TMI Tax Updates - e-Newsletter
July 27, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Securities / SEBI
Insolvency & Bankruptcy
Service Tax
CST, VAT & Sales Tax
Highlights / Catch Notes
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GST:
GST registration - registration was granted but at a later date i.e., 09.03.2018 - The only possible manner in which the issue can be resolved is for the petitioner to pay tax for the period covered by provisional registration from 01.07.2017 to 09.03.2018 along with applicable interest under Form GST DRC-03 dealing with intimation of payment made voluntarily or made against the show cause notice (SCN) or statement. If such payment is effected, the recipients of the petitioner under its provisional registration (ID) for the period from 01.07.20217 to 09.07.2018 shall not be denied ITC only on the ground that the transaction is not reflected in GSTR 2A. - HC
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Income Tax:
Reopening of assessment u/s 147 - This being the scope of Section 147 for reopening of assessment, this Court do not find any acceptable reason for the purpose of interfering with the reopening proceedings initiated by the authorities competent and it is for the petitioner to participate in the assessment/re-assessment proceedings and defend his case in the manner known to law. - HC
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Income Tax:
Assessment u/s 153C - The assessment for the relevant AY was open assessment not having been concluded pursuant to the original return of income filed by the Assessee either by an order u/s.143(3) or by non issue of notice u/s.143(2) of the Act, within the time period prescribed for issue of such notice before the date of search - the proceedings against the assessee would not be hit by the proviso to section 153A of the Act - AT
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Income Tax:
Prior period expenses - expenses of store and spares and expenses in respect of the contract - assessee has demonstrated that liability has been crystallised in the year under consideration and therefore, the Learned CIT(A) is justified in deleting the disallowance - AT
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Income Tax:
Addition u/s 68 - related party transaction - Merely because M/s. LDC Holding Pvt. Ltd., outsourced solar plant installation work to a third-party, would not make the transaction to be bogus. Similarly, in respect of manpower supply charges paid by assessee, except for the allegation by the Ld. AO that the employees who rendered services to assessee were related to the director of assessee would not lead to a conclusion that the necessity of such services were not required by assessee. In any case there is no evidence brought on record by the Ld. AO that assessee was not in requirement of any manpower supply services or that the solar plant machine was not installed by assessee. - No additions - AT
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Income Tax:
Deduction u/s 54B - LTCG - Agriculture land purchased in the name Individual on behalf of HUF - Sale of agriculture land owned by HUF - In substance, the HUF is owner of the said agricultural land though it is registered in the name of the Coparcener, as the HUF is enjoying all the fruits of the said agricultural land. Thus, the HUF is entitled to claim exemption/deduction under section 54B - AT
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Income Tax:
Levying penalty u/s 271D - Accepting loan / deposits in cash from relatives in violation of section 269SS - the assessee has taken loans from relatives to finance her higher education. We do not see any reason to impose a penalty in the circumstances of this case where the assessee has taken loan from her relatives without approaching any banking institution. Accordingly, the penalty imposed by the revenue authorities are deleted. - AT
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Customs:
Refund of Container Detention Charges - The contractual relationship between the service providers, who is a private person and the petitioner cannot be resolved under writ jurisdiction by the High Court. Thus, based on the Detention Certificate issued by the Customs Authorities, the petitioner has to adjudicate the same before the Competent Forum or claiming recovery of refund - HC
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Service Tax:
Principles of natural justice - matter was adjudicated ex-parte - It is settled law that when an order is passed in violation of the principles of natural justice the availability of an alternative remedy is not a bar for exercise of the jurisdiction under Article 226 of the Constitution of India - the respondent shall adjudicate Ext.P7 show cause notice afresh within a period of one month from the date of receipt of a certified copy of this judgment. - HC
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Service Tax:
Condonation of delay in filing appeal before Commissioner (Appeals) - Initially the appellant was advised to file a representation before the Chief Commissioner against the order dated 26.10.2009, but subsequently, the counsel who was contacted, after the Range Officer informed the appellant that no appeal had been filed before the Commissioner (Appeals), advised that an appeal was required to be filed before the Commissioner (Appeals), that an appeal was filed on 13.05.2010. - Delay conodoned - AT
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VAT:
Consideration of both these aspects which are sought to be urged before this Court would certainly require this Court to record a finding of fact by examining the relevant documents. This Court, if it choses to dwell on these aspect will have to examine whether the petitioner had produced invoices or had failed to produce those invoices in order to ascertain whether rejection of input tax credit was according to law or otherwise. In the same manner scrutiny of Form Nos.10 and 10B will be required to be undertaken by this Court - the petitioner has alternate and more efficacious remedy of approaching the appellate authority in the matter. - HC
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VAT:
Validity of assessment order - The practice of filing the Writ Petitions are in ascending mode without exhausting the appeal remedy mostly with an idea to avoid payment of pre-deposit for filing an appeal. Such a practice can never be encouraged. - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (7) TMI 998
Provisional attachment of bank accounts and immovable properties - petitioner has already deposited the amount of deposit for filing the appeal - Section 83 of CGST Act - HELD THAT:- Considering the affidavit-in-reply filed by the respondent to the effect that the petitioner firm is liable to pay the tax with interest and penalty, in aggregate ₹ 1,09,61,102/- and the department has attached the movable and immovable properties to the tune of ₹ 75,48,541/-, which include the attachment of two bank accounts i.e. of Union Bank of India account, having balance amount of ₹ 4,16,050/- and Canara Bank account with balance of ₹ 5,386/- and two other immovable properties worth ₹ 55,37,123/- and ₹ 15,89,982/- respectively, the Court is of the opinion that the interest of the Revenue would still remain substantially protected even if, at present, without going into the merits of the case, the provisional attachment in respect of two bank accounts is removed. It may be noted that the petitioner has already deposited the amount of deposit for filing the appeal under section 107 of the said Act.
The provisional attachment in respect of the bank account of the Canara Bank is removed - provisional attachment in respect of the two immovable properties shall continue.
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2021 (7) TMI 992
Grant of Regular Bail - input tax credit - fictitious firms - fake and bogus invoices - section 132 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The Court looking to the seriousness of the offence and lack of change in circumstances, rejected the application of the applicant.
In the considered opinion of this court, after the aforementioned orders were passed rejecting the applications, no substantial change in circumstances or any exceptional aspect has been pointed out by the applicant, which would warrant his release on bail under the provision of section 439 of the Cr.P.C.
Application dismissed.
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2021 (7) TMI 988
GST registration - registration was granted but at a later date i.e., 09.03.2018 - inability to comply with the requirements in terms of the statutes for the period from 01.07.2017 to 09.03.2018 - HELD THAT:- There are merit in the submission that the fresh registration on 09.03.2018 having been obtained by the petitioner in terms of the interim order issued, an opportunity for statutory compliance for the period prior to 09.03.20218 ought to be provided. At the same time, there is substance in the submission made on behalf of the respondents that it is technically impossible to make changes in the GST portal for providing opportunity for an individual assessee to comply with the statutory requirements from a date prior to its registration.
The only possible manner in which the issue can be resolved is for the petitioner to pay tax for the period covered by provisional registration from 01.07.2017 to 09.03.2018 along with applicable interest under Form GST DRC-03 dealing with intimation of payment made voluntarily or made against the show cause notice (SCN) or statement. If such payment is effected, the recipients of the petitioner under its provisional registration (ID) for the period from 01.07.20217 to 09.07.2018 shall not be denied ITC only on the ground that the transaction is not reflected in GSTR 2A. It will be open for the GST functionaries to verify the genuineness of the tax remitted and credit taken.
This writ petition is filed by one of the concerns that had purchased goods from the petitioner in W.P.(C) No.17235 of 2020. The grievance is regarding issuance of Ext.P2 intimation in Form GST DRC-01A, despite payment of tax in full for the purchases effected. In view of the directions in W.P.(C) No.17235 of 2020, nothing survives for consideration herein.
Petition closed.
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Income Tax
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2021 (7) TMI 984
Addition u/s 36 - Excess of the provision for bad and doubtful debts - provision for non-performing asset but actually with the provision has been created for bad and doubtful debts u/s 36 - HELD THAT:- Profit and loss account assessee debited being provision for non-performing assets and being provision for standard assets this shows that the excess of the provision has not been claimed by assessee under section 36(1)(viia) has not been claimed. We therefore do not find any reason for the disallowance to be upheld.
Accordingly these grounds raised by assessee stands allowed.
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2021 (7) TMI 983
Assessment u/s 153C - no order u/s.143(3) of the Act was passed - assessee submitted that proceedings u/s 153C of the Act can be initiated only if incriminating material is found in the case of a searched person belonging to the other person against whom proceedings u/s153C of the Act are sought to be initiated - HELD THAT:- The assessment for the relevant AY was open assessment not having been concluded pursuant to the original return of income filed by the Assessee either by an order u/s.143(3) or by non issue of notice u/s.143(2) of the Act, within the time period prescribed for issue of such notice before the date of search. In this regard, we also notice that in the present case, the assessee filed return of income on 15.10.2007 and no order under section 143(3) of the Act was passed.
The search in the case of Shri. N. Krishna based on which proceedings under section 153C of the Act were initiated against the assessee took place on 26.08.2008. The time limit for issue of notice under section 143(2) of the Act for Assessment Year 2007-08 was available to the AO till 30.09.2008. Since the search was conducted on 26.08.2008 in the case of Shri. N. Krishna, the proceedings against the assessee would not be hit by the proviso to section 153A of the Act and the proceedings can be initiated and additions can be made even in the absence of any incriminating material because such proceedings will be considered as abated proceedings in which scope of making additions will be much greater.
The issue with regard to validity of initiation of proceedings under section 153C of the Act has to be held in favour of the Revenue.
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2021 (7) TMI 999
Disallowance of depreciation of project assets being road and bridge - Addition on the ground that the assessee is not the owner of the project assets and hence is not eligible for claiming depreciation of such assets - HELD THAT:- As decided in own case [2021 (7) TMI 32 - MADRAS HIGH COURT] assessee is entitled to claim depreciation of public roads, treating the same as building. - Decided against the Revenue.
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2021 (7) TMI 981
Disallowance u/s 14A - HELD THAT:- We find that during the year, no exempted income was received by the assessee and therefore, following the finding of case of Cheminvest Ltd.[2015 (9) TMI 238 - DELHI HIGH COURT]the Ld. CIT(A) deleted the disallowance. In our opinion, there is no infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly we uphold the same. The ground of the appeal of the Revenue is accordingly dismissed.
Prior period expenses disallowance - CIT(A) has allowed relief in respect of expenses of store and spares and expenses in respect of the contract holding that same were crystallised in the year under consideration - assessee has demonstrated that liability has been crystallised in the year under consideration and therefore, the Learned CIT(A) is justified in deleting the disallowance - HELD THAT:- We uphold the finding of the Learned CIT(A) on the issue in dispute. The grounds of the appeal of the Revenue are dismissed.
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2021 (7) TMI 980
Addition u/s 41(1) - HELD THAT:- The contention of the assessee merits consideration that the provisions under section 41 (1) of the Act are not applicable to the facts of the case. This view is fortified by the decision of the Hon’ble jurisdictional High Court in the case of Shri Vardhaman Overseas [2011 (12) TMI 77 - DELHI HIGH COURT] - In the circumstances, we are of the considered opinion that the Ld. CIT(A) rightly applied the law to the facts of the case and reached an unassailable conclusion.
We accordingly hold that the findings of the Ld. CIT(A) do not suffer any illegality or irregularity and they cannot be disturbed. Consequently grounds of appeal of Revenue are found devoid of merits and are liable to be dismissed. In view of our findings in the appeal of the Revenue, the cross objections become infructuous and are also liable to be dismissed.
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2021 (7) TMI 978
Addition u/s 68 - related party transaction - CIT(A) has returned a finding of fact that, provisions of section 68 are in applicable, as assessee has proved the identity of the creditor capacity as well as the genuineness of the transaction - HELD THAT:- Manpower supply service charges paid by assessee, CIT(A) notes that as long as M/s. LDC Holding Pvt. Ltd. is genuine, no addition could be made in the hands of assessee under section 68 - assessee had filed ledger accounts showing the payments made to LDC Holdings Pvt. Ltd., in respect of manpower supply service charges and that in the subsequent financial year the entire amount outstanding was paid by assessee. It is also been recorded by the Ld. CIT(A) that provisions of section 68 of the Act would not have any application to the said liability shown by assessee to M/s. LDC Holding Pvt., for the year under consideration.
No-fault could be profound in the view taken by the Ld. CIT (A). Merely because M/s. LDC Holding Pvt. Ltd., outsourced solar plant installation work to a third-party, would not make the transaction to be bogus. Similarly, in respect of manpower supply charges paid by assessee, except for the allegation by the Ld. AO that the employees who rendered services to assessee were related to the director of assessee would not lead to a conclusion that the necessity of such services were not required by assessee. In any case there is no evidence brought on record by the Ld. AO that assessee was not in requirement of any manpower supply services or that the solar plant machine was not installed by assessee.
Application of section 68 - The amount under consideration are expenses in the hands of assessee. Section 68 cannot be applied in the present facts of the case as there is no cash credits in the books of account of assessee. Thus in our view addition made in the hands of assessee by invoking provisions of section 68 are misconceived and has been rightly deleted by the Ld. CIT(A). - Decided against revenue.
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2021 (7) TMI 977
Penalty u/s 271(1)(c) - addition of residuary balance of peak credit in foreign bank account with HSBC, Geneva - HELD THAT:- Once the addition in dispute has been set aside and restored to the file of the Assessing Officer to be decided afresh, the penalty levied in respect of the addition cannot be survived and it would be at the discretion of the Assessing Officer to re-initiate the penalty proceedings as per law. Accordingly, penalty levied in the case of the assessee is deleted. The grounds of the appeal of the assessee are accordingly allowed.
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2021 (7) TMI 997
Deduction u/s 80IA - lease rent income received from letting out modules of Software Technology park to various lessees - whether Tribunal was right in holding that the income derived from letting out of property to the tenants as 'income from business in the hands of the owner of the property? - HELD THAT:- Issue decided in M/S. TIDAL PARK LTD. [2021 (7) TMI 302 - MADRAS HIGH COURT] income derived from letting out of the property with all amenities and facilities would be income from business and cannot be assessed either as income from house property or as income from other sources.
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2021 (7) TMI 996
Reopening of assessment u/s 147 - Addition u/s 68 - whether the initiation of 147 proceedings are based on tangible materials or change of opinion? - HELD THAT:- Since the assessee has completely failed to discharge his onus, the trade advances was treated as ingenuine and assessed under Section 68 - The said findings would reveal that though the petitioner has filed the list of persons, failed to furnish the complete details of the trade advances and to proof it is arising out of the purchases made in normal course of business. In view of the said non-disclosure, the Assessing Officer has formed an opinion for reopening of an assessment.
The findings of the AO reveals that during the original assessment proceedings, the assessee was asked to furnish the details and confirmations, in respect of the unsecured loans. The assessee, vide written submissions made on 12.10.2007, furnished a list containing the name of persons and amount outstanding against them in respect of the unsecured loans. However, the assessee has not furnished the loan confirmation, address and PAN of the persons from whom he claims to have received such loans - Assessing Officer formed an opinion that the onus is on the assessee to substantiate the loans by furnishing the above details to verify the genuinity and credit worthiness of the loan creditors. Since the assessee has completely failed to discharge his onus, the unsecured loan was treated as ingenuine and assessed under Section 68 of the Act.
This Court is of the considered opinion that as pointed out by the learned counsel for the petitioner, the assessee has furnished the list of persons and list of unsecured loans. However, the details of the names and other particulars, in order to establish the genuinity of such transactions, were not furnished. Thus, the Assessing Officer has reason to believe that income chargeable to tax escaped assessment due to non-furnishing of the complete informations and details, truly and fully, during the original assessment.
This Court do not find any infirmity or perversity in respect of the findings arrived by the respondent, while disposing of the objections.
Reasons as well as the inference drawn from and out of the particulars provided by the petitioner are candid and convincing. Thus, this Court is not inclined to interfere with the proceedings initiated for reopening of the assessment. The petitioner has to cooperate with the disposal of the reassessment proceedings. The respondent is bound to proceed with the reassessment and complete the exercise.
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2021 (7) TMI 976
Deduction u/s 54B - Agriculture land purchased in the name Individual on behalf of HUF - Sale of agriculture land owned by HUF - Rejection of claim in respect of purchase of agricultural land against the LTCG eligible for deduction u/s.54B - Assessee is Hindu Undivided Family - HELD THAT:- Entire purchase consideration for agricultural land was paid by utilizing money of HUF. We note that Purchase Deed is in the name of the Coparcener ( one of the HUF members). However, the property (land) is owned by HUF. The property (land) is shown in the Balance Sheet of HUF. The Co-parcerner of the HUF may hold property on behalf of the HUF. The HUF money was utilized to purchase the said agricultural land.
HUF is doing agricultural activities - in case of a company, a property may be registered in the name of the Director, because company is an artificial person which can not talk, walk and think, however, the Directors do all the activities on behalf of the Company, therefore, just because property is registered in the name of director does not mean that director is owner in substance. In substance, the Company will be treated as owner of the property. Likewise, HUF is also an artificial person which can not talk, walk and think, however, the Coparceners (member of HUF) do all the activities on behalf of the HUF.
In substance, the HUF is owner of the said agricultural land though it is registered in the name of the Coparcener, as the HUF is enjoying all the fruits of the said agricultural land. Thus, the HUF is entitled to claim exemption/deduction under section 54B - Decided in favour of assessee.
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2021 (7) TMI 991
Reopening of assessment u/s 147 - whether the mandatory requirements have been complied with in the present case or not? - HELD THAT:- It is relevant to consider Explanation 1 to Section 147 of the Act, which states that production before the AO of account books or other evidence from which material evidence could due diligence have been discovered by the AO will not necessarily amount to disclosure within the meaning of the foregoing proviso. Even Explanation 2 to Section 147 provides various circumstances under which reopening of assessment shall be done. Where assessment has been made, but income chargeable to tax has been under-assessed, then also re-assessment can be made.
There are numerous circumstances, which all are contemplated for the purpose of reopening of assessment and once, the AO has reason to believe that the income chargeable to tax has escaped assessment on account of the fact that the assessee has not disclosed fully and truly all material facts necessary for his assessment, then initiation u/s 147 shall be made beyond the period of four years and within six years.
This being the scope of Section 147 for reopening of assessment, this Court do not find any acceptable reason for the purpose of interfering with the reopening proceedings initiated by the authorities competent and it is for the petitioner to participate in the assessment/re-assessment proceedings and defend his case in the manner known to law.
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2021 (7) TMI 975
Disallowance on interest expenditure - Suffiecny of own funds - HELD THAT:- It is now well settled proposition of law that the interest disallowance is not called for when the own funds available with the assessee is more than the amount of interest free advance given. In the instant case, we have already seen that the own funds available with the assessee is in excess of the value of the amount of investment and interest free loan. Hence, the tax authorities are not justified in disallowing the interest claim made by the assessee. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue and direct the A.O. to delete the disallowance.
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2021 (7) TMI 989
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2021 (7) TMI 974
Levying penalty u/s 271D - Accepting loan / deposits in cash from relatives - assessee failed to comply with the provisions of section 269SS - HELD THAT:- We notice that assessee has taken loan from her relatives in various dates in cash in order to meet her higher education expenses. We notice that all these loans were taken from close relatives for the purpose of higher education.
As held in CIT versus Balaji Traders [2006 (12) TMI 126 - MADRAS HIGH COURT] that when there is an immediate need of money the person cannot get it immediately from a nationalized bank. To satisfy such immediate requirement of money a person normally approaches the moneylender or a friend or relative who could lend money immediately. In those circumstances it cannot be said that the assessee has entered into a transaction to avoid the payment of tax or to defraud the revenue. Even in this case, the assessee has taken loans from relatives to finance her higher education. We do not see any reason to impose a penalty in the circumstances of this case where the assessee has taken loan from her relatives without approaching any banking institution. Accordingly, the penalty imposed by the revenue authorities are deleted. Appeal filed by the assessee is allowed.
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Customs
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2021 (7) TMI 990
Refund of Container Detention Charges - violation of the Detention / Demurrage Waiver Certificate dated 27.10.2017 - unflavoured supari - despite the Detention Certificate, no action has been taken by the 4th respondent / Service Provider - HELD THAT:- Once the imported goods are confiscated by the Customs authorities, they became in possession of the goods and therefore, the Service Provider shall not levy any charges for the said confiscated goods. If at all any deposits are collected in this regard, the said deposits are to be refunded - In the present case, even the goods are not released and the Service Provider is claiming charges, which is in violation of the Detention certificate issued by the Customs authorities. Thus, the petitioner is constrained to move the writ petition.
In the present case, admittedly, the goods are being maintained by the Service providers. On confiscation, the Customs authorities take possession. However, the goods are still under the custody of the Service Provider. The goods are not taken away from the premises of the Service Provider. Therefore, the grievances of the service provider are also to be looked into and considered, while granting the relief of release of the imported goods or refund of the deposits, if any made - this Court is of the considered opinion that in between disputes, more specifically, with the Service Provider and the importer or exporter has not been considered in any of these judgments relied upon by the petitioners. Therefore, this Court is of the opinion that the Detention certificate issued under the provisions of the Customs Act is reiteration of the legal position, which is binding on the Service Provider. However, such Detention certificate cannot be the sole document for the purpose of grant of relief of refund or release of goods without further adjudication with reference to the disputes or grievances exists between the Service Provider, who is a private party and the exporter or importer.
The contractual relationship between the service providers, who is a private person and the petitioner cannot be resolved under writ jurisdiction by the High Court. Thus, based on the Detention Certificate issued by the Customs Authorities, the petitioner has to adjudicate the same before the Competent Forum or claiming recovery of refund - this being the nature of the Detention Certificate issued under the Regulations, this Court is of an opinion that mere issuance of Detention Certificate would not confer any right to get refund directly from service provider, who is a private party. The contract between the service provider and the importer and exporter are to be considered and terms and conditions are to be looked into with reference to the facts and an adjudication on the factual aspects, became imminent, and such an exercise cannot be done in a writ proceedings.
Petition dismissed.
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Securities / SEBI
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2021 (7) TMI 986
Violation of the provisions of the SEBI Act - What exact violations raised - HELD THAT:- On going through Exhibit P3 show cause notice issued by the Deputy General manager of SEBI dated 13th March, 2020, we could not locate any such eventuality, apart from the same being explanatory in nature, enabling an aggrieved person to identify the exact violations raised against him and submit a reply understanding the gamut of the issues.
Learned single Judge has rightly dismissed the writ petition holding that SEBI has power to initiate action against the appellant for violation of the provisions of the SEBI Act, 1992 - minute intricacies of the issues raised in regard to the power of the Deputy General Manager of SEBI, the question of limitation etc. are all aspects to be considered by the statutory authority in terms of the provisions of Act, 1992 and the regulations thereto discussed above. That said, the issues raised by the appellant in respect of the power of the authority under the Companies Act, 1956 vis-a-vis the Companies Act, 2013 are all matters, which can be raised before the statutory authority. This we say because, from the show cause notice it is clear that the violations are relating to the years 2007-2013 during which period the Companies Act,1956 was in force.
We are also conscious of the fact that when the functions of an authority are regulated and controlled by clear statutory provisions and without any inhibitions created, we have no reason to think that the said authority would not adjudicate the issues in terms of law.
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Insolvency & Bankruptcy
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2021 (7) TMI 985
Liquidation process - J.M. Financial Asset Reconstruction Company Ltd. has been asserting rights on the basis of being part of Committee of Creditors and Financial Creditor of the Corporate Debtor - HELD THAT:- Application by the Adjudicating Authority, the same was dismissed as infructuous and period of CIRP was extended. In 9th CoC Meeting dated 10.09.2018, as plans received were not viable CoC again decided to file for Liquidation and I.A. No. 376 of 2018 was filed by Resolution Professional on 25th September, 2018.
Company Appeal (AT) (Ins.) No. 1219 of 2019 read with Company Appeal (AT) (Ins.) No. 1327 of 2019
Direction of refund of money to Dr. Tandon and others - Order/direction as may be issued by Competent Court in pending litigation - it is claimed that when the Adjudicating Authority accepted that Dr. Tandon and others were not financial Creditors and that their claim was time-barred, the Adjudicating Authority could not have directed the Resolution Professional to return the money as has been directed - HELD THAT:- It is claimed in state of Madhya Pradesh in view of Section 17(1) clause ‘f’ added Registration Act, 1908 document which purports or operates to effect any contract for sale of any immovable property is required to be compulsorily registered. Under Section 49 such document cannot be received as evidence of any transaction affecting the property. Dr. Tandon and others did not show copy of registered sale-deed to show that it was executed by authorized representative and thus they were not allottees of Real Estate Project. It is argued that Dr. Tandon and others could not be treated as Financial Creditors.
The Adjudicating Authority erred in not considering such documents and it came to the wrong conclusion that Dr. Tandon and others could not be treated as Financial Creditors. As per the amended definition of Section 5(8) which added the Explanation, Dr. Tandon and others were required to be treated as allottees to Real Estate Project and to have been treated accordingly - It was also error on the part of the Adjudicating Authority to state that agreement of sale was dated 31st March, 2012 and thus the claim was time22 Company Appeal (AT) (Ins.) No. 1176, 1203, 1219 & 1327 of 2019 barred.
Whether or not Corporate Debtor could have ultimately executed Sale Deed is not relevant in the facts of case read with provisions of IBC. Resolution Professional/Liquidator could not have asked Dr. Tandon & Ors. to first show No Objection of HUDCO or show document to prove that Mr. Amresh Pandya had authority without which the Resolution Professional outright refused to look into the document of Agreement to Sell which was coupled with huge amounts admittedly received in accounts of Corporate Debtor and reflected in Audited Returns - The Appellants in Company Appeal (AT) (Ins.) No. 1327 of 2019 are at liberty to request the Liquidator to act on the claim as they had filed during the period of CIRP or they may submit their fresh updated claim with the Liquidator under Regulation 18 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The Liquidator is directed to receive the same and act according to law.
Company Appeal (AT) (Ins.) No. 1203 of 2019
Refund of the advance given as security deposit - no lease deed was signed between the Corporate Debtor and the Appellant No. 2 even after the expiry of the period and the Corporate Debtor failed to hand over the shop to the Appellant No. 2 - HELD THAT:- Appellant Nos. 1 and 3 claimed to have registered lease deed in their favour executed in 2011 and both of them then claimed that subsequently they executed lease deed in favour of the Corporate Debtor for the same space for which they had entered into lease deed by other documents of leave and licence executed in 2013. Appellant Nos. 1 and 3 claimed that the said documents of leave and licence were in the nature of assured returns. Their claims appear to be in the nature of claiming rent. These Appellants have tried to draw parity with the case of Dr. Tandon and others where the document was of the Agreement to Sell. These Appellants cannot seek to be treated similarly with Dr. Tandon and others - Appellant Nos. 1 and 3 cannot be considered as Financial Creditors. As regards the Appellant No. 2, it is only a claim for return of security deposit for which already litigation was raised before the District Consumer Redressal Forum - the Adjudicating Authority rightly directed these Appellants to file their claims before the Liquidator.
Appeal stands disposed with direction to the Liquidator to receive the claims made by these Appellants (if not already made) and treat the same appropriately under the provisions of law.
Company Appeal (AT) (Ins.) No. 1176 of 2019
Seeking direction to set aside Liquidation order - HELD THAT:- Impugned Order shows that Section 7 of IBC Application in the matter was admitted on 14.09.2017. The Liquidation Order has been passed on 20th September, 2019. Clearly much more period than what Section 12 of IBC prescribes was consumed. The prayer of the Appellant to set aside the Liquidation Order for reasons stated against the Resolution Professional/Liquidator cannot be granted as in the set of facts Liquidation is the necessary consequence if in the time prescribed under Section 12 of IBC Resolution Plan has not become possible - As regards, averments made against the Resolution Professional/Liquidator, as IBBI which is the regulatory authority for Resolution Professionals has already been ceased of the matter we need not deliberate over those issues and leave them for IBBI - the appeal cannot be allowed.
Application disposed off.
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2021 (7) TMI 979
Dissolution of the Corporate Person - voluntary liquidation - Section 59(7) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- On the Petition filed by the Liquidator under sub-section 7 of Section 59 of the Code for dissolution of this Corporate Person, it is noticed that the affairs of the Corporate Person have been completely wound up and its assets are liquidated. This Corporate Person, through its Liquidator, voluntarily liquidated itself so as to get dissolved, therefore, this Corporate Person is dissolved directing the Liquidator to file this order with concerned Registrar of Companies and IBBI within 14 days thereof.
This Company Petition is allowed.
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Service Tax
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2021 (7) TMI 982
Condonation of delay in filing appeal before Commissioner (Appeals) - appeal was filed beyond the period prescribed under section 85 (3) of the Finance Act - Rejection of refund claim - HELD THAT:- Initially the appellant was advised to file a representation before the Chief Commissioner against the order dated 26.10.2009, but subsequently, the counsel who was contacted, after the Range Officer informed the appellant that no appeal had been filed before the Commissioner (Appeals), advised that an appeal was required to be filed before the Commissioner (Appeals), that an appeal was filed on 13.05.2010.
We are satisfied from the averments made in the delay condonation application that the appellant was prevented by sufficient cause from filing the appeal before the Commissioner (Appeals) within a period of three months from the date of receipt of the order. The delay, is, accordingly condoned and the appeal shall be treated to have been filed within time before the Commissioner (Appeals).
The matter is remitted to the Commissioner (Appeals) to decide the appeal on merits as expeditiously as is possible since the Adjudicating Authority had passed the order in 2009 - Appeal allowed - decided in favor of appellant.
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2021 (7) TMI 987
Principles of natural justice - matter was adjudicated ex-parte, in the absence of the petitioner - petitioner did not appear before the respondent - levy of service tax in respect of service rendered to members - HELD THAT:- One more opportunity can be extended to the petitioner to present its case before the respondent. It is true that a person who did not avail of the opportunity for hearing cannot later complain about violation of principles of natural justice. However, considering the fact that Ext.p11 request was made citing the COVID-19 pandemic and considering the fact that it the specific case of the petitioner that E-mail dated 03-03-2021 fixing the date of hearing on 25-03-2021 had not come to the notice of any of the office bearers of the petitioner, it is only appropriate such opportunity is extended to the petitioner.
It is settled law that when an order is passed in violation of the principles of natural justice the availability of an alternative remedy is not a bar for exercise of the jurisdiction under Article 226 of the Constitution of India - the respondent shall adjudicate Ext.P7 show cause notice afresh within a period of one month from the date of receipt of a certified copy of this judgment.
Petition disposed off.
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CST, VAT & Sales Tax
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2021 (7) TMI 995
Rectification of mistake - error apparent on the face of record or not - escaping of turnover - refund the excess Input tax credit - HELD THAT:- The impugned order at Ext.P4 has considered this aspect and it has been observed by the rectifying authority that the petitioner/dealer has failed to produce the invoices and had admitted that the suppliers failed to upload the invoices and therefore the tax was not remitted to the exchequer and hence the impugned tax credit came to be rejected.
Escaped turn over - HELD THAT:- The same point was considered in the rectification order with a finding that the turn over taken for assessment was only in respect of Form No.10 relating to the traders. The turn over of Form No.10B was not taken in the order of assessment and so there is no question of giving credit of payment as per Form No.10B. With these reasons by holding that there is no mistake to be rectified under Section 66 of KVAT Act, 2003, the rectification application so far as these two aspects is concerned, came to be rejected.
Consideration of both these aspects which are sought to be urged before this Court would certainly require this Court to record a finding of fact by examining the relevant documents. This Court, if it choses to dwell on these aspect will have to examine whether the petitioner had produced invoices or had failed to produce those invoices in order to ascertain whether rejection of input tax credit was according to law or otherwise. In the same manner scrutiny of Form Nos.10 and 10B will be required to be undertaken by this Court - the petitioner has alternate and more efficacious remedy of approaching the appellate authority in the matter.
Petition dismissed.
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2021 (7) TMI 994
Violation of principles of natural justice - impugned order passed without granting any further opportunity of hearing to the petitioner - penalty u/s 67 of the KVAT Act - HELD THAT:- The petitioner was not granted an opportunity of hearing in the matter, the impugned order at Ext.P8 is quashed and set aside and the matter is remitted for fresh consideration to the 1st respondent State Tax Officer. The petitioner to appear before the 1st respondent State Tax Officer at 11.00 A.M on 21.07.2021 along with all necessary records and then to abide by the further directions of the 1st respondent State Tax Officer. He shall co-operate the 1st respondent State Tax Officer in disposal of the matter without seeking any adjournments.
The learned counsel for the petitioner prays that till disposal of the issue of the penalty the notice at Ext.P10 be stayed. However, the petitioner is free to show cause to the said notice at Ext.P10 by disclosing the fact that the impugned order of penalty at Ext.P8 is quashed and set aside by this Court.
This writ petition is disposed of.
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2021 (7) TMI 993
Validity of assessment order - assesses have not filed option letter for payment of tax under compounding scheme - discrepancies in the turnover - HELD THAT:- This Court is of an opinion that the impugned order stipulates that regarding the difference in the turnover, the dealers have file Form WW and Profit and Trading and loss account for the Month of December 2014 only. At the time of filing Form WW, they have reported that the total sales turnover is ₹ 56,08,055/- in the Trading Account. At that time of inspection, they have not reconcile the above turnover before the Enforcement Officials. Now, they have stated that the correct turnover is ₹ 62,52,658/- only. But the trading account, they have reported the turnover is ₹ 56,08,055/- only. At that time personal hearing also, they have not reconcile how they have shown in the Trading Account - This Court is of an opinion that an adjudication is required with reference to the disputed facts.
Discrepancies in the turnover - HELD THAT:- Verification of records are required and the Appellate Authority is the final fact finding Authority regarding the adjudication of disputes. Therefore, preferring an appeal is preferable for the purpose of resolving the issues in a full-fledged manner.
The practice of filing the Writ Petitions are in ascending mode without exhausting the appeal remedy mostly with an idea to avoid payment of pre-deposit for filing an appeal. Such a practice can never be encouraged. In all circumstances, the parties are bound to exhaust the appeal remedy in the manner prescribed. This being the principles settled by the Courts, this Court is of an opinion that such disputed questions raised in the Writ Petition cannot be decided by this Court based on the affidavit or based on the orders passed by this Court, holding that the option letters need not be submitted by the assessee. All these issues are to be decided on merits and with reference to the documents and evidences to be produced.
The petitioner has to exhaust the Appellate remedy as contemplated under the provisions of the Act. Accordingly, the petitioner is at liberty to prefer an appeal in a prescribed format by applying the provisions of Statute and Rules, within a period of six weeks from the date of receipt of a copy of this order - Petition disposed off.
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