TMI Tax Updates - e-Newsletter
May 7, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
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GST:
Violation of principles of natural justice - notice u/s 46 was not been given to the petitioner - The Court rejects the petitioner's contention regarding non-compliance with Section 46. Since the petitioner filed a NIL return, no notice was necessary under this section. The case falls under Chapter XIV, where notices were issued under Section 70 post-search and seizure. - The Court finds no violation of principles of natural justice. The petitioner was provided with opportunities for a personal hearing, as mandated by Section 75(5) of the Act. The petitioner's admission of GST liability in evidence strengthens this finding. - Consequently, the writ petition was dismissed, with the petitioner directed to pursue appellate remedies.
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GST:
Validity of assessment order - Utilization of Input Tax Credit - Upon review, it was found that the appellant had indeed utilized IGST credit for the payment of SGST liabilities, resulting in the transfer of tax to the State of West Bengal. The Deputy Commissioner confirmed the transfer of the IGST credit amount to the Government of West Bengal. - Considering the findings, the High Court concluded that the assessment order challenged in the writ petition could not be sustained. Therefore, the appeal was allowed, and the writ petition was granted, setting aside the impugned assessment order.
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GST:
Condonation of delay in filing an appeal before the appellate authority - The High Court disagreed with the State's contention regarding the implied exclusion of Section 5 of the Limitation Act, 1963. It emphasized that in the absence of a specific exclusion of Section 5, it would be improper to read an implied exclusion. - The Court set aside the order of the appellate authority refusing to condone the delay under Section 107 of the WBGST Act, 2017. It held that the appellate authority had failed to exercise jurisdiction in refusing to entertain the application under Section 5 of the Limitation Act, 1963. Consequently, the delay in preferring the appeal was condoned, and the appeal was restored to its original file and number.
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GST:
Time Limitation for filing refund claim - Impact of COVID-19 Pandemic - The High Court, considering the exceptional circumstances, interpreted the limitation period flexibly and referred to legislative provisions and notifications extending the period. Consequently, the court set aside the impugned order and remitted the case for reconsideration, directing the respondent to review the petitioner's refund claim in light of the extended limitation period, with a mandate for expeditious resolution.
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GST:
Rejection of refund claim - Status of the Subsidiary as a Distinct Person - Export of software development services - The High Court examined the provisions of Section 2(6) of the IGST Act, 2017 and the arguments presented by both parties. It concluded that the interpretation placed by the first respondent was incorrect. The Court affirmed that the petitioner and its subsidiary are distinct entities, fulfilling the requirements of Section 2(6)(v) of the Act. - Regarding the status of the subsidiary, the Court noted that Circular No.161/17/2021-GST clarifies that a company incorporated in India and a foreign company are separate legal entities under the CGST Act. Thus, the Court held that the subsidiary should not be considered merely an establishment of a distinct person under Explanation 1 of Section 8 of the IGST Act, 2017. - Accordingly, the High Court set aside the impugned order and directed the second respondent to process the refund claim along with applicable interest.
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GST:
Failure to File Appeal within prescribed period of limitation - The court observed that despite the various grounds raised by the petitioner, the failure to file an appeal within the statutory period or seek condonation of delay rendered the writ petition vulnerable to dismissal. Citing the decision of the Hon'ble Supreme Court in a similar case, the High Court emphasized that the remedy of appeal is a creature of statute. The court highlighted the importance of adhering to statutory timelines for filing appeals and condoning delays only with valid reasons. Consequently, the High Court dismissed the petition.
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GST:
Denial of input tax credit - demand of differential input tax - The court notes the discrepancy in the GST numbers but suggests the petitioner could obtain certification from the supplier to validate the transactions. However, the petitioner filed belated returns and paid taxes late, which led to the issuance of a show cause notice. The court finds no merit in the petitioner's argument regarding the imposition of penalties, emphasizing the belated payment of taxes and interest. - While dismissing the writ petition, the court grants the petitioner liberty to file an appeal within 30 days from the receipt of the order.
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GST:
Refund claim of encashed amount by the revenue - Direction to withdraw recovery proceedings by issuing a demand draft equivalent to the Bank Guarantee - circular dated 18.03.2020 - The Court notes the submissions of both parties regarding the inability to prefer an appeal due to the non-constitution of the appellate tribunal. - Referring to a circular, the Court acknowledges the issue of pending appellate processes due to the absence of the appellate tribunal. The Court directs the respondent to refund the encashed amount to the petitioner within one month from the date of the judgment. It further directs the petitioner to furnish a fresh bank guarantee within one week from the date of refund, valid for one year.
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GST:
Wrong availment of transitional Input Tax Credit - request for an adjournment was not responded to - The Court acknowledged that although a personal hearing was offered under the reminder dated 16.12.2023, the subsequent issuance of the impugned order without considering the petitioner's adjournment request rendered the order unsustainable. Consequently, the High Court quashed the impugned order and remanded the matter for reconsideration.
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GST:
Validity of assessment order - Disparity in Returns - The High Court examined the case thoroughly. It noted that the entire tax liability stemmed from the disparity between the petitioner's GSTR 3B return and the auto-populated GSTR 2A return. Considering Circular No.183, which required obtaining a certificate from the supplier, the Court acknowledged that the petitioner eventually obtained the certificate, albeit belatedly. - The High Court, considering the submissions and evidence presented, set aside the impugned order and directed the respondent to provide the petitioner with a fair opportunity to address the tax demand.
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GST:
Liability of tax arising on account of inadvertent error - mismatch between the petitioner's GSTR 1 and GSTR 3B returns The High Court noted the certificates from purchasers, confirming exclusion of duplicate invoices while availing ITC, which reflected in their GSTR 2A returns. The Court concluded that the matter required reconsideration to ascertain if purchasers indeed did not avail excess input tax credit based on duplicate invoices. - The impugned order disregarded the petitioner's explanation, citing failure to amend the GSTR 1 statement by the prescribed deadline. The Court observed that the matter required reconsideration in light of documents submitted by the petitioner, indicating the need to ascertain if purchasers indeed did not avail excess input tax credit based on duplicate invoices.
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GST:
Validity of assessment order - classification of oil coolers as heat exchangers - The High court observed that the petitioner's main grievance was the disregard of the Chartered Engineer's certificate. However, the court determined that this contention could be raised in appellate proceedings, as the overall facts and circumstances did not justify interference under Article 226 of the Constitution. - The court disposed of the writ petition by permitting the petitioner to file a statutory appeal before the appellate authority within three weeks.
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Income Tax:
Reopening of assessment under old regime - scope of new regime - scope of TOLA - In this detailed judgement, the Court found that the notice issued under Section 148 was invalid due to its reliance on repealed provisions. The High Court noted that subsequent legislation and court decisions had overtaken the statutes on which the original notices were based, rendering them ineffective. The High Court pointed out procedural flaws in the reassessment process, including the lack of proper approval from designated authorities, which was mandated by the law. The court emphasized the importance of following due process to uphold the integrity of tax reassessment procedures.
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Income Tax:
Recovery proceedings - attaching the property and bringing the property for sale - The High Court observed that the impugned actions were indeed barred by Rule 68B of the Income Tax Act, 1961. Since the attachment was made on 20.12.2018 and the sale notice was issued on 27.03.2019, after the conclusion of the relevant financial year in 2010, they were beyond the prescribed time limit. Relying on Rule 68B (1) of the Income Tax Act, 1961, the Court held that no sale of immovable property could be made after the expiry of the specified time limit. Consequently, the impugned actions were deemed barred by limitation, and the attachment over the petitioner's immovable property was set aside.
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Income Tax:
Validity of Reassessment proceedings - notice issued in the course of the reassessment proceedings not served on the assessee - The High Court examined the evidence presented, including copies of notices and postal tracking reports. It noted that all notices appeared to have been dispatched to the assessee but returned to the sender, the assessing officer. Despite this, the officer claimed the notices were served. The Court held that the mere dispatch of the assessment order to the same address did not prove due service of preceding notices. - Consequently, it set aside the assessment order and directed the petitioner to file detailed objections within a specified timeframe. The Court also allowed the assessing authority to reevaluate the issue of the firm's existence independently.
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Income Tax:
Reopening of assessment u/s 147 against non-existing entity - scheme of the amalgamation and arrangement approved - The High Court acknowledges the petitioner's argument regarding the issuance of notices and assessment orders to a non-existent entity. It finds that the reassessment orders and notices cannot be sustained due to this fundamental flaw. As a result, the court quashes and sets aside the reassessment orders and notices. - The court observes that the reassessment orders failed to consider the legal consequences of the approved scheme of amalgamation and arrangement. - Consequently, the court quashed and set aside the reassessment orders and notices.
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Income Tax:
Levy of penalty u/s 271(1)(c) - claim of incorrect deduction u/s 80GGA - The Appellate Tribunal analyzed the timeline of events and noted that the assessee had voluntarily offered the disputed deductions for taxation before the initiation of reassessment proceedings. It was observed that the assessee had withdrawn the claims of deductions and paid the necessary taxes well before the notice under section 148 of the Act was issued. The Tribunal found no basis in the findings of the lower authorities that there was concealment of income on the part of the assessee. Consequently, the Tribunal found no justification for the imposition of penalties u/s 271(1)(c) of the Act and proceeded to delete the penalties for both assessment years.
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Income Tax:
Estimation of income - bogus purchases - The Tribunal considered the facts surrounding the alleged bogus purchases. Despite the inability of the assessee to establish the identity of the parties and the genuineness of the transactions, the Tribunal deliberated on whether the Assessing Officer was justified in adding the entire amount of bogus purchases or only the profit margin. Referring to a precedent set by the Hon’ble Gujarat High Court, the Tribunal concluded that once it is determined that the amount represents alleged bogus purchases from bogus suppliers, it is not necessary to restrict the disallowance. Thus, the Tribunal upheld the addition of 100% of the alleged bogus purchases.
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Income Tax:
Reopening of assessment - Reasons to believe - ACIT jurisdiction to issue the notice u/s 148 - The Tribunal concluded that the reasons for reopening were based on credible information from the Investigation Wing, providing sufficient grounds for prima facie belief of income escapement. The approval from the PCIT, although brief, was considered valid as there was no evidence indicating lack of proper application of mind. - The Tribunal rejected the appellant's argument about the notice being issued after the prescribed time limit, noting that the acknowledgment from the postal authorities confirmed receipt within the deadline. Objections regarding reasons for issuing notices under section 143(2) and inadequate time for compliance were deemed meritless.
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Income Tax:
Disallowance of depreciation claimed on the “Goodwill” - The Tribunal reiterated its earlier decision and held that the assessee was entitled to claim depreciation on "Goodwill" arising from the amalgamation, following the precedent set in its own case. Since the year under consideration was the second year of the claim for depreciation on "Goodwill," it was deemed academic to determine eligibility, as depreciation was to be calculated on the opening Written Down Value (WDV) of the asset.
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Income Tax:
LTCG - denial of a claim of exemption u/s 54 - new residential house property was purchased only after the lapse of two years from the sale of original property - The Tribunal found that the assessee had deposited the entire sale consideration in the Capital Gains Scheme Account before the due date for filing the return of income. Consequently, the Tribunal held that the assessee complied with the provisions of Section 54(2) of the Act. - Regarding the purchase of the new residential property, the Tribunal observed that the property bought by the assessee was an under-construction flat, for which the occupation certificate was awaited. As a result, they directed further examination to determine if the extended period of three years for construction as provided under Section 54 of the Act applied in this case.
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Income Tax:
Levy of interest u/s 234A and 234B - defaults in furnishing return of income - The Case and situation pertains to situations where the original assessment is set aside during appellate proceedings for fresh assessment. In such cases, there is contention between the Revenue and the assessee regarding whether the subsequent assessment should be considered the regular assessment or if it is still the first assessment. - Since the existing precedents failed to address the changed legal scenario and legislative amendments, the Tribunal deemed it necessary to reexamine the computation of interest under sections 234A and 234B. - Therefore, the Tribunal decided to remand the issue back to the ld. CIT(A) for fresh consideration, allowing both parties to present their arguments and considering all relevant decisions.
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Income Tax:
Registration applied u/s 80G - The Tribunal examined the provisions of Section 80G(5) of the Act and clarified the interpretation of CBDT Circulars related to application deadlines. It emphasized the importance of allowing institutions already engaged in charitable activities to obtain final registration under Section 80G(5)(iii) of the Act, regardless of when they commenced activities. Based on its findings, the Tribunal set aside the Commissioner's decision and directed the granting of provisional approval to the assessee, subject to eligibility.
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Income Tax:
Undisclosed income of the assessee - bogus sale of agricultural produce - preponderance of probability theory - The Tribunal noted that the AO had not properly considered the nature of the appellant’s income and the agricultural evidence provided. It was observed that the lower authorities failed to appreciate the complexities of agricultural income and its proof, particularly in light of the transactions during the demonetization period. - The statements recorded by the AO, including those of a person responsible for the appellant's agricultural affairs, did not conclusively prove that the agricultural receipts were manipulated. - The Tribunal allowed the appeal, setting aside the addition of income.
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Income Tax:
Cash deposit in bank account treated as unexplained income - Agricultural income or not? - The Tribunal found discrepancies in the appellant's claims regarding agricultural income. While accepting that the appellant is an agriculturist, the Tribunal determined that the entire agricultural income claimed by the appellant could not be justified. However, they accepted the explanation regarding cash withdrawals and upheld the addition to the extent of Rs. 2,24,000/-, deleting the remaining amount.
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Customs:
Legality of Not Extending Anti-dumping duty - Power of Central Government to accept or reject the recommendations of the Designated Authority (DA) - Imports of the Textured Toughened (Tempered) Glass of Chinese origin - The High court held that the Central Government has the legislative discretion to accept or reject the recommendations of the DA. This decision is guided by broader economic considerations and public interest, rather than strictly adhering to the DA's findings. - It was clarified that the imposition or non-imposition of anti-dumping duty is a legislative decision, and the government is not required to provide a detailed reasoned order. - The court reiterated that its role is limited in matters of economic policy and legislative discretion exercised by the government. The judicial review does not extend to questioning the wisdom or advisability of such economic decisions unless there is a clear violation of statutory provisions or principles of natural justice.
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Customs:
Valuation of the seized goods - (i) Grey metal powder suspected to be Iridium, (ii) Grey metal powder suspected to be Ruthenium, (iii) Micro SD Memory cards, (iv) Stone beads ('Chaton') and (v) Branded watches - The adjudicating authority arrived at the valuation using various sources such as metal bulletins, NIDB data, purchase invoices, and website details. The Appellate Tribunal found the valuation to be appropriate except for Ruthenium, where it disagreed with the method used by the adjudicating authority. The Tribunal determined the value of Ruthenium at Rs. 3,00,000 per kg, which was within the range identified by the authority. Accordingly, the duty payable by the appellants was re-quantified based on the revised valuation.
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Customs:
Classification of the imported goods - ‘Activity trackers’ - rate of duty - Legal Niceties in Classification - The Tribunal observes deficiencies in the adjudicating authority's reasoning for the revised classification. It highlights the importance of identifying the predominant function of the goods and properly justifying the chosen classification. Emphasizing the importance of legal principles and independent assessment, the Tribunal sets aside the impugned order and remands the matter for fresh consideration in accordance with the law and judicial precedents.
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Customs:
Imports Of Marble slabs - Mis-declaration of quantity in the declared goods - Considering the appellant's failure to contest the discrepancy during assessment and their request for immediate release without a show cause notice, the Tribunal found them legally estopped from challenging the assessment later. - The Tribunal noted the substantial difference between the declared and measured quantities of marble slabs. Despite the appellant's argument regarding technical expertise, the measurements were conducted using standard methods, and the discrepancy was evident. The Tribunal upheld the customs authorities' decision to invoke relevant sections of the Customs Act and impose penalties. - Citing legal precedents, the Tribunal upheld the assessment and penalties imposed by customs authorities.
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Customs:
Valuation - Export of Carpets and threading bars - Mis-declaration of description and value - The Tribunal found that while the carpets were misdeclared and subject to confiscation, the threading bars were not misdeclared. The redetermined value was set aside due to lack of evidence from the department to counter procurement documents provided by the respondent. The reduction of redemption fine and penalty was partially upheld considering the admitted misdeclaration by the respondent.
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Customs:
Denial of FTA benefit - Import of Alkalised Cocoa Powder from Malaysia - The Tribunal noted that the denial of FTA benefits was based solely on the suspicion of non-compliance with the value addition requirement. However, it found that no independent verification was conducted to substantiate this suspicion. - The Tribunal highlighted the lack of proper verification by the customs authorities regarding the validity of the certificates of origin. It emphasized the requirement under the Customs Tariff Rules for retroactive checks and noted the absence of such checks in the present case. Consequently, it concluded that the denial of benefits based on presumption and assumption without proper verification was not maintainable in law. - Additionally, it observed that similar cases had been decided in favor of the appellant, rendering the issue non-res-integra. Therefore, the denial of benefits was unsustainable, and the appeal was allowed.
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Customs:
Cancellation of MEIS scrips - Re- classification of the goods - Export of “Lamda Cyhalothrin Technical” - The Tribunal upheld the appellant's classification, emphasizing that only DGFT had the authority to cancel MEIS scrips. The Customs Department lacked the power to invalidate exports based on alleged misclassification. The Tribunal reiterated that customs authorities cannot invalidate exports or cancel MEIS scrips without DGFT's action. They emphasized the need for DGFT to follow due procedure under the FTDR Act and FTP for such cancellations. The Tribunal affirmed the separation of roles between customs and licensing authorities. Customs authorities should not interfere with licensing policies or reclassify goods after valid licenses are issued.
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Customs:
Revocation of the Customs Broker License - forfeiture of security deposit - Penalty - The Tribunal found that the CB had obtained and verified the necessary documents in accordance with existing regulations. It referenced previous cases where similar circumstances absolved the CB of liability due to the authenticity of the documents provided. The Tribunal agreed that there was a failure in supervising the employee effectively, as admitted by the CB. This lack of oversight led to the improper filing of the bills of entry. - The Tribunal decided that while the CB failed in its supervisory duties, the complete revocation of the license was too severe. Instead, it upheld the forfeiture of the security deposit and the imposed penalty but overturned the license revocation.
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Corporate Law:
Professional misconduct by CA - Liability of the Engagement partner with audit firm - Acceptance of the Audit Engagement - The NFRA concluded that the audit firm and the responsible auditors committed professional misconduct. This was established through their failure to adequately address and report material misstatements and their overall failure to perform their duties diligently. - As a result of the findings, the NFRA imposed significant penalties on the audit firm and the individual auditors involved. The firm was penalized financially, and the responsible auditors were barred from undertaking any audit work for specified periods.
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Indian Laws:
NDPS - Power to seize and arrest of a person in a public place - Smuggling - Ganja - Samples being taken at the CGST Bhawan - The High Court found that the officers involved were duly authorized and acted within their powers under the NDPS Act. It was established that the search and seizure were conducted in compliance with Section 43 of the NDPS Act, which pertains to actions in public places. The Court held that the procedural requirements were met, including the immediate forwarding of seized items for chemical analysis and the safekeeping of the seized narcotics. - The appeals of appellants directly involved with the narcotics in the truck were dismissed, and their convictions were upheld based on the corroborative evidence of seizure and compliance with the NDPS procedural requirements. The appeals of two appellants, argued to be not present at the scene and implicated mainly through inadmissible confessional statements, were allowed, and their convictions were set aside.
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IBC:
Impleadment of the appellant bank as Proposed 2nd Respondent, in main Company Appeal - necessary/proper party - The Tribunal noted that the bank's interest was protected under pari passu charge and not an exclusive charge. It further highlighted that the bank had previously acquiesced to decisions made without its impleadment, demonstrating that its participation was not crucial for the resolution of the main appeal. - It was determined that the first respondent/appellant was not entitled to possession once the lease expired. The Tribunal rejected the appellant's argument for a right to stay based on investment in the property, citing lack of a valid, enduring lease agreement beyond the explicitly stated term.
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Service Tax:
Rejection of refund claim - GTA Service - time limitation - The tribunal reaffirmed the previous tribunal orders that transportation of coal within and outside mining areas does not constitute GTA service due to the absence of consignment notes. Therefore, the appellant is not liable to pay service tax under RCM for GTA service. - The tribunal found that the refund claim was filed within the prescribed time limit, as it was based on the final order of the tribunal dated 13.08.2014, and thus, was not barred by time.
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Service Tax:
Levy of service tax - Auction of abandoned imported goods by the CONCOR - ground rent/storage rendered towards the un-cleared/un-claimed cargo of the importer - The Tribunal emphasized that in the auction transaction of abandoned goods, no service recipient exists, thus no service is provided. They cited Sections 48 and 150 of the Customs Act, 1962, which deal with the sale of goods not cleared, and stressed that these sections make no provision for any service rendered. The Tribunal analyzed the relevant provisions of the Finance Act, 1994, which stipulate that to attract service tax, there must be a taxable service provided to a service recipient in exchange for consideration.
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Central Excise:
Classification of goods - Sulphuric Acid, used in the manufacture of Agricultural Grade Zinc Sulphate - classified as fertiliser under Chapter 31 of CETA or classifiable under 28332990 of CETA - Both appellants successfully argued that despite Zinc Sulphate’s classification under a non-fertilizer tariff, its use as a fertilizer in agriculture justified the exemption. The Tribunal aligned with this broader, functional interpretation of the law, setting a precedent for similar cases, where the end use of the product determines its classification for tax purposes rather than strict adherence to tariff codes.
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Central Excise:
Re-quantification of interest (on the refund of the pre-deposit) payment to the appellant - relevant time - The Tribunal focused on the applicable legal provisions, specifically Section 35FF of the Central Excise Act, 1944, as amended. It noted that the pre-deposit was made before the amendment of this section, and therefore, the provisions applicable at the time of the deposit govern the interest calculations. The Tribunal upheld the view that interest is payable only after three months from the date of the appellate order, as per the unamended Section 35FF.
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Central Excise:
Principles of Res-judicata - suo-moto re-credit taken instead of filing refund application - The Tribunal noted that the initial rounds of litigation, up to the High Court, had affirmed the appellant's eligibility to claim Cenvat credit under Notification No. 6/2006-CE, which the Tribunal upheld. It was observed that the re-credit was an accounting correction and did not require a refund claim, especially since it was done with Revenue's intimation. The Tribunal ordered the refund of the duty amount deposited by the appellant, with interest. This decision rested on the principle that once an appellate decision becomes final, it is binding, and the administrative authorities must comply without re-litigating settled matters.
Articles
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2024 (5) TMI 319
Time Limitation for filing appeal - condonation of delay - Appellate Authority has the jurisdiction and/or competence to condone the delay beyond the prescribed period of one month provided for filing an appeal under Section 107(4) of the said Act? - HELD THAT:- It is found that the observations made by the Appellate Authority that there is no scope under the provisions of the said Act read with corresponding Chapter and Section of the said Act for condoning the delay beyond four month cannot be sustained. Such finding is set aside. It may be noticed that the petitioner did not file any application for condonation of delay before the Appellate Authority. The petitioner, however, says that before the application under Section 5 of the Limitation Act could be filed the appeal was dismissed on the ground of limitation without giving an opportunity to the petitioner - Be that as it may, since the petitioner has not filed an application for condonation of delay, this Court cannot consider whether there is any sufficient cause for condoning the delay. Thus, no relief can be granted in favour of the petitioner at this stage - The writ petition is accordingly disposed of.
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2024 (5) TMI 318
Time Limitation - Refusal on the part of the appellate authority to condone the delay in maintaining the appeal under Section 107 of the West Bengal Goods and Services Tax Act, 2017 - determination under Section 73 of the said Act. Whether the appellate authority had failed to exercise jurisdiction in rejecting the application for condonation of delay, inter alia, on the ground that the same was filed beyond the maximum period of four months from the date of communication of the order? HELD THAT:- An identical issue had fell for consideration before the Hon ble Division Bench of this Court in the case of S.K. CHAKRABORTY SONS VERSUS UNION OF INDIA ORS. [ 2023 (12) TMI 290 - CALCUTTA HIGH COURT] . The Division Bench of this Court, while considering the scope and ambit of Section 107 of the said Act and the applicability of Section 5 of the Limitation Act 1963 on the basis of the provisions contained in Section 29(2) of the Limitation Act 1963, and by placing reliance on the judgment delivered by the Hon ble Supreme Court in the case SUPERINTENDING ENGINEER/ DEHAR POWER HOUSE CIRCLE BHAKRA BEAS MANAGEMENT BOARD (PW) SLAPPER ANOTHER VERSUS EXCISE AND TAXATION OFFICER, SUNDER NAGAR/ASSESSING AUTHORITY [ 2019 (11) TMI 6 - SUPREME COURT] ], had concluded that in absence of non obstante clause rendering Section 29(2) of the Limitation Act 1963, non applicable and in absence of specific exclusion of Section 5 of the Limitation Act, 1963, it would be improper to read implied exclusion thereof. The appellate authority is not denude of its power to condone the delay beyond one month from the prescribed period of limitation as provided for in Section 107(4) of the said Act. The appellate authority had failed to exercise jurisdiction in refusing to consider the application for condonation of delay in its proper perspective, since the same was filed beyond the prescribed period of four months from the date of communication of the order appealed against - order passed by the Appellate Authority in rejecting the appeal on the ground of delay is set aside - petition disposed off.
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2024 (5) TMI 317
Violation of principles of natural justice - notice under Section 46 of the Act has not been given to the petitioner - primary contention of petitioner is that provisions of Section 46 of the Act was not complied with and notice was not given to the petitioner who was a registered person - HELD THAT:- Since there is non-obstante clause under Section 62 of the Act, no proceedings could have taken place under Section 74 of the Act. It is not required to accept the said arguments for the very reason that this is not a case where the registered person failed to furnish the return rather, the petitioner has filed the NIL return. Therefore, there was no requirement to give notice to the petitioner under Section 46 of the Act. The present is a case where search and seizure had taken placed under Chapter XIV of the Act and in pursuance of search and seizure, summons were given under Section 70 of the Act to the petitioner to give evidence. Consequently, thereupon the evidence of petitioner was recorded and after recording of evidence, petitioner was afforded three opportunities of personal hearing and thereafter, the present assessment order has been passed - there are no violation of principles of natural justice as the petitioner himself has admitted his GST liability in evidence given by him and the person who has himself given evidence, cannot be permitted to be cross-examined by his own counsel. Since present is a case where there is no violation of principles of natural justice, it is not inclined to entertain the writ petition and the same is accordingly, dismissed. Petition dismissed.
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2024 (5) TMI 316
Validity of assessment order - Utilization of Input Tax Credit - dismissed on the ground that it is an appealable order - Applicability of section 5 of the Limitation Act, 1963 - impugned assessment order in the writ petition was stayed subject to the condition that the appellant/assessee deposits 10% of the disputed tax within a time frame - HELD THAT:- The stand taken by the Department of Commercial Taxes, Government of West Bengal, the amount of Rs. 63,71,353/- has been transferred to the Government of West Bengal - the assessment order, which was the subject-matter of challenge in the writ petition can no longer survive. The appeal is allowed, the order passed in the writ petition is set aside and the writ petition is allowed and the impugned assessment order dated 21st August, 2023 is set aside - the respondent/department is directed to refund the 10% pre-deposit made by the appellant pursuant to the interim order granted by this Court within eight weeks from the date of receipt of server copy of this order.
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2024 (5) TMI 315
Condonation of delay in filing an appeal before the appellate authority - Appeal u/s 107 of the WBGST Act, 2017 - appellate authority failed to exercise jurisdiction in rejecting the application for condonation of delay, inter alia, on the ground that the same was filed beyond one month from the prescribed period of limitation, as provided in Section 107(4) of the said Act - HELD THAT:- An identical issue had fell for consideration before the Hon ble Division Bench of this Court in the case of S.K. Chakraborty Sons [ 2023 (12) TMI 290 - CALCUTTA HIGH COURT ]. The Division Bench of this Court, while considering the scope and ambit of Section 107 of the said Act and the applicability of Section 5 of the Limitation Act 1963 on the basis of the provisions contained in Section 29(2) of the Limitation Act 1963 and by placing reliance on the judgment delivered by the Hon ble Supreme Court in the case Superintending Engineer/Dehar Power House Circle Bhakra Beas Management Board (PW) Slapper and another versus Excise and Taxation Officer Sunder Nagar/Assessing Authority [ 2019 (11) TMI 6 - SUPREME COURT ], had concluded that in absence of non obstante clause rendering Section 29(2) of the Limitation Act 1963, non-applicable and in absence of specific exclusion of Section 5 of the Limitation Act, 1963, it would be improper to read implied exclusion thereof. Having regard to the above, in my view the appellate authority is not denude of its power to condone the delay beyond one month from the prescribed period of limitation as provided for in Section 107(4) of the said Act. The appellate authority had failed to exercise jurisdiction in refusing to entertain the application under Section 5 of the Limitation Act, since the same was filed beyond one month, beyond the prescribed period of Limitation as provided for in Section 107(4) of the said Act. The explanation provided by the petitioner in the application under Section 5 of the Limitation act is satisfactory and delay has been sufficiently explained. Having regard thereof the delay in preferring the appeal under Section 107 of the said Act is condoned and appeal is restored to its original file and number. Petition disposed off.
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2024 (5) TMI 314
Time Limitation for filing refund claim - Impact of COVID-19 Pandemic - whether refund claim has to be filed by the exporter two years from the date of shipment? - HELD THAT:- In this case, the exports were made by the petitioner between 24.04.2018 to 25.02.2019. It is evident that the last date for filing the refund claim would have expired at the time when the country was under partial/intermittent/full lockdown due to outbreak of Covid-19 pandemic from third week of March 2020. The Hon'ble Supreme Court taking note of this earlier extended the period of limitation. Taking note of the same, the Central Government also promulgated an ordinance called Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Ordinary 2020, which was replaced by TOLA Act 2020. The Central Government has now issued notification No.13/2022-Central Tax dated 15.07.2022. By virtue of the above notification, the period from 1st day of March 2020 to 28th of February 2022 for computation for period of limitation for filing refund claim U/s.54 or under 55 of the CGST Act 2017 has been excluded. It is noticed that neither the 1st respondent nor the 2nd respondent had the benefit of the above notification when the orders were passed. Under these circumstances, impugned order upholding the rejection of the refund claim of the 2nd respondent are set aside and the case is remitted back to the 2nd respondent to reconsider the petitioner's refund claim afresh in the light of the above mentioned notification. Petition allowed by way of remand.
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2024 (5) TMI 313
Rejection of refund claim - Export of services - Export of software development services - petitioner submitted that the first respondent has wrongly affirmed the order of the second respondent by confusing the status of the subsidiary as a distinct person in accordance with explanation 1 in Section 8 of IGST Act, 2017 - HELD THAT:- The impugned order passed by the first respondent fairly concludes that the petitioner has satisfied the requirements of Section 2(6)(i) to (iv) of IGST Act, 2017. Admittedly, the petitioner and its subsidiary are two distinct entities and therefore, it cannot be said that the petitioner has not satisfied the requirements of Section 2(6)(v) of IGST Act, 2017. The doctrine of the authority for advance Ruling IN RE: SEGOMA IMAGING TECHNOLOGIES INDIA PRIVATE LIMITED [ 2018 (12) TMI 650 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA] cannot be applied to the facts of this case - It cannot be said that the petitioner and its subsidiary are not merely establishment of a distinct person in accordance with the explanation I in Section 8 of the IGST Act, 2017. The second respondent is directed to process the re-fund claim of the petitioner together with interest payable in accordance with the provisions of the Act as expeditiously as possible, preferably within a period of 12 weeks from the date of receipt of a copy of this order. The writ petition is allowed.
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2024 (5) TMI 312
Time limitation for filing appeal - petitioner did not file any appeal either within the period of limitation as prescribed under Section 107 of the RGST Act, 2017/ the CGST Act, 2017 or within the maximum period thereafter which could be condoned - liability of tax with interest and penalty on royalty - HELD THAT:- Present is a case where the petitioner did not even file appeal and allowed the order passed in assessment proceedings to become final and thereafter approached this Court by filing writ petition seeking to challenge the determination of tax, interest and penalty by the competent authority vide order dated 09.02.2023. Present is not a case where the order under Section 74 of the RGST Act, 2017/ the CGST Act, 2017 levying tax along with interest and penalty was passed without giving any opportunity of hearing to the petitioner. Even according to the petitioner, he was issued show cause notice and thereafter, impugned order was passed. In the writ petition, no plausible explanation has been offered as to why the petitioner did not take recourse to the remedy of statutory appeal. It, therefore, appears that the petitioner consciously did not choose to take recourse to the remedy of appeal as provided under Section 107 of the RGST Act, 2017/the CGST Act, 2017, but waited for the expiry of the period of limitation for filing appeal as also the maximum period of delay which could be condoned in the exercise of powers conferred upon the appellate authority under the provisions of Section 107 of the RGST Act, 2017/ the CGST Act, 2017. Having not preferred an appeal, the petition in the present case, in view of the decision of Hon'ble Supreme Court in the case of ASSISTANT COMMISSIONER (CT) LTU, KAKINADA ORS. VERSUS M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED [ 2020 (5) TMI 149 - SUPREME COURT] is not maintainable. Petition dismissed.
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2024 (5) TMI 311
Time limitation - appeal not filed within the period of limitation as prescribed under Section 107 of the RGST Act, 2017/ the CGST Act, 2017 - Challenge to Show Cause Notice - Levy of tax liability along with interest and penalty on Royalty - HELD THAT:- Present is a case where the petitioner did not even file appeal and allowed the order passed in assessment proceedings to become final and thereafter approached this Court by filing writ petition seeking to challenge the determination of tax, interest and penalty by the competent authority vide order dated 13.03.2023. Present is not a case where the order u/s 74 of the RGST Act, 2017/ the CGST Act, 2017 levying tax along with interest and penalty was passed without giving any opportunity of hearing to the petitioner. Even according to the petitioner, he was issued show cause notice and thereafter, impugned order was passed. In the writ petition, no plausible explanation has been offered as to why the petitioner did not take recourse to the remedy of statutory appeal. It, therefore, appears that the petitioner consciously did not choose to take recourse to the remedy of appeal as provided under Section 107 of the RGST Act, 2017/the CGST Act, 2017, but waited for the expiry of the period of limitation for filing appeal as also the maximum period of delay which could be condoned in the exercise of powers conferred upon the appellate authority under the provisions of Section 107 of the RGST Act, 2017/ the CGST Act, 2017. Having not preferred an appeal, the petition in the present case, in view of the decision of Hon'ble Supreme Court in the case of ASSISTANT COMMISSIONER (CT) LTU, KAKINADA ORS. VERSUS M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED [ 2020 (5) TMI 149 - SUPREME COURT] , is not maintainable. Petition dismissed.
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2024 (5) TMI 310
Validity of assessment order - denial of input tax credit - demand of differential input tax - input tax credit based on the wrong GSTIN wrongly availed - HELD THAT:- As far as the denial of input tax credit is concerned, there appears to be discrepancy in the GST and the number given by the Supplier in the invoice raised by the Supplier on the petitioner. The petitioner can get suitable certificate from the supplier that the sale was indeed made to the petitioner. It is noticed that the petitioner had filed returns for the assessment year 2017-2018 on 30.04.2022, which is the belated returns filed by the petitioner. In the return that was filed belatedly by the petitioner, the petitioner has accepted the short payment declared as the taxable turnover and yet had failed to pay the tax in time. The petitioner paid the tax only on 04.06.2022 - There is an inordinate delay in payment admitted tax liability in the return that was filed on 30.04.2022 for the assessment year 2017-2018. The petitioner cannot take advantage of its own mistake and state that the petitioner is not liable to pay penalty on account of belated filing of returns in GSTR 9 on 30.04.2022. There is no merit in the submission of the learned counsel for the petitioner, inasmuch as tax was belatedly paid on 04.06.2022. The interest on belated payment of tax for the month of July, 2017, was remitted by the petitioner only on 27.12.2022. The payment was not within 30 days from the date of issuance of the Show Cause Notice dated 22.09.2022. The Show Cause Notice dated 22.09.2022 preceded an audit, issuance of audit report in GST ADT-02 on 19.08.2022 - the Writ Petition is not maintainable. It is therefore liable to be dismissed. The petitioner can give proper explanation for the discrepancy in the GST number and in the invoices raised by the supplier, namely Vinvent Chemilab Private Limited and Moorthy Industries - Petition dismissed.
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2024 (5) TMI 309
Refund claim of encashed amount by the revenue - Direction to withdraw recovery proceedings by issuing a demand draft equivalent to the Bank Guarantee - circular dated 18.03.2020 - HELD THAT:- It is deemed just and appropriate to dispose of this petition by directing the respondent to refund the aforesaid amount of Rs.11,21,840/- encashed by the respondent on 01.02.2024 within a period of one month from today. It is further directed that immediately upon the respondent refunding the aforesaid amount back to the petitioner, petitioner would furnish a fresh bank guarantee within a period of one week thereafter which would be valid for a period of one year. Petition disposed off.
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2024 (5) TMI 308
Validity of assessment order - order challenged on the ground that the petitioner's reply was disregarded - violation of principles of natural justice - HELD THAT:- The petitioner's reply was disregarded by categorising such reply as an unauthorised reply. It is unclear as to why the reply was described as unauthorised. In any event, the impugned order is vitiated by non consideration of the petitioner's reply. Consequently, such order is unsustainable. The impugned order dated 29.12.2023 is set aside and the matter is remanded for reconsideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of a copy of this order. Petition disposed off by way of remand.
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2024 (5) TMI 307
Wrong availment of transitional Input Tax Credit - request for an adjournment was not responded to and that a personal hearing was not provided in breach of sub-section (4) of Section 75 of the Tamil Nadu Goods and Services Tax Act, 2017 - violation of principles of natural justice - HELD THAT:- The reply dated 20.12.2023 of the petitioner refers to the death of the mother of one of the partners on 11.12.2023. On account of the same, the petitioner requested for further time to reply to the show cause notice. The respondent did not respond to the request for adjournment and instead issued the impugned order. While a personal hearing was offered under the reminder dated 16.12.2023, the order is unsustainable because the request of the petitioner for an adjournment was not considered and no personal hearing was offered pursuant to such reply. The impugned order is quashed and the matter is remanded for re-consideration. The petitioner is permitted to submit a reply to the show cause notice within fifteen days from the date of receipt of a copy of this order. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity, including a personal hearing, and thereafter issue a fresh order within a period of two months from the date of receipt of the petitioner's reply. Petition disposed off.
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2024 (5) TMI 306
Violation of principles of natural justice - cancellation of GST registration of petitioner - mismatch between the petitioner's GSTR 1 and GSTR 3B returns - HELD THAT:- On perusal of the impugned order, it appears that the tax liability pertains to a mismatch between the petitioner's GSTR 1 and GSTR 3B returns. Since the petitioner's GST registration was cancelled, at a minimum, the petitioner has little reason to continually monitor the GST portal. The petitioner submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand. The principles of natural justice demand that the petitioner be provided an opportunity to contest the tax demand. Therefore, the impugned order is quashed and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. The Writ Petition is disposed off.
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2024 (5) TMI 305
Validity of assessment order - order challenged on the ground that documents submitted by the petitioner were not duly considered and that the petitioner was not provided a reasonable opportunity - violation of principles of natural justice - HELD THAT:- The entire tax liability is on account of the disparity between the petitioner's GSTR 3B return and the auto-populated of GSTR 2A return. In accordance with Circular No.183, the petitioner obtained a certificate from the supplier albeit belatedly. The reply of the petitioner indicates that documents in support of the contention that the purchases were genuine were submitted. In these circumstances, it is just and necessary that the petitioner be provided an opportunity to effectively deal with the tax demand after putting the petitioner on terms. The impugned order is set aside on condition that the petitioner remits a sum of Rs. 1,00,000/- towards the disputed tax demand - Petition allowed.
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2024 (5) TMI 304
Liability of tax arising on account of inadvertent error - mismatch between the petitioner's GSTR 1 and GSTR 3B returns - error was committed by providing details pertaining to the same invoice more than once - HELD THAT:- The petitioner's explanation was disregarded as unacceptable and as an after-thought merely on the ground that the petitioner did not amend the GSTR 1 statement on or before March 2019. In the face of the documents submitted by the petitioner, the matter requires reconsideration so as to ascertain whether the purchasers indeed did not avail of excess input tax credit on the basis of the duplicate invoices. For such reason, the impugned order call for interference. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of two months from the date of receipt of a copy of this order - Petition allowed by way of remand.
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2024 (5) TMI 303
Validity of assessment order - classification of oil coolers as heat exchangers - to be classified within HSN 8419 or 8708 - main grievance of the petitioner is that the Chartered Engineer's certificate was disregarded while concluding that oil coolers should be classified under chapter 8708 instead of 8419 - HELD THAT:- The impugned order is dated 30.12.2023 and the period of limitation, without condonation, expires by the end of this month. Since the petitioner challenged the order by way of this writ petition, which was filed on or about 16.03.2024, it is just and necessary that if a statutory appeal is filed, such appeal is received and disposed of on merits. The petition is disposed of by permitting the petitioner to file a statutory appeal before the appellate authority within three weeks from the date of receipt of a copy of this order.
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Income Tax
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2024 (5) TMI 302
Reopening of assessment under old regime - scope of new regime - scope of TOLA - as argued notice has been issued on the basis of the provisions which have ceased to exist and are no longer in the statute - Whether TOLA is applicable for Assessment Year 2015-2016 and whether any notice issued u/s 148 of the Act after 31st March 2021 will travel back to the original date? - HELD THAT:- For Assessment Year 2015-2016 the provisions of TOLA are not applicable. This is a categorical finding in Tata Communications Transformation Services Ltd. [ 2022 (4) TMI 44 - BOMBAY HIGH COURT] and has been followed by the Siemens Financial Services (P.) Ltd. [ 2023 (9) TMI 552 - BOMBAY HIGH COURT] Therefore, there is no question of Revenue relying on TOLA to justify the impugned notice under Section 148 of the Act as being within the period of limitation. Even in New India Assurance [ 2024 (1) TMI 803 - BOMBAY HIGH COURT] the Court held that reliance by Revenue on Instruction No. 1 of 2022 issued by CBDT is grossly misplaced and neither the provisions of TOLA nor the judgment in Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] provide that any notice issued under Section 148 of the Act after 31st March 2021 will travel back to the original date. Time limit to issue notice - In the present case, in view of the fifth proviso, the period to be excluded would be counted from 25th May 2022, i.e., the date on which the show cause notice was issued under Section 148A (b) of the Act by respondent no. 1 subsequent to the decision of the Hon ble Apex Court in the case of Ashish Agarwal (Supra) and upto 10th June 2022, which is a period of 16 days. Further, the time period from 29th June 2022 upto 4th July 2022 cannot be excluded as the same was not based on any extension sought by petitioner, but at the behest of respondent no. 1. Even if the same was to be excluded, still it will mean further exclusion of 5 days. Considering the said excluded period as well, the impugned notice dated 27th August 2022 is still beyond limitation. The fact that the original notice dated 8th April, 2021 issued under Section 148 of the Act, was stayed by this Court on 3rd August 2021, and its stay came to an end on 29th March 2022 on account of the decision of this Court, will not be relevant for providing extension as per the fifth proviso. The fifth proviso provides for extension for the period during which the proceeding under Section 148A of the Act is stayed. The original stay granted by this Court was not with respect to the proceeding under Section 148A of the Act, but with respect to the proceeding initiated as per the erstwhile provision of Section 148 of the Act and, hence, such stay would not extend the period of limitation as per the fifth proviso to Section 149 of the Act. The question of applicability of the sixth proviso does not arise on the facts of the present case. We find support for this in Godrej Industries Ltd. [ 2024 (3) TMI 109 - BOMBAY HIGH COURT] In view of the aforesaid, the impugned notice dated 27th August 2022 is clearly barred by the law of limitation. Validity of assessment order issued without a DIN - The impugned notice dated 27th August 2022 issued under Section 148 of the Act is invalid and bad in law as the same has been issued without a DIN. Faceless assessment of income escaping assessment - notice being issued by the JAO as the same was not in accordance with Section 151A - There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice under Section 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice under Section 148 of the Act. Automated allocation is defined in paragraph 2(b) of the Scheme to mean an algorithm for randomised allocation of cases by using suitable technological tools including artificial intelligence and machine learning with a view to optimise the use of resources. Therefore, it means that the case can be allocated randomly to any officer who would then have jurisdiction to issue the notice under Section 148 of the Act. It is not the case of respondent no. 1 that respondent no. 1 was the random officer who had been allocated jurisdiction. With respect to the arguments of the Revenue, i.e., the notification dated 29th March 2022 provides that the Scheme so framed is applicable only to the extent provided in Section 144B of the Act and Section 144B of the Act does not refer to issuance of notice under Section 148 of the Act and hence, the notice cannot be issued by the FAO as per the said Scheme - An act which is done by an authority contrary to the provisions of the statue, itself causes prejudice to assessee. All assessees are entitled to be assessed as per law and by following the procedure prescribed by law. Therefore, when the Income Tax Authority proposes to take action against an assessee without following the due process of law, the said action itself results in a prejudice to assessee. Therefore, there is no question of petitioner having to prove further prejudice before arguing the invalidity of the notice. With respect to the Office Memorandum dated 20th February 2023, the said Office Memorandum merely contains the comments of the Revenue issued with the approval of Member (L S) CBDT and the said Office Memorandum is not in the nature of a guideline or instruction issued under Section 119 of the Act so as to have any binding effect on the Revenue. Moreover, the arguments advanced by the Revenue on the said Office Memorandum dated 20th February 2023 is clearly contrary to the provisions of the Act as well as the Scheme dated 29th March 2022. Hon ble Telangana High Court in the case of Kankanala Ravindra Reddy [ 2023 (9) TMI 951 - TELANGANA HIGH COURT] has held that in view of the provisions of Section 151A of the Act read with the Scheme dated 29th March 2022 the notices issued by the JAOs are invalid and bad in law. We are also of the same view. Reason to believe - AO has restricted the escapement of income only with regard on the claim of deduction under Section 80JJAA of the Act and disallowance of excess claim of Forex loss - On the Forex loss, respondent has prima facie accepted the contentions of petitioner that there was a Forex loss. Therefore, the same cannot be justified as an escapement of income. Respondent no. 1 has also accepted that the transactions of Calibre Point Business Solutions Ltd. have been duly incorporated in the accounts of petitioner and that no deduction is claimed in respect of the deduction allowed under Section 10AA of the Act. None of the issues raised in the impugned order show an alleged escapement of income represented in the form of asset as required in Section 149(1) (b) of the Act. As regards the claim of deduction under Section 80JJAA of the Act, an issue of correctness of claim of deduction under Chapter VI of the Act, in our view, cannot be covered by Section 149(1) (b) of the Act.The term asset is defined in Explanation to Section 149 of the Act to include immovable property being land or building or both, shares and securities, loans and advances, deposit in bank account. The present case does not fall in any of the types of the assets as mentioned above. Further, the alleged claim of disallowance of deduction also can never fall under the category of either clause (b) or clause (c) as it is neither a case of expenditure in relation to an event nor a case of an entry in the books of account as no entries are passed in the books of account for claiming a deduction under the provisions of the Act. On this ground also the impugned notice will be invalid. Power of review - We agree with petitioner that there cannot be a reopening based on a change of opinion. The claim of deduction under Section 80JJAA of the Act was made by petitioner in the return of income and petitioner had filed Form 10DA being the report of the Chartered Accountant. In the said Form, a note has been filed alongwith Form 10DA and it has specifically been submitted by petitioner that software development activity constitutes manufacture/ production of article or thing . The claim of deduction under Section 80JJAA of the Act was also disclosed in the Tax Audit Report filed by petitioner alongwith the return of income. AO has passed the assessment order dated 30th November, 2017 allowing the claim of deduction under Section 80JJAA of the Act. The claim for deduction under Section 80JJAA of the Act was allowed by the Assessing Officer in the previous years as well. Hence, the present case is clearly a case of change of opinion or review of the original assessment order which is not permissible even under the new provisions. Therefore, the concept of change of opinion being an in-built test to check abuse of power by the Assessing Officer and the Assessing Officer having allowed the claim of deduction under Section 80JJAA of the Act in the assessment order dated 13th November 2017, now to disallow the same is based on a clear change of opinion. Reassessment proceedings initiated on the basis of a mere change of opinion is invalid and without jurisdiction. On this ground also the impugned notice issued under Section 148 of the Act has to be quashed and set aside. No question of reopening the assessment for the relevant assessment to disallow the deduction under Section 80JJAA of the Act. Valid approval for passing the order under Section 148A (d) or not? - The approval is invalid and bad in law. We are unable to agree with Mr. Mistri to hold, in the facts and circumstances of the case, there was non application of mind by the approving authority.
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2024 (5) TMI 301
Recovery proceedings - recourse to other provisions/alternate method for recovery of the dues from the petitioner - attaching the property and bringing the property for sale - notice of public auction/proclamation of sale of the property of the petitioner - period of limitation as per provision of Rule 68B of the Schedule II of the Income Tax Act, 1961 - time limit of a period of three years[now seven] for sale of attached immovable property - whether the impugned sale notice dated 27.03.2019 and the attachment is barred by limitation under Rule 68B of the Schedule II of the Income Tax Act, 1961? - HELD THAT:- A bare reading of the provision of Rule 68B of the Schedule II of the Income Tax Act, 1961, clearly shows that no sale of immovable property shall be made after the expiry of seven years (earlier three years) from the end of the financial year in which the order giving rise to a demand of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has become conclusive under the provisions of section 245-I or, as the case may be, final in terms of the provisions of Chapter XX. Sub Rule-(ii) of Rule-68B provides for exclusion of certain periods while computing the period of limitation. Sub Rule-(iii) of Rule-68B provides that special provision for cases where any immovable property has been attached before 01.06.1992 and the order giving rise to a demand of any tax, interest, etc has also become conclusive or final before the said date. In such a situation the period of limitation as referred by Sub-Rule-I would commenced from 01.06.1992, this Sub-Rule (1), thus, makes it clear that limitation provided under Sub Rule-I for sale of immovable property would appear also to be attachment of immovable property and finalisation of tax demand which have occurred where from 01.06.1992. In such a case, computing the period of limitation would be 01.06.1992, i.e. the date on which the said rule was inserted. Sub-Rule (IV), of Section-68 provides that where the sale of immovable property is not made in accordance with the provisions of sub-rule (1), the attachment order in relation to the said property shall be deemed to have been vacated on the expiry of the time of limitation. It provides for a time limit of a period of three years for sale of attached immovable property starting from the end of the financial year in which the order giving rise for demand of tax, interest etc. has become conclusive. Sub-Rule-IV of the Rule-68B provides for the consequence of the immovable property not being sold within such time. As per the Sub-Rule-IV, the attachment order in the relation to the said property would be deemed to have been vacated on the expiry of the time limit as provided. Thus as Rule-68B would apply. The attachment of the said immovable property was made on 20.12 2018 and the notice of proclamation of sale/auction was made on 27.03.2019 from the end of the financial year in which the order giving rise to a demand of tax etc, has become conclusive in the year 2010. Thus, hit by the period of limitation prescribed under the said rule. By virtue of Sub-Rule-(IV) of Rule-68B, upon completion of the period of limitation, the attachment would be deemed to have been vacated. Thus by virtue of Rule-68B of the schedule II of Income Tax Act, 1961, the impugned notice of proclamation of sale is barred by limitation and as such is deserve to be set aside and quashed. Accordingly, the impugned notice of proclamation of sale is set aside. Consequently, attachment over the immovable property of the petitioner is also set aside.
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2024 (5) TMI 300
Validity of Reassessment proceedings - notice issued in the course of the reassessment proceedings not served on the assessee - reassessment notice has been issued in the name of the partnership firm, though business of the erstwhile partnership firm had been taken over by sole proprietor - HELD THAT:- Remarkably, all the notices seen to have been dispatched to the assessee were returned back to the sender i.e. assessing officer. Yet, the assessing officer has made a recital as to notices duly served. AO has not proceeded on deemed service of notice basis rather he has treated the same to have been actually served on the assessee. In view of the above fact, it loses relevance that the impugned assessment order was received by the petitioner when dispatched at the same address at which he had been earlier issued notices in the course of the reassessment proceedings. The fact that the assessment order may have been served may not be read with as evidence of due service of preceding jurisdictional and procedural notices. That essential compliance may not be inferred considering subsequent service on the assessment order. Rather, that survived to be established, independently. Unless the jurisdictional notice was served and unless the procedural notice were duly served, the assessee may have been effectively prevented from participating in the assessment proceedings and obtaining consideration on its say. Seen in that light, no useful purpose would be served in keeping the present petition or calling for counter affidavit, at this stage. Also, we are unable to sustain the objection raised by learned counsel for the revenue that the petitioner may avail statutory alternative remedy of appeal. At present, that remedy may only allow this appeal authority to either annull or confirm or modify the assessment order but may not allow the appeal authority to set aside the same and remit the matter to the assessing authority in view of the amended powers of the appeal authority u/s 251(1)(a) of the Act.
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2024 (5) TMI 299
Reopening of assessment u/s 147 against non-existing entity - scheme of the amalgamation and arrangement approved - HELD THAT:- As things stand, the reopening notices issued u/s 148 of the Act impugned in the Petitions are in the name of a non-existing entity. In the affidavit in reply filed also, the stand taken is of the pendency of the SLP. The reassessment orders impugned in the Petitions have been passed u/s 144 of the Act on best assessment basis. The notices were issued on the email of a consultant of the SEL and, therefore, the notices sent have bounced. Infact in the reassessment orders, it is also mentioned that notices were sent by the AO to DVU for service but the DVU did not respond and in view of this situation, there was no way except to complete the assessment on the basis of material available on record. We are satisfied that the reassessment orders issued u/s 148 cannot be sustained and the same are hereby quashed and set aside. Consequently, the recovery notices also stand quashed and set aside.
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2024 (5) TMI 298
Levy of penalty u/s 271(1)(c) - concealment of income - assessee while filing the original return of income claimed an incorrect deduction u/s 80GGA in order to reduce his taxable income - it was only after an investigation was carried out by the Department which revealed that Navjeevan Charitable Trust, to whom a donation was made by the assessee, was involved in providing bogus accommodation entries the assessee offered to not claim deduction u/s 80GGA while filing its return in response to the notice issued u/s 148 - as per assessee much before the issuance of notice u/s 148 assessee had withdrawn its claim of deduction in respect of the donation made to Navjeevan Charitable Trust and paid the necessary taxes - HELD THAT:- We find no basis in the findings of the lower authorities that it is only after the issuance of notice u/s 148 of the Act that a fresh return of income withdrawing the claim of deduction u/s 80GGA of the Act was filed and necessary taxes were paid. Accordingly, there is also no basis in the findings of the lower authorities that if notice u/s 148 of the Act had not been issued, the income would have escaped assessment in respect of deduction claimed u/s 80GGA of the Act. Since in the present case, the assessee voluntarily offered the deduction claimed u/s 80GGA of the Act to income tax much before the initiation of proceeding u/s 147 of the Act which resulted in the impugned penalty, we are of the considered view that there is no concealment of income on the part of the assessee justifying levy of penalty u/s 271(1)(c) of the Act. Hence, we delete the penalty levied u/s 271(1)(c) - Decided in favour of assessee. Levy of penalty u/s 271(1)(c) - weighted deduction u/s 35(1)(ii) claimed - HELD THAT:- As before the issuance of notice u/s 148 of the Act, the assessee had withdrawn his claim of weighted deduction in respect of donations made to Rural Development Society and paid the necessary taxes along with interest on 25.03.2019. Thus, we do not find any basis in the findings of the lower authorities that income chargeable to tax has escaped assessment and the assessee has concealed the income to reduce his tax liability. Accordingly, we find no basis in the levy of penalty u/s 271(1)(c) of the Act, and therefore, the same is deleted. - Decided in favour of assessee.
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2024 (5) TMI 297
Estimation of income - bogus purchases - whether the AO is justified in making 100% addition of the bogus purchase amount or he should have added only the profit margin earned by the assessee? - HELD THAT:- The Hon ble Gujarat High Court in the case of N.K. Industries Ltd.[ 2016 (6) TMI 1139 - GUJARAT HIGH COURT] has held that once it comes to a categorical finding that the amount represents alleged bogus purchases from bogus suppliers it is not incumbent to restrict the disallowance and thereby directed to make addition of 100% of the alleged bogus purchases. The SLP preferred by the assessee against this decision of the Hon ble High Court has been dismissed by the Hon ble Supreme Court[ 2017 (1) TMI 1090 - SC ORDER] . We find that the First Appellate Authority has followed this decision of the Hon ble Gujarat High Court. As no distinguishing decision has been brought to our notice in favour of assessee, we do not find any reason to interfere with the findings of the Ld. CIT(A). Appeal filed by the assessee is dismissed.
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2024 (5) TMI 296
Reopening of assessment - Reasons to believe - ACIT jurisdiction to issue the notice u/s 148 - notice was issued by another officer (i.e. ACIT) while jurisdiction over the case was with ITO - HELD THAT:- AO had recorded the reasons to believe based on the specific and credible information received from the Investigation Wing of the department which prima facie showed escapement of income. Reasons recorded were duly furnished to the appellant. Since the return of income u/s. 139(1) was filed at an income of Rs. 53,77,300/-. (well above the prescribed monetary limits) the ACIT had jurisdiction to issue the notice u/s. 148 of the I.T. Act. Necessary approval has also been taken from the Competent authority. Subsequently, the case was transferred u/s. 127 from ACIT Circle 1(1), Mumbai to ITO Ward (1)(1), Mumbai. As such the grounds of appeal relating to reopening of assessment and the procedure followed are found to be without merit and hence rejected. Estimation of income - bogus purchases - HELD THAT:- AO has rightly held that books of accounts are not reliable and, after rejecting the same, made as addition of 30% of the disputed purchase amount. The CIT(A) has sustained the addition to the extent of 12.5% of total disputed purchases. The same is considered reasonable and is therefore upheld. Assessee appeal dismissed.
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2024 (5) TMI 295
Disallowance of depreciation claimed on the Goodwill - Scheme of amalgamation sanctioned - method of accounting for the amalgamation - HELD THAT:- As decided in M/S. KEVA FRAGRANCES P. LTD. [ 2021 (8) TMI 286 - ITAT MUMBAI] 5th proviso to section 32 of the Act, which is now the 6th proviso to section 32 of the Act, is not applicable to the present case as the amalgamating company did not claim any depreciation on Goodwill Thus the assessee is entitled to claim the depreciation in the year under consideration on Goodwill , which is arising on account of the aforesaid amalgamation. In any case, since the year under consideration is the second year of the claim of depreciation on Goodwill by the assessee, which has already been allowed to the assessee in the first year of its claim, therefore the entire exercise of determining the eligibility of claim in the year under consideration is merely academic, as in this year the depreciation on Goodwill is to be calculated on its opening WDV. Accordingly, we find no infirmity in the impugned order passed by the learned CIT(A), and the same is upheld. As a result, the grounds raised by the Revenue are dismissed.
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2024 (5) TMI 294
LTCG - denial of a claim of exemption u/s 54 - new residential house property was purchased only after the lapse of two years from the sale of original property - assessee was a co-owner, having 80% of shares, in an immovable property - assessee deposited the consideration from the sale of the original asset in the Capital Gains Scheme Account - HELD THAT:- As we find that the original return of income filed by the assessee on 01.10.2013 is within the due date prescribed u/s 139(1) of the Act. Further, since in the present case, it is undisputed that the entire sale consideration was deposited by the assessee in Capital Gains Scheme Account on 26.09.2013, therefore, we are of the considered view that the assessee has duly complied with the provisions of section 54(2) of the Act. Thus, we find no basis in the findings of the learned CIT(A) in concluding that the assessee has not filed his return of income u/s 139(1) of the Act and has not deposited the sale consideration in the Capital Gains Scheme Account before the due date of filing return of income u/s 139(1) of the Act. New house property was not purchased within the period of two years from the date of transfer of the original assetThe process of obtaining the occupation certificate was in process and the developer agreed to procure the occupation certificate at the earliest. Therefore, it needs to be determined whether the residential property purchased by the assessee on 29.09.2014 is a ready-to-move-in flat or an under-construction flat. As evident that this aspect of the matter was neither examined nor any documentary evidence verified in this regard. Since the examination of the aforesaid aspect is necessary for determining the availability of the benefit u/s 54 of the Act to the assessee, we deem it appropriate to restore this issue to the file of the jurisdictional AO for examination and adjudication of the aforesaid aspect as noted by us. We also direct the assessee to furnish all the necessary documents in support of his claim of entitlement to exemption from capital gains u/s 54 of the Act. The assessee is also directed to furnish all the documents as may be required by the AO for complete adjudication of this issue - Assessee appeal allowed for statistical purposes.
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2024 (5) TMI 293
Penalty u/s 271(1)(c) - disallowance of cash business expenses by invoking provisions of Sec 40(A)(3) - HELD THAT:- We find that in this case, assessee does not deserve to be visited with the rigours of penalty u/s 271(1)(c) of the Act. The case laws cited above duly supports the case of the assessee [MSK CONSTRUCTIONS P. LTD. [ 2007 (3) TMI 181 - MADRAS HIGH COURT] and RELIANCE PETROPRODUCTS PVT. LTD. [ 2010 (3) TMI 80 - SUPREME COURT] . Furthermore, the conduct of the assessee is not contumacious. Accordingly, relying on the precedent as above, we delete the penalty. Appeal filed by the assessee is allowed.
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2024 (5) TMI 292
Levy of interest u/s 234A and 234B - Interest for defaults in furnishing return of income - Determination of date of regular assessment - obliteration of demand consequent to an assessment being set aside - original assessment stands set aside in the appellate proceedings for fresh assessment - as original demand surviving no longer, the Revenue claims the subsequent assessment as the regular assessment, while the assessee claims it to be the first one HELD THAT:- As explained in CIT vs. Prakash Chand Lunia [ 2023 (4) TMI 1057 - SUPREME COURT] for a precedent to be binding there has to be a conscious consideration of an issue involved (Also see - Hussain Bhai Ors. v. [ 1971 (4) TMI 1 - SUPREME COURT] . The decision in Modi Industries Ltd. [ 1995 (9) TMI 324 - SUPREME COURT] settles the issue qua the date of regular assessment , clarifying it to be for the purpose of determination of interest payable to or, as the case may be, by the assessee, i.e., ss. 214, 215, also adverting to ss. 243 and 244 - The said provisions are no longer operative, with, further, there being legislative changes, the legal import of which is to be judicially determined. The decision in Mahesh Investments . [ 2020 (10) TMI 428 - KARNATAKA HIGH COURT] and by the Tribunal in Santhimadom Herbal City Trust [ 2013 (7) TMI 1219 - ITAT COCHIN] stand rendered de hors the same. There being no consideration of the changed legal scenario, we only consider it fit and proper to restore this issue, i.e., computation of interest u/ss. 234A 234B, back to the file of the ld. CIT(A) for a consideration afresh, who shall adjudicate thereon per a speaking order after allowing adequate opportunity of hearing to the parties before him, in accordance with law, considering all the decisions that may be relied upon by them, or that he may wish to rely upon, confronting them therewith. All contentions qua this issue, whether raised and considered in this order or not, are, without reservation, open to both the sides. We may not be construed as having expressed any final view in the matter, save as to the instant appeals, as indeed the assessments from which they arise, as being maintainable. Two, we may clarify that the nature of levy as mandatory, as well as compensatory, and of the default being a continuing one, is not in dispute, so that demand, where paid, would automatically close the interest, even as found in CIT v. Pranoy Roy [ 2008 (9) TMI 150 - SUPREME COURT] - The compensatory aspect, which also prevailed with the Apex Court in Modi Industries Ltd. [ 1995 (9) TMI 324 - SUPREME COURT] stands met by the extant law providing for interest up to the date of grant of interest; a statutory confirmation of the interest being compensatory. The dispute concerns only the aspect of date of regular assessment in the given facts and circumstances of the case, and the law in the matter. Assessee s appeals are allowed for statistical purposes.
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2024 (5) TMI 291
Registration applied u/s 80G - denial of registration as application in Form 10AB u/s 80G(5)(iii) was not filed in time - HELD THAT:- In the present case in hand that the assessee is a registered Society under the Registrar of Firms, Societies Non-Trading Corporations, West Bengal, exemption u/s 80G(5) of the Act on 19.08.2008, application for provisional approval u/s 80G(5)(iv) was filed on 29.04.2021, Order for provisional approval exemption u/s 80G(5)(iv) of the Act passed on 28.05.2021, and assessee filed application for regular exemption u/s 80G(5)(iii) of the Act on 01.06.2023. The present case is squarely covered with the aforesaid cited decisions. Therefore, the impugned order is set aside. The appeal of the assessee is allowed and CIT (E) is directed to grant provisional approval to the assessee u/s 80G(5)(iii) of the Act if the assessee is otherwise found eligible. CIT (E) will decide the application for final registration within three months of the receipt of this order. Appeal filed by the assessee is allowed.
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2024 (5) TMI 290
Undisclosed income of the assessee - bogus sale of agricultural produce - preponderance of probability theory - as per revenue assessee has coloured the story of sale of agricultural produced - AR vehemently argued before us that based on the information placed on record, it is not under dispute that the assessee is having the only source of income and that is agricultural income. Even on the same set of evidence the ld. AO has partly considered as income of the assessee - While making the addition the ld. AO recorded statement of Mr. Pappu, who handles the affairs of his agricultural land on sharing basis HELD THAT:- During the course of assessment proceedings, it is very much clear that the assessee has his son and his relative (Buwa) holding 50 bighas of agricultural land and the assessee is having facility for storage of agricultural produce. Even the Krushi Upaj Mandli based on the set of facts placed on record has not lodged any compliant for enquiry. Considering all these set of facts merely invoices which are not of registered firm or a person and having not paid agricultural cess, the same cannot be considered as non genuine. In support of the contention our attention was invited to the various judgement of Co-ordinate Bench cited by ld. AR of the assessee. As decided in Shri Chaudhary Mange Ram Panwar [ 2023 (6) TMI 1129 - ITAT DEHRADUN] preponderance of probability theory would go in favour of the assessee in the instant case. The predominant income available with the assessee is only the agricultural income. No other source of income is brought on record by learned Assessing officer and it is not in dispute that the assessee is not engaged in any business or profession. The source of income in any manner whatsoever could only emanate from agricultural income. Hence, the overall explanation given by the assessee for explaining the cash deposits as emanating out of the sale of car and agricultural receipts need to be accepted. No other source available with the assessee which would have enabled him to earn income. Thus we are of the considered view that the addition made by the ld. AO in the case of the assessee is directed to be deleted. Appeal of the assessee is allowed.
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2024 (5) TMI 289
Cash deposit in bank account treated as unexplained income - Agricultural income or not? - appellant is an agriculturist and there is nothing on record to show that assessee had earned income from any other source except from agricultural activities - whether the quantum of agricultural income claimed by the assessee is justifiable? - HELD THAT:- It is a fact that there are 6 other members in the family of assessee. Therefore, it cannot be said that the assessee was the owner of all the agricultural land of 38 binghas and the entire agricultural income belonged to him. Assessee stated that uncles and cousins of the assessee are staying in USA and only the assessee and his father carried out agricultural activities. Even if uncles and cousins are staying in USA, then also it cannot be accepted that the entire agricultural income was earned only by the assessee and he retained the same. No confirmation or affidavit of his uncles and cousins staying in USA has been given to support the claim of appellant that agricultural income legally earned by them was given up in favour of the appellant. The assessee has also not furnished any details of the ITR and other supporting evidences to show that the income of his father was diverted to him. He has not even given the affidavit or confirmation of his father in support of such claim. Therefore, the explanation of the assessee that the entire agricultural income belongs to him and to none others is not acceptable. Be that as it may, the fact that assessee is an agriculturist and that he was not having any other source of income cannot be denied in the face of various details and evidences given by him. It has accepted the contention of the assessee that he had deposited cash in the bank account out of agricultural income and out of earlier cash withdrawals from the bank (i.e., unused cash out of the cash withdrawn from bank of assessee). The ratio of above decision is applicable to the present case. We have already held that explanation regarding agricultural income of Rs. 2,24,000/- out of claim of Rs. 9,24,000/- is not acceptable. Therefore, addition to the extent of Rs. 2,24,00/- is sustained and remaining amount of Rs. 14,85,000/- is deleted. Accordingly, this ground is partly allowed.
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Customs
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2024 (5) TMI 288
Imposition of anti-dumping duty on Metcoke (Metallurgical Code) - Origin from China P.R - liability of interest Interest chargeable on duties - Validity Of Notification No. 69/2000-Customs - Central Government also exempted import of Metcoke by a manufacturer of Pig Iron or Steel using a blast furnace in the said Notification - Whether the anti-dumping duty would be a part of the duty, which is covered by Section 25(1) of the Customs Act or not - HELD THAT:- As per the decision of the Hon ble Supreme Court in the case of Jaswal Neco Ltd. [ 2015 (8) TMI 243 - SUPREME COURT] , the Central Government has considered the effect of the Notification No. 69/2000 and approved to the fact that such Notification is applicable retrospectively and the manufacturers of Pig Iron, Steel using the blast furnace were not even liable to pay interest as no provisions for levy of interest is provided either in the Customs Act or in the Customs Tariff Act. Notification No. 75/2003-Customs dated 2nd May 2003, the Notification No. 69/2000 was revoked with effect from 5th May 2004 by extending the anti-dumping duty for another one year and the same was rescinded by Notification No. 22/2004-Customs dated 21st January 2004, on being satisfied, it was necessary in the public interest so to do. The Hon ble Supreme Court, in the case of TATA Chemicals Limited (2) vs. Union of India and others [ 2008 (3) TMI 17 - SUPREME COURT] , clarified that the order dated 24th August 2000 passed in TATA Chemicals Ltd (1) vs. Union of India [ 2000 (8) TMI 1147 - SC ORDER ] to the fact that the decision in the case of Saurashtra Chemicals Ltd vs. Union of India [ 2000 (5) TMI 38 - SC ORDER] was on account of the fact that the relevant aspects were not brought to the notice of the Bench and held that the appeals before the CEGAT were maintainable when the challenge was to the determination made. In view of the above fact that the appeal was maintainable before the CEGAT, the Central Government was, thereafter, justified in passing the impugned Notification No. 69/2000 dated 19th May 2000. As per above conspectus of law and for the foregoing reasons and the settled legal position that the Central Government is entitled to grant exemption while exercising the powers under the provisions of Section 25(1) of the Customs Act, no interference is called for in the impugned Notification No. 69/2000 dated 19th May 2000 and this petition, to that extent, is, accordingly, dismissed. As per the interim order passed by this Court, the petitioner is clearing the goods on filing of the undertaking and/or bond, as this petition is dismissed, the interim relief stands vacated forthwith. Therefore, so far as the liability of interest which may accrue, it was submitted by the learned Senior Advocate for the petitioner if this petition is not entertained, then the petitioner may not be saddled with the liability of interest. Thus, the petitioner would not be liable to pay any interest on the amount of anti-dumping duty, which would be leviable as per the Notification No. 69/2000 dated 19th May 2000 till such levy was revoked by Notification No. 22/2004 with effect from 2004 without any interest. This petition is, accordingly, disposed of.
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2024 (5) TMI 287
Legality of Not Extending Anti-dumping duty - Imports of the Textured Toughened (Tempered) Glass of Chinese origin - Countervailing duty - Sunset review investigation Notification, allowing hearing to all the interested parties, who all participated in the investigation and submitted their evidence, data etc. - Power of Central Government - Whether or not to accept the recommendations in terms of Section 9A of the Act read with Rule 18 of the Rules - HELD THAT:- It was submitted that on perusal of Section 9A read with Rules stipulates an administrative discretion granted to the Central Government to decide to impose or not to impose antidumping duty. It was submitted that plain reading of Section 9A(1) of the Act gives a discretion to the Central Government as the word may is used in both the Act and the Rules and not the word shall and therefore, the Central Government may disagree with the final findings and recommendations given by the Designated Authority. It was submitted that there is no jurisdictional error committed by the respondent No. 1 in issuing the impugned Office Memorandum as the said Notification is not issued while exercising quasi-judicial powers, but it is a legislative power to levy the antidumping duty or not and therefore, the decision not to issue a Notification for imposing / continuing the anti-dumping duty by not accepting the recommendations of the Designated Authority in general public interest cannot be the subject matter of the judicial review in this petition. It was submitted that the legal provisions of the Act and the Rules does not provide that the recommendations of the Designated Authority are binding on the Central Government. It is pertinent to note that the provisions of countervailing duty and the anti-dumping duty are similar in nature and the Notifications under the Act being in quasi-judicial exercise, which are amenable to appeal and the challenge, were held to be subjected to judicial review in the writ jurisdiction also. In view of the decision of the Division Bench of this Court, wherein it is held that recommendations of the Designated Authority are not binding on the Central Government and therefore, the Central Government would have its own decision after recommendations of the Designated Authority are made available to it in accordance with the statutory procedure. In the facts of the case, the Central Government, after considering the recommendations of the Designated Authority, has taken a decision not to extend the anti-dumping duty, for which, no interference can be made while exercising writ jurisdiction as it would be in the domain of the Central Government to decide as to whether the anti-dumping duty should be continued in the public interest taking into consideration all the various factors. Thus, this petition, being devoid any merit, is hereby dismissed. Notice is discharged.
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2024 (5) TMI 286
Valuation of the goods - Smuggling activities - (i) Grey metal powder suspected to be Iridium, (ii) Grey metal powder suspected to be Ruthenium, (iii) Micro SD Memory cards, (iv) Stone beads ('Chaton') and (v) Branded watches - courier company - Quantum of redemption fine - Penalty - HELD THAT:- We find that it is a fact admitted by the appellants that all the four passengers who were intercepted at the Airport were carrying the goods in question and were engaged in the activity of smuggling of the said goods into India without payment of any Customs duties thereon. Further, we observe that Meraj Ahmed was engaged in the activity of transportation of these smuggled goods, as evidenced from the records placed before us. On going through the valuation adopted by the ld. adjudicating authority in the impugned order, we find that the valuation adopted by the ld. adjudicating authority is through proper analysis of the best value available of the goods seized except Ruthenium wherein in the Remarks column it has been stated by the ld. adjudicating authority that the value of this smuggled goods has been arrived at by adding duty quantum, overhead and profit margin for this very rare and precious smuggled item. We are not in agreement with the said observation made by the ld. adjudicating authority in the impugned order. As the quantum of duty along with overheads and profit margin cannot be taken as the value of the said goods, Thus, the value of the said goods has to be taken as Rs.3,00,000/- (Rupees Three Lakhs) per kg., which is in the range arrived at by the ld. adjudicating authority i.e., Rs.2.82 lakhs to Rs.3.38 lakhs per kg. Accordingly, the duty has to be re-quantified which is payable by the appellants. We also find that redemption fine imposed on the appellants for release of the seized goods is justified. The penalties imposed are also found to be justified. In view of this, we do not find any merit on these grounds in the appeals filed by the appellants. Accordingly, the appeals in respect of quantum of redemption fine and imposition of penalties are dismissed. The ld. Adjudicating authority is directed to re-calculate the duty payable by the appellants, as discussed, if they so desire to get release of the goods. The appeals are disposed of on the above terms.
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2024 (5) TMI 285
Classification of the imported goods - Activity trackers - rate of duty for levy intended by section 12 - enhancement of duty liability - recovery of differential duty - Classification of a product under specific heading or residuary heading - HELD THAT:- In the impugned order, appears to have been influenced by reference to wrist bearable devices (otherwise known as smart watches) in several clarifications of Central Board of Indirect Taxes Customs (CBIC) that enunciated these as corresponding to 8517 6290 of First Schedule to Customs Tariff Act, 1975 to suffice for any article capable of being so worn to be so classified. The enormity of chasm of logic between the design of the activity tracker and smart watch , let alone unquestioned acceptance that smart watch is indeed so classifiable, which has not been touched upon in the impugned order demonstrates inadequacy of finding. It is also settled law that a notification giving effect to rate of duty, in whichever manner designed, or prescribing a special procedure cannot substitute for the mandate of the charging section. Here, the premise that the goods are composite should have been followed by selecting the predominating function from among the identified constituents and the description corresponding to each that, along with relevant notes in the chapter and section, would be evaluated for defining the characteristic of the whole taken together without question. That glaring lack precludes us from evaluation of the revised classification as being legal and proper. It would appear that the rules of engagement for revision in classification as required by the General Rules of Interpretation of the Import Tariff appended to Customs Tariff Act, 1975 and the law as determined by the Hon ble Supreme Court in HPL Chemicals Ltd v. Commissioner of Central Excise, [ 2006 (4) TMI 1 - SUPREME COURT] have been observed in their breach. Therefore, it is necessary that the entire dispute should be revisited. To enable that to be done, we set aside the impugned order and remand the matter back to the original authority for a fresh decision on the proposed classification after subjecting it to validation in accordance with law as statutorily enacted and judicially determined.
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2024 (5) TMI 284
Imports Of Marble slabs - Mis-declaration of quantity in the declared goods - demand of duty - Confiscation - Penalty - Validity Of Order-in-original passed without grant of personal hearing - No show cause notice was issued as the appellant had requested in writing - HELD THAT:- We find that the appellant had declared the total quantity measured as per punchnama was more than double the quantity declared. The appellant had declared the total quantity of 2199 Sq. Mtr. whereas as per punchnama, the total quantity found was 4516.031 Sq. Mtr. The business of the appellant is largely based on the method of measurement. The punchnama records that the measurement was taken by Inspector using a measuring tape. The annexure B to Punchnama indicates that the measurements have been taken in the unit of Millimetre of length and height. The number of pieces have been counted and from the length height and number of pieces, the total square meter is measured. The argument of the appellant is that the officers were not experts in measuring marbles as it needs technical expertise. It has been argued that without unloading the slabs, the marble could not have been measured. On the strength of these arguments, learned counsel has sought to discard the annexure-B to the punchnama which contains the measurements of the slabs and the number of units. In this case no show cause notice was issued as the appellant had requested vide letter dated 02.03.2017 for release of seized goods immediately without issue of show cause notice and without holding personal hearing. The importer had indicated that he is ready to pay up duty, fine and penalty imposed in this regard. Consequently, the order-in-original was passed without grant of personal hearing. We find that the Principal Bench in the case of Vikas Spinners [ 2000 (11) TMI 196 - CEGAT, COURT NO. IV, NEW DELHI] has observed that once the assessee accepts the objection raised at the time of assessment without demur he cannot later challenge assessment. Thus, it is seen that the goods were taken by the importer without any protest. The method of measurement was not challenged before clearance of goods.In these circumstances, the impugned order demanding duty, interest and confiscation cannot be faulted. However, the redemption fine is reduced from Rs. 15 lakhs to Rs. 5 lakhs and penalty is reduced from Rs. 2 lakhs to Rs. 50,000/- only. Appeal is partly allowed in above terms.
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2024 (5) TMI 283
Valuation - Export of Carpets and threading bars - Mis-declaration of description and value - Overvaluation - Confiscation of carpets - reduction of FOB value - shortage of quantity of carpets - difference in weight of threading bars - value for synthetic carpets is much lesser than that of woolen carpet - show cause notice not served upon the respondent based on his own request to waive off the issuance of show cause notice and of any opportunity of personal hearing - HELD THAT:- Apparently, the respondent, the proprietor thereof namely Shri Ankit Sehgal while being examined on 30.05.2019 had mentioned him to be the trader who purchase the goods/carpets to export the same. However, he admitted that the description of carpet in the impugned shipping bills was mis-declared. The shortage of quantity of carpets in terms of area was clearly admitted in his subsequent statement dated 10.06.2019. With respect to the difference in weight of threading bars proposed to be exported in the impugned consignment, the said proprietor mentioned that the threading bars were to be exported based on per piece criteria. Hence any difference in weight of the consignment for threading bars is irrelevant for the alleged misdeclaration and undervaluation. In the light of this kind of statement of respondent himself, we proceed to examine the findings goods wise i.e. for carpets and threading bars separately as follows: Carpets - We observe that commissioner (Appeals) has held that the misdeclaration of description of carpets stands established, hence, the said export goods merit confiscation u/s 113 (one of Act). Accordingly, the confiscation of carpets is upheld. Once based upon the said two reports, the description of carpets is held to be wrong even by Commissioner (Appeals) and the respondent herein have not challenged that part of the impugned order. The findings that the carpets which were to be exported by the appellant were mis-declared as far as their quality and quantity is concerned are hereby upheld. There is no denial rather it can also be judicially noticed that carpets made out of wool have more value than the carpets made out of synthetic polyester. Once the carpets are proved to not to be purely of wool, the value declared for the carpets wrongly declaring those as woolen carpets cannot be denied to be the overvalue of the consignment of the carpets. The rejection of re-determined value of the carpets is therefore held to be contradictory finding by Commissioner (Appeals). The value has been rejected also on the ground that the market enquiry cannot be considered in the case of export of goods. Respondent has also relied upon Section 18 of Foreign Exchange Regulation Act but we observe from the record that the market enquiry was conducted in presence of the respondent with his own consent. The said consent has never ever been withdrawn. Secondly, the value arrived in the market survey is in corroboration to the value given by the government testing labs CRCL. Hence the entire case law as has been relied upon by the Commissioner (Appeals) for rejecting the value of market enquiry is held not applicable to the given set of facts and circumstances of the present case. We hold that the case law has wrongly been quoted while rejecting the re-determined value with respect to carpets. The modification in the Order-in-Original to that effect is therefore ordered to be set aside. Threading bars - The consignment of threading bars was detained based upon the difference in weight of the containers as was observed at the time of vehement than the one declared in the shipping bills. We observe that the sole contention of respondent is that they have never tried to export threading bars on weight basis. They were exporting the threading bars on piece basis and length basis as is also apparent from the copies of shipping bills placed on record, the threading bars both of M-8/M-10 quality have been valued unit wise. There is no mention of weight of the threading bars in the shipping bills. Thus, findings with respect to no misdeclaration nor any undervaluation with respect to threading bars has rightly been arrived at by Commissioner (Appeals). The re-determined value for threading bars has rightly been set aside. The confiscation thereof has rightly been set aside. We uphold the impugned order to the said extent. Thus, the order under challenge is partly set aside i.e. with respect to the reduction of amount of redemption fine and the penalty with respect to carpets. However, the findings with respect to threading bars are confirmed. The appeal is accordingly partly allowed.
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2024 (5) TMI 282
Denial of FTA benefit under Notification 46/2011-Cus - Import of Alkalised Cocoa Powder from Malaysia - Condition of value addition of 35% - Verification of Certificate of Origin - Duty demand - Penalty - HELD THAT:- We find that the benefit of Notification issued under FTA was denied by the Custom only on the ground that there was an intelligence that the value addition of 35% in respect of cocoa powder supplied from Malaysia is not fulfilled however to support this allegation no verification was carried out by the department. However, all the cases made out on the same line have been decided in favour of the assessee by extending the benefit of Notification 46/2011. Therefore, the issue is no longer res-integra. Since the facts and charges levelled in M/s. BDB Exports Pvt. Ltd Vs. CC [ 2016 (9) TMI 1087 - CESTAT KOLKATA] and R.S. Industries (Rolling Mills) Ltd. Vs. CCE [ 2017 (11) TMI 1256 - CESTAT NEW DELHI] in the present case are identical and are directly applicable in the present case. Therefore, following the same, the impugned order is not sustainable. Accordingly, the same is set aside. Appeal is allowed.
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2024 (5) TMI 281
Cancellation of MEIS scrips - Re- classification of the goods - Export of Lamda Cyhalothrin Technical - fine - Interest and penalty - Rejection of the classification as declared by the appellant and for rejecting the MEIS benefits of not only the single shipping bill dated 9.12.2019 but also for the past 53 shipping bills pertaining to earlier exports - Non-application of mind - Powers of customs authorities - HELD THAT:- The amount of penalty on the appellant u/s 114AA in numerical is mentioned as Rs.25,00,000/- but in words its written Rupees twenty eight crores . This is clear example of non-application of mind and hope the authorities concerned will be more careful while adjudicating or deciding any appeal. We do not propose to draw any inference, adverse or otherwise, about causes of this discrepancy. As per para/clause 3.19 of the Foreign Trade Policy 2015-20 over-claimed or illegally claimed MEIS benefits alongwith interest is recoverable by the Regional Authorities of DGFT, if the scrip is issued to the Exporter and the same is not utilized for the payment of customs duty. Therefore, in the first place only the DGFT is empowered to cancel or recover the MEIS scrips and that too only if it s not utilized for payment of customs duty. What the customs authorities are trying to recover from the appellant u/s. 28(4) ibid is MEIS benefits already availed by the appellant during the years 2016-2019 which certainly they cannot do as under the said provision the customs department can recover only the duty not levied or not paid or short levied or short paid or erroneously refunded or interest not paid, partpaid or erroneously refunded by reason of collusion or willful mis-statement or suppression of facts and not the MEIS benefits and, that, too only on the ground of ineligibility to MEIS. The learned Counsel has also submitted that there is no customs duty liability on export of the impugned product even if the classification is changed and the issue is only about the availability of MEIS benefits to the appellant which we have already made clear. The role of customs authorities, if at all, may commence only upon presentation of scrips for clearance of exported goods that too in accordance with Notification No. 24/2015-dt. 8.4.2015 issued u/s. 25 of the Customs Act, 1962. Once the scrips are issued and are presented before customs authorities to be debited towards duty liability as assessed, the acceptance thereof is governed by the notification (supra) issued u/s. 25 ibid. This is segregation of jurisdiction, which is implicit in the notification applicable to utilization of scrips on imports of goods. There is, thus, no concurrent jurisdiction over the stages involved between export and import and each stage is governed to the limits of licensing and assessment jurisdiction by the respective statutes. It is not for the customs authorities to interpret licensing policy or to enforce the same once a valid licence is produced or to dissect the license granted. This function is of the licensing authority. If this bifurcation of function is not adhered to, there is every likelihood of utter confusion. The licensing authority may interpret the policy one way and the customs authorities may take contrary view producing a conflict between the two authorities resulting in harassment to the importer or exporter, as the case may be. It is therefore, that the function of the two authorities which operate in two different spheres must be kept within their proper ambit. If a licence is granted in respect of a particular item by the licensing authority, the customs authority will have no right or power to go beyond the licence and determine the classification or reclassifying the same. It is only the licensing authority who has to determine the said question at the time of granting licence. The exercise of rejecting the entitlement to the scrip commenced with reclassification of the export goods, for assigning a different tariff item in Schedule to Customs Tariff Act, 1975. The classification of the goods is exclusive to Section 12 of Customs Act, 1962 and that too only for levy of duty. The classification declared by the exporter can be disturbed only by reference to the General Rules for Interpretation of the Export Tariff appended to Customs Tariff Act, 1975. Like undertaking of reclassification for imported goods, it is necessary that the onus of identifying the correct classification as substitute for declared classification rests with the assessing officer/proper officer. Such reclassification is to be undertaken solely for the purpose of conformity with the General Rules for Interpretation and not for any other purpose. Reclassification for any other purpose has no place in adjudication. Thus, we are of the view that the customs authorities have overstepped its jurisdiction by resorting to re-classification of exported goods and cancelling the MEIS scrips. The same are hereby restored to the appellants. Accordingly the impugned order is set aside and the appeal filed by the Appellant is allowed with consequential relief, if any, in accordance with law.
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2024 (5) TMI 280
Revocation of the Customs Broker License - forfeiture of security deposit - Penalty - mis-declaration/undervaluation - failure to apply due diligence in verifying the proper KYC documents and also failed to exercise proper supervision on the functioning of G Card employee - Violation of the provisions of Regulation 10(n) of CBLR and Regulation 13(12) - Whether the appellant had any knowledge or in any manner colluded with the importer - HELD THAT:- In the light of the provisions of Regulation 10(n) and the Circulars, we find that the appellant had obtained the copy of the IEC, GSTIN, PAN card , Aadhaar card and other documents like notarised rent agreement executed between one Harish Gulshan and the proprietor of the importer firm namely, Dhirender Kumar. All these documents show the address of the importer firm. As admitted by G-card holder in his statement, on the basis of the original documents produced by Shri Mahesh Ramji Bhanushali, he tallied the same and finding them to be true processed the clearance of the consignment. Moreover, the G-card holder had acquired knowledge about the past antecedents of the importer where the earlier consignments through other CHAs were cleared and therefore believed the importer to be genuine. Verifying the earlier track record of the importer was a valid step towards discharge of his obligation under the regulations. Reliance is placed on Perfect Cargo Logistics Vs. C.C (Airport General), New Delhi [ 2020 (12) TMI 649 - CESTAT NEW DELHI] , where it was observed that the appellant did obtain two documents and neither the Circular nor the Annexures require any physical verification of the premises. It is not the case of the Department that the documents obtained were forged. Thus, it is not a case where the CB had not obtained the requisite documents or that he did not verify the said documents in discharge of his obligations under the regulations. We are of the opinion that the appellant has carried out proper due diligence as required under Regulation 10(n) by obtaining all the documents and verifying the same from the originals. Thus the obligation on the part of the CB in terms of Regulation 10(n) stands fulfilled. According to the learned counsel for the appellant by not keeping any effective supervision on the employees of the firm, at best, it can be viewed as a procedural irregularity. In the statement of Shri Rattan Singh Bisht, he has admitted that he did not monitor the work of his G-card holder and he was not aware of the filing of these bill of entries or the importer. He has provided the G-card holder the dongle and ID for filing the papers on his behalf. Such a conduct on the part of CB has led to the violation of regulation 13(12) which requires the CB to exercise such supervision that may be necessary to ensure the proper conduct of his employees and in the event of failure to do so, he shall be responsible for all acts or omissions of his employees. We, therefore hold that the CB failed to discharge the obligation to supervise his employees in the conduct of the business and thereby violated Regulation 13(12). The Revenue has not produced any evidence which could connect the appellant with the alleged offence. The facts of the case do not reveal any intention or mens-rea on the part of the CB to act fraudulently. We are, therefore, of the considered view that the appellant cannot be held liable for any mis-declaration of the goods. CB was not aware of the entire transaction, but on the other hand, he failed to monitor the functioning of his employee and enabled him to operate independently by providing the dongle to him, he acted negligently. The act of negligence, in itself is not so grave so as to justify the revocation of license which is extremely harsh and unjustified in the given circumstances when the license of the appellant was suspended on 04.07.2022 and since then he is deprived of his livelihood. We therefore, set aside the revocation of the CB license, however uphold the forfeiture of security deposit and imposition of penalty. We therefore conclude, that the CB is not guilty of violating the provisions of Regulation 10(n) of CBLR but on his own admission has violated Regulation 13(12) and consequently, the punishment of revocation of license do not survive, however, the punishment of forfeiture of security deposit and penalty of Rs 50,000/- are affirmed. The impugned order is accordingly modified and the appeal stands partly allowed.
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Corporate Laws
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2024 (5) TMI 279
Professional misconduct by CA - Liability of the Engagement partner with audit firm - Acceptance of the Audit Engagement - Significant Matters Reported by the Previous Auditor - Evaluation of the Going Concern Assumption - Verification of Expected Credit Loss (ECL) on Financial Assets - Modification of the Audit Opinion on the Financial Statements - Use of the work of Management's Experts and Auditor's Expert - Engagement Quality Control Review (EQCR) - Compliance with SA 230 [SA 230, Audit Documentation] - penalty and sanctions - HELD THAT:- The Auditor has made a series of departures from the Standards and the Law, in conduct of the audit of Reliance Home Finance Limited for FY 2018-19. Based on the discussion, it is proved that the Audit Firm issued an audit opinion on the Financial Statements without adequate supporting evidence. Based on the discussion and analysis, it is concluded that the EP, EQCR Partner and the Audit Firm have committed Professional Misconduct as defined in the Act, as below: a) The Audit Firm Mis Dhiraj Dheeraj and the EP CA Piyush Patni committed professional misconduct as defined by Section 132(4) of the Companies Act, 2013, read with Section 22 and Clause 5 of Part I of the Second Schedule of the Chartered Accountants Act, 1949 (No. 38 of 1949) as amended from time to time, which states that a CA is guilty of professional misconduct when he fails to disclose a material fact known to him which is not disclosed in a financial statement, but disclosure of which is necessary in making such financial statement where he is concerned with that financial statement in a professional capacity . This charge is proved as the Audit Firm and EP failed to disclose in their report the material non-compliances the Company. b) Mis Dhiraj Dheeraj and CA Piyush Patni committed professional misconduct as defined by Section 132 (4) of the Companies Act, 2013, read with Section 22 and Clause 6 of Part I of the Second Schedule of the Chartered Accountants Act, 1949 (No. 38 of 1949) as amended from time to time, which states that a CA is guilty of professional misconduct when he fails to report a material misstatement known to him to appear in a financial statement with which he is concerned in a professional capacity . This charge is proved as the Auditor failed to disclose in their report the material misstatements made by the Company. c) Mis Dhiraj Dheeraj, CA Piyush Patni and the EQCR Partner CA Pawan Kumar Gupta committed professional misconduct as defined by Section 132 (4) of the Companies Act, 2013, read with Section 22 and Clause 7 of Part I of the Second Schedule of the Chartered Accountants Act, 1949 (No. 3 8 of 1949) as amended from time to time, which states that a CA is guilty of professional misconduct when he does not exercise due diligence or is grossly negligent in the conduct of his professional duties . This charge is proved as the Auditor, conducted the audit of a Public Interest Entity in total disregard of their statutory duties, evidenced by multiple critical omissions and violations of the standards. The instances of failure to conduct the audit in accordance with the SAs and applicable regulations, and failure to report the material misstatements in the financial statements and non-compliances made by the Company. d) Mis Dhiraj Dheeraj, CA Piyush Patni and CA Pawan Kumar Gupta committed professional misconduct as defined by Section 132 (4) of the Companies Act, 2013, read with Section 22 and Clause 8 of Part I of the Second Schedule of the Chartered Accountants Act, 1949 (No. 38 of 1949) as amended from time to time, which states that a CA is guilty of professional misconduct when he fails to obtain sufficient information which is necessary for expression of an opinion or its exceptions are sufficiently material to negate the expression of an opinion . This charge is proved as the Auditor failed to conduct the audit in accordance with the SAs and applicable regulations as well as due to their total failure to report the material misstatements and non-compliances made by the Company in the financial statements. e) Mis Dhiraj Dheeraj and CA Piyush Patni committed professional misconduct as defined by Section 132 (4) of the Companies Act, 2013, read with Section 22 and Clause 9 of Part I of the Second Schedule of the Chartered Accountants Act, 1949 (No. 38 of 1949) as amended from time to time, which states that a CA is guilty of professional misconduct when he fails to invite attention to any material departure from the generally accepted procedure of audit applicable to the circumstances . This charge is proved since the Auditor failed to conduct the audit in accordance with the SAs but falsely reported in their audit report that the audit was conducted as per SAs. f) Mis Dhiraj Dheeraj, CA Piyush Patni and CA Pawan Kumar Gupta committed professional misconduct as defined by Section 132 (4) of the Companies Act, 2013, read with Section 22 and Clause 8 of Part I of the First Schedule of the Chartered Accountants Act, 1949 (No. 38 of 1949) as amended from time to time, which states that a CA is guilty of professional misconduct when he fails to communicate with outgoing auditor . This charge is proved since the Auditor failed to accept the audit in accordance with the law. Thus it is concluded that the charges of professional misconduct in the SCN are established based on the evidence in the Audit File, the audit reports on the standalone financial statements for the FY 2018-19 dated 13th August 2019 and the submissions made by the Auditor, and the Annual Report of Reliance Home Finance Limited for the FY 2018-19. Penalty and sanctions - HELD THAT:- Section 132 (4) of the Companies Act, 2013 provides for penalties in a case where professional misconduct is proved. The seriousness with which proved cases of professional misconduct are viewed is evident from the fact that a minimum punishment is laid down by the law. Because professional misconduct has been proved and considering the nature of violations and principles of proportionality, in the exercise of powers under Section 132 (4) (c) of the Companies Act, 2013, it is ordered as follows: a. Imposition of a monetary penalty of Rupees One crore on the Audit Firm Mis Dhiraj Dheeraj. b. Imposition of monetary penalties of Rs 50,00,000/- and Rs.10,00,000/- respectively on CA Piyush Patni (EP) and CA Pawan Kumar Gupta (EQCR). c. In addition, EP and EQCR partners are debarred for five years and three years respectively from being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate.
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Insolvency & Bankruptcy
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2024 (5) TMI 278
Impleadment of the appellant bank as Proposed 2nd Respondent, in main Company Appeal - necessary/proper party - petitioner having exclusive charge over the Superstructures built by the 1st Respondent / Appellant, on the Land of the Corporate Debtor - HELD THAT:- This Tribunal, pertinently points out that the Petitioner / Bank, in its Sanction Letter, dated 30.03.2011, had stated that, it has a Pari Passu Charge, only, on the Superstructures, built on the Land of the Corporate Debtor. Even the Form D, dated 06.08.2022 of the Petitioner / Bank, furnished with the Liquidator, as a Financial Creditor of the Corporate Debtor, unerringly points out that the Petitioner / Bank, does not have a Exclusive Charge, over the Superstructures, built upon the Land of the Corporate Debtor. It cannot be brushed aside that the Asset, subject to such Security Interest, Viz. the subject matter of the present Lis, was already relinquished by the Petitioner / Bank, in to the Liquidation Estate of the Corporate Debtor, by their own admission. To bring a Person as a Party Respondent / Defendant, in a given Legal Proceedings, is not a Substantive Right, but One of Procedure. The instant main Company appeal hovers around the issue of Eviction, of the 1st Respondent / Appellant, from the Land of the Corporate Debtor , even though, the Lease Deed , dated 30.09.2017, which had expired on 30.09.2022, and further that, the Petitioner / Bank, has a Pari Passu Charge , in respect of the Superstructures , built on the Land of the Corporate Debtor , and in any event, the Petitioner / Bank , nor the 1st Respondent / Appellant , cannot place reliance, on the alleged Rental Deed , this Tribunal , comes to an irresistible and inevitable conclusion, that the Petitioner / Bank , is not a Necessary and Proper Party , to get itself Impleaded , in the main Company appeal. Appeal dismissed.
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Service Tax
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2024 (5) TMI 277
Exemption from Service Tax - reimbursement expenses - whether the service tax component, which is remitted by them as service provider has to be reimbursed by the recipient KMC? - HELD THAT:- An order of adjudication requires the authority to not only consider the respective stand of the parties but also to appreciate the documents and details, which may be placed before the authority for consideration. These essentially involves adjudication into facts, which cannot be done in exercise of jurisdiction under Article 226 of the Constitution of India solely based upon affidavits. Therefore, the matter has to necessarily go back to the adjudicating authority for fresh consideration. The matters are remanded back to the adjudicating authority for a fresh decision - Appeal allowed by way of remand.
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2024 (5) TMI 276
Rejection of refund claim - GTA Service - time limitation - refund claim is filed after the expiry of time limit prescribed - principles of unjust enrichment - HELD THAT:- The scope of remand was a simple factual verification but the original adjudicating authority in sheer violation of judicial discipline has readjudicated the issue about impugned activity to fall or not under the scope of GTA Services. As already observed, the same was not the point raised even in the impugned show cause notice. The orders under challenge in both these appeals are not only an outcome of judicial indiscipline but are also held to be beyond the scope of show cause notice. Commissioner (Appeals) vide the impugned order has tried to distinguish as far as the principles of res judicata shall or shall not apply to the given facts. It is observed that there is a fundamental material change whenOrder-in-Original subsequent to final order of this Tribunal has been passed that Apex Court has decided the issue holding that the activity is covered under GTA - these findings are not sustainable as the classification was not the subject matter of the impugned show cause notice. The entitlement of appellant for the impugned refund, the issue of time bar and the issue of unjust enrichment have already stands decided in favor of the appellant including the issue of classification of the impugned activity of transportation (at least for this particular case). The refund claim has wrongly been rejected. The case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR VERSUS SINGH TRANSPORTERS [ 2017 (7) TMI 494 - SUPREME COURT] is held to have wrongly been applied retrospectively. The Commissioner (Appeals) have traversed while passing the impugned orders in both these appeals. The order are contrary to the findings of this Tribunal amounting to an act of Judicial indiscipline. Accordingly, the impugned order stands set aside. Appeal allowed.
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2024 (5) TMI 275
Levy of service tax - Auction of abandoned imported goods by the CONCOR - ground rent/storage rendered towards the un-cleared/un-claimed cargo of the importer - Amount accrued to CONCOR under Section 150(2)(d) of the Customs Act, 1962 - consideration for the provision of storage and warehousing services or not - HELD THAT:- It is agreed with the findings recorded by the Adjudicating Authority in view of the decision of this Tribunal in COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, RAIGAD VERSUS M/S. BALMER LAWRIE AND CO LTD. [ 2015 (11) TMI 902 - CESTAT MUMBAI] where it is held 'the auction charges adjusted towards warehousing charges cannot be considered as receipt of any services and hence not liable to demand of service tax.' What emerges from the various decisions is that the issue whether the service tax can be demanded on the sale proceeds of the auction of the abandoned imported goods is no longer res integra and has been decided in favour of the assessee and it has been settled that in the whole transaction, no service recipient exists and, therefore, there is no question of providing any service to any person. There are no reasons to differ from the views consistently taken by the different Benches and, therefore, the present appeal by the Revenue has no merits and the same is accordingly dismissed - appeal dismissed.
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2024 (5) TMI 274
Levy of service tax under Reverse Charge Mechanism (RCM) - GTA service - no consignment note issued - HELD THAT:- The issue is no longer res integra and has been consistently decided in favour of the assessee by the various co-ordinate Benches of the Tribunal - Reliance can be placed in the case of CHARTERED LOGISTICS LIMITED VERSUS C.C.E. -AHMEDABAD-II [ 2023 (7) TMI 883 - CESTAT AHMEDABAD] where it was held that ' it is settled that a person even if provides Goods Transportation service but if he does not issue Consignment Notes/LR, he cannot be brought under the ambit of GTA.' Thus, the settled principle of law is that even if a person has provided goods transport service but has not issued the consignment note, service tax from that person cannot be recovered under the category of GTA. The case of the appellant is on the same footing as he availed the services of individual transporters and truck owners and in the absence of issuing the consignment note, the appellant cannot be made liable to pay service tax under the category of GTA. There are no reason to sustain the impugned order and the same is accordingly set aside - appeal allowed.
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Central Excise
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2024 (5) TMI 273
Classification of goods - Sulphuric Acid, used in the manufacture of Agricultural Grade Zinc Sulphate - classified as fertiliser under Chapter 31 of CETA or classifiable under 28332990 of CETA - benefit of exemption N/N. 04/2006-CE (Sl.No. 32) dated 01.03.2006 - HELD THAT:- The appellants have relied on the decision in the case of PUNJAB MICRO NUTRIENTS LTD. VERSUS COLLECTOR OF C. EX. [ 1990 (4) TMI 122 - CEGAT, NEW DELHI] in support of their contention that the benefit of exemption Notification No. 04/2006-CE dated 01.03.2006 is available for procuring Sulphuric Acid without payment of duty. The ratio of the above decision has been followed in the case of Himgiri Metal Pvt. Ltd. Vs. Commissioner of Central Excise, Meerut-I [ 2014 (12) TMI 1030 - CESTAT NEW DELHI] where it was held that 'The only requirement in the present Notification which was also introduced in the previous Notification by way of including Explanation is to explain the meaning of fertilizer. It stands mentioned in the Explanation that fertilizer shall have the meaning assigned to it under Fertilizer (Control) Order, 1985.' In Jyothi Chemicals Fertilisers [ 2023 (8) TMI 1141 - SC ORDER] , the plea raised by appellant that Zinc Sulphate (agricultural grade) is known as fertiliser in common parlance was not considered as the said plea was not raised by appellant therein before earlier forums. Appreciating the ratio of the above decisions as applicable to the facts obtaining in these appeals, the impugned Order cannot sustain and ordered to be set aside - appeal allowed.
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2024 (5) TMI 272
Re-quantification of interest (on the refund of the pre-deposit) payment to the appellant - relevant time - interest to be paid from the date of deposit of the amount or from three months from the date of communication of the order? - HELD THAT:- The pre-deposit has been made by the appellant during February/March 2006 and May 2013. During the relevant period, Section 35(FF) of CEA, 1944, as reproduced above, laid down for payment of interest on delayed refund of pre-deposit only after the expiry of three months from the date of communication of the order of the appellate authority, till the date of refund of such amount. There is no dispute that the said impugned order was passed after the amendment in Section 35FF ibid, but it has to be borne in mind that in terms of proviso below amended Section 35(FF) of CEA, 1944, the payment of interest on pre-deposit made prior to 06.08.2014 has to be governed by pre-amended Section 35(FF) of CEA, 1944 only. It is also that CESTAT, being a creature of the statute, cannot traverse beyond the provisions of the Statute. This view has been held in a catena of decisions viz., M/S. KALI AERATED WATER WORKS REPRESENTED BY ITS PROPRIETOR K.P.D. RAJENDRAN VERSUS THE CUSTOMS EXCISE AND SERVICE TAX, THE COMMISSIONER OF CENTRAL EXCISE NGO 'A' COLONY, TIRUNELVELI [ 2022 (11) TMI 795 - MADRAS HIGH COURT ]. This view is resonated in similar other decisions viz., M/S VEER OVERSEAS LTD. VERSUS CCE, PANCHKULA [ 2018 (4) TMI 910 - CESTAT CHANDIGARH] , AJAY EXPORTS VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI [ 2015 (12) TMI 996 - CESTAT MUMBAI] and MAA MAHAMAYA INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX VISAKHAPATNAM-I, COMMISSIONERATE [ 2014 (11) TMI 747 - ANDHRA PRADESH HIGH COURT] . Accordingly, the provisions regarding payment of interest as provided in the Central Excise Act, 1944 shall prevail, and the Tribunal cannot intervene in this regard. There are no infirmity in the impugned order - appeal dismissed.
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2024 (5) TMI 271
Principles of Res-judicata - suo-moto re-credit taken instead of filing refund application - Refund of amount of duty deposited by the Appellant under the unamended Section 35F of CEA - eligibility for exemption under Notification No. 6/2006-CE dated 01.03.2006 - HELD THAT:- Both the parties agreed that in earlier round of litigation, this Tribunal in SARASWATI ENGINEERING LIMITED VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, KANPUR [ 2021 (8) TMI 1144 - CESTAT ALLAHABAD ] decided the Appellant s entitlement to interest for the period starting from the date of deposit till its realization. Both the parties are also ad-idem to the fact that the said order dated 04.08.2021 was not challenged further. Once this is so, the said order dated 04.08.2021 attained finality between the parties and the Assistant Commissioner was bound by the said order. The impugned order of the Commissioner (Appeals) taking a contra view on the issue of entitlement and period of interest, is therefore contrary to the principle of judicial discipline as enunciated by the Hon'ble Supreme Court in UNION OF INDIA VERSUS KAMLAKSHI FINANCE CORPORATION LTD. [ 1991 (9) TMI 72 - SUPREME COURT] , wherein the Hon ble Supreme Court was pleased to hold 'the mere fact that the order of the appellate authority is not acceptable to the department in itself an objectionable phrase and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.' It is also found that the direction in the impugned order directing the adjudicating authority to decide the issue of entitlement to interest afresh, is also barred by principle of res judicata, as the said issue was conclusively decided in order dated 04.08.2021 and therefore the parties cannot be allowed to re-agitate the said issue again. Further, it is a settled law that once an order has not been challenged before the appropriate authority, it cannot be reopened and challenged in collateral proceedings subsequently by the same authority - the impugned order violates principle of judicial discipline and is liable to be set-aside on this ground alone. The impugned order is set aside and the appeal is allowed.
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Indian Laws
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2024 (5) TMI 270
Challenged the impugned judgment of conviction and order of sentence - Power to seize and arrest of a person in a public place - Smuggling - transportation of Ganja from truck - non-availability of documents - Seizure - Offence punishable u/s 28 read with 20 (b)(ii) (C) and Section 29 read with 20 (b)(ii) (C) of the NDPS Act - conviction based solely on the purported confessional statement recorded u/s 67 of the NDPS Act - Whether Section 42(1) of the NDPS Act has been complied with in its letter and spirit or not? - HELD THAT:- Perusal of the notices shows that Central Government has empowered the Intelligence Officer of the Revenue Intelligence Directorate under the crime relating to Act in their regional jurisdiction. In the instant case, K.V.L Narasimham (PW-11) has conducted the proceeding of the case under his regional jurisdiction and it is accordingly established. In any case, it is important that the drug seized in the case should be kept safe and secure and the process of extracting the sample from it should be done duly and the sample should also be sent to a competent laboratory under proper custody. In the present case, the process of sealing the seized drug and keeping it in a safe in godown and taking out the sample has also been found to be legal and the sample taken out has also been found to be sealed and sent for testing legally. At any stage of the case, no tampering has been found in the drug samples or the seized packets, hence, the entire case cannot be considered unbelievable merely on the basis of samples being taken at the CGST Bhawan. Therefore, this Court is of the view that there has been proper compliance of Section 43 of the NDPS Act and the Investigator on the information of the informant, intercepted the vehicle wherein 6545 Kgs Ganja was kept and appellants K. Dharmara, Surjeet Singh Randhawa and Avtar Singh were present in the said truck. Thus, in the opinion of this Court, the prosecution has proved its case in respect of appellants K. Dharmara, Surjeet Singh Randhawa and Avtar Singh. Thus, the trial Court has rightly convicted and sentenced them. Statement recorded u/s 67 by the IO (PW-11) naming Appellants-Vishnu Bhadra and Premanand is not admissible because there is no corroborative evidence or other evidence on record, therefore, statement u/s 67 of the NDPS Act is a weak type of evidence in the instant case. Whether Appellant Vishnu Bhadra and Premanand were involved in the said crime or not? - We are of the view that the case of the prosecution in respect of Appellant Vishnu Bhadra and Premanand is not proved beyond all reasonable doubts. In the result, Cr.A. on behalf of appellants K. Dharmara, Surjeet Singh Randhawa and Avtar Singh are devoid in merits and liable to be and are hereby dismissed. The said appellants are stated to be in jail. They shall serve out the sentenced awarded to them by the Trial Court. So far as Cr.A. filed on behalf of Appellants-Vishnu Bhadra and Premanand is concerned, it is hereby allowed. Accordingly, the conviction and sentence awarded to the Appellants-Vishnu Bhadra and Premanand by the trial Court is hereby set-aside. The Appellants-Vishnu Bhadra and Premanand are acquitted of the charges framed against them. The Appellants-Vishnu Bhadra and Premanand are in jail. They shall be set at liberty forthwith if no longer required in any other criminal case. Keeping in view the provisions of Section 437-A of the CrPC, the Appellants-Vishnu Bhadra and Premanand, are directed to forthwith furnish a personal bond in terms of Form No. 45 prescribed in the Code of Criminal Procedure of sum of Rs. 25,000/- each with two reliable sureties in the like amount before the Court concerned which shall be effective for a period of six months along with an undertaking that in the event of filing of Special Leave Petition against the instant judgment or for grant of leave, the aforesaid appellant on receipt of notice thereof shall appear before the Hon ble Supreme Court.
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