.I. C. Circular No. 163/19/2021-GST, dated 6th October, 2021 from F. No. 190354/206/2021-TRU and the provisions of Section 3(7) of the Customs Tariff Act, 1975 the scented sweetened supari merits classification under CTH 2106 90 30 - Due to processes of coating with edible colours, silver, menthol and adding of artificial sweeteners and aromatic additives to which illaichi is subjected to in the instant case the emerging product is definitely a value-added product of illaichi and also distinctly different from illaichi or cardamom classifiable under Chapter 9 of the Customs Tariff Act, 1975. In view of the above supplementary note to Chapter 21 read with Para 7 of C.B.I. C. Circular No. 163/19/2021-GST, dated 6th October, 2021, same merits to be classified under Tariff Item 2106 90 99. The product namely Menthol Scented Sweet Supari merits classification under CTH 2106 90 30 - Flavoured and coated Illaichi merits classification under CTH 2106 90 99, of the First Schedule to the Customs Tariff Act, 1975.

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• 2023 (6) TMI 905
  Classification of goods intended to be imported - rate of tax / Basic Customs Duty (BCD) - DJI Mini 3 Pro fly more kit - classifiable under subheading 88071000 or not - HELD THAT:- The impugned propellers are used to provide thrust to DJI mini 3 pro drone. Subheading 88071000 specifically mentions, inter-alia, propellers to be used with drones falling under heading 8806. Therefore, these items are classifiable under subheading 88071000. The rate of duty is 2.5% - The screws for propellers are made of stainless steel and have standard threading. The goods are classifiable under subheading 73181900 as other threaded screws of steel. The rate of duty is 15%. The shoulder bag is used to store/carry one drone and accessories like one remote controller, three batteries, one charging hub, propellers, an ND filter set, a data cable, and an SD card. The interior has a divided compartment style. The outer surface is made up of Polyurethane (PU) sheeting of plastic, i.e., synthetic leather. The bag is designed to provide storage, protection, portability, and organization to a drone and its accessories. The applicable subheading is 42029200, which provides for other containers or cases; with outer surface of sheeting of plastics . The rate of duty is 15% - The USB type-C cable is to be used for the two-way communication of information and data and/or DC voltage between the connected equipment. The cable is insulated by plastic material. There are standard connectors on both ends. The applicable subheading is 85444220, which provides for Insulated wire, cable and other insulated electric conductors; Other electric conductors, for a voltage not exceeding 1,000 V; Fitted with connectors; Plastic insulated . The rate of duty is 15%. The applicant in their CAAR-1 application inquired about the rate of duty applicable to the impugned goods. Accordingly, the rate of duty specified above for various goods is only the basic customs duty (BCD. However, the applicant is advised to refer to the ICEGATE website (https://www.icegate.gov.in/Webappl/index_im.jsp). to know about the effective rate of duty on subject goods, which includes, besides BCD, various cesses, IGST levy, other duties, etc. Thus, the goods under consideration are classifiable under the following subheadings of the Customs Tariff Act, 1975 having rate of duty (BCD):- Intelligent flight battery - subheading 85076000 - rate of duty 20%. Two-way charging hub - subheading 85371000 - rate of duty 15%. Propellers - subheading 88071000 - rate of duty 2.5%. Screws - subheading 73181900 - rate of duty 15%. Shoulder bag - subheading 42029200 - rate of duty 15%. USB 3.0 type -C data cable - subheading 85444220 - rate of duty 15%.

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• 2023 (6) TMI 904
  Classification of goods proposed to be imported - Nokia 7210 SAS products - classifiable under the tariff entry 85176290 of the Customs Tariff of India or not - benefit under Sr. No. 13N of Notification No. 24/2005 Customs dated 1st March 2005 as amended on 30th December 2019 vid Notification No. 36 / 2019-Customs - HELD THAT:- The goods under consideration are networking devices. Nokia 7210 SAS product family provides service providers with IP routing and carrier ethernet demarcation, access, and aggregation for mobile backhaul, business, and residential service delivery. For enterprise and mission-critical network operators, the 7210 SAS products address stringent requirements for high network resiliency, deterministic network performance, and scalability. The goods principally work as routers along with carrier ethernet switches. These products are Layer-3 routers running IP protocols, segment routing, BGP, etc. These devices provide Layer-3 IP-VPN, EVPN, Internet Enhanced Services (IES) and Layer-2 services like VPLS and VLL. They also provide sophisticated Quality-of-Service (QoS), rich operation management and security features, typically required for routed carrier grade networks. Subheading 851762 covers machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus. Nokia 7210 SAS products are capable of performing functions such as reception, conversion and transmission of data. Therefore, the impugned products performing various functions including switching and routing are clearly classifiable under subheading 851762 - it is evident that the manufacturer is listing these products under the product portfolio of service routers. Accordingly, in trade parlance, these products are known as routers. In respect of notification benefit under Sr. No. 13N of Notification Noe 24/2005, as amended, the entry exempts routers from 100% BCD. As discussed in previous paras, based on the datasheet, trade parlance and technical opinion of TEC, the subject goods are routers capable of performing some additional functions - it is clear that the goods under consideration are routers. The notification does not distinguish routers based on intended use or capability. It does not bar the routers used by telecom network and support service providers. Therefore, the goods under consideration appear to be covered by the said notification. Accordingly, they are eligible to claim benefit under the above-mentioned notification. Nokia 7210 SAS products are classifiable under subheading 85176290 as routers and are eligible to avail the benefit under Sr. No. 13N of Notification No. 24/2005-Customs, as amended.

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• Corporate Laws

• 2023 (6) TMI 903
  Liability of Purchaser of the Company which was sold as a going concern in liquidation proceedings - Old and past sales tax dues - raising tax demand against the petitioners as impugned, which include demands under the Sales Tax Act - HELD THAT:- In view of the orders dated 9th March, 2021 passed by NCLT, the petitioners would submit that it was always open to the respondents to take steps to recover the tax dues from the Directors of the erstwhile company, as it stood prior to the same being taken over by the petitioner. The next contention as urged on behalf of the petitioners is that the respondents in the present case cannot take any action, which is contrary to resolution plan which has attained finality in view of the order dated 9th March, 2021 passed by NCLT - In the said application, the State Tax Authorities sought to contend that the claims of the Sales Tax Department, should be treated as the claim of a secured creditor and in that regard the adjudicating authority viz. NCLT had committed an error - It is stated that till the date no further steps are taken by the State Government to challenge the said order. In this view of the matter, there appears to be much substance in the contentions as urged on behalf of the petitioners in assailing the actions of the respondents as challenged in the petition. The parties need to be finally heard on the present proceedings. Hence, Rule. Respondents waive service. Rule is made returnable on 25 August 2023.

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• Insolvency & Bankruptcy

• 2023 (6) TMI 902
  Seeking permission from the Adjudicating Authority/Tribunal, to purchase four separate Residential Apartments from the Corporate Debtor - Moratorium was ordered in terms of Section 14 of the Insolvency and Bankruptcy Code, 2016 at the time of Admission of the Application - HELD THAT:- A mere running of the eye over the contents of the ingredients of Section 43(2)(b) of the Insolvency and Bankruptcy Code, 2016 points out latently and patently that if the reliefs sought by the Appellant/Petitioner is granted by this Appellate Tribunal, it will be in the form of Alienating/Disposing/Transferring of the Corporate Debtor in relation to any of its Assets or Beneficial Interest or any Legal Rights arising thereto. By so doing, the assets of the Corporate Debtor undoubtedly, in the considered subjective opinion of this Tribunal will change in diametrical term and it will also has to effect of placing such Creditor or Surety or Guarantor in the advantageous position than it would have been at the time of distribution of assets being made, in the teeth of ingredients of Section 53 of the Insolvency and Bankruptcy Code, 2016 - It is to be remembered that Moratorium was ordered in terms of Section 14 of the Insolvency and Bankruptcy Code, 2016 at the time of Admission of the Application and that is also not a favourable circumstance to in favour of the Appellant/Petitioner, as opined by this Tribunal. This Tribunal comes to a resultant conclusion that the conclusion arrived at by the Adjudicating Authority/Tribunal in Dismissing the IA(IBC)/98(KOB)/2020 in IBA/11(KOB)/2020 (preferred by the Appellant/Applicant) by making an observation that the Appellant/Applicant is to wait till the CIRP is over and also that the Resolution Professional cannot handover possession of the four Apartments to the Appellant/Applicant are fee from any legal infirmities or does not suffer from any material irregularities. Appeal dismissed.

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• Service Tax

• 2023 (6) TMI 901
  Levy of Service Tax - Business Support Service - corporate commission given by the appellant herein to its holding company abroad i.e. M/s. Thyssenkrupp, Germany - suppression of facts - extended period of limitation - HELD THAT:- With effect from 1.7.2012 section 66B(44), Finance Act, 1994 defined service as any activity carried out by a person for another for consideration and includes a declared service . There is nothing wrong in the findings of the authorities below that commission per se would fall under the ambit of the definition of service (supra). After 1.7.2012 once the activity falls within the definition of service it is taxable and the fact that some wrong classification by revenue has been given to it, is not of much help of the assessee as prior to 1.7.2012 services were distinguished under different categories u/s. 65(105) ibid and service tax was charged u/s. 66 therein but w.e.f. 1.7.2012 section 66 ibid was replaced by section 65B ibid for charging service tax. Admittedly the appellant had deposited the duty immediately after being pointed out by the audit which, in the facts of this case, strengthens the stand of the appellant that there was no willful or deliberate suppression on their part. So far as the period 2013-14 is concerned the duty is demanded after invoking the extended period of limitation by attributing willful suppression on the part of the appellant. Suppression etc. cannot be imputed against the appellant merely because they failed to pay the tax on time. It is settled legal position that mere allegation of suppression is not sufficient, it has to be established through some evidence as mere omission to give some information will not always be termed as suppression with intention to evade tax, something more needs to be brought on record by the department. Admittedly the appellant was under obligation to discharge service tax under reverse charge mechanism on the commission paid for corporate guarantee provided by its parent company and if any service was taxed under reverse charge mechanism, they will be entitled to the benefit of Cenvat credit of the service tax paid. Therefore, the entire exercise is revenue neutral. In such a situation this Tribunal in the matter of JET AIRWAYS (I) LTD. VERSUS COMMISSIONER OF SERVICE TAX MUMBAI [ 2016 (8) TMI 989 - CESTAT MUMBAI] has held that in view of the fact that the demand is completely revenue neutral, extended period of limitation cannot be invoked and therefore I am of the considered view that the demand for the period 2013-14 is hit by limitation and accordingly set aside. The appeal is partially allowed so far as the period 2013-14 is concerned and for the period 2014-15 the same is remanded for the purpose of calculation of duty for the normal period alongwith interest, if any.

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• 2023 (6) TMI 900
  Denial of refund of Cenvat Credit on various services - export of service - Period October, 2016 to June, 2017 - rejection of refund on the ground of nexus - HELD THAT:- In the matter of M/S. BNP PARIBAS INDIA SOLUTIONS P. LTD. VERSUS COMMISSIONER OF CGST, MUMBAI EAST [ 2020 (2) TMI 224 - CESTAT MUMBAI] this Tribunal while allowing the appeal of the assessee therein allowed the refund claim u/s. 5 ibid by holding that since the provisions of Rule 14 ibid has not been invoked, the refund of Cenvat credit as claimed by the Appellant under Rule 5 ibid cannot be denied. Therefore it is settle legal position that in absence of any notice for recovery as provided by Rule 14 ibid the refund claimed by the assessee under Rule 5 cannot be denied. Nothing contrary has been produced on record. The authorities below have erred in rejecting the refund claim of the appellant. Accordingly the impugned orders are set aside - Appeal allowed.

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• 2023 (6) TMI 899
  Job Work - Exemption to taxable service of production of goods on and for behalf of a client under N/N. 08/2005-ST dated 01.03.2005 - benefit denied on the ground that Excise Duty has neither been paid by the appellant (job worker) nor by the client (principal) - conversion charges received from M/s. Organon (India) Ltd. for undertaking manufacture of oral contraceptive medicines under the brand names- Novelon , Femilon , Elogen , etc. HELD THAT:- The appellant is engaged in manufacturing of pharmaceuticals products is not disputed by the revenue. As these fact is not disputed by the Revenue, the case of the appellant is squarely covered by the CBEC Circular vide Letter Dy. No. 2305/Commr(ST)/2011, dated 15-7-2011 where it was held that said notification can be applicable only in cases where the activity of the service provider does not amount to manufacture within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944. As the appellant is manufacturer of the goods, the demand of Service Tax is not sustainable against the appellant under the category of Business Auxiliary Service . Same view was taken up by this Tribunal in the case of SAMRAJYAA AND COMPANY VERSUS COMMISSIONER OF CENTRAL EXCISE, COIMBATORE [ 2018 (10) TMI 34 - CESTAT CHENNAI ] where it was held that the activities carried out by the appellant will indeed amount to manufacture for the purpose of Section 2(f) of the Central Excise Act,1994 and in consequence, the same will not be a Business Auxiliary Service under Section 65 (19) of the Finance Act, 1994 and therefore no service tax liability will arise in consequence. This being so, the impugned orders confirming demand of service tax under Business Auxiliary Service cannot then sustain and will require to be set aside As the appellant is the manufacturer of the pharmaceutical goods, demand of Service Tax is not sustainable - the impugned demand is set aside and the appeal is allowed.

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• 2023 (6) TMI 898
  Nature of activity - bariatric surgery - To be classified as cosmetic surgery or plastic surgery - HELD THAT:- The issue involved in this appeal has been decided in favour of the appellant in the appellant s own case in M/S. MOHAK HI TECH SPECIALITY HOSPITAL VERSUS PRINCIPAL COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, INDORE MP [ 2020 (11) TMI 152 - CESTAT NEW DELHI] for the period 01.11.2011 to 31.03.2015. Bariatric surgery performed by the appellant on patients suffering from morbid obesity coupled with life-taking diseases like Type-II diabetes and Hypertension, arthritis, lipid disorder or obstructed sleep apnea or disease of a like nature, cannot not be subjected to service tax under section 65(105)(zzzzk) of the Finance Act. The present proceedings arise out of the show cause notice for the subsequent period from 01.04.2015 to 31.03.2016 - Appeal allowed.

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• Central Excise

• 2023 (6) TMI 897
  CENVAT Credit - capital goods - various iron and steel items used for fabrication of capital goods - Revenue is of the view that the tanks fabricated are not goods as they are immovable in nature and are not capital goods as defined in Rule 2A of the Cenvat Credit Rules, 2004 - HELD THAT:- The storage tanks irrespective of immovable or moveable, are considered as capital goods. The tanks used for processing the goods at intermediate stage. We find that only the goods falling under Chapter 82, 84, 95 and 90 are falling under the definition of capital but they are components, spares and accessories falling under definition (i) and (ii) also are termed as capital goods as per the definition of capital goods under Rule 2A of Cenvat Credit Rules, 2004. The Hon ble High Court of Karnataka in the case of COMMISSIONER OF CENTRAL EXCISE, BANGALORE-II VERSUS SLR STEELS LTD. [ 2012 (9) TMI 169 - KARNATAKA HIGH COURT] held that appellate authority committed a serious error firstly in holding that the storage tank is an immovable property and secondly, on the ground that it cannot be bought and sold in the market, the criteria which is totally unwarranted. These iron and steel items have been used for manufacturing/processing of final products - In that circumstances, any iron and steel items used for fabrication of those tanks are entitled for cenvat credit as input in terms of Rule 2 (k) of the Cenvat Credit Rules, 2004. The appellant has correctly taken the cenvat credit on the items in question - Appeal allowed.

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• CST, VAT & Sales Tax

• 2023 (6) TMI 896
  Cancellation of the permission to pay tax on compounded basis for the year 2015-16 - alleged shifting of business premises - principles of interpretation - HELD THAT:- The statutory provision that enables an assessee to pay tax on compounded basis [Section 8(f) of the KVAT Act] does not mandate that the assessee should not change its place of business during the year in which it has sought to pay tax on compounded basis. The provision of sub clause (iv) of Section 8(f) only empowers an Assessing Authority to cancel a permission already granted for valid and sufficient reasons such as shifting of place of business, furnishing of false information, suppression of relevant information, failure to furnish such information demanded etc. It can be seen therefore that sub clause (iv) of Section 8(f) uses the phrase shifting of place of business along with other phrases such as furnishing of false information , suppression of relevant information etc. to denote those reasons which are treated as valid and sufficient by the Statute for the purposes of cancellation of a permission already granted. It is a settled principle of interpretation of statutes that the true scope and ambit of a phrase used in a statute must be gathered from the other words/phrases which are used along with it in the statutory provision. The principle of noscitur a sociis is a rule of interpretation that stipulates that where the general words in a statutory text are flanked by restricted words, the meaning of the general words are taken to be restricted by implication with the meaning of the restricted words. The Latin term, noscitur a sociis contemplates that a statutory term is recognised by its associate words. On applying the principle of noscitur a sociis, to determine the scope and ambit of sub clause (iv) of Section 8(f), it can be safely stated that the shifting of a place of business can be cited as a valid and sufficient reason for cancelling a permission already granted only if such shifting is without the knowledge of the Assessing Officer and thereby had an element of suppression of relevant information or failure to furnish relevant information. Justification refers to the principle that the exercise of public power must be justified, intelligible and transparent, not in the abstract, but to the individuals subject to it. Demonstrated expertise refers to the requirement of the decision maker establishing the reasonableness of his decision by demonstrating therein his experience and expertise. On the facts in the instant case, it is not found that the Assessing Authority or the Tribunal to have indicated or provided a clear justification for the action of the Assessing Authority in cancelling the permission that was granted to the petitioner to pay tax on compounded basis for the assessment year 2015-16. The cancellation of the permission already granted was illegal and unreasonable, and hence, liable to be set aside. The O.T. Revision is allowed.

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• 2023 (6) TMI 895
  Violation of principles of natural justice - opportunity for cross-examining the driver of the lorry not provided - Validity of assessment order and penalty - attempt to fraudulently bring goods into the State - HELD THAT:- The specific contention of the petitioner that he had not been given a reasonable opportunity to prove that the transactions were fraudulent in nature and that the consignments were not intended and did not reach him requires consideration - the contention of the respondent that an opportunity to cross-examine the driver of the vehicle would not be practical in the circumstances, is accepted. The petitioner was entitled to be granted reasonable opportunity to substantiate his contention that the consignments were not intended for delivery to him. It is clear from the orders of assessment that the contention of the petitioner that interstate purchase had not been effected by him and that he has to be granted an opportunity to rebut the allegations levelled against him has been rejected largely relying on Section 9 of the KVAT Act stating that the burden of proving that any transaction of a dealer is not liable to tax under the Act shall lie on the dealer. Reasonable opportunity as provided in the statute has to be a full and proper opportunity to the dealer not only to raise his contentions, but also to make available and rely on material which would support his contentions - In the instant case, the petitioner had relied on a letter dated 28.7.2012 by which he had informed the authorities that there was an attempt to misuse his TIN for bringing in consignments into the State. It is to be noted that it was only from 1st February, 2012 that the electronic filing of declaration in Form 8F had been made mandatory. The assessment years are 2011-12, 2012-13, 2013-14. In the facts and circumstances of the instant case, the petitioner ought to have been given a full and proper opportunity to substantiate his contention that the consignments which passed the check posts purportedly in the name of the petitioner were actually not intended for delivery to the petitioner. The assessment completed and the penalty imposed without giving such an opportunity to the petitioner is, therefore, unsustainable for want of a reasonable opportunity being granted to substantiate his case. The impugned orders are set aside. There will be a direction to the respondents to give the petitioner a reasonable opportunity to place on record any material to show that the consignments were not intended for him or that the consignments did not reach the petitioner - Petition allowed.

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• Indian Laws

• 2023 (6) TMI 894
  Dishonour of Cheque - vicarious liability of director - whether the complaint was maintainable under Section 138 of the Negotiable Instruments Act against its Director in absence of the company being joined as party respondent accused in the original complaint? - HELD THAT:- The issue is no more res-integra. The issue arose for consideration of the Hon ble Supreme Court in the case of Aneeta Handa [ 2012 (5) TMI 83 - SUPREME COURT ]. The Hon ble Supreme Court was examining the controversy as to whether any person who has been mentioned in Section 141(1) and 141(2) of the Act can be prosecuted without the company being impleaded as accused. To appreciate the controversy, the Hon ble Supreme Court had proceeded to examine the relevant provisions of the Negotiable Instruments Act. The Court upon careful examination of Section 138 of the Act and upon appreciation of the proviso, notice that cheque has to be drawn by a person on the account maintained by him and must have issued the cheque in discharge of any debt or other liability. The Hon ble Supreme Court further notice that the word drawer has been defined under Section 7 of the Act which mean maker of a bill of exchange or a cheque. Thus, the Court held that even an authorized signatory in company becomes a drawer as he has been authorized to do so in respect of account maintained by the company - The Hon ble Supreme Court upon analysis of the deeming fiction created in the proviso to Section 141 held that it crystallizes the corporate criminal liability and vicarious liability of a person who is in charge of the company. Thus from the aforesaid legal position, there cannot be any iota of doubt for maintaining prosecution under Section 141 of the Act, the company must be joined as an accused. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. The Court notice that in absence of specific averment as to the role of the respondent and particularly in view of the material at the relevant time, which in no manner connected with the affairs of the company, rejected the appeal of the complainant. In the instant case, the contents of the complaint as reproduced in the impugned order goes to suggest that the complainant has even failed to make necessary averments with regard to the role of the accused by virtue of his position to make him liable or to be proceeded with the prosecution under Section 138 of the Negotiable Instruments Act. As held by the Hon ble Supreme Court in the case of Aneeta Handa, criminal liability can be only imposed if the principal offenders viz. concerned company being joined as party accused - thus no error is committed by the learned Magistrate in not entertaining the complaint having noticed the lacuna of not joining the company as party respondent. The present application of leave to appeal fails and stands rejected.

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• 2023 (6) TMI 893
  Dishonour of Cheque - discharge of legal liability - requirement of additional evidence for adjudication of the case before the Appellate Court - Section 391 Cr.P.C. - HELD THAT:- It is apparent that the petitioner had been prosecuted by the respondent-company in a complaint filed under Section 138 of the Negotiable Instruments Act. After the trial, the petitioner was convicted and sentenced by the trial Court for the offence under Section 138 of the Negotiable Instruments Act for a period of one year of rigorous imprisonment with a compensation of Rs.23 lacs to the complainant - It is apparent from the perusal of the record that the complainant is SEBI registered company and the petitioner was a client of the same. Both of them entered into an agreement exhibited as Ex.C-2. As apparent from the arguments raised, the crux of the arguments raised by learned counsel for the petitioner is that on his asking the complainant had not produced the complete record pertaining to sell and buying of holdings. It is an admitted fact that the petitioner was given numerous opportunities to lead his evidence. He proved the documents as Ex.DX to DZ. Counsel for the petitioner has laid emphasis on the deposition of the CW-2 Ajit Baluni. The contentions regarding charge of commission/ brokerage have been admitted by the witnesses produced by the complainant. The record which was produced by the complainant had also been put to the petitioner and he had cross-examined the complainant witness regarding the same. Thus, this is an admitted fact that record which was not produced as contended by learned counsel for the petitioner, was very much in the knowledge of the petitioner since beginning. But despite having availed numerous opportunities, he did not make any endeavour to bring the same on record, if it was so essential for just decision of the case. Even after filing of this appeal, the present application has been filed at a belated stage. There is no gainsaying that the Appellate Court had the jurisdiction to invoke its power under Section 391 Cr.P.C. but the same cannot be invoked in a cavalier manner. There is no denial to the fact that statutory power under Section 391 Cr.P.C. can be invoked by the Court at any stage if the circumstances prove that production of the evidence prayed for, is necessary for the just decision of the case and accepting the same would meet the ends of justice. However, in the present case, the petitioner has failed to make out a case that the additional evidence prayed for is necessary for decision of the case and thus, the appeal being without any merit, has been rightly dismissed by the appellate Court. Petition dismissed.

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• 2023 (6) TMI 892
  Dishonour of Cheque - compounding of offences - amicable settlement arrived inter-se parties - whether this Court can quash the judgments of conviction and order of sentence recorded by the courts below on the basis of amicable settlement arrived inter-se parties while exercising power under Section 482 of CRPC or not? HELD THAT:- This Court vide judgment passed in titled Gulab Singh v. Vidya Sagar Sharma [ 2017 (3) TMI 1891 - HIMACHAL PRADESH HIGH COURT] , while relying upon judgment of Hon ble Apex Court as well as other Constitutional Courts has already held that court, while exercising power under Section 147 of Negotiable Instruments Act, court can proceed to compound offence even in those cases, where accused stands convicted. The Hon ble Apex Court in K. Subramanian Vs. R.Rajathi [ 2009 (11) TMI 1013 - SUPREME COURT] has categorically held that in view of the provisions contained under Section 147 of the Act, read with Section 320 of Cr.P.C, compromise arrived inter se the parties, can be accepted and offence committed under Section 138 of the Act, can be ordered to be compounded. This Court finds that court while exercising power under Section 482 Cr.PC can proceed to compound the offence even after recording of the judgment of conviction and order of sentence. In the aforesaid judgment Hon ble Apex Court has categorically held that High Court having regard to the nature of offence and the fact that parties have settled their dispute and the victim has willingly consented to the nullification of criminal proceedings can quash such proceedings in exercise of its inherent powers under Section 482 Cr.PC., even if the offense are non-compoundable, however while doing so, high court is under obligation to evaluate the consequential effects of the offence beyond the body of an individual and thereafter, adopt a pragmatic approach to ensure that the felony even if goes unpunished, does not tinker with or paralyze the very object of the administration of criminal justice system. Since in the case at hand, petitioner-accused and complainant have resolved their dispute amicably under OTS Scheme, no fruitful purpose would be served by sending the person behind bars pursuant to judgment of conviction recorded against him. In the peculiar facts and circumstances of the case as well as law taken into consideration, this Court finds no impediment in accepting the prayer made by the parties for quashing of Complaint (i.e Registration No. 222/2017) as well as consequential proceedings arising out of it. The present petition is disposed of as compromised, as a result of which, Complaint No. 290-I/2017 (Registration No. 222/2017) as well as judgment of conviction and order of sentence dated 30.7.2018 and 23.6.2021, passed by the courts below are quashed and set-aside and petitioner is acquitted of the charges framed against him under Section 138 of the Act.

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