TMI Tax Updates - e-Newsletter
August 1, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Highlights / Catch Notes
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Income Tax:
Invoke Section 12AA for cancellation of registration - BMW car - it was stated that though the said car was purchased in the name of a Trustee, it was used for the purpose of trust only and the deduction of the same which was disallowed, has been allowed by the lower authorities - No cancellation - HC
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Income Tax:
The person or body corporate from which such interest income is received will not change its character, viz. interest income not arising from its business operations, which made it ineligible for deduction under Section 80P - HC
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Income Tax:
Loans to companies in liquidation had become bad debts and ought to be written off - whether he Tribunal was right in allowing the re-valuation of only loss making shares at market value? - Held Yes
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Income Tax:
Non service of notice - validity of assessment - service by way of affixture - It is seen that the Income Tax Inspector has signed as the local independent person but such witness cannot be considered to be a local independent person for the purposes of rule 17 of order V of CPC.
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Income Tax:
Depreciation on boiler - CIT (A) has not committed any error in allowing depreciation at the correct rate even though the assessee had claimed depreciation at a lesser rate in the return filed.
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Customs:
The request for conversion of free shipping bills to DEEC (Advance Licence) Scheme cannot be considered, as the said scheme is strictly on actual user basis exemption and no transferability is allowed pre or post export.
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Customs:
Refund - even if the Department assessed the shipping bills, for the ductile iron spun pipes, attracting Notification No.66/2008-Cus, the right course of remedy would have to file appeal against the assessed copy of shipping bills immediately after receipt of the said assessed shipping bills before the Commissioner (Appeals). Non filing of the appeal against the assessment order of the shipping bills, cannot make them eligible for refund.
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State GST:
ASSAM GST - Government specifies the documents that the person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage.
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State GST:
TRIPURA GST - The documents viz. Tax Invoice, Manifest and Consignment Note shall be carried by the person in charge of a conveyance carrying any consignment of goods taxable under GST while the goods are in movement or in transit storage till an E-way Bill system is developed and approved by the GST Council.
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Indian Laws:
Govt extends ITR filing deadline to August 5
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Service Tax:
VCES Scheme - rejection of VCES application cannot be reopened at this stage after more than a year of Order-in-Original rejecting VCES declaration
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Central Excise:
Refund - cenvat credit - Rule 5 read with N/N. 5/2006 thus provides that refund should be filed on quarterly basis only after completion of the particular quarter. Therefore, the refund cannot be filed before completion of the quarter - refund allowed.
Articles
Notifications
Customs-
74/2017 - dated
31-7-2017
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Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver- Reg
GST - States-
FTX.56/2017/068 - dated
12-7-2017
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Assam SGST
Withdrawal of notification no. FTX.56/2017/35 Dt. 29-06-2017.
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FTX.56/2011/039 - dated
12-7-2017
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Assam SGST
Notifying the prescribe documents to be carried by a person in-charge of conveyance under the Assam Goods and Services Tax Act 2017.
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S.O. 121. - dated
19-7-2017
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Bihar SGST
Corrigendum - Notification No. 02/2017 State Tax (Rate), dated the 29th June, 2017.
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S.O. 119. - dated
19-7-2017
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Bihar SGST
Corrigendum to Notification No. 1/2017-State Tax (Rate) dated the 29th June, 2017.
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S.O. 117. - dated
19-7-2017
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Bihar SGST
Corrigendum to Notification No. 01/2017-State Tax (Rate) 29th June, 2017,
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18/2017-State Tax (Rate) - dated
19-7-2017
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Bihar SGST
Amendments in the notification No.1/2017-State Tax (Rate), dated the 29th June, 2017.
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F.No.12(56)FD/Tax/2017-70 - dated
27-7-2017
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Rajasthan SGST
CORRIGENDUM - Notification No. F.12(56)/Tax/2017-Pt-I-41 dated 29 June, 2017
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F.No.12(56)/FD/Tax/2017-69 - dated
27-7-2017
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Rajasthan SGST
CORRIGENDUM - Notification No. F.12(56)FD/Tax/2017-Pt-I-40 dated 29 June, 2017.
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F.No.12(46)/FD/Tax/2017-71 - dated
27-7-2017
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Rajasthan SGST
The Rajasthan Goods and Services Tax (Fourth Amendment) Rules, 2017
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F.1-11(91)-TAX/GST/2017 (Part-IIIA) - dated
31-7-2017
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Tripura SGST
Corrigendum - Notification No. 2/2017-State Tax (Rate), dated the 29th June, 2017
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F.1-11(91)-TAX/GST/2017 (Part-IIIA) - dated
31-7-2017
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Tripura SGST
Corrigendum - Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017.
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F.1-11(91)-TAX/GST/2017 (Part-IV) - dated
29-7-2017
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Tripura SGST
Latest Notification on E-Way Bill.
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F.1-11(100)-TAX/GST/2017 - dated
28-7-2017
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Tripura SGST
Tripura State Goods and Services Tax (Fourth Amendment) Rules, 2017.
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01/2017-GST - dated
21-7-2017
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Tripura SGST
Extension of time limit for filing intimation for composition levy under sub-rule (1) of rule 3 of the Tripura State Goods and Services Tax Rules, 2017.
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F.1-11 (91)-TAX/GST/2017 (Part-IIIA) - dated
12-7-2017
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Tripura SGST
Corrigendum - Notification No. 01/2017-State Tax (Rate), dated the 29th June, 2017.
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F.1-11(91)-TAX/GST/2017 (Part-IIIA) - dated
11-7-2017
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Tripura SGST
Corrigendum - Notification No. 2/2017-State Tax (Rate), dated the 29th June, 20l7.
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F.1-11 (91)-TAX/GST/2017 (Part-IIIA) - dated
11-7-2017
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Tripura SGST
Corrigendum - Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017
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F.1-11 (91)-TAX/GST/2017 (Part-V) - dated
6-7-2017
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Tripura SGST
Tripura State Goods and Services Tax (Third Amendment) Rules, 2017.
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18/2017-State Tax (Rate) - dated
6-7-2017
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Tripura SGST
Amendments in the Notification No. 01/2017- State Tax (Rate) dated 29th June, 2017
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F.1-11(91)-TAX/GST/2017 (Part-III) - dated
29-6-2017
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Tripura SGST
Tripura State Goods and Services Tax (Second Amendment) Rules, 2017.
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F.1-11 (91)-TAX/GST/2017 (Part-IV) - dated
29-6-2017
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Tripura SGST
E-way bill system is developed and approved by the Council.
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F.1-11 (91)-TAX/GST/2017 (Part-III) - dated
29-6-2017
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Tripura SGST
Notification of appointment of sections of Tripura State Goods and Services Tax Act, 2017
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F.1-11 (91)-TAX/GST/2017 (Part-III) - dated
29-6-2017
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Tripura SGST
Notification of rates of Interest under Tripura State Goods and Services Tax Act, 2017.
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F.1-11 (91)-TAX/GST/2017 (Part-III) - dated
29-6-2017
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Tripura SGST
Notification of HSN code under Tripura State Goods and Services Tax Rules, 2017.
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F.1-11 (91)-TAX/GST/2017 (Part-III) - dated
29-6-2017
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Tripura SGST
Regarding specification of modes of verification.
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17/2017-State Tax (Rate) - dated
29-6-2017
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Tripura SGST
Notify the categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator [Section 9 (5)]
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16/2017-State Tax (Rate) - dated
29-6-2017
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Tripura SGST
Notify specialised agencies entitled to claim a refund of taxes paid on the notified supplies of goods or services or both received by them under TSGST Act [Section 55].
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15/2017-State Tax (Rate) - dated
29-6-2017
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Tripura SGST
Notify the condition of non-availability of refund of unutilized ITC for supply of service.
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14/2017-State Tax (Rate) - dated
29-6-2017
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Tripura SGST
Notify the supplies which shall be treated neither as a supply of goods nor a supply of service under the Tripura State Goods and Services Tax Act [Section 7 (2)].
Income Tax-
75/2017 - dated
28-7-2017
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IT
Central Government notifies Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2017 (7) TMI 1054
Admission of additional evidence - Held that:- The production of additional evidence has to be within the parameters as set out in Rule 46A of the Income Tax Rules. The Tribunal has found that the assessee was prevented by a reasonable cause for not being able to file the books of accounts earlier. The reasons given for production of additional evidence, it appears, are plausible, and would be within the purview of Rule 46 of the Income Tax Rules. The discretion has been exercised by the Tribunal. However, it is found that the Tribunal has exceeded and gone beyond the scope of Rule 46. The Tribunal could not have directed the Assessing Officer to compute the income only on the basis of books of accounts. It will have to be left to the Assessing Officer to test the genuineness and authenticity of the entries in the books of accounts and thereafter pass fresh assessment order.
In light of above, we pass the following order :
i) The order of the Tribunal to the extent of allowing the production of additional evidence, that is, books of accounts, is maintained. However, we clarify that it will be open for the Assessing Officer to test the genuineness and authenticity of the entries in the books of accounts and thereafter pass assessment order afresh.
ii) The directions of the Tribunal with regard to determination of unaccounted investments, disallowance of deduction on account of interest expenditure, disallowance of deduction on account of other expenditure, to hold the sale of shares as capital gains and allow deduction under Section 48 of the Income Tax Act, will all depend upon the decision of the Assessing Officer with regard to the books of accounts and its decision upon the genuineness of the entries therein.
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2017 (7) TMI 1053
Invoke Section 12AA for cancellation of registration - Held that:- The fact that the appellant had put land on sale is not disputed. However, an explanation has been given that assessee had undertaken construction of the hospital and constructed substantial part of the cancer hospital. However, could not complete construction because of the financial stringency, and to achieve the further object of the trust decided to sale the same. The sale has not materialised and the said property is not sold. It cannot be said that the Tribunal has erred in its conclusion.
With regard to purchase of BMW car, it was stated that though the said car was purchased in the name of a Trustee, it was used for the purpose of trust only and the deduction of the same which was disallowed, has been allowed by the Commissioner and confirmed by the Tribunal. It shows that the trust has purchased the said car for its own use.
As far as payment of scholarship is concerned, it has come on record that the amount of scholarship has been paid to the students directly through their educational institutions and not through PAAK foundation, though, initially it was decided to route the said payment through PAAK foundation, but the same has not been done and the amount which was deposited for scholarship with PAAK foundation has been taken back by the respondent. The Tribunal after appreciation of evidence has arrived at plausible conclusion in allowing the appeal in favour of assessee.
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2017 (7) TMI 1052
Condonation of delay - Held that:- No justification on the part of the authorities in not condoning the delay in filing the appeal. Hence, the Writ Petition is allowed. The impugned order confirming the order of the original authority is set aside and the matter is remitted to the first appellate authority/Commissioner of Customs and Central Excise (Appeals-II), Trichy. The delay in filing the appeal is condoned. The second respondent is directed to entertain the appeal and number the same and decide the issue on merits and in accordance with law, after affording reasonable opportunity of hearing to both sides and dispose of the appeal within a period of one month from the date of receipt of a copy of this order. If the petitioner-Company fails to represent the matter for any reason whatsoever, the second respondent is directed to pass orders on merits based on the documents available on record.
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2017 (7) TMI 1051
Joint possession - addition on money in the hands of the accused - assets found during the course of search proceedings - Held that:- The prosecution has not been able to lead evidence to establish that some of the money could be held in the hands of the accused. In the case of joint possession it is very difficult when one of the persons accepted the entire responsibility. The wife of the accused has not been prosecuted and it is only the husband who has been charged being a public servant. In view of the explanation given by the husband and when it has been substantiated by the evidence of the wife, the other witnesses who have been produced on behalf of the accused coupled with the fact that the entire money has been treated in the hands of the wife and she has owned it and she has been assessed by the Income Tax Department, it will not be proper to hold the accused guilty under the Prevention of Corruption Act as his explanation appears to be plausible and justifiable.
Neither the investigation authorities nor the Assessing Officer have brought anything on record to prove that the above referred assets found during the course of search proceedings actually belonged to the assessee. Further, as mentioned above, the relevant source of income was already offered tot ax in the hands of the above two companies (M/s.Silver Shoes Pvt. Ltd. And M/s.Souther Rims Pvt. Ltd) and has reached finality.
In view of the above, the Assessing Officer is not justified in bringing the above mentioned assets found during the course of search proceedings, to tax in the hands of the assessee. The additions of ₹ 44,91,000/- made by the Assessing Officer, for the A.Y.1994-95, are, therefore, deleted. - Decided in favor of assessee.
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2017 (7) TMI 1050
Attachment of the immovable property and proclamation of attachment - procedure for recovery of tax - Held that:- Impugned order has been passed by the Tax Recovery Officer under Rule 16 (1) and (2). A reading of Rule 16 (1) and (2) would show that the Tax Recovery Officer has no power to declare the alienation as null and void. Accordingly, the impugned order is liable to be quashed and it is quashed. However, it is made clear that the department is at liberty to proceed against the properties of the defaulters which according to the department have been attached on 06.01.1988. It is open to the petitioner to approach the Tax Recovery Officer under Rule 11(1) claiming that this property is not liable for attachment. Once such claim is preferred, it is for the Tax Recovery Officer to adjudicate the sale of the property under Rule 11. If the claim is rejected, the aggrieved party has got a right to move the Civil Court to establish his right. The writ petition is accordingly allowed. Rule nisi is made absolute. However, the right of the department to proceed against the property on the basis of the attachment made on 06.01.1988, is protected with liberty to the petitioner to move the Tax Recovery Officer under Rule 11 seeking adjudication of his claim.
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2017 (7) TMI 1049
Entitled to 100% deduction under Section 80P(2)(d) - income by way of interest earned during the relevant Assessment Years from 2007-2008 to 2011-2012 on the deposits or investments made by it during these years with a Co-operative Bank, M/s.Kanara District Central Co-operative Bank Limited - Held that:- Character of income depends upon the nature of activity for earning that income and though on the face of it, the same may appear to be falling in any of the specified Clauses of Section 80P(2) of the Act, but on a deeper analysis of the facts, it may become ineligible for deduction under Section 80P(2) of the Act. The case in Udaipur Sahakari (2009 (7) TMI 11 - SUPREME COURT ) was that of Section 80P(2)(e) of the Act, whereas in the present case, it is under Section 80P(2)(d) of the Act. Hence, the income by way of interest earned by deposit or investment of idle or surplus funds does not change its character irrespective of the fact whether such income of interest is earned from a schedule bank or a co-operative bank and thus, clause (d) of Section 80P(2) of the Act would not apply in the facts and circumstances of the present case. The person or body corporate from which such interest income is received will not change its character, viz. interest income not arising from its business operations, which made it ineligible for deduction under Section 80P of the Act, as held by the Hon’ble Supreme Court.
Appeals filed by the Revenue deserve to be allowed and the appeals filed by the assessee deserve to be dismissed.
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2017 (7) TMI 1047
Disallowance made under section 35(1)(ii) - Held that:- When the institution was enjoying the approval within the meaning of section 35(1)(ii) of the Act as on the date of receipt of donation and retrospective cancellation of approval of the concerned institution, the deduction claimed in respect of donation cannot be denied. Under the above facts and circumstances, denial of exemption claimed in respect of donation cannot be sustained.
With regard to the donation, M/s. Herbicure confirmed the voluntary donation of ₹.15 lakhs from the assessee. A copy of the trust’s Corporation Bank statement in which the donation received was also sent by the trust. Based on the sworn statement of the Founder Director Shri Swapan Ranjan Das Gupta of M/s. Herbicure, wherein, he has admitted that his organization accept the donation and giving back of the same to the donor after deducting a commission @ 5% on the donation amount. However, the Department has not made any effect to get any valid evidence that the organization has given back the donation to the donor after deducting a commission @ 5% on the donation amount. Under the above facts and circumstances, the Assessing Officer is directed to ascertain the means as well as actual amount repaid by the donee to the assessee and decide the issue afresh after giving sufficient opportunities of hearing to the assessee. Thus, the ground raised by the assessee is partly allowed for statistical purposes.
Disallowance made under section 14A - Held that:- Assessing Officer has observed that the assessee had shown an amount of ₹.20,36,486/- on dividend received from shares and mutual funds and claimed exemption under section 10(38) of the Act. The Assessing Officer disallowed a sum of ₹.58,888/- being the expenses incurred towards earning the exempt income. In the assessment order, the Assessing Officer has not given any basis and details of disallowance made under section 14A of the Act, such as total investment made by the assessee, application of relevant provisions of Income Tax Rules, etc. Under the above facts and circumstances, we direct the Assessing Officer to pass a speaking order with regard to the disallowance under section 14A of the Act. Thus, the ground raised by the assessee is allowed for statistical purposes.
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2017 (7) TMI 1046
Non service of notice - validity of assessment - service by way of affixture - Held that:- For resorting to affixture, efforts have to be made to serve the notice upon the assessee and only after reaching a finding that the notice cannot be served upon the assessee, the mode of affixture can be resorted to. Further rule 17 of order V of CPC mandates that an independent local person be the witness of service through affixture and for the purpose of having been associated with the identification of the place. However a perusal of the affixture report shows that there was no independent local person as a witness and there is no evidence that anyone identified the place as belonging to the assessee before such affixture. It is seen that the Income Tax Inspector has signed as the local independent person but such witness cannot be considered to be a local independent person for the purposes of rule 17 of order V of CPC.
Department has failed to prove a valid service of notice on the assessee before embarking upon the assessment proceedings. Since the entire reassessment proceedings were based on assumption of jurisdiction through the issue of notice under section 143 (2) of the Act, which was not validly served on the assessee, we hold that the assessing officer was patently wrong in completing the assessment without effecting the service of notice in accordance with section 282 (1) of the Income Tax Act, 1961 read with order V rule 12 and order V rule 17 of the CPC. - Decided in favour of assessee.
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2017 (7) TMI 1045
Assessment against non existent companies - assessment framed by the Assessing Officer on the amalgamating company - Held that:- It is clearly decided in the earlier assessment year i.e. 2011-12 in assessee’s own case that the notice issued u/s 143(2)/142(1) is void ab initio. The amalgamating company i.e. M/s. Suzuki Powertrain India Ltd. was not in existence on the date of passing Assessment Order. Hence, the Assessment proceedings as well as the Assessment order itself are not valid. The assessment order for Assessment Year 2012-13 is set aside. Appeal of the assessee is allowed.
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2017 (7) TMI 1044
Sustainability of assessment against non existent company - appellant has since been amalgamated with another company - Held that:- The assessment passed by the Ld. assessing officer is not sustainable, as it has been passed after the amalgamation on the assessee company who was no more in existence. In view of this the additional ground raised by the assessee succeeds. See Spice Enfotainment Ltd. Versus Commissioner of Income Tax [Printed as: SPICE ENTERTAINMENT LTD. Versus COMMISSIONER OF SERVICE TAX] [2011 (8) TMI 544 - DELHI HIGH COURT ] - Decided against revenue
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2017 (7) TMI 1043
Validity of assessment u/s 153A - addition on account of gift - Held that:- In absence of any incriminating material found during the course of search qua the gifts disclosed in the original return of income, no addition can be made in the assessment made u/s 153A.
Similarly, in the appeal for the AY 2005-06 admittedly the return of income filed originally had attained finality and in terms of section 153A read with second proviso, hence the assessment for the AY 2005-06 was unabated at the time of search conducted on 28.02.2007. For the said gift also nothing incriminating was unearthed during the search and therefore, in absence of any incriminating material relating to gift found during the course of search, we hold that such an addition cannot be roped in while completing the reassessment u/s 153A. Above finding given in the AY 2004-05 will apply mutatis mutandis and accordingly, appeal for assessment year 2005-06 is allowed in favour of assessee.
In the appeal for the AY 2001-02, the addition relates to opening balance as on 01.04.2001 as reflected in Balance Sheet. For this addition also, from the perusal of the assessment order, it is quite apparent that no incriminating material has been found during the course of search that the opening balance as shown in the balance sheet as on 31.03.2001 in the form of cash in hand or bank balance of ₹ 3,03,309/- is an undisclosed income which has been unearthed on the basis of any incriminating material found during the course of search. Moreover, the amount of opening balance cannot be added unless something incriminating is found qua the same amount of closing balance as reflected in the balance sheet of the earlier year. Thus, this addition cannot be made while making reassessment under the provisions of section 153A.
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2017 (7) TMI 1042
Best judgment assessment - addition on account of fall in GP rate - Held that:- The closing stock of the assessee included two types of stock i.e. i) which had been sold up to the date of signing of audit report measuring 305287 metres and; ii) which was still unsold measuring 252864 metres. It has been contended by the Ld. AR that the Ld. CIT (A) applied the differential rate in valuation @Rs. 5/- per metre on the entire stock instead of the stock remaining unsold i.e. 2526784 metres. This contention of the assessee appears logical to us and we are of the considered opinion that the assessee should be allowed benefit of the same. Therefore, while rejecting the department’s grounds, we partly allow ground no. 1 of the assessee’s C.O. by restricting the addition to ₹ 15,26,435/- (305287 mtrs. x ₹ 5/-). Thus, ground no. 1 of the department’s appeal stands dismissed whereas ground no. 1 of the assessee’s C.O. stands allowed.
Bad debts written off - Held that:- We find that the amounts have been shown as interest income receivable during earlier assessment years and as such, the assessee has already paid tax on the same. Therefore, for the purposes of section 36(2), the conditions laid down therein have duly been met by the assessee. Therefore, there is no reason as to why these amounts should not be allowed as bad debt. We accordingly set aside the order of the Ld. CIT(A) on this issue and direct the Assessing Officer to delete this addition of ₹ 18,18,058/- also. In the result, ground no.2 of the department’s appeal is dismissed and whereas ground no. 2 in assessee’s C.O. is allowed.
Depreciation on boiler - boiler Falls under item no. 8(ix) under the head ‘energy saving devices’ in the chart prescribing the rates of depreciation under the Income Tax Rules - Held that:- CIT (A) has noted that it is an admitted fact that as per Certificate dated 8.12.2009 issued by supplier of the boiler and submitted before the Assessing Officer along with letter filed on 22.12.2009, the assessee had purchased Fluidized Bed Combustion Boiler which is specifically covered under item (ix) – Energy Saving Devices of the depreciation schedule under the heading (A)(a) as Ignifluid/Fluidised Bed Boilers eligible for depreciation @80%. In the proceedings before us, the department could not negate the fact that the boilers were in fact eligible for depreciation @80% and the only cause of grievance was that the assessee did not file a revised return. Considering the overall factual matrix, we are of the considered opinion that the Ld. CIT (A) has not committed any error in allowing depreciation at the correct rate even though the assessee had claimed depreciation at a lesser rate in the return filed. Therefore, we find no reason to interfere on this issue and we dismiss ground no. 3 of the department’s appeal.
Disallowance on account of short term capital loss - Held that:- As already allowed depreciation on boiler @80% and the motor cars fall under different block of assets, although rate of depreciation is 15% as applicable to machinery and plant other than those covered by sub items (2), (3) and 8 below the table and sub item (2) being motor cars, other than those used in business of running them on hire. Consequently, the disallowance of short term capital loss of ₹ 1,48,76,639/- made by the AO is deleted as the block of plant and machineries other than motor car, computer and boiler ceased to exist. The AO is directed to withdraw depreciation of ₹ 13,22,785/- allowed in the order.
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2017 (7) TMI 1041
Reopening of assessment - Held that:- AO simply acted upon the information received from the Investigation Wing and did not apply his own mind. Therefore, the reopening u/s 147 by issuing the notice u/s 148 of the Act only on the basis of information received from the Investigation Wing was not valid. Accordingly, the reassessment framed by the AO is held to be invalid and quashed. - Decided in favour of assessee.
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2017 (7) TMI 1040
TPA - whether services have actually been rendered by the foreign AE or not? - Held that:- Startlingly, assessee himself has not submitted any proof with respect to accounting administrative services and management information system listed at Sl No. 6 and 7 of the chart. With respect to financial services only sector revenue forecast and Q3 forecast revenue were mentioned. Therefore, on analysis of the above documents we found that there are no proper evidences led before the ld TPO that services have infact been actually rendered by the AE.
It is expected from the assessee for proper benchmarking to lead evidence with respect to each of the nature of services with respect to each class of services mentioned in the above chart with corresponding manner of rendering of the services, the time lag of initiation of services and closure of the services. The evidences produced are apparently very general and do not show the rendering of the services. Thus we set aside the appeal of the assessee to the file of ld TPO/AO for verifying the evidence of rendering of the services by the AE with respect to nature of each of the services listed in the agreement. The assessee is also further directed to lead proper and credible evidence with respect to nature of services and how and when those services have been rendered by the AE. It is also made clear that AO shall not question the need and benefit arising out of these services as the same have been conclusively decided by the order of the coordinate bench for earlier years in the case of the assessee itself. In the result the appeal of the assessee with respect to ground No. 1, 2, and 3 are allowed with above direction accordingly.
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2017 (7) TMI 1048
Shares treated as stock in trade of the assessee company - Held that:- Underwriting or subscription in shares, debentures or other securities of industrial concerns and the rendition of financial assistance by various modes including loans, guarantees and under writing subscription. The assessee was thus incorporated solely for the purpose of ensuring and facilitating growth and development of industries in the state of Tamilnadu. Investment by way of subscription to shares is solely on account of the under writing operations. Such being the position, the investments are of the nature of stock-in-trade and cannot be held to be otherwise. In fact, this aspect of the matter was decided by the Income Tax Appellate Tribunal in the assessee's own case in respect of assessment year 1970-71 wherein, by a well reasoned order dated 14.3.1975, the stand of the assessee that investment in companies would constitute represent stock in trade, was accepted. Question No.2 is thus answered in favour of the assessee and against the revenue.
Loans to companies in liquidation had become bad debts and ought to be written off - whether he Tribunal was right in allowing the re-valuation of only loss making shares at market value? - Held that:- A detailed analysis has been undertaken therein with respect to various items identified and sought to be written off in view of the doubtful character of recovery of loans and investments. Investments in the shares of six industrial companies were undertaken by way of underwriting of issue of shares. Upon finding that the net worth was negative, it was proposed to write off 100% of such investment in five cases. In the matter relating to one defaulter, M/s. Southern Brick Works Limited, the recommendation for write-off was only 50% of the investment, in view of a proposal for take over of the entity by M/sVinichem Private Limtied.
The note also proposes the write-off of an amount of ₹ 33.82 lakhs being 90% of the advances made to two companies, M/s.Upper India Bearings Limited and M/s. Nedumbalam Samiappa Annapoorani Mills Limited, where creditors had approached the High Court seeking their winding-up and receivers had been appointed.
The need for and criteria adopted for the valuation of the shares as well as the efforts taken and measures adopted by the assessee company for recovery of the advances have been duly noted by the tribunal. The erosion of capital leading to a fall in value of shares has been established. We are thus of the view that the conclusion of the tribunal in this regard are well founded and are not vitiated by perversity. - Decided in favour of the assessee.
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Customs
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2017 (7) TMI 1026
Amendment of free shipping bill into DEEC shipping Bill - export of Purified Water Solution Plant consisting of machinery, equipment, accessory spares to one M/s Baximco. Pharmaceuticals Ltd., Bangladesh - whether the appellants are eligible to convert/amend the Free Shipping Bill No.1171741 dated 22.8.2005 into DEEC (Advance Licence) Shipping Bill, as requested by them on 27.11.2009 under Section 149 of the Customs Act, 1962? - Held that: - the present case are that the appellant had applied for conversion of free shipping bills into DEEC (Advance Licence Scheme) Shipping Bills four years after export i.e. on 27.11.2009. Also, at the time of clearance of the goods it was specifically not disclosed in the free shipping bills nor in the ARE-1 export document by declaring thereunder specifically to claim any of the export benefit i.e. benefit under DEEC (Advance Licence), therefore, the consignment was not opened for physical examination by the Customs and the export was allowed. Hence, it is difficult to appreciate the argument of the appellant that it was a question of mere amendment to the shipping bills and should be allowed under Section 149 of the Customs Act, 1962 which is contrary to the Circular No.4/2004 dated 16.1.2004 issued by the Board and was in force during the relevant time.
The request for conversion of free shipping bills to DEEC (Advance Licence) Scheme cannot be considered, as the said scheme is strictly on actual user basis exemption and no transferability is allowed pre or post export. Hence, strict interpretation need to be applied.
Appeal dismissed - decided against appellant.
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2017 (7) TMI 1024
Refund claim - rejection on the ground that the export duty had been paid against shipping bills which were finally assessed but the Appellant had not challenged the same by filing Appeal - whether the appellants are entitled to refund of ₹ 15,26,962/- of the export duty paid on the goods ductile iron spun pipes during the period 23.5.2008 to 05.6.2008 against seven Shipping Bills? - Held that: - it is incorrect to say that there was no assessment of the shipping bills against which the appellant had discharged the export duty during the relevant period in accordance with N/N. 66/2008-Cus. However, the appellant had not challenged the said assessments but directly filed refund claim on 04.12.2008.
It is settled principle of law that assessed bills of entry/shipping bills could be challenged before the appellate authority; in the event, the assessee was aggrieved by the assessment of ductile iron spun pipes recorded in the said shipping bills; they could have challenged it. In my opinion, the classification of the goods or applicability of export duty to a particular kind of pipes cannot be settled by filing refund claim. Thus, even if the Department assessed the shipping bills, for the ductile iron spun pipes, attracting Notification No.66/2008-Cus, the right course of remedy would have to file appeal against the assessed copy of shipping bills immediately after receipt of the said assessed shipping bills before the Commissioner (Appeals). Non filing of the appeal against the assessment order of the shipping bills, cannot make them eligible for refund.
Appeal dismissed - decided against appellant.
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2017 (7) TMI 1023
Confiscation - smuggling - gold and foreign currency - Held that: - both the appellants along with the mastermind Sh. Jay Sudhirbhai Vaidya involved in the act of smuggling of goldand foreign currency totally valued at ₹ 92,01,487/- - there is no merit in the contention of the Ld. Advocate appearing for the appellant Sh. Manvendra Singh Vaghela that no evidence has been brought on record establishing his role in the activity of smuggling.
Penalty upheld on appellants - in the interest of justice, the penalty imposed on Sh. Mahendra Singh Vaghela is reduced to ₹ 1,00,000/ and on Shri Arpit Singh Raol is to ₹ 50,000/- - appeal allowed - decided partly in favor of appellants.
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2017 (7) TMI 1025
Imposition of penalty u/s 112(a) and Section 112(b) of the Customs Act, 1962 - high value electronic items - Held that: - The provisions of Sections 112(a) and 112(b) of the Customs Act, 1962 are sought to be attracted in the present case by the impugned order. As the petitioner had allegedly successfully smuggled goods into India on other occasions, the adjudicating authority assumes that the petitioner is guilty of smuggling of the value as indicated in the impugned order. The penalty is imposed on an assumption. Such assumption is not supported by any material. Therefore such imposition of penalty on the petitioner cannot be sustained - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2017 (7) TMI 1019
Period of limitation - transfers registered without duly complying with the FEMA Regulations - eligibility of application made by a depository company participant or investor or the Security Exchange Board of India - Held that:- Time of filing the petition during 2011 have not made any application showing 'sufficient cause' for the condonation of delay or even during the course of arguments no such explanation has been made. Thus, the counsel for Respondents/petitioners have neither shown “sufficient cause” for the prolonged delay, nor payed for condonation of delay in the matter in hand. However, he made a reference to the ruling of the CLB given in S. Kanthimathy v. Woodlands Estates Ltd. [2008] 83 SCL 491. In the said case, under para 22, it has been observed that it is a settled law that delays in bringing the appeals are required to be condoned in the interest of justice, where no gross negligence or deliberate inaction or lack of bona fide is imputable to the party seeking condonation of delay and in the said matter the legal heirs were engaged in resolving the dispute before approaching the CLB and the CLB had taken the ground of their being engaged in resolving the disputes as “sufficient cause” for condonation of ten months' delay. But in this case, Respondents/petitioners have never given any explanation with regard to the delay caused in filing the company petition. Therefore, this ruling is not applicable to the facts and circumstances of the present case, as the facts in this matter are distinguishable from that of the facts stated in the ruling referred above. From 2007 to 2011 there is a lapse of four years which is abnormal delay in filing the petition. Therefore, the present petition is barred by delay and laches.
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Insolvency & Bankruptcy
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2017 (7) TMI 1018
Corporate Insolvency Resolution Process - whether the petitioner has been able to satisfy the requirement of Section 7 of the Code? - Held that:- Firstly, the order dated 30.05.2017 may not by itself be regarded as notice within the meaning of proviso to Section 7 (5) of the Code. Secondly it is highly doubtful whether the defect concerning power of attorney would be the one covered by Section 7 (2) of the Code. Section 7 (2) of the Code only provides that application has to be in the form and manner as may be prescribed. By virtue of Section 7 of the Code read with Rule 4 of the Adjudicating Authority Rules' Form-1 has been prescribed as performa for presentation of the application by a 'Financial Creditor'. A perusal of Form-1 would reveal that there is no requirement specified in any part of that performa with regard to power of attorney. It would thus mean that there is no defect in terms of Section 7 (2) read with Section 7 (5) of the Code. It does not however lead to the conclusion that there is no requirement of filing a power of attorney. But then it is a different matter and would not be hit by the defect in the performa prescribed by Rule 4 of Adjudicating Authority Rules. It is not that every defect is hit by Section 7 (2) of the Code. Therefore, no notice by the registry was issued. This is a hyper technical legal argument raised on the basis of order dated 30.05.2017. Taking clue from the order of that date this argument has been advanced. Therefore, we do not accept the submission. Going by that conclusion we find that affidavit has been filed on 07.06.2017 which has consumed seven days' time. Therefore, we do not find any substance in the aforesaid submission and reject the same.
For the reasons, aforementioned this petition is admitted.
In pursuance of Section 13 (2) of the Code we direct that public announcement shall be immediately made by the Interim Resolution Professional with regard to admission of this application under Section 7 of the Code. We also declare moratorium in terms of Section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d).
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FEMA
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2017 (7) TMI 1017
Contravention of certain provisions of Foreign Exchange Regulation Act, 1973 - Held that:- It is of conscious of the fact that by this order, the petitioner should not take advantage and protract the proceedings. Likewise by rejecting this petition, I am of the considered view that it would amount to denial of a reasonable opportunity of argument since framing of charges is an important event in the trial of warrant cases. In order to strike the balance between the prosecution's objections and the petitioner's request, it would be appropriate to direct the Court below to grant one day time for the petitioner to put forth his arguments with regard to framing of charges.
In the result, the charges framed on the file of the learned Additional Chief Metropolitan Magistrate (E.O.II), Egmore, Chennai is set aside. The petitioner is permitted to put forth his arguments on the charges framed in the said case. Such an exercise shall be completed within one working day and such date shall be fixed by the learned Additional Chief Metropolitan Magistrate (E.O.II), Egmore, Chennai on or before 31.07.2017. It is made clear that I have not expressed any of my views with regard to the merits of the petitioner's case and it is open to the learned Additional Chief Metropolitan Magistrate (E.O.II), Egmore, Chennai to frame charges against the petitioner, if such arguments are not advanced on the stipulated date.
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Service Tax
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2017 (7) TMI 1039
Construction of complex service - the entire defence of the appellant is based on the arguments that MHADA is a philanthropic/non-profit organisation and therefore, the activities conducted by them are not of commercial nature - Ministry of Finance Circular No.B2 8/82004-TRU dated 10/09/2004 - Held that: - The clarification relied upon by the appellant in Circular dated 10/09/2004 is a clarification issued with reference to commercial and industrial construction service. The demand has however been issued under construction of complex service as defined under Section 65 (30 a) of the Finance Act, 1994 in respect of construction of residential complex, commercial or otherwise nature of the construction is irrelevant - The so-called bonafide belief of the appellant was based on the non-commercial nature of MHADA. It can be seen from the definition above that the word “commercial’ itself does not figure in the said definition - appeal dismissed - decided against appellant.
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2017 (7) TMI 1038
Rectification of mistake - date of realization of the export proceeds has been wrongly submitted - Held that: - I allow correction of the date from 29/02/2014 to 29/08/2014 in last but one sentence of Para 4 of said Final Order No.A/170760-70761/2016 dated 31/08/2016. Further, I hold that all other contentions in the said Para 5 of the ROM Application are totally wrong when compared with the record as reflected in above stated Para 13 of Appeal memorandum so far as it related to allegations made against counsel and facts on record. I, therefore, hold that there was no mistake apparent of the facts on the face of record save as corrected in respect of typographical mistake about date which was recorded as 29/02/2014 - ROM application allowed.
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2017 (7) TMI 1037
Refund of unutilised CENVAT credit - Scientific and Technical Consultancy Services - Held that: - the learned Commissioner (Appeals) has wrongly rejected the refund of cenvat credit on ‘Scientific and Technical Consultancy Services' without any basis by wrongly holding that the said service is not an ‘input service' - this service is very much part of the input service and it is directly linked with the output service of the company - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 1036
Business Auxiliary Service - VCES Scheme - appellant submitted the prescribed declaration before the Punjab National Bank (PNB) and not before the designated authority prescribed under the scheme - Held that: - rejection of VCES application cannot be reopened at this stage after more than a year of Order-in-Original rejecting VCES declaration - Since the entire arguments and case laws cited by the appellant are in relation to the Order-in-Original dt. 18.09.2014, which has already attained finality, I do not see the need to deal with the case laws cited by the appellant - appeal dismissed - decided against appellant.
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2017 (7) TMI 1035
Maintainability of appeal - pre-deposit - non-compliance of the provisions of Section 35F of the Central Excise Act 1944 made applicable to Service Tax - Held that: - It is a fact that the appellant had filed this appeal without mandatory pre-deposit as required under Section 35F of the Central Excise Act 1944 as made applicable to Service Tax vide Section 83 of the FA 1994 - the present appeal is not maintainable without the mandatory pre-deposit as provided under Section 35F of the Central Excise Act 1944 - appeal dismissed being not maintainable.
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Central Excise
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2017 (7) TMI 1034
Valuation - includibility - insurance charges(part of cost of transportation) - The Appellant claims that it is not includible in the value being post removal expenses viz. transportation, whereas, revenue claims it as breakage allowance/compensation, hence, part of the value of the goods - whether the amount equal to 7% of the value of the goods, collected as insurance charge under the head Cost of Transportation from the dealers/buyers is includible in the assessable value and chargeable to duty? - Held that: - A simple reading of the General terms of sale reveals that the appellant though claimed that all of their sales are on ex-factory basis, but there are two category of buyers as per the said sales agreement; namely, buyers who take delivery of the goods at the factory gate and the second category of buyers who opt for delivery at their place which should be undertaken by the appellants - in the present case, the appellants on receiving extra amount @7% of the total value undertook to deliver the goods breakage free, and compensate the buyer for breakages by issuing credit notes, therefore, such sale ought to be considered not a sale on ex-factory basis but on FOR basis even though the Cost Transportation is not included in the price but shown separately in the invoice. Besides, the condition stipulated in clause (3) General Terms of Sale looses its significance of the delivery of possession at the factory gate, when the Appellant compensated the buyers for loss/breakages during transit to later premises by issuing credit notes.
In our opinion, the issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of Surya Roshni Ltd. (2000 (9) TMI 71 - SUPREME COURT OF INDIA]. - Decided against the assessee.
Extended period of limitation - Whether the demand issued for the period from 01.02.1999 to 30.9.2004 is barred by limitation as the demand notice was issued on 26.2.2004? - Held that: - Once the facts are within the knowledge of the Department, being always in dispute, hence the allegation that they had suppressed the facts from the knowledge of the Department, cannot be acceptable.
On the issue relating to the differential duty on the quantum of discount not passed to the customers, the ld. Advocate for the appellants claimed that during the said period, though they have claimed a total discount of ₹ 21,60,72,896/- but in fact they have passed more discount to their buyers amounting to ₹ 23,23,77,024/-hence, duty demanded on this count is unsustainable in law - the matter is remanded to the adjudicating authority for determination of the said issue.
Penalty - Section 11AC of CEA, 1944 - Held that: - since the issue relates to interpretation of valuation provision and duty has been confirmed for the normal period, in our view, imposition of penalty equal to the duty under Section 11AC of CEA, 1944 is unwarranted and unjustified.
Appeal allowed in part and part matter on remand.
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2017 (7) TMI 1033
Refund of excess amount paid - time limitation - Section 11B of Central Excise Act, 1944 - whether the refund claim filed by the appellant for refund of excess amount paid in terms of Rule 6(3)(b) of the CENVAT Credit Rules, 2004 is to be considered by applying the provisions of Section 11B of the Central Excise Act, 1944 and whether such refund claim is admissible?
Held that: - Provisions of Section 11B of the Central Excise Act, 1944 clearly indicate as to what is "relevant date". By applying the said meaning of "relevant date", in the case in hand, the relevant date for claiming the refund of any excess amount paid could be the date on which the appellant has debited the amount of 10% of the value of the exempted goods cleared from his factory which was 31.03.2009 and the refund claim has been filed with the office of the Assistant Commissioner, Central Excise on 27.06.2011. Provisions of Section 11B do not permit for filing the refund claim of any amount beyond the period of one year if the same are not paid "under protest". In the case in hand, appellant has not paid the amount for which refund claim has been preferred, “under protest”. On this ground itself, I find that the impugned order is correct and legal and does not suffer from any infirmity - appeal dismissed - decided against appellant.
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2017 (7) TMI 1032
CENVAT credit - separate accounts for exempted as well as taxable goods - Natural justice - Held that: - the issue involved in the present case is no more res integra and has been settled in favor of the appellant by the decision in the case of Sujana Metal Products Vs. CCE [2011 (9) TMI 724 - CESTAT, BANGALORE], wherein the Division Bench has come to the conclusion that supplies made to SEZ from DTA are deemed exports and assessee is entitled to the benefit of CENVAT credit and is not required to maintain separate account for dutiable and non-dutiable goods - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 1031
Liability of interest - Rule 14 of the CCR, 2004 - irregular cenvat credit was reversed immediately on being pointed out - Held that: - the issue involved in the present case is no more res integra and has been settled in favour of the assessee by the decision of the Hon'ble Karnataka High Court in the case of Bill Forge Pvt. Ltd. [2011 (4) TMI 969 - KARNATAKA HIGH COURT], where it was held that if the credit availed is not utilized there is no liability to pay interest - appeal dismissed - decided against Revenue.
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2017 (7) TMI 1030
Refund claim - rejection on the ground that the appellants have filed refund claim after one year from the date of shipment (date of export) therefore, in terms of Section 11B the refund is time bar as the same were filed after one year from the date of export - Held that: - the fact is not under dispute that all the refund claims were filed within one year from the end of the quarter, for which the refund pertains - Rule 5 read with N/N. 5/2006 thus provides that refund should be filed on quarterly basis only after completion of the particular quarter. Therefore, the refund cannot be filed before completion of the quarter - in the facts of the present case, since all the refund were filed within one year from the date immediately after completion of a quarter, even as per the provisions of 11B the refund claims are within time limit. For this reason the refund is not liable to be rejected on time bar - appeal dismissed - decided against Revenue.
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2017 (7) TMI 1029
CENVAT credit - separate set of accounts for dutiable as well as exempt goods - case of Revenue is that when separate maintenance account for receipt, consumption and inventory of inputs which are common to dutiable as well as exempted goods has not been maintained in terms of Rule 6(2), the appellants will have to pay the amount equal to 8% or 10% of the sale price of the exempted final products cleared from the factory either for home consumption or for export.
Held that: - the demand is not sustainable as the proportionate credit is already reversed by the appellant and the same is allowed with retrospective effect - reliance placed in the case of M/s Bhusan Power & Steel Ltd. Versus Commissioner of Central Excise & Customs, BBSR II [2013 (11) TMI 843 - CESTAT KOLKATA] - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 1028
100% EOU - Refund claim - input services - Interior Decorator service - Courier Service - Banking and Financial Service - Air Travel Agent Service - Rent-a-cab service - denial on the ground of nexus - Held that: - the appellant being a 100% EOU and on the undisputed fact that during the relevant quarter i.e. January 2007 to March 2007 entire manufactured goods have been exported, there is no need of any co-relation to be established. The co-relation is required only when the part manufactured goods is exported and part is cleared in the domestic market - all the services were held as admissible input service and cenvat credit is admissible - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 1027
Clandestine manufacture and removal - undervaluation - shortages and excesses of raw material and finished goods - Held that: - the learned Commissioner has erred in his findings based on the submissions and admission made by the appellant-RPIL before Settlement Commission, which are wholly against Section 32 E(1) of the Act. The learned Commissioner has also erred in relying on the case made out by the investigation, in view of the glaring fact that Shri. S.G. Gupta has stated that the said private record contains entries relating to RPIL-appellant, Premier Polyfilm Ltd. and his personal affairs. No effort was made by investigation in segregating entries with respect to particular company and/or the appellant leading to erroneous conclusion by declaring all the transactions recorded in the said diary/private ledgers as attributable to appellant RPIL. Further, Shri. S.G. Gupta has categorically stated that no clearance have been made by RPIL without issuance of invoice. Further, during entire investigation or even till the adjudication, no person other than Shri S.G. Gupta had admitted the case of clandestine removal or under valuation by RPIL.
There is no evidence produced to establish that there has been flow back of any funds to establish under valuation and therefore under valuation is also not established in the present case. Therefore, while setting aside the demand of duty raised on account of clandestine removal or under valuation, we also set aside the impugned order. As regard confiscation, we found that the Panchnama does not refer to any method of verification of stock, which was otherwise not possible in such a short span of time. Further, the show cause notice referred to statements of Shri Dwarika Dhish Sharma and Shri S.G. Gupta on the spot in this regard whereas no such statement was produced or found on record (RUD). The goods were very well in the factory and not even a single roll was found kept outside or in concealed manner or loaded on vehicle for removal without duty. Mere holding of the explanation as afterthought was not sufficient to confiscate the goods.
As regard demand of duty on account of shortage during stock verification, we set aside the same also on the basis of observation made above. We also set aside the confiscation and we hold that the penalties as imposed under Rule 26 are erroneous. As regards under valuation, it is observed that but for the entries in the records of Shri S.G. Gupta, no other evidence is adduced by the Department. None of the customers or even any other employee of RPIL had accepted the same. Here again it is observed that when the personal records of Shri S.G. Gupta were having information mainly of PPL, no case otherwise could be made against the appellant, as no incriminating document or corroborating evidence of whatsoever nature was brought on record against RPIL. We also fail to understand as to why Department did not make enquiry against PPL in spite of having such information at the beginning of their investigation. Therefore, we hold that the department has miserably failed to make out case against the appellant. It is a well settled law that the charge of clandestine removal and under valuation being serious charge, the department is required to produce corroborative evidence, which the department has failed in the instant case. Accordingly, we allow all the appeals.
The penalty under Rule 26 is not warranted against all co-appellants in view of there being no proposal of confiscation in the relevant show cause notice, apart from our findings given above that no case of demand of duty and penalty is otherwise made out.
Appeal allowed - decided partly in favor of appellant.
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CST, VAT & Sales Tax
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2017 (7) TMI 1022
Classification of goods - “Ujala Supreme” Fabric / Laundry Whitener - Entry 119 of Schedule-IV Part-B instead of Schedule-V - classifiable under Tariff Entry No.3204.12.94 of the Central Excise Tariff Act, 1985? - Held that: - Both the Appellate Authorities have given a finding that the said product “Ujala Supreme” is classifiable under Entry 69, Sub-Entry 119 of Part-B of Schedule-IV of the Act of 2003. From the facts noticed hereinbefore and analysed earlier, the Entry starts with “Synthetic Organic Colouring Matter” and, therefore, any preparation based on “Synthetic Organic Colouring Matter”, should in my opinion, will also fall in the said Sub-Entry 119 referred to hereinbefore.
The Apex Court, time and again, in the cases of Western India Plywood Ltd v. Collector of Customs [2005 (10) TMI 90 - SUPREME COURT OF INDIA], Dunlop India Ltd. v. Union of India [1975 (10) TMI 94 - SUPREME COURT OF INDIA], has reiterated the well settled proposition that resort to Residuary Tariff Entry can only be made if a product does not squarely fall within any of the specified Entries, and a good deal of caution is required to be undertaken in the matter of classification, identification of an Entry and a description thereof would be relevant for assigning it to a particular Tariff Entry, and lodgment of an item in Residuary Category is approvable only if by no conceivable reasoning which can be brought within the purview of any other tariff item, and the burden always lie on the Revenue, if it intends to carry it to the Residuary Schedule.
Penalty u/s 61 - Held that: - no case of penalty is made out. Merely because an addition was made by the AO, is no reason for initiating penalty proceedings or even levying penalty. Admittedly, it is a case where the assessee claimed a lower rate and claiming to be falling in a specific Entry and Revenue intended to carry it to Residuary Entry, that does not mean that a case of concealment has been made out by the Revenue - the Apex Court in the case of Sree Krishna Electricals v. State of Tamil Nadu & Another [2009 (4) TMI 428 - SUPREME COURT OF INDIA], has held that in a case of classification of Entries, two views being possible, question of levy of penalty does not arise.
Appeal dismissed - decided against Revenue.
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2017 (7) TMI 1021
Refund of tax remitted by the petitioner - Section 22(2) of the TNGST Act - penalty - natural justice - rejection of refund on the ground that the petitioner did not file the name of the real beneficiary to whom the refund has to be granted either before the Assessing Officer or the Appellate Authority or even before the Tribunal - Held that: - the Tribunal rightly understood the legal effect of such an order of assessment, wherein the turnover of the petitioner fell below the taxable minimum and the rate of tax was nil and therefore, the Tribunal observed that the amount collected by way of tax from the petitioner at ₹ 24003/- has been retained by the Assessing Officer without any demand or invoking any penal provision as provided under Section 22(2) of the TNGST Act. Thus, answer to the question as to whether the respondent can retain the amount of tax is in the negative.
In the absence of any provision corresponding to Sections 11-B and 12-A of the Central Excise and Salt Act, 1944, in the Tamil Nadu General Sales Tax Act, it is not permissible for the authorities under the Act to impose a penalty on the sole ground that it is meant to offset a refund, the result of making which would result in unjust enrichment to the dealer. In the case on hand, the Tribunal took note of this legal position and made an observation as to how the Assessing Officer was not justified in retaining the tax amount to his account.
The Assessing Officer has assessed the petitioner to a nil rate of tax. Therefore, the respondent is not justified in retaining the amount to himself and the interpretation given by the respondent stating that the petitioner has not produced the name of the ultimate beneficiary or the person who has paid the tax is of no consequence, as the there is no law which empowers the respondent to retain the tax, which was remitted by the petitioner in the absence of any assessment.
The petitioner is entitled for the refund of the tax remitted by them - petition allowed - decided in favor of petitioner.
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2017 (7) TMI 1020
Pre-deposit - direction of part payment - Held that: - the Tribunal has observed that, at this interlocutory stage it does not want to express opinion - the impuged order is quashed and set aside - appeal allowed - decided in favor of appellant.
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