TMI Tax Updates - e-Newsletter
July 24, 2020
Case Laws in this Newsletter:
GST
Income Tax
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Profiteering - restaurant service supplied by the Respondent (Franchisee of M/s Subway Systems India Pvt Ltd.) - the Respondent is directed to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules.
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Income Tax:
Income accrued in India - PE in India or not - Though it was pointed out to the ITAT that there were only two persons working in the Mumbai office, neither of whom was qualified to perform any core activity of the Assessee, the ITAT chose to ignore the same. This being the case, it is clear, therefore, that no permanent establishment has been set up within the meaning of Article 5(1) of the DTAA, as the Mumbai Project Office cannot be said to be a fixed place of business through which the core business of the Assessee was wholly or partly carried on. - SC
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Income Tax:
Receipt of non-competitive fee - non-compete fee payable under the Deed of Covenant - capital receipt or revenue receipt - the matter was pertaining to the period which is much before 2003 - the agreement entered was led to loss of source of business - Not taxable as capital receipt - SC
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Income Tax:
Income of lease rental earned from property along with facilities - Income from Other sources - The workstation in the form of plant and machinery are inseparable from the building and for exploitation or use of the workstation, the use of the building is incidental. - where the letting was inseparable, section 56(2)(iii) was rightly invoked.
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Corporate Law:
Non-disclosure of allotment of equity shares of Respondent company - Dispute between the Directors - The allotment of shares has been done without getting it approved in any Board Meeting - In the absence of any record available to be produced by either of the parties and non-existence of the assets of the company, it will be futile exercise to make any order except winding up of the company in the circumstances.
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IBC:
Rectification in the approved Resolution Plan - Adjudicating Authority had no jurisdiction to entertain an application for rectification of Resolution Plan and making substantial changes in the Plan, after a lapse of 13 months of the completion of CIRP, even after the approval and implementation of the Resolution Plan on the pretext of rectification of clerical or typographical error in the order.
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IBC:
Initiation of CIRP - the pendency of the SARFAESI proceeding or other dispute does not prevent a financial creditor to trigger the corporate insolvency resolution process because the nature of remedy being sought for under the provisions of the I and B Code is "Remedy in Rem" in respect of the CD.
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (7) TMI 549
Maintainability of petition - availability of efficacious alternative remedy of appeal - Refund of GST - rejection on the ground that it involves multiple tax periods - HELD THAT:- The present petition cannot be entertained when the petitioner has an equally alternate efficacious remedy of preferring an appeal before the Additional Commissioner, GST - The present petition is accordingly disposed of with liberty granted to the petitioner to seek its remedies against the impugned order before the Appellate Authority, along with an application for condonation of delay.
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2020 (7) TMI 548
Filing of GST TRAN-1 and TRAN-2 returns - rejection on the ground of the petitioner failing to produce any material/evidence to show that he had tried to submit the TRAN-1 and TRAN-2 within the stipulated period, the petitioner faced technical glitch. HELD THAT:- This court is of the opinion that the respondent State authorities on the matter being referred to it by the High Court in the earlier round of litigation in WPT No.68 of 2018 should have considered the contentions of the petitioner raised by him in the said writ petition wherein itself he had categorically submitted that he has faced certain technical glitches while submitting TRAN-1 forms and the report in this regard was lodged on 26.12.2017and he has lodged complaint in this regard to the authorities well before the last date - In addition, he has also manually submitted the same on 18.01.2018 and had also sent it by registered post on the same day - All these aspects have not been considered or decided by the Commissioner in his order dated 14.09.2018 in the absence of any reasons and discussion by the Commissioner to the contentions and submissions of the petitioner, this court is of the view that the said order dated 14.09.2018 needs to be reconsidered. Matter remanded back to the Commissioner, Commercial Tax for a reconsideration and for passing of a fresh order - appeal allowed by way of remand.
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2020 (7) TMI 547
Transition of credit available under the VAT scheme to the GST portal - credit generated on the basis of incorrect ID, thereafter new registration granted - Section 139 of the PGST Act - HELD THAT:- The appropriate authority is directed to issue the necessary positive recommendations for migration/transition of credit available in the account of the R2 within a period of four (4) weeks from date of receipt of a copy of this order and R2 will, in turn and within four weeks from receipt thereof, issue necessary intimation to the petitioner permitting it to access the portal and upload the forms. Permission to deposit tax, penalty and interest u/s 50 of the PGST Act - HELD THAT:- Such a prayer is premature, since no assessment has been made in the present case. The petitioner may canvass the same, if so inclined, at the time of assessment and such prayer, if and when put forth, shall be considered by the Authorities in accordance with law. Petition disposed off.
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2020 (7) TMI 546
Profiteering - restaurant service supplied by the Respondent (Franchisee of M/s Subway Systems India Pvt Ltd.) - allegation that the benefit of reduction in the rate of GST not passed on by way of commensurate reduction of price - contravention of section 171 of CGST Act - penalty - HELD THAT:- The profiteered amount is determined as ₹ 7,53,8541- as has been computed vide Annexure-13 of the DGAP s Report dated 31.12.2019. Accordingly, the Respondent is directed to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules. Further, since the recipients of the benefit, as determined above are not identifiable, the Respondent is directed to deposit an amount of ₹ 7,53,854/- in two equal parts of ₹ 3,76,927/- each in the Central Consumer Welfare Fund and the Rajasthan State Consumer Welfare Fund as per the provisions of Rule 133 (3) (c) of the CGST Rules 2017, along with interest payable @ 18% to be calculated from the dates on which the above amount was realized by the Respondent from his recipients till the date of its deposit. The above amount of ₹ 7,53,854/- shall be deposited, as specified above, within a period of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioner. Penalty - HELD THAT:- The Respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus resorted to profiteering. Hence, he has committed an offence under section 171 (3A) of the CGST Act, 2017 and therefore, he is liable to penal action under the provisions of the above Section - Accordingly, a notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him.
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2020 (7) TMI 528
Maintainability of petition - availability of efficacious remedy of appeal - Refund of GST - HELD THAT:- The present petition cannot be entertained when the petitioner has an equally alternate efficacious remedy of preferring an appeal before the Additional Commissioner, GST - The present petition is accordingly disposed of with liberty granted to the petitioner to seek its remedies against the impugned order before the Appellate Authority, along with an application for condonation of delay.
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Income Tax
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2020 (7) TMI 545
Income accrued in India - Taxability of income attributable to a permanent establishment - fixed place in India, arising from the Agreement for avoidance of double taxation of income and the prevention of fiscal evasion with the Republic of Korea ( DTAA ) - to what extent activities of the business were carried on by the Assessee through the Mumbai Project Office? - High Court held that the question as to whether the Project Office opened at Mumbai cannot be said to be a permanent establishment within the meaning of Article 5 of the DTAA would be of no consequence AND there was no finding that 25% of the gross revenue of the Assessee outside India was attributable to the business carried out by the Project Office of the Assessee - HELD THAT:- A reading of the Board Resolution would show that the Project Office was established to coordinate and execute delivery documents in connection with construction of offshore platform modification of existing facilities for ONGC . Unfortunately, the ITAT relied upon only the first paragraph of the Board Resolution, and then jumped to the conclusion that the Mumbai office was for coordination and execution of the project itself. The finding, therefore, that the Mumbai office was not a mere liaison office, but was involved in the core activity of execution of the project itself is therefore clearly perverse. Equally, when it was pointed out that the accounts of the Mumbai office showed that no expenditure relating to the execution of the contract was incurred, the ITAT rejected the argument, stating that as accounts are in the hands of the Assessee, the mere mode of maintaining accounts alone cannot determine the character of permanent establishment. This is another perverse finding which is set aside. Equally the finding that the onus is on the Assessee and not on the Tax Authorities to first show that the project office at Mumbai is a permanent establishment is again in the teeth of our judgment in E-Funds IT Solution Inc. [2017 (10) TMI 1011 - SUPREME COURT] Though it was pointed out to the ITAT that there were only two persons working in the Mumbai office, neither of whom was qualified to perform any core activity of the Assessee, the ITAT chose to ignore the same. This being the case, it is clear, therefore, that no permanent establishment has been set up within the meaning of Article 5(1) of the DTAA, as the Mumbai Project Office cannot be said to be a fixed place of business through which the core business of the Assessee was wholly or partly carried on. Also, as correctly argued by Shri Ganesh, the Mumbai Project Office, on the facts of the present case, would fall within Article 5(4)(e) of the DTAA, inasmuch as the office is solely an auxiliary office, meant to act as a liaison office between the Assessee and ONGC. This being the case, it is not necessary to go into any of the other questions that have been argued before us. Appeal against the impugned High Court judgment is therefore dismissed.
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2020 (7) TMI 544
Receipt of non-competitive fee - non-compete fee payable under the Deed of Covenant - capital receipt or revenue receipt - substantial question of law that was raised by the High Court - difference in members of ITAT - majority decision of ITAT said that non-competitive fee was a capital receipt u/s 28(iv) income tax act and not a revenue receipt as envisaged in Section 28(ii) of I.T. Act - whether the said Deed of Covenant can be said to contain a restrictive covenant as a result of which payment is made to the appellant, or whether it is in fact part of a sham transaction which, in the guise of being a separate Deed of Covenant, is really in the nature of payment received by the appellant as compensation for terminating his management of CDBL, in which case it would be taxable under Section 28(ii)(a)? HELD THAT:- Clearly, without any recorded reasons and without framing any substantial question of law on whether the said amount could be taxed under any other provision of the Income Tax Act, the High Court went ahead and held that the amount of INR 6.6 crores received by the assessee was received as part of the full value of sale consideration paid for transfer of shares and not for handing over management and control of CDBL and is consequently not taxable under Section 28(ii)(a) - Nor is it exempt as a capital receipt being non-compete fee, as it is taxable as a capital gain in the hands of the respondent-assessee as part of the full value of sale consideration paid for transfer of shares. This finding would clearly be in the teeth of Section 260-A (4), requiring the judgment to be set aside on this score. The reasons given by the learned Assessing Officer and the minority judgment of the Appellate Tribunal are all reasons which transgress the lines drawn by the judgments cited, which state that the revenue has no business to second guess commercial or business expediency of what parties at arms-length decide for each other. As decided in Guffic Chem (P) Ltd. [2011 (3) TMI 6 - SUPREME COURT] the agreement entered into by the assessee with Ranbaxy led to loss of source of business; that payment was received under the negative covenant and therefore the receipt of ₹ 50 lakhs by the assessee from Ranbaxy was in the nature of capital receipt. In fact, in order to put an end to the litigation, Parliament stepped in to specifically tax such receipts under the non-competition agreement with effect from 1-4-2003. Decided in favour of assessee.
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2020 (7) TMI 543
Exemption u/s 11 - Charitable purpose u/s 2(15) - whether the provisions of Section 11(4A) were attracted to the assessee s case? - why the receipts from charges received by the Chamber should not be considered as commercial in nature and why the receipts should not be hit by the provisions of section 2(15)? - whether by rendering specific services to members and non-members for a fee, a trade, professional or similar association can be said to be carrying on a business activity? - HELD THAT:- Respectfully following the consistent decisions of the Tribunal in assessee s own case for the preceding assessment years [ 2017 (9) TMI 1458 - ITAT DELHI] , [ 2018 (5) TMI 2009 - ITAT NEW DELHI] we do not find any infirmity in the order of the CIT(A) in holding that the activities of the assessee are charitable in nature and the assessee is entitled to the claim of exemption u/s 11 of the IT Act. - Decided in favour of assessee.
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2020 (7) TMI 542
Stay petition - Submission seeking to defend the Revenue by contending that petitioner has been shown concession to pay 20% of the tax amount, that too in six equal installments is too fragile to be countenanced - HELD THAT:- Admittedly, an application was filed before the PCIT seeking stay of assessment order. The same has also been disposed of without hearing the petitioner. Generally, in all cases, an application filed before any quasi judicial authority is required to be heard before any orders are passed and more so, in the case of this nature, where the assessee becomes liable to pay huge taxes. The third respondent- PCIT shall grant an opportunity to petitioner to put forth its case so far as the application for stay is concerned. - No coercive steps to recover the tax amount shall be initiated till PCIT passes his order.
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2020 (7) TMI 541
Stay proceedings - HELD THAT:- Considering the fact that there has been an order of interim stay in force, since 30.05.2019, we are of the view that it would be inequitable to modify or alter the interim order at this juncture, especially, when the main appeal is ripe for hearing before the 1st respondent. Accordingly, the appeal stands disposed of and the interim order granted on 30.05.2019, shall continue to remain in force, till the appeal filed by the appellant before the 1st respondent is heard and disposed of. Since the appeal is of the year 2018, having been filed on 30.01.2018, the 1st respondent is requested to dispose of the appeal at an early date, preferably, within a period of six weeks from the date of receipt of the copy of this order.
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2020 (7) TMI 540
Addition being the difference in the opening balance of the claim of advance received - HELD THAT:- Although the CIT(A) called for a remand report from the AO while deciding the issue, the AO has not asked anything about this difference nor the CIT(A) has given any opportunity to the assessee to explain the same - we deem it proper to restore this issue to the file of the AO with a direction to give an opportunity to the assessee to substantiate the difference in the opening balance in the books of the assessee as well as M/s Gulab Farms Pvt. Ltd., and decide the issue as per fact and law. Ground No.1 by the assessee is accordingly allowed for statistical purposes. Addition of consultancy charge to the assessee for the year under consideration - CIT(A) while deleting the above addition has directed the AO to sustain the addition being the difference in the balance as per ledger account of assessee and M/s V.C. Solutions which is in the nature of unexplained credit - submission of the ld. Counsel that the difference is due to the grossing up of amount of TDS by M/s VC Solutions and the assessee has shown the net amount excluding the TDS and there was wrong credit in the name of Ms Chandni - HELD THAT:- Although the ld.CIT(A) has called for a remand report from the AO, this issue was not properly explained by the assessee during the remand proceedings to the AO nor the CIT(A) has considered the same properly in the light of the arguments advanced by the ld. Counsel - we deem it proper to restore the issue to the file of the AO with a direction to grant an opportunity to the assessee to substantiate its case - Decided in favour of assessee for statistical purposes.
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2020 (7) TMI 539
Reopening of assessment u/s 147 - Notice after four years - notice barred by limitation - CSR expenditure allowability - HELD THAT:- When the issue is covered in favour of the assessee on merits by the order of the jurisdictional High Court reopening on that issue does not survive.Thereafter referred plethora of the judicial precedents and held that there was no non disclosure on the part of the assessee. Even otherwise on our examination of the facts and the assessment order, we find that with respect to the CSR expenditure the AO himself refers to the details of other expenses filed during the assessment proceedings. For prior period expenditure also the AO refers to the details filed and disallowance made during the regular assessment proceedings. With respect to the employee s contribution fund the AO refers to the information already available with the return of income. Disallowance u/s 14A was merely to correct the incorrect computation in the original assessment proceedings. With respect to the deprecation on computer software, AO has changed his opinion with respect to the rate of depreciation. He merely applies 25% rate of depreciation instead of 60% as applied in original assessment proceedings. It is apparent that the AO has not pointed out that what facts were not disclosed by the assessee. AO also not brought on record any specific information, which the assessee has failed to disclose in the original return. No infirmity in the order of the CIT (A) in stating that reopening is barred by limitation and the period of six years for reopening is not available to the assessee. CIT (A) is also correct in deciding that in absence of any failure on part of the assessee, extended limitation period of six years cannot be available to the ld AO; therefore, the reassessment order is passed beyond limitation. No infirmity, as argued by CIT DR, in the order of ld CIT (A). In absence of any failure on the part of the assessee, accordingly, we dismiss the appeal filed by the AO on the limited issue that order passed by the ld AO is barred by limitation. Ground No. 1 is dismissed.
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2020 (7) TMI 538
Exemption u/s 54 - Long term capital gain arising on sale of residential flat at Varsova (Mumbai) against the purchase of new residential property made during the year - HELD THAT:- The CBDT in Circular No. 672 dated 16/12/1993 has clarified that in terms of a scheme of the allotment and construction of the flat/house by the co- operative societies or the other institution are similar to those mentioned in para 2 of CBDT circular No. 471/Dated 15/10/1986 and thus such case may be treated as the construction of the flat for the purpose of section 54 and 54F of the Act. The Tribunal in the case of Ayushi Patni [ 2019 (1) TMI 1130 - ITAT PUNE] after following the decision of the Hon ble Bombay High Court in the case of CIT Vs Smt. Beena Jain [ 1993 (11) TMI 7 - BOMBAY HIGH COURT] treated the date of the taking possession as the date of the purchase of the flat and allowed benefit of section. Thus, in view of undisputed facts of the case and the decision rendered in the case of CIT Vs. Smt. Beena K. Jain (supra), we hold that the assessee is eligible for claiming exemption u/s 54F on the entire amount of capital gain utilized for purchase of residential property. Consequently, the appeal of the assessee is allowed and the appeal of Revenue is dismissed.
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2020 (7) TMI 537
Income of lease rental earned from property along with facilities - rental income from letting of workstation i.e. machinery, plant or furniture - Income from house property or income from other source - Whether leasing of plant, machinery furniture was incidental to the letting of the building ? - HELD THAT:- Use of the building is incidental to the main object of leasing of workstation by the assessee. As noted from the brief facts of the case that the assessee has given ground and first floor of the building on the rent to another party separately and income from which has been offered by the assessee under the head income from the house property and which has not been disturbed by the Assessing Officer. Thus, in the instant lease under reference, the prime objective is exploitation of asset in the form of workstations installed by the assessee and not the building or any part thereof. The use of easement and common areas by the second party is incidental to the lease of exploitation of workstation. The workstation in the form of plant and machinery are inseparable from the building and for exploitation or use of the workstation, the use of the building is incidental. We find that Ld. CIT(A) has also relied on the decision of Garg Dyeing and Processing Industries [ 2012 (12) TMI 191 - DELHI HIGH COURT] wherein as held that where the letting was inseparable, section 56(2)(iii) was rightly invoked. In the case of Shambhu Investment [ 2003 (1) TMI 99 - SC ORDER] the issue of taxability of the rental income under the head income from house property vis- -vis income under the head profit and gains of business and profession , whereas in the present case dispute between the parties regarding the lease rental income should be taxed under the head income from house property or under the head income from other sources . - Decided against assessee.
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Corporate Laws
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2020 (7) TMI 536
Maintainability of Contempt Petition - issuance of injunction orders - HELD THAT:- Any of the actions initiated either by ROC or SFIO were for the business of Infra Realty being carried on in fraud of its creditors, or otherwise for fraudulent or unlawful purpose and taking note thereof, the learned Single Judge noted that there were serious allegations against the petitioner Company i.e. Infra Realty. Not even an iota of substance emerges from the record to say that any act of the respondent Nos.1 to 3 invites any order prayed for. The judgments relied upon by the petitioners are of no avail. It would suffice to say, the initiation of contempt proceedings depends on the facts and circumstances of a given case and that, it is to be exercised in the discretion of the court where required, founded on the well established principles of law - There is no doubt in the mind of the court that the instant petition-preferred by Healthcare and one of its Directors is a calculative attempt to involve the respondent No.1 to 3 in unnecessary litigation in an overt attempt to overawe them in discharge of their statutory obligations and thereby, draw an undue advantage. Contempt petition dismissed with costs.
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2020 (7) TMI 535
Non-disclosure of allotment of equity shares of Respondent company - Dispute between the Directors - allegation that Respondent No.2 has handled the affairs of Respondent Company in a dishonest manner - production of record before the Administrator - shifting of office - non-speaking order - HELD THAT:- No Board Resolution has been placed before the NCLT or before this Appellate Tribunal to establish that the shares were allotted as per law - there are no material that the findings of the NCLT on this issue are not reasonable. It is apparent that there is dispute between the two directors regarding their shareholding of the company. Whenever any one of the director has been in control of the company admittedly before 2008 by Lalit Agarwal and after 2008 by Pramod Goil, both of them have taken action in such a manner that the company has been mismanaged to the extent that it has lost its substratum. Once the company has lost its substratum that itself is a valid ground for winding up of company on just and equitable ground. The allotment of shares has been done without getting it approved in any Board Meeting - In the absence of any record available to be produced by either of the parties and non-existence of the assets of the company, it will be futile exercise to make any order except winding up of the company in the circumstances. The NCLT has passed a speaking and well reasoned order and there is no merit in the appeals to interfere with the impugned order. The impugned order is upheld - appeal dismissed.
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Insolvency & Bankruptcy
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2020 (7) TMI 534
Rectification in the approved Resolution Plan, after 13 months of the completion and conclusion of the CIRP - allotment and transfer of shares by the approved plan - HELD THAT:- Since rectification of the resolution Plan does not involve the question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code, therefore it is not Code, therefore it is not permitted to modify the Resolution Plan under the guise of inherent powers of the Tribunal. Thus we are of the considered opinion that the Adjudicating Authority had no jurisdiction to entertain an application for rectification of Resolution Plan and making substantial changes in the Plan, after a lapse of 13 months of the completion of CIRP, even after the approval and implementation of the Resolution Plan on the pretext of rectification of clerical or typographical error in the order. Since the Appellant and Respondent, No 1 was the joint Resolution Applicant. Therefore, any application for rectification of the Resolution Plan could have been moved by both the Resolution Applicants. Thus the Adjudicating Authority had no jurisdiction to allow amendment in the Resolution Plan, submitted by the appellant and the Respondent No.1 as co-applicants in the Resolution Process, without there being any consent on the part of the Appellant. Appeal allowed.
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2020 (7) TMI 533
Maintainability of application - initiation of CIRP - pendency of SARFAESI proceeding - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- It is a settled legal position that the pendency of the SARFAESI proceeding or other dispute does not prevent a financial creditor to trigger the corporate insolvency resolution process because the nature of remedy being sought for under the provisions of the I and B Code is Remedy in Rem in respect of the CD. This Adjudicating Authority is satisfied that corporate debtor availed the loan/credit facilities from the financial creditor; Existence of debt is above Rs. one lakh; Debt is due; Default has occurred on May 1, 2000; The petition has been filed within the limitation period as entire matter entangled in the court cases and clear cause of action arouse only after vacation of the stay by the hon'ble High Court on March 7, 2018. Both the corporate debtor and the guarantors are acknowledging the debts by offering repeated one-time settlement proposals after the application is filed before the Adjudicating Authority on August 21, 2018. Charges filed in the Registrar of Companies has not been satisfied; Copy of the application filed before the Tribunal has been sent to the corporate debtor and the application filed by the petitioner-bank under section 7 of the IBC is found to be complete for the purpose of initiation of the corporate insolvency resolution process against the corporate debtor. Application admitted.
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PMLA
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2020 (7) TMI 532
Money Laundering - proceeds of crime - Liquidation/transfer of attached amount before expiry of appeal period - challenge on the ground that the transfer as contrary to the prayer made in the PAO and the consequent confirmation order passed by the Adjudicating Authority - section 26 (3) of the PMLA, 2002 - applicant came to know about it after resuming business - business was closed due to COVID-19 pandemic situation - violation of principles of natural justice. Whether the appellant has made out a prima facie case for grant of order of status quo ante? - HELD THAT:- Since the respondent has followed the procedure prescribed, there are no illegality found in getting the amount transferred in the account of ED. The appellant has offered Bank Guarantee for the retransfer of the aforesaid amount is not agreed by the respondent. During the course of hearing, the ld. senior counsel for the appellant submitted that the appellant is economically hard pressed and the aforesaid amount would be utilized by them for their real estate business. The appellant could not make out a prima facie case and there are no merit in the application, hence, the application seeking ad-interim order for reversal of the transfer of funds and restoration of status quo-ante is dismissed. The appeal is already listed on 11th September, 2020.
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Service Tax
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2020 (7) TMI 531
Maintainability of application - appropriate forum - High Court or Supreme Court - Issue involving determination of rate of Service Tax - whether fabrication of structure which was not covered under the expression erection of plant, machinery, or equipment s ? - no civil work was undertaken - Erection Commissioning and Installation Service or not? Mr. Shah pointed out that the impugned orders in both the appeals passed by the Appellate Tribunal are one relating to the rate of duty of service tax. According to Mr. Shah, the appeal would lie before the Supreme Court. HELD THAT:- Both the appeals are disposed of as not maintainable before this High Court with the liberty to take appropriate steps in accordance with law before the appropriate forum - appeals disposed off.
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CST, VAT & Sales Tax
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2020 (7) TMI 530
Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT:- Similar issue decided in the case of M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [ 2019 (2) TMI 1850 - MADRAS HIGH COURT] where it was held that benefit of the concessional rate is available to dealers who purchase High Speed Diesel from neighbouring States by way of inter-state sales. The matter is similar and thus the case is relied upon and similar order passed - petition allowed.
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Indian Laws
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2020 (7) TMI 529
Constitutional validity of Section 13(1) of the Chhattisgarh Upkar Adhiniyam, 1981 - insertion of a new provision by way of Section 3(1-a) bringing the 'producers' of electrical energy as well within the 'tax net' made various captive power producers - arrears of Energy Development Cess and interest payable for the period from October, 2007 to January, 2014 - HELD THAT:- Though the statue originally intended to collect EDC only from the ' Distributors ' of electricity as given under Section 3(1) of the 1981 Act, as per the CG Act No. 28 of 2014, 28 of 2004, Section 3(1-a) was introduced in similar terms, demanding Cess from the ' Producers ' of electricity as well. The rate is also common, as on date, by virtue of the CG Act No. 10 of 2010. This being the position, there is no unreasonable classification and both the 'Producers' and the 'Distributors' are required to satisfy the EDC to the requisite extent, though the matter is still pending consideration before the Apex Court in respect of the validity of Section 3(1-a) of the 1981 Act. The entire case is moulded with reference to the nature of business being performed by the Petitioners in the capacity as a 'Distributor ' of electricity, coming within the purview of 'Section 3(1)' of the 1981 Act and not with reference to the liability as a 'Producer' of electricity, separately coming within the purview of 'Section 3(1-a)' of the 1981 Act (which issue is pending before the Supreme Court). There is no pleading in the writ petition that the Petitioner-Company is a 'Producer' of electricity in any capacity and the rights of the Petitioners in this regard are adversely affected because of any unreasonable classification with reference to IPP and CPP, as the case may be. Every 'Distributor' of electrical energy shall pay the electricity duty in respect of each month before expiry of the following month into the Government treasury under the head as mentioned therein and send 'treasury receipt' to the Electrical Inspector within 15 days from the date of such credit - There is no case for the Petitioners that they had complied with the requirements by effecting the payment of 'Cess' in terms of Rule 3 of the Rules, 1949; that they have filed any return in terms of Rule 7(i); that there was no fault or delay in satisfying the statutory requirement or further that they had raised any dispute before any of the competent authorities as to the liability or quantum. This being the position, the contention raised by the Petitioners in this regard is absolutely without any merit or bonafides. The knowledge of the Petitioner/Distributor as to the liability to satisfy the EDC in terms of Section 3 and the relevant Rules is revealed from the materials on record. Even otherwise, there cannot be any defence with reference to the ignorance of law; as it is not an excuse. Whether the said rate of interest of 24% has been imposed by the 2nd Respondent as a matter of penal measure, for the reason that the Petitioners, after collecting the Cess from the consumers has not remitted and has misappropriated it or not? - HELD THAT:- The answer can only be in the 'negative', as discernible from the Rule and the relevant Notification issued in this regard. This Court finds that the Petitioners have failed in establishing a case before this Court with regard to the alleged ultra vires nature of Section 3(1) of the 1981 Act, nor have they succeeded in substantiating the case to dispute the liability towards the Electricity Duty Cess and interest - petition dismissed.
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