TMI Tax Updates - e-Newsletter
August 16, 2023

Case Laws in this Newsletter:

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

Articles

1. Words that are restricted by MCA for a Company Name

   By: Ishita Ramani

2. Rejection of refund application without granting opportunity of hearing is violative of principle of natural justice

   By: Bimal jain

3. No refund of outstanding CENVAT credit after closure of factory

   By: Bimal jain

4. Register a Delaware LLC for Non-US Resident

   By: Ishita Ramani

5. Sufficient Cause holds more weight than length of delay

   By: Bimal jain

6. CONDONATION OF DELAY IN FILING GST APPEAL RELYING ON LIMITATION ACT, 1963 - ACCEPTABLE?

   By: DR.MARIAPPAN GOVINDARAJAN

7. DGGI communication to Bank to freeze bank account of assessee not a valid provisional attachment order

   By: Bimal jain

8. Transportation of ash for disposal does not attracts service tax

   By: Bimal jain

News

1. India’s overall exports in July 2023 is estimated at USD 59.43 Billion, despite global headwinds

2. Directorate of Revenue Intelligence (DRI) officials seized 4 Leopard (Panthera pardus) Skins in Srinagar, Jammu and Kashmir

Circulars / Instructions / Orders

GST - States

1. Trade Circular 21 T of 2023 - dated 11-8-2023

Clarification regarding GST rates and classification of certain goods based on the recommendations of the GST Council in its 50th meeting held on 11th July, 2023

2. Trade Circular 22 T of 2023 - dated 11-8-2023

Clarifications regarding applicability of GST on certain services

3. CCT/26-4/2023-24/G/1377 - dated 4-8-2023

Clarification of taxability of share capital held in subsidiary company by the parent company.

4. CCT/26-4/2023-24/G/1378 - dated 4-8-2023

Clarification on availability of ITC in respect of warranty replacement of parts and repair services during warranty period

5. CCT/26-4/2023-24/G/1379 - dated 4-8-2023

Clarification on TCS liability under Sec. 52 of the Goa GST Act, 2017 in case of multiple E-commerce Operators in one transaction.

DGFT

6. 27/2023 - dated 14-8-2023

Amendment in details of an authorized agency under Appendix 2E of FTP, 2023

Customs

7. Public Notice : 66/2023 - dated 3-8-2023

Debiting from the Special Import Licence and granting permission for clearance of such goods -reg.

8. Public Notice No. 65/2023 - dated 31-7-2023

Standardizing documentary and information requirements for AD Code and Bank Account with IFSC Registration/ modification in relation to exports-— reg.

9. Public Notice No. 64/2023 - dated 31-7-2023

PN-64-2023 Related to (M/s Transindia Logistics Park Pvt. Ltd. )-reg

Highlights / Catch Notes

GST

• Court Affirms Assistant Excise Officer's Jurisdiction in GST Inter-State Supply Case, Citing Section 20 of IGST Act 2017.

  Case-Laws - HC : Jurisdiction - Assistant Excise and Taxation Officer (Enf.) Gurugram was a ‘Proper Officer’ or not - Inter-state supply of goods - In view of the said enabling provisions u/s 20 of the IGST Act, 2017, the provisions of Chapter XIV of GST Act, 2017 which deals with inspection, search, seizure and arrest and power of inspection, search and seizure (Section 67 and 68 of CGST Act, 2017) are applicable to the inter-State supply of goods. - Petition dismissed - HC
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• Court Orders GST Refund with 6% Interest: No Show Cause Notice Issued as Required by Section 74(1) of GST Act.

  Case-Laws - HC : Rejection of Refund claim of voluntary deposit (during investigation) - recovery of GST from petitioner without serving a show cause notice in accordance with Section 74(1) of GST Act - Refund to be granted with interest @6% - HC
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Income Tax

• High Court Dismisses Petition Against Reopening Income Assessment; Evidence Validity Not Reviewed Under Articles 226/227.

  Case-Laws - HC : Validity of reopening of assessment - Reason to believe - Pertinently, the question of going into the veracity and genuineness of material/evidence forming the opinion of the Assessing Officer suggesting that income of petitioner/assessee has escaped assessment ought not to be gone into while exercising writ jurisdiction under Article 226 or supervisory jurisdiction under Article 227 of the Constitution. - Petition dismissed - HC
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• Supreme Court rules goodwill from amalgamation is a depreciable intangible asset u/s 32(1) of Income Tax Act.

  Case-Laws - HC : Depreciation on goodwill that was created as a result of amalgamation - The judgment rendered in Smifs [2012 (8) TMI 713 - SUPREME COURT] clearly recognises goodwill to be an intangible asset and on which depreciation can clearly be claimed in terms of Section 32(1) of the Act. - HC
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• High Court Confirms Tribunal Ruling: No Income Concealment; Invalid Penalty Notice u/s 271(1)(c) Due to Procedural Flaws.

  Case-Laws - HC : Penalty u/s 271(1)(c) - Concealment of income or not? - validity of notice - Tribunal is correct, both with regard to the fact there had been no concealment, as also concerning the view taken by it that the penalty proceedings did not indicate the limb under which the penalty was sought to be levied on the respondent/assessee. - HC
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• Reassessment Order Invalidated Due to Illegible Reasons u/s 147 of Income Tax Act; Order Quashed.

  Case-Laws - AT : Validity of reopening of assessment u/s 147 - reasons for reopening supplied but were not legible and not readable - Assessee was unable to file proper reply- It is not in dispute before me that the reasons said to have been supplied by the Revenue are neither legible nor readable. In the circumstances the reasons said to have been furnished are as good as no reasons furnished at all. - the reassessment order is quashed as bad in law - AT
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Customs

• Court Imposes Rs. 25,000 Penalty on Petitioner for Withholding Final Confiscation Order in Smuggling Case Currency Release Request.

  Case-Laws - HC : Smuggling - Seeking release of seized currency - Since, the petitioner has suppressed the fact of passing of final order of confiscation which was well within his knowledge and filed this present petition seeking provisional release of the goods, the cost of Rs. 25,000/- is hereby imposed on the petitioner - HC
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Indian Laws

• Supreme Court Rules Bank Officer Not a Public Servant Under IPC; No Protection Under CrPC Section 197.

  Case-Laws - SC : Removal from Office/duty - Bank officer - Scope of public servant - the banking sector being governed by the Reserve Bank of India and considered as a limb of the State under Article 12 of the Constitution and also by virtue of Section 46A of the Banking Regulation Act, 1949, the appellant herein is deemed to be a “public servant’ for the purpose of provisions under the PC Act, 1988. However, the same cannot be extended to the IPC. - the protection available under Section 197 of the CrPC is not available to the appellant herein - SC
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• High Court Quashes Complaint: Cheque Void for Material Alteration, Account Closure u/s 87 of Negotiable Instruments Act.

  Case-Laws - HC : Dishonour of Cheque - the cheque has been dishonoured due to closure of the bank account, since the very cheque in question is materially altered and had been returned back first time on the grounds of material alteration, the provisions of Section 87 of the Negotiable Instruments Act and the RBI guidelines would apply rendering the cheque void, moreso, when the complaint does not explain as to how the materially altered cheque came into the possession of the complainant. - the complaint is quashed. - HC
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IBC

• Authority Failed to Consider Emails as Evidence of Pre-Existing Dispute Before CIRP; Section 8 Demand Notice Affected.

  Case-Laws - AT : Initiation of CIRP - pre-existing dispute - the Adjudicating Authority has erred by not considering the various e-mails communication exchanged between the corporate debtor and operational creditor as evidence of a pre-existing dispute, but vide paragraph 11 of the Impugned Order has gone ahead to adjudicate the said dispute on merits even though the Adjudicating Authority was only required to see whether a dispute existing prior to the issue of section 8 Demand Notice. - CIRP closed - AT
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• Resolution Professional Criticized for Manipulating CIRP Timelines for Personal Gain, Expenses Ratification Questioned.

  Case-Laws - AT : CIRP - conduct of Resolution Professional (RP/IRP) - the Adjudicating Authority has rightly noted that the Appellant took advantage of the situation and mechanically pulled on with the CIRP process and kept on getting his expenses ratified from time to time by trumping up of the need to adhere to CIRP timelines. - AT
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Service Tax

• SEZ Unit Wins Service Tax Exemption for Dormitory Construction Linked to CSR Activities u/s 26(1)(e) of SEZ Act.

  Case-Laws - AT : Denial of ab initio exemption from Service Tax - SEZ unit - the appellant had to construct dormitory where such workers / employees could be accommodated - CSR activities are intricately linked with the appellant’s business and hence, must be regarded as contributing for carrying out authorized operations in the SEZ and consequently, the same are also covered under Section 26(1)(e) of the SEZ Act. - Benefit of exemption allowed - AT
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Central Excise

• Circular Favorable to Assessee Prevails Over Legal Classification; No Duty Demand Allowed During Its Validity Period.

  Case-Laws - AT : Classification of goods - any Circular which is beneficial to the assessee should be given effect irrespective to the different correct legal position of classification. Therefore, even though subsequently the Larger Bench has decided the classification under heading 8419 but by virtue of Circular dated 19.05.2010 during the currency of the said Circular the goods is classifiable under heading 8437 and consequently no duty could have been demanded on this very issue. - AT
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• Excise Duty Demand Limited to Finished Goods Only, Not on Goods Used in Production Process.

  Case-Laws - AT : Clandestine Removal - Grey Fabrics - It is also found that on the one hand the Revenue has made demand of central excise duty on goods consumed in the finished goods and on the other hand it is demanding duty on the finished goods which is wrong. Even if there is any duty demand, the same shall be restricted only upon finished goods. - AT
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VAT

• Maharashtra High Court Upholds Municipal Authority to Assess LBT Despite Repeal and GST Introduction; Saving Clause Applies.

  Case-Laws - HC : Payment of the Local Body Tax (LBT) - Post GST era - The contention that in view of the deletion of the provisions of the LBT by Maharashtra Act No. XLII of 2017, the saving clause would not operate and the entire exercise of assessment as undertaken by the municipal corporation in regard to the LBT being levied by the municipal corporation is without jurisdiction, cannot be accepted - HC
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Case Laws:

• GST

• 2023 (8) TMI 694
  Rejection of refund claim of excess tax paid - petitioner applied for refund of excess tax after having made good the short payment of tax through the annual returns - HELD THAT:- By the impugned order, as is evident from the text of the order itself the order rejecting the claim for refund under Section 54(5) of the CGST Act, 2017 is without any reasons. Considering the various orders passed by this Court in the case of the petitioner itself, the petitioner is directed to make a fresh application for refund in terms of Circular No. 125/44/2019-GST dated 18.11.2019 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing, within a period of three weeks from today. On such application being made, the authorities shall dispose of the same on merits in accordance with law as early as possible, preferably within a period of four weeks thereafter. The impugned order dated 27.2.2020 is hereby quashed and set aside. The petition stands allowed.

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• 2023 (8) TMI 693
  Jurisdiction - Asstt. Excise and Taxation Officer (Enf.) Gurugram was a Proper Officer or not - power of to inspect and detain vehicle as well as goods - vehicle carrying goods for inter-State transportation from Tamil Nadu to Delhi - authority to pass an order under Section 129 and 130 of GST Act, 2017 read with provisions of IGST Act, 2017. Whether the Asstt. Excise and Taxation Officer (Enf.) Gurugram was a Proper Officer and was authorized to inspect and detain the vehicle which was carrying goods for inter-State transportation from Tamil Nadu to Delhi and was further authorized to pass an order under Section 129 and 130 of GST Act, 2017 read with provisions of IGST Act, 2017? - HELD THAT:- Since the vehicle was transporting the goods inter-State, therefore, the provisions of IGST Act, 2017 as well the provisions of GST Act, 2017 in so far applicable in view of the provisions of Section 20 of the IGST Act, are applicable to the facts of the present case - In view of the said enabling provisions under Section 20 of the IGST Act, 2017, the provisions of Chapter XIV of GST Act, 2017 which deals with inspection, search, seizure and arrest and power of inspection, search and seizure (Section 67 and 68 of CGST Act, 2017) are applicable to the inter-State supply of goods. Apart from the enabling provisions under the IGST Act, 2017, the Commissioner of State Tax, Haryana had issued the order dated 07.12.2017 (Annexure P-46) exercising the powers conferred under sub-section 1 of Section 5 read with clause 91 of section 2 of Haryana Goods and Services Tax Act, 2017 assigning the functions to be performed under the said Act by a Proper Officer. As per entry of Sr. No.51, 52 and 53 of the said order, the Asstt. Excise and Taxation Officer of State Tax has been assigned the functions to be performed under Section 129 (1) and (3); 129 (6); and Section 130 of the Haryana Goods and Services Tax Act, 2017. Section 129 and 130 of the said Act is having the similar provisions as under the said sections of IGST Act, 2017. In view of the enabling provisions of Sections 20 and Section 4 of the IGST Act; as well as the order dated 07.12.2017 (Annexure P-46) passed by the Excise Taxation Commissioner, Haryana, assigning the functions to the Proper Officer under the Haryana Goods Services Tax Act, 2017, we are of the considered opinion that the Asstt. Excise and Taxation Officer of State Tax is competent and authorized to exercise the powers under Section 129 and 130 of the IGST Act, 2017. Thus, the Asstt. Excise Taxation Officer of State Tax was authorized to Act as a Proper Officer and was having the authority to act under Section 129 and 130 of the IGST Act. Whether the impugned order dated 26.11.2018 (Annexure P-1) is liable to be quashed? - HELD THAT:- As per Rule 138, if value of the goods is more than Rs. 50,000/-, it is mandatory for a registered person to upload the information on the common portal and generate a unique number and even, the transporter can generate the said unique number from the said portal by uploading the information when the transporter receives an authorization from a registered person. Generation of the said unique number by way of generating e-way bill provides authenticity to the movement of the goods and also provides the information as to whether, the registered person had included the taxes in the value of supply . Whether, the provisions of Sections 129 and 130 of the CGST Act, 2017 are attracted. Section 129 of the CGST Act, 2017 provides for detention, seizure and release of the goods, whereas, Section 130 of the said Act provides for confiscation of the goods or conveyance and levy of penalty? - HELD THAT:- In the present case, the payment was not made, as such the Proper Officer was authorized to initiate the proceedings under section 130 of the Act for confiscation of the goods or conveyance and for levy of penalty. Apart from this, the provisions of section 130 of the Act provides that where any person supplies any goods in contravention of any provisions of the Act or the Rule made therein with an intention to evade the tax, he is liable to be proceeded under section 130 of the CGST Act, 2017. Intention to evade payment of tax is an essential ingredient, for initiating proceedings against a person under section 130 of the said Act. In the present case, the petitioner had tried to reuse the e-way bills and the tax invoices, as such the intention to evade the payment of tax is impliedly proved on record. Hence, the order passed by the Proper Officer under Section 129 as well as under Section 130 of the CGST Act, 2017 read with the provisions of IGST Act, 2017 is legal and valid and has been rightly upheld by the appellate authority. The appellate authority has properly dealt with all the submissions made by the appellant and has passed a well reasoned order. There is no scope for interference and to invoke the extra-ordinary writ jurisdiction. Petition dismissed.

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• 2023 (8) TMI 692
  Constitutional validity of the provisions of Section 17(5)(c) of the Central Goods and Services Tax Act, 2017 and Section 17(5)(c) of the Maharashtra Goods and Services Tax Act, 2017 - Restriction on benefit of ITC on works contract services - HELD THAT:- This petition in terms of our order in CONNECT RESIDUARY PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2023 (8) TMI 644 - BOMBAY HIGH COURT] where it was held that Considering the complexion of the present proceedings, we agree with Mr. Rastogi, learned Counsel for the petitioner that the present petition can be permitted to be withdrawn with liberty to the petitioner to raise all contentions at the appropriate time and before the appropriate forum. Petition disposed off.

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• 2023 (8) TMI 691
  Rejection of Refund claim of voluntary deposit (during investigation) - recovery of GST from petitioner without serving a show cause notice in accordance with Section 74(1) of GST Act - Violation of principles of natural justice - HELD THAT:- A bare reading of provisions of Section 74(1) of the Act makes it clear that it provides for determination of tax not paid, shortly paid or erroneously refunded or wrongful availment of ITC by reason of fraud, willful misstatement or suppression of facts etc. The sub-Section 5 of Section 74 on the other hand, provides an opportunity to an assessee for amicable settlement of an assessment before the authorities prior to receipt of show cause notice and the assessee may pay at that stage the tax along with interest and penalty on the basis of self ascertainment or on ascertainment by the proper officer. It is, however, well settled proposition of law that Section 74(5) of the Act cannot be considered as a statutory sanction for advance tax payment, pending final determination in the assessment because that would certainly be contrary to scheme of assessment as set out under Section 74 - Further, it is also the well established that no collection of tax from an assessee can be insisted upon prior to final determination of liability being made. Whether the deposit of sum Rs. 50.70 lacs which was made by the petitioner during the course of investigation, is to be considered as voluntary deposit of amount which had allegedly been claimed by it by way of ITC on the basis of purchases made by it from M/S Royal which are alleged to be false purchases? - HELD THAT:- The self ascertainment which is contemplated under Section 74(5) of the Act, 2017 is in the nature of self assessment and amounts to a determination by it which is unconditional and not as in the present case when shortly after depositing the amount Rs. 50.70 lacs, the petitioner approached the revenue for refund of the same. Such recovery is not permissible - Further, no crystalised liability was shown to be existing against the petitioner and no show cause notice had been issued to it either at that time or even till now and the amount of Rs. 50.70 lacs was recovered from it during investigation and has been retained by it. In similar circumstances in CENTURY KNITTERS (INDIA) LTD. AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 2013 (6) TMI 245 - PUNJAB HARYANA HIGH COURT] , a Bench of this Court had observed that unless and until demand was finalised and existing, no crystalised liability was existing against the petitioner and the revenue could not retain any amount in absence of specific statutory provisions and the refund of the amount so recovered was ordered. Similarly, in M/S CONCEPTS GLOBAL IMPEX THROUGH ITS PARTNER SH. SANJEEV ARORA VERSUS UNION OF INDIA AND OTHERS [ 2018 (11) TMI 688 - PUNJAB AND HARYANA HIGH COURT] , a Co-ordinate Bench of this Court was dealing with a case wherein, at the time of import of goods, the duty leviable thereon, was paid but the Directorate of Revenue Intelligence has pressurized the petitioner to pay another sum of Rs. 42 lacs while detaining the goods in transit. The petitioner submitted that the same had been paid without there being any show cause notice or order confirming the demand and the same was in violation of Article 265 of the Constitution of India as it was paid under the pressure of DRI officials. It was held that since there was no show cause notice or demand, the revenue could not retain the deposited amount and the refund thereof, was allowed. In the present case, the petitioner shortly after depositing the amount of Rs. 50.70 lacs had approached the revenue for refund of the same therefore, the ascertainment contemplated under Section 74(5) of the Act which amounts to an unconditional determination and in the nature of self assessment by the assessee is not attracted and hence, the said deposit could not be stated to be voluntary deposit by any stretch of imagination, irrespective of the fact that deposits were made in the form of GST DRC-03 - the petitioner deserves the relief as claimed by it and accordingly, mandamus as sought by the petitioner, is granted and it is ordered that the sum of Rs. 50.70 lacs, which was collected from the petitioner-M/S Parsvnath Traders during the course of search, shall be refunded to it within a period of 6 weeks from today. The petitioner shall also be entitled to interest @ 6% per annum from the date of deposit till the refund amount is released in its favour. With regard to the petitioner- M/S Mahavira Dyes Chemicals, who had deposited an amount of Rs. 45.65 lacs, the similar directions are issued and it is ordered that the respondents shall refund this amount along with interest 6 % per annum from the date of deposit till its realisation. Petition allowed.

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• 2023 (8) TMI 648
  Seizure of goods alongwith vehicle - seeking provisional release of the goods and conveyance, as provided under Section 67(6) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- By way of interim relief, it is DIRECTED that the goods and vehicle of the petitioner shall be released provisionally, provided the petitioner complies with the conditions imposed - application allowed.

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• Income Tax

• 2023 (8) TMI 690
  Revision u/s 264 in favor of assessee - Additions based on 26AS statement - undisclosed income - As per HC No grounds made out for interference in the order of the CIT passed in revision - HELD THAT:- Having heard the learned counsel for the petitioner, this court is not inclined to interfere with the impugned judgment and order of the High Court. The special leave petition is, accordingly, dismissed.

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• 2023 (8) TMI 689
  Exemption u/s 11 - Exemption u/s 10(29) - Assessment of trust - HELD THAT:- As jointly submitted that these appeals are covered by the judgment of this Court in Ahemdabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT] wherein held that amounts or any money whatsoever charged by a statutory corporation, board or any other body set up by the State Governments or Central Government, for achieving what are essentially public functions/services (such as housing, industrial development, supply of water, sewage management, supply of food grain, development and town planning, etc.) may resemble trade, commercial, or business activities. However, since their objects are essential for advancement of public purposes/functions (and are accordingly restrained by way of statutory provisions), such receipts are prima facie to be excluded from the mischief of business or commercial receipts. For the period 1-4-2003 to 1-4-2011, a statutory corporation could claim the benefit of Section 2(15) having regard to the judgment of this Court in the Gujarat Maritime Board Case[ 2007 (12) TMI 7 - SUPREME COURT] Likewise, the denial of benefit under Section 10(46) after 1-4-2011 does not preclude a statutory corporation, board, or whatever such body may be called, from claiming that it is set up for a charitable purpose and seeking exemption under Section 10(23-C) or other provisions of the Ac Also submitted at the Bar that the respondent(s) herein which has been registered for conducting an activity, in the nature of a General Public Utility, which is charitable in nature under Section 10(29) of the Income Tax Act is entitled to exemption from tax under Sections 11 and 12 of the said Act, therefore, appropriate an order may be made in these appeals. Appeal dismissed.

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• 2023 (8) TMI 688
  Penalty u/s 271D - HELD THAT:- While the matters have proceeded upto this Court, in the interregnum acting on the order of the CIT (Appeals) who had remanded the matter back to the file of the AO a fresh order has been passed by the AO holding that the entries made by the assessee were only journal entries; therefore it did not call for imposition of any penalty. The aforesaid order passed by the AO on remand has not been assailed by the Revenue and has thus attained finality. Revenue submits that it is factually correct that on remand, the AO has reversed the imposition of penalty. Nonetheless the question, as to whether, penalty is leviable u/s 271D where transfer of money has taken place through journal entries is a live issue and is required to be adjudicated upon. We are of the view that the issue raised in these appeals have been rendered infructuous because of the subsequent turn of events. As a matter of fact, the same has become academic. Therefore, keeping the question of law open, we deem it appropriate to close the proceedings.

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• 2023 (8) TMI 687
  Assessment u/s 153A - addition based on seized material or not? - competency of AO to consider all the material that is available on record - HELD THAT:- As submitted by the learned counsel on both sides that the issue involved in this appeal is squarely covered by the decision of this Court Abhisar Buildwell P. Ltd.[ 2023 (4) TMI 1056 - SUPREME COURT ] In the light of the dictum laid down thereunder and in view of the indisputable fact that during the search no incriminating material was found, this appeal must fail. Consequently, it is dismissed. In view of the decision in Abhisar s case (supra), completed/unabated assessments could be re-opened by the AO in exercise of powers under Sections 147/148 of the Income Tax Act subject to fulfilment of the conditions envisaged under Sections 147/148 of the Income Tax Act and hence, such powers are saved in terms of the said judgment. Appeal dismissed.

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• 2023 (8) TMI 686
  Assessment u/s 153A - addition based on seized material or not? - competency of AO to consider all the material that is available on record - HELD THAT:- The issue involved in the present petitions is squarely covered against the Revenue in view of the decision of this Court in the case of Principal Commissioner of Income Tax, Central -3 Vs. Abhisar Buildwell P. Ltd.[ 2023 (4) TMI 1056 - SUPREME COURT] The present Special Leave Petitions stand dismissed. Pending applications shall stand disposed of.

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• 2023 (8) TMI 685
  Assessment u/s 153A - Addition u/s 68 - addition based on seized material or not? - competency of AO to consider all the material that is available on record - HELD THAT:- The issue involved in the present petitions is squarely covered against the Revenue in view of the decision of this Court in the case of Principal Commissioner of Income Tax, Central -3 Vs. Abhisar Buildwell P. Ltd.[ 2023 (4) TMI 1056 - SUPREME COURT] The present Special Leave Petitions stand dismissed. Pending applications shall stand disposed of.

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• 2023 (8) TMI 684
  Vivad se Vishvas Scheme - Condoning the delay of three days in depositing the balance amount payable under the Direct Tax Vivad Se Vishwas Scheme - HELD THAT:- From the pleadings of the parties and after perusal of the record, it appears that the Ministry of Finance, Government of India, has issued the Vivad se Vishvash Scheme in pursuance of the Act 2020. In section 2(l), the last date means such date as may be notified by the Central Government in the official gazette. As per Section 3 of the Act 2020, if the declarant for resolution, for resolution of disputed tax, files a declaration to designated authority in accordance with the provision of Section 4 in respect of tax arrears as mentioned in the chart before the last date, then the designated authority within 15 days from the date of receipt of declaration will determine the amount payable by the declarant and grant certificate to the declarant containing particulars of tax arrears and the amount payable after such declaration as per Form-III then the declarant shall pay the amount determined within 15 days from the date of receipt of certificate. Delay of three days occurred because on 1.11.2021, the petitioner met with an accident and suffered a knee injury, and, therefore, he could not approach the bank to clear the cheque or credit the amount on 1.11.2021. For this delay of three days, the Income Tax Department did not accept the amount deposited by the petitioner under the Vivad is Vishwas Scheme. Thereafter, the petitioner s application for condonation of delay of three days was also rejected by the Chairman of the Central Board of Direct Tax by order dated 25.8.2022. The fact of dropping of cheque in the drop box as well as the accident of the petitioner was not disputed by the respondent in the counter affidavit. Now the fact remained is whether the delay of three days in depositing the arrears of tax can be condoned, considering the fact of unforeseen circumstances which were beyond the control of the petitioner. This Court is of the view that a delay of three days in depositing the arrears of tax deserves to be condoned, and the amount balance tax deposited by the petitioner be accepted by the respondents treating the same well within time as per the scheme of Act, 2020 and also the impugned order /letter dated 25.8.2022, passed by Central Board of Direct Tax, is hereby quashed. Accordingly, the writ petition is allowed.

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• 2023 (8) TMI 683
  Validity of reopening of assessment - Reason to believe - whether show-cause notice contains sufficient information revealing the opinion formed by Assessing Officer that certain income of assessee has escaped assessment? - HELD THAT:- As in the backdrop of textual interpretation of Section 148A(b), it is evident that if the show-cause notice contains sufficient information revealing the opinion formed by AO that certain income of assessee has escaped assessment with a precise but concise elaboration in the show-cause notice of the foundantional material behind the opinion, then the show-cause notice can sustain judicial scrutiny even if the fundantional evidence/material (oral/documentary) is not supplied to the assessee. The reason for taking the aforesaid view is not far to see. The insertion of Section 148A w.e.f. 01.04.2021 in the Income Tax Act is to ensure that the power u/s 148 is not exercised as a matter of course or without application of mind. Thus, the inquiry contemplated by Section 148A(b) is not a detailed or full-scale one, but is merely meant to offer reasonable opportunity of being heard to the assessee to avoid casual re-opening assessment u/s 148. It may not be out of place to mention that the show-cause notice u/s 148A(b) ought to be pregnant with concise and precise information revealing the information about foundational material which persuaded the AO to come to a tentative finding that certain income has escaped assessment. In the conspectus of aforesaid discussions, it is obvious that petitioner/assessee is not entitled to the material/evidence (oral/documentary) which are the foundation of the opinion formed by the Assessing Officer so long as a show-cause notice mentions about such foundational evidence/material and the supportive reasons to form the said opinion. It is obvious from the show-cause notice u/s 148A(b) that it is accompanied by annexure which informs the petitioner/assessee of the reasons and information which persuaded the Assessing Officer to form the tentative opinion that income pertaining to assessment year 2016-17 has escaped assessment. Moreso, the petitioner/assessee has also filed a detailed reply (Annexure-P/4) to the said notice. From the above, it is evident that the impugned order u/s 148A(b) and the consequential notice u/S 148 were issued/passed after following due process of law. Pertinently, the question of going into the veracity and genuineness of material/evidence forming the opinion of the Assessing Officer suggesting that income of petitioner/assessee has escaped assessment ought not to be gone into while exercising writ jurisdiction under Article 226 or supervisory jurisdiction under Article 227 of the Constitution. Thus the ground of reliability and tenability of the evidence/material is not considered herein.

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• 2023 (8) TMI 682
  Disallowance of business loss - HELD THAT:- As this is a case involving appreciation of the circumstances surrounding the working of the aforementioned agreement and the material placed on record by the appellant/assessee. While we agree with Appellant that the Tribunal could not have made an observation to the effect that, since better technology was available, they ought not to have entered into an arrangement with SAL, what has persuaded us to uphold the impugned order is that no material that was produced by the appellant/assessee to establish the transaction in issue was genuine.As noted by the authorities below; firstly, the appellant/assessee failed to produce the original agreement. Secondly, the amount which was forfeited towards security deposit was an odd amount. As noticed above the amount in issue is Rs. 6,95,80,595/-.Thirdly, the forfeiture notice was issued only on 22.02.2015, when, even according to the appellant/assessee, SAL had discovered that product was not of requisite quality, much earlier. Lastly, the write off of Rs. 1,59,36,508/- was carried out by SAL only in Financial Year (FY) 2014-15 [AY 2015-16], although, according to the appellant/revenue, the defect in the product and its usefulness was discovered way back in March-April 2010. We may also note that it is not in dispute that the appellant/assessee, at the relevant time, held 10% SAL s equity and some Directors were common to the appellant/assessee as well as SAL. It may be also relevant to note that, in support of his case, Mr Jain has argued that insofar as the security deposit which was forfeited by SAL was concerned, it had paid service tax on the said amount. On being queried, Mr Jain says that the relevant document was produced, for the first time, before the Tribunal. This cannot impact the conclusion reached by the Tribunal, as what was required to be ascertained was whether the agreement dated 23.01.2010 represented a genuine arrangement. Significantly, the service tax document is dated 29.03.2019.Therefore, for the forgoing reasons, we are not inclined to interfere with the impugned order.

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• 2023 (8) TMI 681
  Depreciation on goodwill that was created as a result of amalgamation - whether goodwill is an intangible asset which would clearly fall within the ambit of Explanation 3 to Section 32(1) of the Act? - HELD THAT:- Section 47 in express terms excludes the transfer of a capital asset in terms of a scheme of amalgamation. We further find that the provisions of the Act referred to by learned counsel for the appellant are placed in a Chapter dealing with the Capital Gains . That Chapter itself pertains to profits or gains arising from the transfer of a capital asset. However, it is well settled that a transfer in terms of a scheme of amalgamation which is sanctioned is accomplished by operation of law as opposed to an act of parties. It is in that backdrop that the decision in Smifs assumes significance. The judgment rendered in Smifs [2012 (8) TMI 713 - SUPREME COURT] clearly recognises goodwill to be an intangible asset and on which depreciation can clearly be claimed in terms of Section 32(1) of the Act. Decided in favour of assessee.

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• 2023 (8) TMI 680
  Penalty u/s 271(1)(c) - Concealment of income or not? - validity of notice - non specification of clear charge - ITAT deleted penalty levy - HELD THAT:- Tribunal is correct, both with regard to the fact there had been no concealment, as also concerning the view taken by it that the penalty proceedings did not indicate the limb under which the penalty was sought to be levied on the respondent/assessee. In the instant matter, the Tribunal had taken into account the earlier judgments of this Court, as well as the judgments of the Karnataka High Court. In Pr Commissioner of Income Tax-3 v Ms Minu Bakshi [ 2022 (7) TMI 1307 - DELHI HIGH COURT] the issue concerning the penalty notice not indicating the precise limb of Section 271(1)(c) under which the assessee was proceeded came up for consideration wherein held that the notice issued by the AO u/s 274 r.w.s.271(1)( c) to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. Decided in favour of assessee.

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• 2023 (8) TMI 679
  TP Adjustment - comparable selection - HELD THAT:- For Accentia Technology Ltd. Tribunal notes that it has developed its own software, it is in the business of medical transcription services and not the BPO services and during the period in issue, it experienced an extraordinary economic event i.e., it had acquired 96% stake in Oak Technologies Inc. which added heft to both its top and bottom line. For Cosmic Global Ltd, the Tribunal has returned a finding of fact that it operated on a business model which was different from that of the respondent/assessee. According to the Tribunal, Cosmic Global Ltd outsourced a major part of its business and that in the relevant period, it had registered abnormal profit. According to us, these are findings of fact which cannot be termed as perverse. Even otherwise, we find that there is no question of law proposed by the appellant/revenue categorizing these findings as perverse. We are not inclined to interfere with the impugned order. According to us, no substantial question of law arises for our consideration.

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• 2023 (8) TMI 678
  Reopening of assessment - reason to believe - change of opinion - scrutiny of records reveal that the assessee has furnished no supporting evidence regarding genuineness of 9 sundry creditors - HELD THAT:- As issue regarding sundry creditors remaining unverifiable was specifically enquired into during the course of original assessment proceedings. Therefore, in our considered view, the assessing officer cannot resort to the same issue and make additions to the total income on the very same ground/issue for consideration, which has been considered and enquired into detail during the course of original assessment proceedings and which formed the basis of framing of original assessment order. In the case of Kelvinator India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT ] Hon ble Supreme Court has categorically held that change of opinion is an in-built test to check abuse of power by the Assessing Officer. Hence, for the purpose of re-opening of assessment, there has to be some fresh tangible material which was not available with the Assessing Officer at the time of original assessment proceedings. In absence of any such fresh tangible material, the re-opening cannot be resorted to since the same would amount to mere change of opinion . Further, the Supreme Court held that mere change of opinion cannot be per se reason to reopen the assessment proceedings which have already been concluded. Thus in the instant facts the re-assessment proceedings have been initiated on a mere change of opinion and hence the same are not liable to be sustained. Accordingly, we direct, that the re-assessment order having been passed on mere change of opinion is liable to be quashed.

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• 2023 (8) TMI 677
  Book profit u/s 115JB - addition made towards other comprehensive income with the book profit - HELD THAT:- As comprehensive income on account of revaluation of investments and by virtue of which the increase in value of investments taken by assessee as notional income is uncertain income and which cannot be made subject matter of book profit u/s. 115JB of the Act. We find that the CIT(A) has rightly deleted the addition and hence, we confirm the order of CIT(A). The appeal of the Revenue is dismissed.

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• 2023 (8) TMI 676
  Penalty u/s 271(1)(b) - assessee failed to comply with the notice issued u/s 142(1) - as contented that non-receipt of the notices was the reason for non-compliance - HELD THAT:- Looking to the facts and contentions of the assessee that the notice was not received by the assessee. Therefore, assessee was having reasonable cause for non-compliance of the notice hence, the impugned penalty is hereby, deleted. Appeal of the assessee is allowed.

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• 2023 (8) TMI 675
  Penalty u/s 271(1)(c) - Defective notice u/s 274 - notice was issued for both the limbs without strike off irrelevant limb and specifying the charge for which the notice was issued - HELD THAT:- The notice issued by the AO was bad in law if it did not specify under which limb of section 271(1)(c) of the Act the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. Ratio of the full bench decision of MR. MOHD. FARHAN A. SHAIKH [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] squarely applies to the facts of the assessee s case as the notice u/s. 274 r.w.s. 271(1)(c) of the Act was issued without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued. Thus, respectfully following the said decision I hold that the penalty order passed u/s. 271(1)(c) of the Act by the Assessing Officer is bad in law and accordingly the penalty order passed u/s. 271(1)(c) of the Act for Assessment Year 2008-09 is quashed.

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• 2023 (8) TMI 674
  Validity of reopening of assessment u/s 147 - reasons for reopening supplied but were not legible and not readable - as argued assessee could not exercise the right to file objection against the reasons formed to issue notice under section 148 - As per assessee without supplying the legible reasons AO passed draft assessment order proposing addition u/s 69C - HELD THAT:- Revenue could not produce the signed legible / readable reasons, which was provided to the assessee. On perusal of the draft / final assessment order the CIT (Appeals) s order it is noticed that the reasons said to have been recorded for re-opening of assessment were neither legible nor readable. It is also noticed that in spite of several requests the Revenue did not provide legible and reasonable reasons to the assessee to file rebuttal. The procedure laid down in the case of GKN Driveshafts (India) Ltd [ 2002 (11) TMI 7 - SUPREME COURT] have not been followed strictly making the reassessment bad in law. The reasons said to have been supplied to the assessee if it is neither legible nor readable it is as good as non-supply of the reasons to the assessee. The assessee filed return on 26.02.2021 and requested for reasons on 28.02.2021. Reminder was sent on 2.07.2021. The reasons said to have been furnished on 28.07.2021 and again on 20.08.2021. The assessee filed objections on 28.09.2021 making it clear that in the absence of legible and readable reasons for reopening the assessment the assessee is not in a position to file its objections for reopening the assessment. Immediately on 29.09.2021 the assessment was completed under section 143(3)/147/144B of the Act. It is not in dispute before me that the reasons said to have been supplied by the Revenue are neither legible nor readable. In the circumstances the reasons said to have been furnished are as good as no reasons furnished at all. Thus the reassessment order is quashed as bad in law - Decided in favour of assessee.

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• 2023 (8) TMI 673
  Revision u/s 263 - non-initiation of penalty u/s 271B - HELD THAT:- We find that submissions of assessee in this regard are cogent. The case laws cited duly establish that no issue of satisfaction by the AO is required for initiating this penalty. Hence, this plank of revision is not sustainable and we set aside the order of Pr.CIT in this regard. Non-disallowance of loss on sale of tower - It is duly emanating that this aspect was raised on the basis of audit objection. The case laws cited by assessee duly establish that revisionary power u/s 263 cannot be initiated on the basis of audit objection. Hence, we set aside the order passed by the ld. Pr.CIT on this issue. Disallowance of statutory dues not paid before the due date of return - We find that ld. Counsel has fairly conceded that he will not be contesting this aspect. Hence, revision order is sustained on this issue. Appeal filed by the assessee is partly allowed.

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• 2023 (8) TMI 672
  Adjustment and issuing intimation u/s 143(1)(a) by CPC - whether Centralized Processing Centre (CPC) could not have made the disallowance u/s 143(1)(a) as it is beyond the scope of the adjustment enumerated in the said provision? - HELD THAT:- We find, the first appellate authority has not examined the aforesaid aspects, may be because, as submitted by the learned counsel for the assessee, the appeal proceedings were conducted through faceless mechanism. Therefore, we are inclined to restore the issue to the file of the first appellate authority to examine assessee s contention regarding non-compliance with the conditions enshrined in first and second proviso to section 143(1)(a) - FAA is also directed to consider all other submissions of the assessee disputing the disallowances. Ground is allowed for statistical purposes. Credit for TDS - We do not find any infirmity in the decision of the FAA as he has directed AO to verify whether corresponding income relating to TDS amount credit for which it has been claimed by the assessee, has been offered to tax or not and thereafter allow the credit. In any case of the matter, the restriction imposed u/s 251 is only in respect of the first appellate authority. we direct the AO to verify whether the assessee has offered the corresponding income in relation to which it has claimed credit for TDS amount and thereafter allow the credit. Non grant of TDS credit in the written submissions filed before the first appellate authority, which was not considered - objection of DR on entertaining the issue is unacceptable. Be that as it may be, it is the case of the assessee that, though, the TDS amount of Rs. 5,76,79,710 is appearing in Form 26AS, however, the assessee has inadvertently not claimed the TDS credit in the return of income. The learned counsel has further submitted before us that he is ready to furnish a reconciliation statement before the Assessing Officer indicating that income corresponding to the TDS amount has been offered to tax. We are inclined to restore the issue to the Assessing Officer for examining assessee s claim after verifying the TDS credit appearing in Form 26AS and also the reconciliation statement to be filed by the assessee to ascertain whether the corresponding income in relation to the claim of TDS has been offered to tax by the assessee or not. Needless to mention, the Assessing Officer must provide reasonable opportunity of hearing to the assessee.

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• 2023 (8) TMI 671
  Approval u/s. 80G - Application filed by the assessee in Form no. 10AB for grant of approval u/s. 80G(5) rejected - HELD THAT:- No doubt, there are clauses in the object clause in MOA viz. clause 1 and 6 , which permits the carrying on activities which are religious in nature, and the assessee case is prima-facie hit by the judgment and order of Upper Ganges Sugar Mills Limited [ 1997 (8) TMI 4 - SUPREME COURT] but to arrive at the decision in the instant case of the assessee that these objects in MOA are wholly , or substantially wholly , of a religious nature, requires inquiry by ld. CIT(E). Thus, interest of justice will be best sub-served, if the order of ld. CIT(E) is set aside and matter is restored back to the file of ld. CIT(E) for adjudication afresh of the application filed by the assessee in Form No. 10AB on 29.09.2022 for grant of approval u/s 80G(5) , on merit in accordance with law.

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• 2023 (8) TMI 670
  Disallowance on account of loss on sale of the property in Vasant Square Mall - HELD THAT:- As assessee submitted that though the agreement for sale was entered on 29.09.2009 but the purpose thereof was carried out in the present assessment year. Assessee could not produce any material to justify the submission that the agreement of sale was given effect in the present assessment year. In these circumstances, we do not find any infirmity in the order of Ld. CIT(A) and we uphold the same. This ground of assessee is dismissed. Addition on account of interest and rent expenses - HELD THAT:- Payments made to the parties is fully verifiable and the fund received from the parties were received by way of cheques and the same were utilized by the assessee for its business purpose for completing the project and the assessee has also made the TDS on interest payment and the funds received were on the basis of valid MOU against booking of space and on the basis of fixed return plan offered by the assessee, hence, the expenditure incurred was for the purpose of commercial expediency and meeting the fund requirement of the business. We further find that CIT(A) has deleted the addition by following the order of his predecessor. No infirmity in the order of the Ld. CIT(A), hence, we affirm the same and dismiss the ground no. 1 raised by the Revenue. Addition on account of compensation given to various parties - HELD THAT:- We note that since the project was given from Gannon Dunkerly to M/s Merlyn Projects Ltd, so the credit has to be given on the shortfall worked out in the quantity of steel and thus this expenditure is valid claim of the assessee and made for the purpose of business. In view of the aforesaid discussions, we are of the considered opinion, that the above expenditure of Rs. 2,24,08,048/-, on account of compensation given to various parties are made for the purpose of business, hence, the same were rightly deleted by the CIT(A), which do not require any interference on our part, therefore, we affirm the same and dismiss the ground no. 2 raised by the Revenue. Addition u/s. 14A r.w.r. 8D - HELD THAT:- As in view of Cheminvest Ltd. case [ 2015 (9) TMI 238 - DELHI HIGH COURT] as well as on the anvil of ITAT decision in assessee s own case decided [ 2017 (10) TMI 1637 - ITAT DELHI] in Assessee s appeal (AY 2010-11) and on the face of the factual position that there is no dispute as to the assessee not deriving any exempt income, we are of the considered view that disallowance made by the AO is not permissible where no exempt income is received or receivable during the relevant previous year. CIT(A) has rightly held that Assessee has not earned any exempt income, after perusing the computation of income and the copy of balance sheet and by relying upon the decision of Holcim India Pvt. Ltd. [ 2014 (9) TMI 434 - DELHI HIGH COURT] wherein, it has been held that if there is no dividend income, no disallowance can be made u/s. 14A r.w.r. 8D - Decided against revenue.

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• 2023 (8) TMI 669
  TP Adjustment - non-issuance of notice under proviso to section 92C(3) - grievance of the assessee is that DRP did not consider the plea of the assessee, but, upheld the action of the TPO, claiming that neither the TPO nor the learned DRP gave any opportunity to file the objections against the comparable adopted by the learned TPO - HELD THAT:- It could be seen from the proviso to section 92C(3) or under sub-section (2) of section 92CA of the Act that issuance of notice to the assessee is mandatory. At the same time, it could be seen from the excerpts of the remand report culled out by the DRP of their direction, no such notice was admittedly issued to the assessee. Apart from this, there were 16 comparables as chosen by the assessee - Not even a single entity selected by the assessee is considered by the learned TPO. Without referring to the comparables selected by the assessee, the learned TPO recorded that the assessee is specialized in managed document review and contract management, it is, therefore, providing high end legal services and, therefore, the assessee is not comparable with high end ITeS and has to be benchmarked under ITeS. We are of the considered opinion that the learned TPO must be directed to issue notice contemplated under proviso to section 92C(3) or under sub-section (2) of section 92CA as the case may be and complete the assessment in accordance with law. At the same time, the learned TPO will also keep in view the assessment orders for the assessment year 2013-14 and 2014-15 passed pursuant to the set aside of the same by the ITAT. Interest charged on delayed payments on trade receivables - AR submitted that this issue is squarely covered by the order [ 2023 (3) TMI 1392 - ITAT HYDERABAD] in assessee s own case for the assessment year 2014-15 wherein set aside the issue to the file of the AO/TPO. We set aside the issue to the file of AO/TPO with a direction to follow the same for this year also. Grounds are accordingly treated as allowed for statistical purposes.

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• 2023 (8) TMI 668
  Validity of proceedings u/s 92CA(3A) - period of limitation - Procedural irregularity and breach of time limit for completion of proceedings - TP order passed which is beyond the timeline for completion of proceedings u/s 92CA(3A) - HELD THAT:- As for the assessment year 2016-17, the TPO has passed order u/s. 92CA of the Act, on 01.11.2019. As per provisions of section 153(1) 153(4) of the Act, the period of 60 days prior thereto would run till 01 st November, 2019 and any order passed prior to that date would mean 31 st October, 2019 or before. Since, the order was passed on 01.11.2019, the same would be barred by limitation, as held by the Hon ble Madras High Court in the case of M/s. Pfizer Healthcare [ 2021 (2) TMI 1152 - MADRAS HIGH COURT ] In this case, the TPO has passed their order on 01.11.2019 and assessment year involved is AY 2016-17. In our considered view, the case is squarely covered by the decision of ITAT Chennai Benches in the case of M/s. Verizon Data Services India Pvt. Ltd. [ 2023 (3) TMI 190 - ITAT CHENNAI ] Thus, we quashed order passed by the TPO and consequent draft assessment order passed by the AO, directions issued by the DRP and final assessment order passed by the AO. A similar view has been taken in the case of M/s. Verizon Data Services India Pvt Ltd. [ 2023 (3) TMI 190 - ITAT CHENNAI ] where the Tribunal by following the decision of Pfizer Healthcare India Pvt Ltd Ors. (Supra), held that final assessment order passed after 31 st October is beyond limitation as prescribed u/s. 153(4) of the Act. Thus the final assessment order passed by the AO u/s. 143(3) r.w.s. 143C(13) of the Act on 01.11.2019 is clearly bad by limitation and liable to the quashed and thus, we quashed final assessment order passed by the AO. Decided in favour of assessee.

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• 2023 (8) TMI 667
  TP Adjustment - Comparable selection - HED THAT:- Larsen Toubro Infotech Ltd.and Infosys Ltd. - As present assessee is found to be a captive service provider who carries out software development services in accordance with the direction of its associated enterprises and is compensated on a cost+mark-up basis. Therefore in our considered opinion, both the comparables cannot be considered to be fit for being included. R Systems International Ltd. - This Tribunal in ACI Worldwide Solutions Pvt. Ltd. [ 2022 (5) TMI 1491 - ITAT BANGALORE ] has restored R Systems International Ltd. with the direction to verify if the said company has prepared the financials for financial year ending on March 31 or if it could be reasonably extrapolated. We accordingly remand this comparable to the Ld.AO/TPO for reverification based on similar direction. Persistent Systems Ltd. - As this company is mostly into product development and owns huge intellectual properties. It is also noted that there is no segmental details available in respect of the various systems of revenue earned by this company. Under such circumstances, we do not find it appropriate to be included in the final list. Accordingly we direct the Ld.AO/TPO to exclude this company. Tata Elxsi Ltd. - Admittedly this company is into research and development activities and has developed various product design, industrial design etc. It is also noted that though this company is into software development services, in the process has developed various products that has been sold and revenue has been generated from sale of products. The segmental details in respect of software services rendered and product sale is not available in the financials of this company. It is noted that in case of Infor (India) Pvt. Ltd. [ 2023 (3) TMI 597 - ITAT HYDERABAD ] for similar reason has excluded this company from the final list. We therefore direct this comparable to be excluded from the final list as it is not comparable with a captive service provider like that of assessee. Infobeans Technologies Ltd. - As relying on case of case of Airlinq [ 2022 (8) TMI 1283 - ITAT BANGALORE ] we direct the Ld.AO/TPO to exclude this company from the final list. Sasken Communication Technologies Ltd. - As submitted this comparable has been excluded by the Ld.TPO as it is involved in R D activities and owns huge patents. We have hereinabove excluded Infosys Ltd., L T Infotech Ltd. for the reason that they are into research and development activities and owns huge intangibles which is not akin to a captive service provider. Applying the same principle, we do not find any infirmity in exclusion of Sasken Communication Technologies Ltd. by the Ld.TPO. TP Adjustment with respect to outstanding receivables - AR has objected by submitting that no interest is attributable as the same was not charged by the AEs on any delayed payment by the assessee - HELD THAT:- This Bench referred to decision of Instrumentation Corpn. Ltd. [ 2016 (7) TMI 760 - ITAT KOLKATA ], held that outstanding sum of invoices is akin to loan advanced by assessee to foreign AE., hence it is an international transaction as per explanation to section 92 B of the Act. We deem it appropriate to set aside the impugned order on this issue and remit the matter to the file of the Ld.AO/TPO for deciding it in conformity with the above referred judgment. We also direct the Ld.TPO that in the event the WCA subsumes the outstanding receivables, no separate characterisation is to be made. However for those receivables that fall out of the WCA pertaining to year under consideration, then, the rate of interest to be charged must be LIBOR + 300 basis points which is in accordance with the principles laid down in case of CIT vs. Cotton Naturals (I) Pvt. Ltd. [ 2015 (3) TMI 1031 - DELHI HIGH COURT ] by considering a credit of 90 days. Needless to say, the assessee will be allowed a reasonable opportunity of being heard in such fresh proceedings.

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• Customs

• 2023 (8) TMI 666
  Seeking provisional release of the seized goods - to whom / any person - iPhones - Respondent s ownership of such goods itself is seriously disputed - contravention of Section 110 A of the Customs Act, 1962 - HELD THAT:- The petitioner has not been able to satisfy that they ever acquired title in the goods. On the other hand, learned ASG pointed out that the matter went to the Settlement Commission which has found even the documents produced by the petitioner are tampered with. There are no reason to exercise jurisdiction under Article 136 of the Constitution of India - SLP dismissed.

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• 2023 (8) TMI 665
  Smuggling - Seeking release of seized currency - before the goods could be released implementing the Tribunal s Order, final order of Confiscation was passed - HELD THAT:- Reliance placed on the judgment passed by the High Court of Gujarat at Ahmadabad in case of TOPLAND ENGINES PVT. LTD. VERSUS UNION OF INDIA [ 2005 (7) TMI 112 - GUJARAT HIGH COURT] in which the Division Bench has held that once the order of Tribunal attained finality in absence of any challenge to its order, issue of show cause notice by Department refusing to implement Tribunal s order is not legal. In the present case, the subordinate authorities have not denied the compliance of order passed by the Tribunal for provisional release but before the goods could be released, the final order of confiscation has been passed which is an appealable order, therefore, the order passed by the Tribunal cannot be complied with. Since, the petitioner has suppressed the fact of passing of final order of confiscation which was well within his knowledge and filed this present petition seeking provisional release of the goods, the cost of Rs. 25,000/- is hereby imposed on the petitioner - Petition dismissed.

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• Insolvency & Bankruptcy

• 2023 (8) TMI 664
  Challenge to order reserving judgment - NCLAT, Chennai is on vacation presently and that the Liquidator is proceeding with the process of liquidation, disabling the appellant from approaching the NCLAT, Chennai - HELD THAT:- It is informed that after summer vacation, the NCLAT, Chennai reopens on 5th June, 2023. In such view of the matter, we grant liberty to the appellant to approach the NCLAT, Chennai on 5th June 2023 and seek such relief as may be available to him in law. It is expected that till 5th June, 2023, the Liquidator shall not take any action adverse to the interest of the appellant. Civil appeal dismissed.

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• 2023 (8) TMI 663
  Maintainability of application - initiation of CIRP - Operational Creditors - dispute relating to the operational debt as claimed by the operational creditor is a pre-existing dispute or not - HELD THAT:- The four new invoices which relate to the work done as covered in the four old invoices issued in December, 2016 and January, 2017 were fully paid by the corporate debtor and these were in accordance with the GST regime. Therefore, it stands to reason that the operational debt with regard to the work done, which was the subject matter of four old invoices, namely NV No. 3189000123 dated 26.12.2016 for Rs. 5,752,713.00, NV No. 3189000140 dated 28.12.2016 for Rs. 5,572,713.00, NV No. 3189000143 dated 28.12.2016 for Rs. 5,572,713.00 and NV No. 3189010008 dated 25.01.2017 for Rs. 5,572,713.00, were paid by the corporate debtor, and the operational creditor has not raised any issue about the non-payment of related operational debt. It is thus, clear that there is no operational debt due to be paid by the corporate debtor to the operational creditor, but the disputed amount is only regarding the service tax amounting to Rs. 40,37,816/-, which was paid by the operational creditor to the Government. It is thus clear that there is a dispute in relation to the service tax paid by the operational creditor. Clearly, this was a dispute between the operational creditor and the corporate debtor regarding how credit or refund service tax amount could be claimed and by whom - this dispute existed before the issue of statutory demand notice under section 8 and the corporate debtor had clearly mentioned this dispute in its reply dated 1.4.2019 to the section 8 demand notice. Regarding the necessary condition for examining the presence of a pre-existing dispute in relation to an operational debt, we refer to the judgment of Hon ble Supreme Court in the matter of MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [ 2017 (9) TMI 1270 - SUPREME COURT ], wherein it is held all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. From the judgement, it is clear that it would be sufficient that a dispute that is not hypothetical, illusory or moonshine dispute exists and such a dispute should have arisen on a date prior to the date of issue of section 8 demand notice - In the present situation, it is found that the Adjudicating Authority has erred by not considering the various e-mails communication exchanged between the corporate debtor and operational creditor as evidence of a pre-existing dispute, but vide paragraph 11 of the Impugned Order has gone ahead to adjudicate the said dispute on merits even though the Adjudicating Authority was only required to see whether a dispute existing prior to the issue of section 8 Demand Notice. Thus, a dispute regarding credit/refund of the service tax amount which is claimed to have been paid by the operational creditor to the government existed prior to the issue of demand notice under section 8 and further that such a dispute was a real dispute and not merely an assertion or ploy of the corporate debtor to avoid taking care of his liability. The Corporate Insolvency Resolution Process which was initiated against the corporate debtor as a result of the Impugned Order will abate forthwith and the corporate debtor shall be released from the rigours of CIRP and other effects of moratorium under section 14 of IBC with immediate effect - appeal allowed.

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• 2023 (8) TMI 662
  CIRP - conduct of Resolution Professional (RP/IRP) - Seeking revisitation of certain portions of order (Impugned Order) passed by the National Company Law Tribunal, Chandigarh Bench - withdrawal of application allowed while discharging the IRP from his duties after modifying the reimbursement of expenses claimed by the IRP besides making certain remarks deprecating the conduct of IRP - HELD THAT:- While examining the factors behind disallowing of non-essential expenses by the Adjudicating Authority, it is found that the reasons assigned by the Adjudicating Authority has been the absence of records and the non-handing over of the assets by the suspended management to the IRP. The reasons ascribed by the Adjudicating Authority are cogent and weighty because in the absence of the requisite documents/details/records, it could not have been expected for such an exercise to have been undertaken in the right earnest - the exclusion of these expenses by the Adjudicating Authority was done after due and proper application of mind which was only fair and reasonable. The applicability of the judgment of this Tribunal in MADHUSUDAN SHARMA VERSUS J.D. ANEJA EDIBLES PVT. LTD. [ 2019 (8) TMI 1871 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] has to be tested against the facts of the present case. That the withdrawal and stay application were heard several times is an admitted fact. However, there is nothing on record in the interim orders to show that the Appellant had been successful in demonstrating before the court the conundrum confronting him in the conduct of CIRP. The Appellant has taken the pretext that the Adjudicating Authority had made an oral observation during the hearings that it would not pass any interim order on the stay as may be seen at page 5 of Appeal Paper Book - the Madhusudan decision cannot come to aid of the Appellant. Instead, the Adjudicating Authority has rightly noted that the Appellant took advantage of the situation and mechanically pulled on with the CIRP process and kept on getting his expenses ratified from time to time by trumping up of the need to adhere to CIRP timelines. Conduct of the IRP has been strongly disapproved for not having actively pursued the matter before the Adjudicating Authority and for unnecessarily adding to the costs by carrying out non-essential activities - HELD THAT:- The Appellant has submitted that he is academically highly qualified and possesses rich experience having handled several CIRP/liquidation related assignments and unless these adverse remarks get expunged, it would jeopardize his professional career - there are no observations on the academic qualification or experience claimed by the Appellant. In the same breath, the academic qualifications and past experience cannot absolve the Resolution Professional of his conduct which has been found to be unprofessional by the Adjudicating Authority for reasons well-articulated in the impugned order. The application is devoid of merit and is dismissed.

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• Service Tax

• 2023 (8) TMI 661
  Seeking permission for withdrawal of appeal - Valuation - receiving damages/compensation from the service provider - declared service as per the provisions contained in Section 66E(e) of Finance Act, 1994 - HELD THAT:- The Civil Appeal is dismissed as withdrawn.

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• 2023 (8) TMI 660
  Levy of Service Tax - Business Support Services - appellant undertook promotional activities pursuant to the contract - coming within the scope of service or not - invocation of the extended period of limitation - suppression of facts or not - HELD THAT:- There is substance in the contention advanced by the learned counsel for the appellant that mere suppression of fact is not enough as it has also to be conclusively established that suppression is wilful with an intent to evade payment of service tax - It is correct that section 73 (1) of the Finance Act does not mention that suppression of facts has to be wilful since wilful precedes only misstatement. It has, therefore, to be seen whether even in the absence of the expression wilful before suppression of facts under section 73(1) of the Finance Act, suppression of facts has still to be willful and with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has to be wilful and there should also be an intent to evade payment of service tax. In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [ 1995 (3) TMI 100 - SUPREME COURT] , the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since suppression of facts has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. A perusal of the judgment of the Delhi High Court in MAHANAGAR TELEPHONE NIGAM LTD. VERSUS UNION OF INDIA AND ORS. [ 2023 (4) TMI 216 - DELHI HIGH COURT] reveals that when an assessee believes that the amount received was not chargeable to service tax, there is no requirement for seeking clarification, more particularly when the Finance Act also does not contemplate any procedure for seeking clarification from the jurisdictional service tax authority. The Delhi High Court also emphasised that it is only when an assessee knowingly and deliberately with an intent to evade payment of service tax, which it was aware would be leviable, suppresses receipt of consideration for rendering a taxable service, that the extended period of limitation can be invoked. Thus, it has to be held that it was not necessary for the appellant to seek a clarification from the department. The extended period of limitation could not, therefore, have been invoked. This apart, in the absence of any allegation in the show cause notice that suppression was with an intent to evade payment of service tax, the extended period of limitation could also not have been invoked. Thus, the entire demand has been confirmed by invoking the extended period of limitation. As the extended period of limitation could not have been invoked in the present case, the demand deserves to be set aside. Appeal allowed.

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• 2023 (8) TMI 659
  Denial of ab initio exemption from Service Tax - SEZ unit - works contract services - security services - rent-a-cab services - N/N. 12/2013-ST dated 01.07.2013 - interest and penalty - HELD THAT:- It is clear from Section 26(1)(e) that the exemption is available to carry on authorized operations in a Special Economic Zone. Clause (2) of the Notification ibid. states that the exemption shall be provided by way of refund of Service Tax paid on the specified services received by the SEZ unit or developer and used for the authorized operations. It is clear from the above Section as well as Notification that there is no specific mention that the services are to be consumed in a SEZ to avail the benefit of Notification No. 12/2013 ibid. - the impugned order that the Ld. Commissioner (Appeals) has given his findings on the ground that the services were found to be not eligible for availing this exemption as they were received / carried out outside the SEZ zone. He has not found that the services were not used for authorized operations. Revenue has also not filed any appeal against the impugned order. The Hon ble Telangana High Court in the case of GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [ 2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT] , while examining Notifications issued under Section 93 of the Finance Act, 1994 and the benefit of exemption flowing therefrom, has held Section 26(1) is a special power of exemption under a special enactment dealing with a unit in a special economic zone. Therefore, the notifications issued under Section 93 of the Finance Act, 1994 cannot be pressed into service for finding out whether a unit in a SEZ qualifies for exemption or not. The location of the SEZ unit of the appellant is in a remote area, due to which they had to employ migrant labourers who did not have accommodation to stay during the period of their employment with the appellant. For this reason, the appellant provided place of stay for such labourers and there is no dispute that such labourers were working with the SEZ unit of the appellant. Therefore, the appellant had to construct dormitory where such workers / employees could be accommodated - CSR activities are intricately linked with the appellant s business and hence, must be regarded as contributing for carrying out authorized operations in the SEZ and consequently, the same are also covered under Section 26(1)(e) of the SEZ Act. There is no requirement that the impugned services should be consumed in the SEZ alone, so long as the services are being used for authorized operations and therefore, the demand raised and confirmed cannot sustain - not only for the reason that the Notification in question has been misinterpreted, but also for the reason that the Order-in-Original has clearly traversed beyond the Show Cause Notice which was also upheld vide impugned Order-in-Appeal. The impugned order is set aside and the appeal is allowed.

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• Central Excise

• 2023 (8) TMI 658
  Clandestine Removal - Grey Fabrics - Evasion of Central Excise Duty - diversion into Domestic Tariff Area (DTA) in guise of clearance to the said EOU unit of West Bengal and failed to get the goods re-warehoused at the said EOU - HELD THAT:- The responsibility of transportation of goods from factory is upon the M/s Neeraj Exim. The contract produced by the appellant clearly shown the delivery term as Ex-factory - It is also found that the appellant has contended that they had followed the procedure as laid down in law for clearances of goods to M/s Neeraj Exim and department has not disputed on the genuineness of CT-3 certificate issued by the department and re-warehousing certificate issued by the Jurisdictional officer of M/s Neeraj Exim - this aspect has not been considered by the Ld. Commissioner in the present matter. Since the department has made the allegation of non-re-warehousing of the goods at the consignee s end, it has to prove the same by substantial evidence and it cannot be made on assumption. It has to be shown as if the goods were not warehoused then where were the same diverted. In present case there is no evidence of diversion of goods. It is also found that on the one hand the Revenue has made demand of central excise duty on goods consumed in the finished goods and on the other hand it is demanding duty on the finished goods which is wrong. Even if there is any duty demand, the same shall be restricted only upon finished goods. The raw material duty cannot be demanded as the same were consumed for intended purpose of manufacture. This aspect also not properly considered by the Ld. Commissioner. Since the issues have not been dealt with in a proper manner by the Learned Commissioner, the matter needs to be reconsidered as a whole - Appeal is allowed by way of remand to the Adjudicating Authority.

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• 2023 (8) TMI 657
  Constitutional Validity of Sub-Rule 3A of Rule 8 of the Central Excise Rules, 2002 - Recovery of short paid Central Excise duty alongwith interest and penalty - HELD THAT:- This issue is no more res-integra as the various Hon ble High Courts have held that the provisions of Sub-Rule 3A of Rule 8 of the Central Excise Rules, 2002 are unconstitutional. In this regard, reliance upon the Jurisdictional High Court of Punjab and Haryana in the case of M/S SANDLEY INDUSTRIES VERSUS UNION OF INDIA AND OTHERS [ 2015 (10) TMI 2455 - PUNJAB HARYANA HIGH COURT] wherein it has been held that we hold that Rule 8(3A) of the 2002 Rules to the extent it contains the words without utilizing the Cenvat credit is held to be arbitrary and unreasonable and is struck down. In other words, the unamended Rule 8(3A) of 2002 Rules whereby the benefit of Cenvat credit for all the period till the actual payment was made, stands disallowed in the event of a minor default also is arbitrary and unreasonable. Thus, there is no infirmity in the impugned order which is upheld by dismissing the appeal of the Revenue.

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• 2023 (8) TMI 656
  Classification of goods - Scope of beneficial Circular over subsequent decision of Larger Bench of Tribunal - Parts of Drier/ parboiling parts namely Heat Exchanges, Drier Fan and Aluminium Fin Tubes cleared by the appellant for Rice Mill machinery - to be classified under Chapter Heading 8419 or under Chapter heading 8437? - suppression of facts or not - extended period of limitation - Board Circular No. 924/14/2010-CX dated 19.05.2010 - HELD THAT:- It is a settled legal position that the Board Circular issued by CBEC/CBIC is binding on the departmental officers. In view of this settled legal position, firstly, the show cause notice ought not to have been issued by following the binding Circular dated 19.05.2010. Therefore, the issuance of show cause notice itself is illegal and incorrect. Secondly, during the relevant period 2011-12 to 2013-14, Circular dated 19.05.2010 was in force according to which the goods were classifiable under heading 8437. It is settled position under various Hon ble Supreme Court Judgments that any Circular which is beneficial to the assessee should be given effect irrespective to the different correct legal position of classification. Therefore, even though subsequently the Larger Bench has decided the classification under heading 8419 but by virtue of Circular dated 19.05.2010 during the currency of the said Circular the goods is classifiable under heading 8437 and consequently no duty could have been demanded on this very issue. This Tribunal, in the case of JYOTI SALES CORPORATION, HSF FOOD PROTECH PVT LTD, SHRI VINAYAKRICE TECHNO, SUNEEL GUPTA AND PUNJAB FABRICATORS VERSUS C.C.E. S.T. -PANCHKULA AND C.C.E. S.T. -ROHTAK [ 2019 (4) TMI 989 - CESTAT CHANDIGARH] held that For the period prior to 15.05.2014 if the appellants have classified their products in question under Chapter Heading No. 8437 of CETA, no demand is sustainable in terms of the Circular No. 924/14/2010-CX dated 19.05.2010. Therefore, the facts are not in dispute that for the period prior to 15-5-2014, the circular dated 19-5-2010 was in operation. In that circumstance, it is to be seen that whether the circular dated 19-5-2010 is binding on the revenue authorities during the period in question or not? Admittedly, the said issue has been examined by the Hon ble Apex Court in the case of Paper Products Ltd. [ 1999 (8) TMI 70 - SUPREME COURT ] wherein the Hon ble Apex Court observed apart from the fact that the Circulars issued by the Board are binding on the Department, the Department is precluded from challenging the correctness of the said Circulars even on the ground of the same being inconsistent with the statutory provision - From the above decision it can be seen that even though the Larger Bench has decided the merits of classification under heading 8419 but despite that the issue that when the Board Circular was in force which classified the goods under heading 8437 shall prevail as per various Supreme Court decisions discussed by the Larger Bench in the aforesaid decision. Revenue s contention is also that at the time of issuance of show cause notice, the Board Circular dated 19.05.2010 was rescinded - HELD THAT:- It is not the date of issuance of show cause notice which is relevant but the period during which the goods were cleared. In the present case, the period involved is 2011-12 to 2013-14 and during this period the circular dated 15.05.2014 was not in force but during the relevant period the Circular dated 19.05.2010 was prevailing and according to which the goods were classifiable under Chapter heading 8437. Therefore, in view of the said Circular dated 19.05.2010 the appellant was not liable to pay any duty for the clearances made prior to rescinding the Circular dated 19.05.2010. Therefore, the decision of this Tribunal in the case of Jyoti Sales Corporation is completely agreed upon. Appeal allowed.

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• 2023 (8) TMI 655
  CENVAT Credit - duty paying documents - denial of credit on the ground that address in the invoices is not mentioned of their Gamharia Unit and in the invoices, the address is mentioned of the Head Office - HELD THAT:- The said issue has been dealt by the adjudicating authority in their own case for the subsequent period, wherein the adjudicating authority has observed Since, all the goods are covered by duty paying documents involved in Show Cause Notice which have been duly received in the premises of the assessee and has been accounted for under respective documents, where utilities manufacture of dutiable goods, hence the error in address mentioned in duty paying document only is technical in nature and therefore condonable. Further, it is an admitted fact that although the invoices were in the name of their Head Office, but the goods have been received in the factory at Gamharia Unit, which is registered with the Central Excise Department and the same has been used by the appellant for manufacture of their final product, which suffered duty. The appellant has correctly taken the cenvat credit on the impugned invoices - there are no merit in the impugned order and the same is set aside - appeal allowed.

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• 2023 (8) TMI 654
  Clandestine Removal - edible refined oil - acid oil - fatty acids - gums - waxes - exempt under Notification No.89/95-CE dated 18.05.1995 as waste or not - demand alongwith interest and penalty - HELD THAT:- The findings of Larger Bench wherein the Larger Bench in the matter of M/S RICELA HEALTH FOODS LTD., M/S J.V.L. AGRO INDUSTRIAL LTD., M/S KISSAN FATS LIMITED VERSUS CCE, CHANDIGARH, ALLAHABAD [ 2018 (2) TMI 1395 - CESTAT NEW DELHI] through detailed chart explained the process of manufacturing of refined rice bran oil and generation of waste at each stage of manufacture. There is nothing on record to show that the manufacturing of acid oil is excluded from the said process of manufacturing of edible oil. The issue whether acid oil can be treated as a waste during the course of manufacture was considered in the case of M/S VINAYAK AGROTECH LTD. VERSUS CCE ST, JAIPUR I [ 2017 (11) TMI 598 - CESTAT NEW DELHI] , and it is categorically held that acid oil is a waste and not a by-product. Hence eligible for the benefit of Notification No.89/95-CE dated 18.05.1995. The issue involved in the appeals has been settled by Larger Bench in the matter of Ricela Health Foods Ltd and the other benches of the Tribunal in similar cases. The impugned orders confirming demand with interest and imposition of penalty in all the above appeals are not sustainable - Appeal allowed.

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• 2023 (8) TMI 653
  Valuation of goods - cost of empty cylinder received from the customers free of cost and used for packing of Sulphur Dioxide Gas supplied to such customers is to be included in the assessable value of final product or not - section 4 of Central Excise Act, 1944 - HELD THAT:- This issue is no longer res- integra particularly in the appellant s own case as this Tribunal has decided the issue in their favour vide M/S. TRANSPEK INDUSTRY LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VADODARA [ 2018 (10) TMI 2005 - CESTAT AHMEDABAD] wherein herein the similar issue has been decided in favour of the appellant and accepted by the Revenue. Thus, following this Tribunal order in the appellant s case for the different period, the Commissioner (Appeals) vide Order-In-Appeal No. SRP/502/VDR-I/2003 dated 27.02.2013 allowed their appeal by setting aside the OIO in that case. The present issue is also covered by the decision cited - demand set aside - appeal allowed.

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• CST, VAT & Sales Tax

• 2023 (8) TMI 652
  Purchase of gold for manufacturing of jewellery and ornaments - Claim of exemption from tax under Rule 33A of the West Bengal Value Added Tax Rules, 2005 (the Rules). It was held by the High Court that the arguments that by preventing the petitioner from carrying out job work outside the State of West Bengal would violate Article 301 and 304 of the Constitution is an argument which is stated to be outrightly rejected. HELD THAT:- There are no reason to interfere with the judgment and order impugned in the petition - SLP dismissed.

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• 2023 (8) TMI 651
  Payment of the Local Body Tax (LBT) under the Maharashtra Municipal Corporation Act, 1949 - Chole Village is included in the local urban area of the Kalyan-Dombivali Municipal Corporation, or not - refund of amount paid by the Petitioner or recovered from the petitioner on account of LBT, interest and penalty - vires of sub-rule (2) and sub-rule (3) of Rule 48 of the LBT Rules respectively for levy of penalty and interest to the Municipal Act - cancellation of LBT registration Certificate - levy of interest and penalty. HELD THAT:- It is clear from the notification that it is issued in exercise of the powers conferred on the State Government under clause (a) of sub-section (3) of Section 3 of the MMC Act. It also specifically refers to the factors mentioned in clause (2) of Article 243Q of the Constitution, as also to the revised boundaries of the municipal corporation, to the effect that after inclusion of the area specified in Schedule-I, it shall be such area as specified in Schedule-II. Schedule-II of the notification provides for the revised boundaries of the larger urban area for which the Municipal Corporation for the City of KalyanDombivali, in which in paragraph 1 under the title North , Village Chole has been included. Thus, on a conjoint reading of Article 243Q read with Section 3(3)(a) and (b) of the MMC Act, as also the definition of the larger urban area as provided in Section 2(30A) of the MMC Act, it is clear that Village Chole forms part of the revised boundary of the larger urban area as Article 243Q read with the provisions as noted by us above of the MMC Act would contemplate. Jurisdiction of municipal corporation when the provisions of the LBT stand deleted - HELD THAT:- Section 78 of the Maharashtra Act No. XLII of 2017 which is a saving provision, which provides that the amendments made by the said Act to the Maharashtra Municipal Corporations Act shall not affect the provisions of the MMC Act, when it provides that notwithstanding the amendments made in the Mumbai Municipal Corporation Act, by such Act (Maharashtra Act No. XLII of 2017), those laws and all rules, regulations, orders, notifications, form, certificates and notices, appointments and delegation of powers issued under the MMC Act which were in force immediately prior to the appointed day of the Maharashtra Goods and Services Tax Act, 2017, shall subject to the other provisions of the said Act, in so far as they apply, continue to have effect after the appointed day of the Maharashtra Goods and Services Tax Act, 2017, for the purposes of the levy, returns, assessment, re-assessment, appeal, determination, revision, rectification, reference, limitation, production and inspection of accounts and documents and search of premises, transfer of proceedings, payment and recovery, calculation of cumulative quantum of benefits, exemption from payment of tax and deferment of due date for payment of tax, cancellation of the certificate of Entitlement etc. as also whether or not the tax, penalty, interest, sum forfeited or tax deducted at source, if any, in relation to such proceedings is paid on or before the appointed day - Section 78 has clearly saved the applicability of the LBT provisions for the relevant period even after coming into force of the GST regime. Thus, Section 78 of the Maharashtra Act No. XLII of 2017 itself provides that the repeal is in view of the provisions of the MGST Act, 2017 being brought into force. The contention that in view of the deletion of the provisions of the LBT by Maharashtra Act No. XLII of 2017, the saving clause would not operate and the entire exercise of assessment as undertaken by the municipal corporation in regard to the LBT being levied by the municipal corporation is without jurisdiction, cannot be accepted - Such argument is in fact contrary to the provisions of Section 78 of the Maharashtra Act No. XLII of 2017 and Section 173 of the MGST Act. Interest and penalty - HELD THAT:- The rules themselves are clear that they would provide for interest and penalty to be levied in the event the circumstances so arise and the tax has not been paid as per the provisions of the Act. It is not the petitioner s case that the rules are framed without any corresponding provision and the power vested under the MMC Act. This apart, it is also found that such a challenge as mounted in the petition on the interest and penalty, is a contention in desperation. In the context of the contention as raised by the petitioner, we also cannot be oblivious of the fact that the petitioner had voluntarily registered itself as a dealer under the provisions of the MMC Act, as also has partly deposited the LBT due and payable, and now after the assessment orders are passed, and a demand is made by the petitioner against the petitioner, the petitioner decided to knock the doors of this Court. Thus, the petitions cannot be entertained and are liable to be dismissed.

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• Indian Laws

• 2023 (8) TMI 650
  Removal from Office/duty - Bank officer - Scope of public servant - conspired with other co-accused to cheat the Bank by sanctioning a corporate loan of Rs. 22.50 crore in favour of M/s Sven Genetech Limited, Secunderabad - appellant serving in his capacity as an Assistant General Manager, State Bank of India, Overseas Bank - applicability of Section 197 of the CrPC - permissible for the Special Court (CBI) to proceed against the appellant for the offences punishable under the IPC despite the fact that the sanction under Section 19 of the PC Act, 1988 to prosecute the appellant for the offences under the PC Act, 1988, is not on record as the same came to be declined. Whether the appellant, serving in his capacity as an Assistant General Manager, State Bank of India, Overseas Bank, is removable from his office save by or with the sanction of the Government so as to make Section 197 of the CrPC applicable? - HELD THAT:- Section 197 of the Cr PC provides that when any person who is or was a public servant, not removable from his office save by or with the sanction of the Central Government or State Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duties, no Court shall take cognizance of such offence, except with the previous sanction of the appropriate Government - protection of sub-section (1) of Section 197 of CrPC is available only to such public servants whose appointing authority is the Central Government or the State Government and not to every public servant. The legislature has given great importance to sanction as is evident from the Scheme of the CrPC. Section 216 of the CrPC gives power to the Court to alter or add to any charge at any time before judgment is pronounced but sub-section (5) thereof provides that if the offence stated in the altered or added charge is one for the prosecution of which previous sanction is necessary, the case shall not be proceeded with until such sanction is obtained, unless sanction has been already obtained for a prosecution on the same facts as those on which the altered or added charge is founded. The appellant was serving as an Assistant General Manager, State Bank of India, Overseas Bank at Hyderabad. State Bank of India is a Nationalised Bank. Although a person working in a Nationalised Bank is a public servant, yet the provisions of Section 197 of the CrPC would not be attracted at all as Section 197 is attracted only in cases where the public servant is such who is not removable from his service save by or with the sanction of the Government. It is not disputed that the appellant is not holding a post where he could not be removed from service except by or with the sanction of the Government. In this view of the matter, even if it is alleged that the appellant herein is a public servant, still the provisions of Section 197 of the CrPC are not attracted at all. The question as to whether a Manager of Nationalised Bank can claim benefit of Section 197 of the CrPC is not res integra. This Court in K. Ch. Prasad v. Smt. J. Vanalatha Devi and Others [ 1987 (2) TMI 532 - SUPREME COURT] , had the occasion to consider the very same question in reference to one who claimed to be a public servant working in a Nationalised Bank. The application filed by the appellant therein questioned the maintainability of the prosecution for want of sanction under Section 197 of the CrPC, was rejected by the Metropolitan Magistrate and revision to the High Court also met the same fate. This Court, while dismissing the appeal held that though a person working in a Nationalised Bank is a public servant, the provisions of Section 197 are not attracted at all. It is pertinent to note that the banking sector being governed by the Reserve Bank of India and considered as a limb of the State under Article 12 of the Constitution and also by virtue of Section 46A of the Banking Regulation Act, 1949, the appellant herein is deemed to be a public servant for the purpose of provisions under the PC Act, 1988. However, the same cannot be extended to the IPC. Assuming for a moment that the appellant herein should be considered as a public servant for the IPC sanction also, the protection available under Section 197 of the CrPC is not available to the appellant herein since, the conditions in built under Section 197 of the CrPC are not fulfilled. Is it permissible for the Special Court (CBI) to proceed against the appellant for the offences punishable under the IPC despite the fact that the sanction under Section 19 of the PC Act, 1988 to prosecute the appellant for the offences under the PC Act, 1988, is not on record as the same came to be declined? - HELD THAT:- The offences under the IPC and offences under the PC Act, 1988 are different and distinct. What is important to consider is whether the offences for one reason or the other punishable under the IPC are also required to be approved in relation to the offences punishable under the PC Act, 1988 - It is important to draw a distinction between an order of sanction required for prosecuting a person for commission of an offence under the IPC and an order of sanction required for commission of an offence under the PC Act, 1988. Although in the present case, the appellant has been discharged from the offences punishable under the PC Act, 1988 yet for the IPC offences, he can be proceeded further in accordance with law - it can be said that there can be no thumb rule that in a prosecution before the court of Special Judge, the previous sanction under Section 19 of the PC Act, 1988 would invariably be the only prerequisite. If the offences on the charge of which, the public servant is expected to be put on trial include the offences other than those punishable under the PC Act, 1988 that is to say under the general law (i.e. IPC), the court is bound to examine, at the time of cognizance and also, if necessary, at subsequent stages (as the case progresses) as to whether there is a necessity of sanction under Section 197 of the CrPC. There is a material difference between the statutory requirements of Section 19 of the PC Act, 1988 on one hand, and Section 197 of the CrPC, on the other. The object behind the enactment of Section 19 of the PC Act, 1988 is to protect the public servants from frivolous prosecutions. Take a case wherein, the sanctioning authority at the time of declining to accord sanction under Section 19 of the PC Act, 1988 observes that sanction is being declined because the prosecution against the accused could be termed as frivolous or vexatious. Then, in such circumstances what would be its effect on the trial so far as the IPC offences are concerned? Could it be said that the prosecution for the offences under the PC Act, 1988 is frivolous but the same would not be for the offences under the IPC? We are not going into this question in the present matter as sanction initially was not declined on the ground that the prosecution against the appellant herein is frivolous or vexatious but the same was declined essentially on the ground that what has been alleged is mere procedural irregularities in discharge of essential duties. Whether such procedural irregularities constitute any offence under the IPC or not will be looked into by the trial court. The appeal deserves to be dismissed and is hereby dismissed.

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• 2023 (8) TMI 649
  Dishonour of Cheque - main contention raised by the learned counsel for the petitioner is that there is material alteration and interpolation in the cheque which was in contravention of the RBI Guidelines - HELD THAT:- In M/s Goyal Enterprises Versus State of Jharkhand, [ 2011 (12) TMI 786 - JHARKHAND HIGH COURT ], the Court held that change of date on the cheque amounted to material alteration in the absence of the signature of the drawer. In the present case, the complaint does not disclose that the cheque was materially altered or that it was dishonoured first time due to a material alteration or as to how and at what stage did Sudha Mittal purportedly sign/counter-sign the material alterations - A perusal of the CTS Cheque (Annexure P-4) would reveal cutting on the name of the beneficiary and the amount in words. There appears to be an overwriting on the amount in figures as well. Therefore, in terms of the RBI Guidelines dated 22.02.2010 (Annexure P-4/A) which have statutory force, read with Section 87 of the Negotiable Instruments Act, the cheque was not valid tender and could never have been presented for encashment even assuming that the material alterations were signed by Sudha Mittal and assuming that she was competent to sign the same despite the fact that she was not an executant of the cheque. Though, the cheque has been dishonoured due to closure of the bank account, since the very cheque in question is materially altered and had been returned back first time on the grounds of material alteration, the provisions of Section 87 of the Negotiable Instruments Act and the RBI guidelines would apply rendering the cheque void, moreso, when the complaint does not explain as to how the materially altered cheque came into the possession of the complainant. The continuation of the proceedings in the present cases would be nothing but an abuse of the process of the Court - the complaint is quashed.

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