TMI Tax Updates - e-Newsletter
August 14, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
Levy of 1% court fee on filing of Appeal before the appellate authority under GST - The constitutional validity of Section 76 of the Kerala Court Fees and Suit Valuation Act, 1959 as extended to GST laws - The notification cannot be seen to be in violation of Article 14 or suffering from the character of tax. - HC
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GST:
Classification of goods - rate of GST - certain parts such as Couplers, Knuckle, Locks, Toggle, Yoke etc. - parts of railway or tramway locomotives or rolling-stock - both the conditions are satisfied - the impugned goods (parts of coupling device) are classifiable under heading 8607.30. - Liable for GST @12% (earlier 5%) - AAR
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GST:
Rate of tax - works contract - contract for construction of channels across Hokersar Wetland along the old alignment from RD 13182m to RD 16713m of flood spill channel, including its side slope protection and dredging of drainage flowing into Hokersar Wetland - It is works contract within the meaning of section 2 (119) of the GST Act, where earthwork exceeds more than 75% of the contract value - AAR
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GST:
Classification of goods - three-wheeled motor vehicles, commonly known as Toto - Unless it is equipped with any device like solar panels that may supply energy for its locomotion, it is not classifiable as a vehicle under Sub-heading 8703 - A three-wheeled motor vehicle is classifiable under HSN 8703 as an electrically operated vehicle, provided it is fitted with the battery pack. Otherwise, it will be classifiable under HSN 8706 - AAR
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GST:
Levy of GST on Transfer Fee - Assignment of leasehold rights on land - The activity of assignment is in the nature of agreeing to transfer one’s leasehold rights. It does not amount to further sub-leasing, as the applicant’s rights as per the Deed stands extinguished. Neither does it create fresh benefit from land other than the leasehold right. It is like a compensation for agreeing to do the transfer of the applicant’s rights in favour of the assignee. It is a service classifiable under ‘Other miscellaneous service’ (SAC 999792) and taxable @ 18% - Available for ITC - AAR
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Income Tax:
Penalty u/s 271AAB - mandatory levy of penalty on surrender of undisclosed income - it is clear that difference in stock of goods as per books and as found at the time of search is on account of valuation of such stock at the market value instead of cost and the same cannot be a basis to hold that it represent undisclosed income so defined in explanation to section 271AAB - AT
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Income Tax:
Assessment u/s.153C - incriminating material found during the course of search or not - It is beyond the scope of our understanding that as to why figures are different in both the returns submitted by the assessee with the income tax department, whereas the auditor and the date of audit report is also same in the both the returns. - The dual policy taken by the assessee cannot be accepted. - AT
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Income Tax:
Research and Development expenditure u/s 35(AB)(2) - weighted deduction at the rate of 200% - A perusal of Form 3CL appended to the typed set of documents, does not throw any light (or) supportive of the case of the appellant / assessee that the benefits of the research and development done by the Hosur unit having been availed by their manufacturing unit at Himachal Pradesh. - HC
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Income Tax:
Condonation of delay in filing the return of income u/s 119(2)(b) - delay in filing the return along with refund claim - There is some lapse on the part of the petitioner. That itself would not be a factor to turn out the plea for filing the return of income, when the explanation offered is acceptable and genuine hardship is established - HC
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Income Tax:
Release of Custody of cash invoking Section 451 of the Cr.P.C. - the apportionment of the amount as between the claimants and release of 40% of the cash amount in deposit to the petitioner as if such portion of the amount would satisfy the claim of the Income Tax authorities is factually and legally wrong. That part of the impugned order allowing the first respondent to get release of 60% of cash in deposit on tender of bank guarantee, therefore, requires to be modified. - HC
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Customs:
Prevention Detention Order - Smuggling of gold - the order of detention passed for more than two grounds and if one of the grounds is not applicable or vague or nonexistent or nonrelevant or not connected or any proximately connected with such person, such detention order cannot be declared as invalid detention order. If the detention order is valid for the purpose of any one of the grounds stated in clause (i) to (v) of subsection (1) of Section 3, then such order of detention, in the given facts and circumstances, can be treated as legal and valid - HC
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Indian Laws:
An appeal by a Chartered Accountant (CA) - Name of ICWAI changed to Institute of Cost Accountants of India - Usage of acronym ICOAI instead of the acronym ICAI - A fortiori, a discretionary public law action cannot be maintained in this situation. Therefore, we concur fully with the findings of the learned Judge in the impugned order that the Appellant/Petitioner does not have locus standi and that the writ petition was not maintainable at his instance. - HC
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Service Tax:
Refund of Service Tax - principles of unjust enrichment - the amount of service tax is included in the value of service provided, if any, payable as no service tax is payable by the appellant. Therefore, question of recovery of service tax does not arise. - The bar of unjust enrichment is not applicable to the facts of the case - AT
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Service Tax:
Request to postpone the recovery of service tax - pandemic COVID situation - in this pandemic situation there may be difficulties to participate in the adjudication proceeding, the respondent authorities shall not give effect to the impugned letter - the hearing may be deferred for the time being till the normal functioning is restored. - HC
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VAT:
Validity of Estimation of turnover - The assessee sells liquor on retail, after purchasing the same from the Kerala State Beverages Corporation. The purchase value cannot be a reference to decide on the assessee's sale price since the assessee offers a premises for the customer to consume alcohol - The estimation has been made on mere surmises and conjectures. There is absolutely no rational basis to reject the books of accounts. - HC
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VAT:
Refund of tax collected from the seller of diesel and deposited with the respondent-authorities, in the absence of C-Forms - The respondents are directed to forthwith process the refund claim of the writ applicant and grant the refund of the tax amount collected from the writ applicant and deposited by the seller in accordance with law within a period of twelve weeks - HC
Articles
Notifications
Customs-
23/2020 - dated
11-8-2020
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ADD
Seeks to amend notification No. 39/2015-Customs (ADD) dated 12th August, 2015 to extend the levy of ADD on flax fabrics imported from China and Hong Kong for a period of 3 months.
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71/2020 - dated
13-8-2020
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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 Silver
DGFT-
27/2015-2020 - dated
11-8-2020
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FTP
Supply of essential commodities to the Republic of Maldives during 2020-21
GST - States-
S.O. 154 - dated
10-8-2020
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Bihar SGST
Seeks to amend Notification No. S.O. 131, dated the 22nd June, 2020
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S.O. 153 - dated
10-8-2020
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Bihar SGST
Seeks to amend Notification No. S.O. 129, dated the 9th June, 2020
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S.O. 152 - dated
10-8-2020
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Bihar SGST
Seeks to amend Notification No. S.O. 117, dated the 06th May, 2020
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S.O. 151 - dated
10-8-2020
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Bihar SGST
Seeks to amend Notification No. S.O. 124, dated the 23rd January, 2018
Income Tax-
61/2020 - dated
13-8-2020
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IT
Amendment in Notification No. S.O 3265 (E) dated the 12th September, 2019
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60/2020 - dated
13-8-2020
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IT
Amendments in the E-assessment Scheme, 2019
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (8) TMI 251
Input tax credit - Levy of GST on Transfer Fee - Assignment of leasehold rights on land - HELD THAT:- The applicant, apart from the conditional possession of the Demised Premises, enjoys no title or ownership, which is central to sale of any immovable property within the meaning of section 54 of the Transfer of Property Act, 1882. The applicant s interest in the benefits arising out of the Demised Premises is limited to sub-leasing in terms of the Deed, and he is capable of transferring the benefits only to that extent. The assignment, therefore, does not amount to transfer of any benefit other than leasehold rights in terms of the Deed for the unexpired period of the lease and is no transfer of any immovable property in the context of the GST Act. The activity of assignment is in the nature of agreeing to transfer one s leasehold rights. It does not amount to further sub-leasing, as the applicant s rights as per the Deed stands extinguished. Neither does it create fresh benefit from land other than the leasehold right. It is like a compensation for agreeing to do the transfer of the applicant s rights in favour of the assignee. It is a service classifiable under Other miscellaneous service (SAC 999792) and taxable @ 18% under Sl No. 35 of Notification No. 11/2017 CT (Rate) dated 28/06/2017 (State Notification No. 1135-FT dated 28/06/2017), as amended from time to time (hereinafter collectively called the Rate Notification). Similarly, the transfer fee charged by the Sub-lessor is in the nature of a consideration for tolerating an act that the applicant is otherwise refrained from doing in terms of clause 12.28 of the Deed. It is also a service classifiable under Other miscellaneous service (SAC 999794) and taxable @ 18% under Sl No. 35 of the Rate Notification. It is the consideration payable to the Sub-lessor for providing a service in the course or furtherance of business, more specifically because business includes supply or acquisition of goods or services in connection with the closure of a business in terms of section 2 (17) (d) of the GST Act. The GST to be paid on such transfer fee is, therefore, admissible as input tax credit.
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2020 (8) TMI 250
Classification of goods - three-wheeled motor vehicles, commonly known as Toto - whether such a three-wheeled vehicle is classifiable as an electrically operated motor vehicle under HSN 8703 when supplied with a battery pack? - determination of classification when supplied without the battery pack - HELD THAT:- Motor vehicles for carrying less than ten passengers are classified under Heading 8703 of the First Schedule of the Customs Tariff Act, 1975 (hereinafter the Tariff Act), which is adopted in the GST Act for classification. Sub-heading 8703 10 covers the vehicles specially designed for travelling on snow, golf cars and similar vehicles. The term similar narrows the scope to specific use other than carrying passengers on hire on regular roads. All other sub-headings except the residual sub-heading 8703 90, refer to vehicles fitted with an internal combustion engine. E-rickshaws or electrically operated three-wheeled vehicles are, therefore, classifiable under Tariff heading 8703 90 10 of the Tariff Act. A three-wheeled motor vehicle without the battery pack does not have the essential character of an electrically operated vehicle. However, it is neither a vehicle fitted with an internal combustion engine. Unless it is equipped with any device like solar panels that may supply energy for its locomotion, it is not classifiable as a vehicle under Sub-heading 8703 of the Tariff Act. However, it includes the chassis fitted with the motor to convert electrical energy into the mechanical energy to put the vehicle into locomotion once the battery pack is attached. Such a device is called the engine of the vehicle. It is, therefore, classifiable under Tariff-head 8706 00 31, being the chassis fitted with an engine of a vehicle under sub-heading 8703. A three-wheeled motor vehicle is classifiable under HSN 8703 as an electrically operated vehicle, provided it is fitted with the battery pack. Otherwise, it will be classifiable under HSN 8706.
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2020 (8) TMI 249
Rate of tax - works contract - contract for construction of channels across Hokersar Wetland along the old alignment from RD 13182m to RD 16713m of flood spill channel, including its side slope protection and dredging of drainage flowing into Hokersar Wetland - Applicability of Sl No. 3 (vii) of Notification No 08/2017 Integrated Tax (Rate) dated 28/06/2017 - HELD THAT:- The concerned Executive Engineer has issued a letter dated 19/03/2020 where he certifies that total value of the works contract constitutes mainly of dredging and earthwork excavation and involvement of material is less than 15 per cent of the total value of the work - The work is aimed at the improvement of immovable property and involves the supply of various services and goods in the course of its execution. It is works contract within the meaning of section 2 (119) of the GST Act, where earthwork exceeds more than 75% of the contract value. The recipient being a Union Territory, all the conditions of Entry No. 3 (vii) of the IGST Notification are satisfied.
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2020 (8) TMI 248
Governmental Authority or not - Applicability of Sl No. 3(vii) of Notification No 08/2017 Integrated Tax (Rate) dated 28/06/2017 - contract for the dredging of Wular lake along with its feeder channels and the strengthening of embankments of the lake - HELD THAT:- It appears from Notification No. 311 dated 25/09/2012 of the Forest Department of State Government (now a Union Territory) that the recipient is constituted as an authority under section 3 (1) of the Jammu and Kashmir Development Act, 1970 for preservation and conservation of Wular Lake. The Board of the recipient, constituted the same day by Notification No. 314, ensures 100% control of the State Government (now a Union Territory). The powers and functions of the recipient are described in Govt Order No. 396 FST of 2012 dated 10/10/2012 of the Forest Department, Government of Jammu and Kashmir. They broadly conform to the function of promoting urban forestry, protection of environment and ecology entrusted to a municipality under article 243W of the Constitution. The recipient is, therefore, a Governmental Authority within the meaning of para 5(ix) of the IGST Notification. The applicant's supply to the Wular Conservation and Management Authority is taxable under Sl No. 3(vii) of Notification No 8/2017 Integrated Tax (Rate) dated 28/06/2017, as amended from time to time.
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2020 (8) TMI 247
Permission for withdrawal of Advance Ruling application - Classification of goods - rate of GST - tobacco leaves procured directly from farmers, which are dried and crushed before selling by the farmers - HELD THAT:- The application filed by the Applicant for advance ruling is disposed off as withdrawn.
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2020 (8) TMI 246
Classification of goods - rate of GST - certain parts such as Couplers, Knuckle, Locks, Toggle, Yoke etc. - parts of railway or tramway locomotives or rolling-stock - whether the impugned goods are liable to be classified under HSN 7325 and the applicable rate of GST is 18% or not? - HELD THAT:- Chapter heading 86 07 covers parts of railway or tramway locomotives or rolling- stock and heading 8607.30 covers hooks and other coupling devices, buffers, and parts thereof. Further the heading 8607 covers parts of railway, tramway locomotives or rolling-stock subject to fulfillment of both the following conditions. i. They must be identifiable as being suitable for use solely or principally with the above mentioned vehicles, and, ii. They must not be excluded by the provisions of the Notes to Section XVII. The applicant, in support of fulfillment of the first condition, submitted that the impugned goods are manufactured as per the pre-determined drawings of Indian Railways, on placement of order by M/s. Sanrok Enterprices (buyer), Faridabad, who are the main contractors for supply of the impugned goods. Further they also submitted that the buyer of the impugned goods have given an affidavit that the said goods supplied by the applicant are in turn supplied only to Indian Railways the said goods are not useful for anyone other than the Indian Railways and thus the impugned goods are suitable for use solely with the Railway Locomotives. It is observed from the photographs submitted by the applicant that the goods are suitable only for coupling the railway bogies/wagons and hence the first conditions is fulfilled - It is observed that in the instant case the impugned goods (parts of coupling device) are suitable for use solely with the Railway Locomotives and also classified specifically under heading 8607.30. Thus the second condition also is fulfilled. Thus, the impugned goods (parts of coupling device) are classifiable under heading 8607.30. Rate of GST - HELD THAT:- The impugned goods are not covered under any other Schedules of the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017. Further No refund of unutilized input tax credit shall be allowed, where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on the output supply of the impugned goods, in terms of Sl.No.14 of Notification No.5/2017-Central Tax (Rate) dated 28.06.2017.
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2020 (8) TMI 212
Grant of Interim Bail - Input Tax Credit availed on the basis of invoices without there being actual sale of goods - HELD THAT:- Keeping in view the custody period and also the fact that the maximum sentence provided for the offence in question is 5 years and that the vires of the Act is itself under challenge, the petition merits acceptance and is hereby accepted. The interim directions dated 20.7.2020 are hereby made absolute on the same terms and conditions.
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2020 (8) TMI 211
Grant of Interim Bail - offences u/s 132(1)(b)(c) of the Punjab Goods and Service Tax Act, 2017 - Input Tax Credit availed on the basis of invoices without there being actual sale of goods - HELD THAT:- Keeping in view the custody period and also the fact that the maximum sentence provided for the offence in question is 5 years and that the vires of the Act is itself under challenge, the petitions merits acceptance and are hereby accepted and the interim directions dated 10.7.2020, 18.5.2020 and 6.7.2020 are hereby made absolute on the same terms and conditions.
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2020 (8) TMI 210
Filing of TRANS-I Forms - transitional credit - transition to GST regime - HELD THAT:- The writ petition is disposed of in terms of the aforesaid judgment, directing the competent authority to take steps to immediately permit the petitioner to revise their TRANS-I Forms either electrically or manually without much delay, preferably within a period of two months from the date of receipt of a copy of this judgment or within such time limit as they deemed fit appropriate, as manual filing is insisted only in such circumstances where electronic filing is not possible. Petition disposed off.
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2020 (8) TMI 209
Vires of Rule 117 of the Central Goods and Service Tax Rules, 2017 - time limitation - transitional credit - Circular bearing No.39/13/2018-GST in F.No.267/7/2018-CX.8 - HELD THAT:- The requirement for an assessee to establish technical difficulty as expressed in Circular dated 03.04.2018, is reiterated in the provision. I am however, unable to understand as to how the assessee would have anticipated this requirement in order that it collects proof by way of screen shots and otherwise establish the factum of technical glitches. Though Goods and Service Tax has been introduced to streamline multiple revenue enactments, the mass of litigation that Rule 117 has generated, has defeated the very object and purpose of the enactment. Transition, by itself, does not vest any right in the assessee. It is only utilisation of credit that does, and such utilisation is subject to verification and assessment by an Assessing Officer. It is thus vital that the distinction between transition of a credit and utilisation of such credit after verification by an Officer is taken note of in the proper perspective. The exchange of communications between 28.12.2017 and 01.01.2020 reveal that the petitioner has been diligent in making efforts to open the portal and upload the forms and the respondents are directed to do the needful forthwith to enable the petitioner to upload the requisite forms.
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2020 (8) TMI 208
Levy of 1% court fee on filing of Appeal before the appellate authority under GST - The constitutional validity of Section 76 of the Kerala Court Fees and Suit Valuation Act, 1959 as extended to GST laws - Levy of non-discriminatory tax per se constitute infraction of Article 301 of the Constitution of India - HELD THAT:- The notification cannot be seen to be in violation of Article 14 or suffering from the character of tax. Petition dismissed.
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2020 (8) TMI 207
Maintainability of petition - availability of alternative remedy - Release of detained goods alongwith vehicle - mistake on the part of the transporter in filing of the part B with reference to the E-Way bill - HELD THAT:- The petitioner submits that the issue regarding the legality of the penalty requires to be considered. This issue has to be assailed by the petitioner by way of the statutory appeal provided to the petitioner under the provisions of Section 107 of the Central Goods and Service Tax Act, 2017. This writ petition is consequently disposed of with liberty to the petitioner to invoke the appropriate remedy by way of the statutory appeal before the competent authority - Petition disposed off.
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2020 (8) TMI 206
Release of detained goods alongwith truck - Section 129 and 130 of CGST Act - HELD THAT:- While issuing notice, this Court directed that the vehicle as well as the goods be released, upon payment of the tax, in terms of the impugned notice. The writ applicant availed the benefit of the interm-order passed by this Court and got the vehicle, along with the goods released on payment of the tax amount. The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law - reliance can be placed in the case of SYNERGY FERTICHEM PVT. LTD VERSUS STATE OF GUJARAT [ 2020 (2) TMI 1159 - GUJARAT HIGH COURT] . It is now for the applicant to make good his case that the show cause notice, issued in GSTMOV-10, deserves to be discharged - petition disposed off.
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2020 (8) TMI 205
Provisional attachment of Bank Account - Section 83 of Punjab Goods and Service Tax Act and Central Goods and Service Tax 2017 - HELD THAT:- It is accepted fact that against CC Account, limit was ₹ 25 lakhs and the petitioner has withdrawn more than ₹ 26 lakhs. The petition is disposed of with the direction that all the accounts of the petitioner be defrozen and the petitioner would maintain the amount which was present in the accounts on the date of provisional attachment.
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2020 (8) TMI 204
Grant of Regular Bail - issuance of fake invoices with the intention of availing fraudulent ITC and from GSTR-3B - HELD THAT:- The maximum sentence for the offence alleged is 5 years and the petitioner has been in custody for the last 16 months and the fact that it is a case of rotating the turn over for availing credit facility from the Banks and further the tax after adjustment of ITC was also paid, without commenting on the merits of the case, it is deemed appropriate to grant regular bail to the petitioner. Bail application allowed.
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2020 (8) TMI 203
Maintainability of petition - right to appeal - Validity of assessment order - Bihar Goods and Service Tax Act, 2017 - HELD THAT:- There are no reason as to why the appropriate appellate authority would not accept a hard copy of the appeal and decide the same in accordance with law. We only hope and expect the appropriate authority to consider and decide the appeal expeditiously on its merit and with reasonable dispatch. Petition disposed off.
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2020 (8) TMI 202
Maintainability of appeal - Release of detained goods - HELD THAT:- There are no reason as to why the appropriate appellate authority would not accept a hard copy of the appeal and decide the same in accordance with law. We only hope and expect the appropriate authority to consider and decide the appeal expeditiously on its merit and with reasonable dispatch. Petition disposed off.
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Income Tax
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2020 (8) TMI 245
Allowable deduction under Section 43B - Disallowance of the amount deposited by the Appellant in its Central Excise Personal Ledger Account (PLA) before 31st March 2000, i.e. the end of the relevant accounting year - Disallowance represented MODVAT credit of excise duty that remained unutilized by 31st March 1999, i.e., the end of the relevant accounting year - Disallowance in respect of Sales Tax Recoverable account u/s 43B - Consumption of raw materials by the Assessee - Nature of software expenditure - revenue expenditure allowance - HELD THAT:- This application has been filed merely on apprehension, we see no reason to entertain this application. The miscellaneous application is accordingly dismissed.
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2020 (8) TMI 244
Revision u/s 263 - PCIT requiring AO to revisit the assessment made earlier of the Assessee u/s 147/143 (3) - addition u/s 68 - ITAT setting aside the order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 - as per HC interpretation placed by the ITAT on Section 68 of the Act, its reasoning and conclusions in the impugned order are consistent with the legal position and cannot be said to be suffering from any legal infirmity - HELD THAT:- SLP dismissed.
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2020 (8) TMI 243
Release of Custody of cash invoking Section 451 of the Cr.P.C. - petitioner seeking custody of cash, invoking Section 451 of the Cr.P.C.- power of the authorities to requisition for delivery of unexplained assets or cash from the custody of the concerned officer or the authority in possession of the same - HELD THAT:- Unexplained amount of cash was possessed by a person, has to apply to the court under Section 226(4) for payment of the money due under the tax. This Court by order dated 28.5.2020 has called upon the petitioner to report whether assessment proceedings have been initiated and finalised and also to report the amount recoverable towards payment of tax etc. under the Act. The petitioner submitted a statement on 11.6.2020 intimating that assessment was completed as against the first respondent making a demand for an amount of ₹ 20,12,420/- towards tax and interest etc. It was intimated that the amount directed to be retained in JFCM Court being only ₹ 15,23,480/- was insufficient to cover the entire liability of the first respondent, assessee. It is contended that when penalty leviable under Sections 271(1)(c) is also quantified, the assessee will be liable for payment of more amount. Going through the counter affidavit filed by the first respondent, his contention appears to be that the cash seized from his possession is an accounted money for which he is not liable to be assessed for the amount as fixed by the authorities under the Act. The assessment order dated 29.12.2018 produced before this Court shows that the first respondent was assessed after following the procedure prescribed by the Act. He cannot therefore contend in this proceeding that he is not liable for payment of tax, interest and penalty unless the order itself is challenged before the appropriate authority competent to entertain appeal under the Act. As to the amount for which he could be finally held liable, it is for the authorities under the Act to determine and quantify the sum. Such an inquiry cannot be undertaken by the Magistrate while deciding the petitions filed under Section 451 of the Cr.P.C. seeking release of cash amount from the court. Therefore, the apportionment of the amount as between the claimants and release of 40% of the cash amount in deposit to the petitioner as if such portion of the amount would satisfy the claim of the Income Tax authorities is factually and legally wrong. That part of the impugned order allowing the first respondent to get release of 60% of cash in deposit on tender of bank guarantee, therefore, requires to be modified. Appropriate remedy open to the Income Tax officer is to apply Section 226(4) of the Act for payment of money towards tax and other amounts due. That means, once the assessment proceedings have become final and conclusive, the authorities under the Act are entitled to apply to the learned Magistrate for release of the portion of amount due and recoverable from the first respondent under law. The amount necessary for satisfying the liability of the first respondent will have to remain in the custody of the court despite any claim being raised by parties demanding interim custody, pending finalisation of the assessment proceedings.
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2020 (8) TMI 242
Condonation of delay in filing the return of income u/s 119(2)(b) - delay in filing the return along with refund claim - HELD THAT:- The second respondent ought to have considered the explanation given by the petitioner for the delay in filing the return along with refund claim, in the light of the facts and circumstances of the case and also the fact that the petitioner had not delayed the filing of the revised return due to negligence, carelessness or due to any other frivolous reason. In that view of the matter, the second respondent ought to have condoned the delay in filing the return rather than taking a very strict and pedantic view of the matter. All, the procedures are meant only to discipline and regulate the conduct of assessee. However, strict application of procedure should not come in the grant of legitimate claim to an assessee. There is some lapse on the part of the petitioner. That itself would not be a factor to turn out the plea for filing the return of income, when the explanation offered is acceptable and genuine hardship is established. It was with a fond hope of getting justice at the hands of the second respondent and thereafter, the first respondent, the petitioner preferred Section 119(2)(b) application seeking to condone the delay in filing the return of income along with refund claim. However, the same were dismissed on the ground of limitation, adopting highly pedantic approach, which cannot be countenanced by this Court, as it is trite law that rendering substantial justice shall be paramount consideration of the Courts as well as the Authorities rather than deciding on hyper-technicalities. For the aforesaid reasons, the order dated 17.04.2012 passed by the first respondent is quashed. Consequently, the delay in filing the return of income by the petitioner relating to the assessment year 2006-07 is condoned. The respondent concerned is directed to process the return of income along with refund claim and pass appropriate orders, on merits and in accordance with law, after affording an opportunity of personal hearing to the petitioner within a period of four weeks from the date of receipt of a copy of this order.
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2020 (8) TMI 241
Applicability of Section 115BBE - Unabsorbed depreciation denied to be set off against sum chargeable to tax as income u/s.68 - HELD THAT:- Circular bearing no.11/2019 dated 19.06.2019 had taken note of the legislative intent behind amendment in Section 115BBE(2), for the purpose of removing any ambiguity of interpretation, observed that vide Finance Act 2016 with effect from 01.04.2017, an assessee is entitled to claim set-off of loss against income determined under Section 115BBE of the Act till the assessment year 2016-2017. In the case on hand, the assessment year pertains to 2006-2007 and therefore, this Court is of the considered view that in the light of the above cited judgment in CHENSING VENTURES. [ 2007 (4) TMI 204 - MADRAS HIGH COURT] as well as the circular, the matter in issue requires further adjudication at the hands of the Income Tax Appellate Tribunal. Substantial Question of Law raised by the appellant is held in affirmative, as it requires further adjudication
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2020 (8) TMI 240
Research and Development expenditure u/s 35(AB)(2) - weighted deduction at the rate of 200% - HELD THAT:- It is not in dispute that the appellant is having it's registered office at Chennai and manufacturing units at Hosur, Pune, Bangalore and Himachal Pradesh, for manufacture seats and parts of seats for automobile application. A perusal of Form 3CL dated 14.08.2015 appended to the typed set of documents, does not throw any light (or) supportive of the case of the appellant / assessee that the benefits of the research and development done by the Hosur unit having been availed by their manufacturing unit at Himachal Pradesh. In order to draw presumption that Himachal Pradesh unit does not have availed the benefit of the research and development done by the Hosur Unit, no material whatsoever has been placed by the appellant/assessee, before the assessing officer. It is not the case of the assessee that the unit at Himachal Pradesh is having it's own Research and Development Unit. Considered opinion of this Court is that the Assessing Officer as well as CTI (Appeals) and the ITAT, had thoroughly gone into the factual aspects and legal position and rightly arrived at the conclusion as to the plea made by the appellant. In sum and substance, the findings rendered by the authorities are concurrent in nature and therefore, there are no substantial questions of law arise for consideration in this appeal. - Appeal dismissed.
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2020 (8) TMI 239
TP Adjustment - bench marking the transaction by adopting PLI of OP/VAE - economic rationale of using Operating Profit/ Value Added Expenses (,OP /V AE') as the Profit Level Indicator ('PLI'), and instead using Operating Profit/ Total Cost (,OP /TC') as the PLI - HELD THAT:- DR made similar submission in A.Y. 2010-11 [ 2019 (12) TMI 1258 - ITAT MUMBAI] , which has been duly recorded and after considering the submission, the co-ordinate bench restored the matter to the file of AO/TPO for bench marking the transaction by adopting PLI of OP/VAE. So far as the ground related with the additional evidences are concerned we have noted that no new evidences were furnished by assessee before DRP. Moreover, ld DRP directed the TPO to verify the sample invoices to his satisfaction with regard to back to back third party charged as recorded in para 4.3.7.6 of the directions. Thus, considering the decision of co-ordinate bench of Tribunal and the order of the ld DRP, which is sound reasoning, we do not find any merit in the ground of appeal raised by revenue. Comparability - Om Logistics Ltd. - HELD THAT:- Considering the decision of Tribunal for earlier year, when no material difference on facts with regards to segmental data, is brought to our notice for the year under consideration, thus, respectfully following the order of coordinate bench, we direct the Assessing Officer to exclude the Om Logistics Ltd. which has a significant asset base, thus being functionally different could not have been feasibly selected as a comparable for the purpose of determining the arm s length price of its international transactions for the year under consideration. Disallowance of depreciation on goodwill - HELD THAT:- This issue as regards the entitlement of the assesses towards claim of depreciation on intangible (i.e goodwill) is squarely covered by the orders of the coordinate benches of the Tribunal in the assesses own case for A.Y. 2008-09, A.Y. 2009-10 and A.Y 2012-13. Accordingly, finding no reason to take a different view, we respectfully follow the view taken by the Tribunal as regards the entitlement of the assessee towards claim for depreciation on intangibles (i.e goodwill) during the year under consideration
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2020 (8) TMI 238
Assessment u/s.153C - Whether there is no incriminating material found during the course of search? - commission income undisclosed and difference in the sundry creditors - HELD THAT:- Under the information regarding audit u/s.44AB of the Act in which he has mentioned the date of audit report as 10.09.2011. In the verification part of the return the date mentioned is 08.03.2012 and the acknowledgement has been generated on 10.03.2012. If the assessee has got audited u/s.44AB of the Income Tax Act and has obtained audit report from a Accountant as defined in the Income Tax Act, the figures shown in the financial statements are put in the appropriate columns and the figures shown in the income tax return should be tallied with the financial statements. The figures shown in the income tax return are in agreement with the audit reports produced before us which is placed in the paper book at page Nos.32 to 39. But the commission income has not been shown and the creditors figures are different. It is beyond the scope of our understanding that as to why figures are different in both the returns submitted by the assessee with the income tax department, whereas the auditor and the date of audit report is also same in the both the returns. As observed that Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. The case of the assessee clearly falls within the ambit of the observations in KABUL CHAWLA [ 2015 (9) TMI 80 - DELHI HIGH COURT] towards undisclosed income . We, therefore, reject the contention of the assessee that there is no incriminating material found during the course of search by which the AO cannot interfere with the assessment completed originally while making the assessment u/s.153C of the Act. The dual policy taken by the assessee cannot be accepted. In the peculiar facts and circumstances of the case, the case law relied on by the ld. AR of the assessee is not applicable in the present case. In view of the above the legal ground raised by the assessee is hereby rejected. During the course of assessment proceedings the assessee could not explain the differences noticed by the AO in both the returns. The assessee had opportunity in the appellate proceedings, however, he could not avail the same and failed to explain before the CIT(A). CIT(A) has passed a good and reasoned order in respect of two additions made by the AO regarding commission income of ₹ 10,11,780/- and difference in the sundry creditors of ₹ 4,00,000/-, which do not require any further interference by us. Accordingly, we dismiss the grounds raised by the assessee on merits. Consequently, the appeal of the assessee is dismissed.
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2020 (8) TMI 237
Stay of recovery of 80% of the outstanding demand - HELD THAT:- We are of the view that the assessee made out a prima facie case inasmuch as the issue sought to be raised in the appeal is identical to the issue considered and decided in favour of the assessee in the case of Menzies Aviation Bobba Pvt. Ltd. [2015 (11) TMI 401 - ITAT BANGALORE]. On the issue of disallowance of interest on hedging swap transaction, there appears to be a prima facie case inasmuch as there was no capital expenditure debited to the Profit Loss account for AY 2017-18 and the asset was put to use as early as in 2008. Considering the payments already made by the assessee and taking note of the financial hardship pointed out by the assessee, we are of the view that there should be a stay of recovery of the balance outstanding demand i.e., ₹ 4,62,06,437 for a period of six months from the date of this order, or till the disposal of the appeal; whichever is earlier. We also find that the appeal is already fixed hearing on 01.10.2020. The assessee shall not seek adjournment, except for unavoidable reasons. Stay petition is allowed.
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2020 (8) TMI 236
Penalty u/s 271AAB - mandatory levy of penalty on surrender of undisclosed income - non specification of charge - difference in stock of goods as per books and as found at the time of search - AR submitted that the penalty notice does not specify the specific limb of section 271AAB under which the penalty was sought to be levied - difference in valuation of stock valued by registered valuer - HELD THAT:- AO has merely gone by the surrender statement of partner of the assessee firm where the stock has been valued at market price as on the date of search and has not examined the matter from the perspective of determining any excess stock and the cost of such stock which is not recorded in the books of accounts. There is no finding that there is any excess stock which has been physically found and which has not been recorded in the books of accounts as on the date of search. Therefore, basis the facts emerging from the records, it is clear that difference in stock of goods as per books and as found at the time of search is on account of valuation of such stock at the market value instead of cost and the same cannot be a basis to hold that it represent undisclosed income so defined in explanation to section 271AAB - In the entirety of facts and circumstances of the case and following the decision referred supra, the penalty levied u/s 271AAB is not sustainable as it doesn t satisfy the requirements as so prescribed under section 271AAB and the orders of the lower authorities are set-aside and the appeal of the assessee is allowed.
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2020 (8) TMI 235
Estimation of income - Bogus purchases - GP rate estimation - addition made by the AO by directing the AO to adopt the GP rate of 25% as against 30% taken by assessee - HELD THAT:- Payments have been made through banking channel and the assessee has substantiated the purchases by providing various documents such as purchase invoice, copy of ledger account, evidence for having made payment through banking channels, VAT return duly reflecting the said purchases, etc. Merely because some of the parties did not respond to the notice issued u/s 133(6) of the IT Act, the same cannot go against the assessee to make such huge addition especially when purchases from those parties were accepted in the preceding year and no reopening of assessment u/s 147 or 263 has taken place. We find, the Jaipur Bench of the Tribunal in the case of Kedia Exports Pvt. Ltd. [ 2020 (6) TMI 566 - ITAT JAIPUR] has held that once the past year results have attained finality and not in dispute, the same can form the basis for estimating the GP rate for the current year. The rejection of books of account by invoking the provisions of section 145(3) of the Act shall lead to the estimation of income of the assessee based on some reasonable and proper criteria. Adoption of GP rate of 4.5% on the turnover under the facts and circumstances of the case will meet the ends of justice. We hold and direct accordingly. The AO is directed to recomputed the addition accordingly. The grounds raised by the assessee are accordingly partly allowed.
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2020 (8) TMI 234
Disallowance u/s 54F - action disallowing the impugned deduction claim for the sole reason that the assessee had not reinvested the impugned long term capital gains in his own name but in the name of his wife - HELD THAT:-CIT(A) s detailed discussion in view of PRAKASH (BY LEGAL HEIR OF ASSESSEE) VERSUS ITO CIT AND OTHERS [ 2008 (9) TMI 234 - BOMBAY HIGH COURT]. Mr. Singh vehemently argues that the assessee s deduction claim has been rightly disallowed. Mr. Poddar quotes CIT vs. Kamal Wahal [ 2013 (1) TMI 401 - DELHI HIGH COURT] deciding the issue in assessee s favour. Faced with this situation of non-jurisdictional high courts having different opinions on the issue and no guidance coming from hon ble jurisdictional high court, we invoke hon ble apex court judgment in CIT vs. Vegetable products Ltd [ 1973 (1) TMI 1 - SUPREME COURT] that the view in assessee s favour has to be adopted. We order accordingly. Assessing Officer is directed to delete the impugned disallowance. Assessee s appeal is allowed.
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2020 (8) TMI 233
Stay petition - Hon ble Bombay High Court had been passing interim orders from time to time stating that the limitation getting expired during the lockdown period - HELD THAT:- Stay which had expired during the lockdown period, as is in the case of the present assessee, need to be automatically extended till 31/08/2020. Accordingly, we are inclined to extend the stay of demand till 31/08/2020.
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2020 (8) TMI 232
Addition u/s 68 - unexplained cash credit - HELD THAT:- Both the parties submitted that two issues in dispute needed a fresh and thorough examination and scrutiny and it would be in fitness of things if both the issues are remitted to the file of the AO for such purpose. Both the parties submitted and agreed that the examination and the verification of the 447 parties would necessarily have to be carried out at the level of the AO. On a query from the Bench, the Ld. Authorized Representative gave an undertaking and assured the Bench that the assessee would fully cooperate in getting the advances verified before the AO. With respect to the interest disallowance both the parties submitted and agreed with this issue also needs detailed enquiry and examination and that the AO would be the best person to carry out such exercise. On this issue also, the Ld. Authorized Representative assured the Bench that the assessee would fully cooperate in getting issue resolve before the AO. Remit issue to the AO for fresh verification, examination and adjudication as per law after giving proper opportunity to the assessee to present its case. We also direct the assessee to extend full co-operation to the AO and submit the relevant documents and details in this regard when called upon to do so - Appeal of the Department stands allowed for statistical purposes.
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Customs
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2020 (8) TMI 231
Maintainability of petition - Jurisdiction - petitioner seeks adjudication of disputes - HELD THAT:- In view of the fact that the petitioner has already furnished the bank guarantee equivalent to the amount claimed by the respondent authorities in terms of the demand notice dated 2nd March, 2020 and having regard to the fact that they have made written representation for waiver of cost recovery charges that is still pending with the appropriate authorities, I am inclined to pass an order by extending the custodianship of the petitioner beyond 30th June, 2020 for a period of 3 months or until the representation pending with the authorities are disposed of by a reasoned order, whichever is earlier. The Assistant Commissioner of Customs is directed to consider the representations dated 13th June, 2018 and 10th December, 2018 after giving an opportunity of hearing to the petitioner and/or their duly authorized representatives and shall dispose of the said representations in accordance with law by a reasoned order within a period of 8 (eight) weeks from the date of communication of this order by either of the parties and such order shall be communicated within 2 (two) weeks from the date of such order. Petition disposed off.
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2020 (8) TMI 230
Prevention Detention Order - Smuggling of gold - conservation and augmentation of foreign exchange - time limitation - retraction of statements - burden to prove non-involvement - COFEPOSA Act - HELD THAT:- The COFEPOSA Act, 1974 has been enacted for the purpose of preventive detention in certain cases for the purposes of conservation and augmentation of foreign exchange and prevention of smuggling activities and for matters connected therewith. As per the object of the Act, as there were violations of foreign exchange regulations and smuggling activities were having an increasingly deleterious effect on the national economy and thereby a serious adverse effect on the security of the State, to prevent such activities and for providing detention of persons concerned in any manner therewith by preventive detention, the Act has been enacted, which has come into force on 30.12.1974 - The importance of foreign exchange in the development of a country needs no emphasis. The conservation and augmentation of foreign exchange continued to be an important thing. All though, contravention of its provision is not regarded as a criminal offence yet it is an illegal activity jeopardizing the very economic fabric of the country. For violation of Foreign Exchange Regulation, penalty can be levied and its noncompliance results in civil imprisonment of the defaulter. But whole intent and idea of the COFEPOSA Act is to prevent violation of Foreign Exchange and Regulation of smuggling activities which have serious and deleterious effect on national economy and security. The power of prevention detention is a precautionary power exercised in reasonable anticipation. It may or may not relate to an offence. It is not a parallel proceeding. It does not co-relate to prosecution even if it relies on certain facts on which prosecution is launched or may have been launched. An order of preventive detention may be made before or during prosecution. The pendency of prosecution is no bar to an order of preventive detention. An order of preventive detention is also no barred to prosecution - The order of preventive detention is based on a reasonable prognosis of future behavior of a person, based on his past, in light of his surrounding circumstances. As per the provisions contained in subsection (2) of Section 3, if the Order is passed by the State Government or by an officer empowered by a State Government, it is their bounder duty to forward to the Central Government a report in respect of the order within 10 days - As per sub-section 3 of Section 3, to satisfy the purposes of clause (5) of Article 22 of the Constitution, the communication to a person detained in pursuance of a detention order of the grounds on which the order has been made, is required to be made as soon as, may be after the detention, but ordinarily not later than five days, and in exceptional circumstances and for reasons to be recorded in writing, not later than twenty days, from the date of detention - thus, the time frame work has been provided in Section 3 regarding communication of the grounds of detention of the person concerned i.e. detenue. It has also revealed from subsection 3 of Section 3 that the satisfaction of the authority is material one and the said satisfaction should be subjective satisfaction. The grounds of such detention may be as referred to above in (i) to (v). On conjoint reading of Section 3 with Section 5A it is crystal clear that the order of detention passed for more than two grounds and if one of the grounds is not applicable or vague or nonexistent or nonrelevant or not connected or any proximately connected with such person, such detention order cannot be declared as invalid detention order. If the detention order is valid for the purpose of any one of the grounds stated in clause (i) to (v) of subsection (1) of Section 3, then such order of detention, in the given facts and circumstances, can be treated as legal and valid - the provision of Section 8 provides for statutory obligation of the concerned appropriate Government to refer the detention order to the Advisory Board within five weeks from the date of detention of the person. At the same time, it is the duty of the Advisory Board to submit its report within eleven weeks from the date of detention of the person concerned. The detaining authority has properly applied his mind while passing individual detention order in respect of each of the petitioner. It is also crystal clear that necessary safeguards are followed by the detaining authority. All the points raised by the petitioner challenging the detention orders are devoid of merits. There is no legal infirmity in the detention orders passed against the present petitioners. This Court is of the considered view that the impugned detention orders are sustainable in the eyes of law and does not deserve to be set aside. Petition dismissed.
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PMLA
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2020 (8) TMI 229
Grant of Interim Bail/Parole - categorization by way of exclusion of UTPs lodged in the jails in Delhi as under trial prisoners qua the alleged commission of offences - allegations levelled against the petitioner herein through the alleged commission of economic offences inter alia punishable under the PMLA Act, 2002 as also qua an offence punishable under Section 409 of the Indian Penal Code, 1860 which is punishable with the imprisonment for life or that which it may extend to ten years and to a fine - HELD THAT:- The Hon ble High Powered Committee whilst considering the representation of the applicant observed also to the effect that the submissions made in the representation, related to the applicant only, but, that the Committee, was not formed to look into merits or demerits of an individual case for being released on interim bail and rather it was formed to lay down a criteria taking into consideration a particular class and not any particular prisoner or inmate and that the Committee thus, was of the opinion that the representation filed by the applicant/petitioner herein was unmerited and the same was accordingly rejected. Significantly, however, the Hon ble High Powered Committee made it clear that the guidelines and minutes of the Committee for release of prisoners on interim bail vide criterion adopted in the meetings dated 28.03.2020, 07.04.2020, 18.04.2020, 05.05.2020, 18.05.2020 and 20.06.2020, would in no way affect the rights of other UTPs, who do not stand covered under these categories, from invoking the jurisdiction of concerned courts for grant of regular/interim bail. The Hon ble High Powered Committee further observed to the effect that the applicant was at liberty to file the bail application before the concerned Courts, and the same as and when filed, may be considered by the concerned Court on merits, in accordance with law. The contention raised by the petitioner that the Hon ble High Powered Committee vide its minutes dated 28.03.2020 which have been included in the present petition and the subsequent minutes till the date 31.07.2020 had in any manner supplanted the provisions of Sections 437/438/439 of the Cr.P.C., 1973,- cannot be accepted and thus, the contention raised on behalf of the petitioner that the criterion laid down by the Hon ble High Powered Committee observing to the effect that the category of persons alienated in its minutes dated 28.03.2020 which may not be considered for the grant of interim bail in terms of the orders of the Hon ble Supreme Court in Suo Moto Writ Petition (C) No.1/2020- IN RE : CONTAGION OF COVID 19 VIRUS IN PRISONS, stifles the right to liberty of the petitioner under Article 21 of the Constitution of India or the right to life under the Constitution of India, is wholly untenable. It is thus, essential to observe that the release of an accused on bail or on interim bail in a non-bailable offence, which he/she is alleged to have committed, is not a vested right in any accused/convict and falls within the discretionary jurisdiction of the Court concerned to grant or not to grant the prayer of an accused seeking bail or interim bail - It is essential to observe that economic offences are offences which corrode the fabric of democracy and are committed with total disregard to the rights and interest of the nation and are committed by breach of trust and faith and are against the national economy and national interest and that such nature of offences have not been considered by the Hon ble High Powered Committee vide its minutes dated 28.03.2020 to fall within the ambit of the grant of discretionary interim bail by the factum simpliciter of the prevalence of the COVID19 corona pandemic, cannot be termed to be an arbitrary exercise of discretion for laying down the guidelines in relation to the category of alleged commission of offence in which an accused may be allowed to be released on interim bail only on the ground of prevalence of the COVID-19 corona pandemic. The contention raised on behalf of the petitioner that there has been an arbitrary and unjust classification made by the Hon ble High Powered Committee of this Court vide minutes dated 28.03.2020 as adhered to till the minutes dated 31.07.2020, qua offences falling under cases under the PMLA Act and those investigated by the CBI/ED/NIA /Special Cell of Delhi Police and Terror related Cases, cases under Anti National Activities and Unlawful Activities(Prevention) Act etc., cannot be accepted as it cannot be contended that these said offences have not been distinguished from other offences on the basis of any intelligible differentia. The prayer made in the petition is declined, however, it is open to the petitioner to seek redressal in accordance with law in terms of Chapter XXXIII of the Cr.P.C., 1973 to seek the grant of bail, which apparently necessarily has to be considered on its own merits as already observed by the Hon ble High Powered Committee vide its minutes dated 20.06.2020 whilst rejecting the representation of the petitioner against the classification in relation to economic offence vide its minutes dated 28.03.2020.
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Service Tax
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2020 (8) TMI 228
Request to postpone the recovery of service tax - pandemic COVID situation - HELD THAT:- Considering the fact that Mr. Ghosh was able to raise the substantial question of law, which requires adjudication and considering the fact that in this pandemic situation there may be difficulties to participate in the adjudication proceeding, the respondent authorities shall not give effect to the impugned letter dated 22nd June, 2020 and the hearing may be deferred for the time being till the normal functioning is restored. In view of the fact that the affidavits have been exchanged by and between the parties, the matter may be listed for hearing on the first available working day in the month of September, 2020 - Application disposed off.
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2020 (8) TMI 227
Refund of Service Tax - principles of unjust enrichment - refund sought during the period 01.04.2016 to 30.09.2016 on the ground that any housing scheme of the State Government is exempted from the payment of service tax by virtue of Notification No. 09/2016-ST dated 01.03.2016 - HELD THAT:- It is not disputed that as per the agreement between the appellant and the Rajasthan Government the construction of housing complex which was on agreed price, if any, service tax is payable, the same shall be payable by the appellant which means the amount of service tax is included in the value of service provided, if any, payable as no service tax is payable by the appellant. Therefore, question of recovery of service tax does not arise. The bar of unjust enrichment is not applicable to the facts of the case, therefore, the appellant is entitled for refund - appeal allowed - decided in favor of appellant.
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2020 (8) TMI 226
Security of Service Tax - abatement of tax - It was noticed by Revenue that as provided under Notification No.30/2012-ST dated 20-06-2012 appellant were required to pay 75% of the service tax chargeable on receiving security services - extended period of limitation - Penalty - HELD THAT:- Since the matter had come to the knowledge of Revenue on 16.11.2012, extended period of limitation as on 31.12.2015 is not invocable by Revenue. Therefore, Revenue could demand service tax not paid for normal period as on 31.12.2015. Further, while computing service tax, Cum-duty benefit needs to be extended. Penalty - HELD THAT:- Since the extended period of limitation is not available to Revenue, penalty under Section 78 shall not be eligible to be imposed. The matter is remitted to Original Authority with directions to compute service tax payable by the appellant for normal period of limitation as on 31.12.2015, extending Cum-duty benefit - appeal allowed by way of remand.
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Central Excise
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2020 (8) TMI 225
Compliance with the clarification issued by the Central Board of Excise and Customs on 10.11.2014 bearing reference in F.No.6/03/2013/CX.1 - levy of excise duty on Fixed Facility Charges (FFC) and Minimum Take or Pay Charges (MTOP) - CENVAT Credit on purchase of Gas - HELD THAT:- The 1st, 2nd, and the 4th respondent being officers under the Central Board of Excise and Customs are bound by its clarification dated 10.11.2014 bearing reference F.No.6/03/2013/CX.1. They cannot act contrary to the clarification issued by the Central Board of Excise and Customs particularly in the light of the fact that the clarification has been given pursuant to directions of the Bombay High Court - Even otherwise, if the Minimum Take or Pay Charges (MTOP charges) and the proportionate Fixed Facility Charges (FFC) were built into the transaction value of the gases supplied by the petitioner to the 3rd respondent on which Excise duty was paid by the petitioner, the 1st, 2nd and the 4th respondent are bound to allow the 3rd respondent to avail CENVAT Credit under the provisions of the CENVAT Credit Rules, 2004 to the 3rd respondent or to any other person with whom the petitioner has similar transactions. This writ petition was filed prior to the substitution of the Central Excise Act, 1944 with the Central Goods and Service Tax Act, 2017. Therefore, the writ petiton has become infructuous - the 4th respondent is directed to comply with the clarification of the Central Board of Excise and Customs 10.11.2014 bearing reference F.No.6/03/2013/CX.1 without any demur, equivocation or prevarication - petition allowed.
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2020 (8) TMI 224
Permission for withdrawal of appeal - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- The prayer for withdrawal of the appeal is allowed - the appeal is dismissed as withdrawn under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 in terms of the provisions of Section 127(6) of the Finance (No.2) Act, 2019.
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CST, VAT & Sales Tax
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2020 (8) TMI 223
Best Judgement Assessment - incomplete or defective form-H - levy of penalty - reversal of input tax credit - levy of tax on certain export and pre-export sales - HELD THAT:- When the first respondent had chosen to assess the petitioner to the best of Judgment under Section 27(1) of the Act, there is a duty cast on them to indicate the proposal to the assessee in the show cause notices. It is not in dispute that such proposals were not made in the prior notices. As such, the consequent impugned order itself cannot be sustained - Furthermore, when the first respondent was of the view that the Form-H submitted by the petitioner was incomplete or defective in nature, in all fairness, the first respondent ought to have returned the same to the petitioner for rectification instead of rejecting the same. The matter is remanded back to the first respondent for passing fresh orders, after giving due opportunity to the assessee - Petition allowed by way of remand.
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2020 (8) TMI 222
Refund of tax collected from the seller of diesel and deposited with the respondent-authorities, in the absence of C-Forms - Non-issuance of C-forms - purchase of diesel at concessional rate - CST Act, 1956 - denial to issue forms on the ground that after introduction of the GST regime, the registration certificates of the dealers such as the writ applicant, automatically stood cancelled and they were not eligible for making purchases of diesel against C form declarations - HELD THAT:- The issue raised in the present litigation is squarely covered by a decision of a Coordinate Bench of this Court in the case of J.K. CEMENT LTD. VERSUS STATE OF GUJARAT [ 2020 (3) TMI 140 - GUJARAT HIGH COURT] where it was held that in the absence of C forms having been issued by the Rajasthan authorities, the respondent authorities have collected excess tax from the seller-Reliance Industries Limited, who in turn has collected the same from the petitioners. Once the Rajasthan authorities issue C forms against the sales made by Reliance Industries Limited to the petitioners and the petitioners produce the requisite documents/forms before the respondent authorities, the respondent authorities are required to process such claim within twelve weeks of the same being made in writing by the petitioners. The respondents are directed to forthwith process the refund claim of the writ applicant and grant the refund of the tax amount collected from the writ applicant and deposited by the seller in accordance with law within a period of twelve weeks of the receipt of a copy of this judgment - Application allowed.
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2020 (8) TMI 221
Validity of Assessment Order - concessional rate of tax - export sales in the course of import (High-Sea Sales) - allegation that the transactions were not supported by any documentary evidence - Section 5(2) of the Central Sales Tax Act, 1956 - HELD THAT:- It was the duty of the 1st respondent to refer to the documents submitted by the petitioner along with its replies dt.06.07.2019 and 09.07.2019 (Exs.P.2 and P.3) and the failure of the 1st respondent to do so before passing of the impugned order vitiates the said impugned order. The impugned Assessment Order passed by the 1st respondent under the Central Sales Tax with reference to the period April, 2015 to March, 2016 is set aside - the matter is remitted to the 1st respondent for fresh consideration - petition allowed by way of remand.
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2020 (8) TMI 220
Classification of goods - inter-State sales on rexin cloth, Tarpauline cloth and PVC cloth - whether classified under Section 8(2) of the Central Sales Tax Act read with Entry-86 in the IV Schedule of the Telangana VAT, 2005 or classified as cotton connected fabrics/ man-made fabrics covered by G.O.Ms.No.2328? HELD THAT:- A reading of the impugned revisional order passed by the 3rd respondent indicates that there is no reference in the said order to the request made by the petitioner on 29.03.2020 through e-mail for grant of time to attend the personal hearing for the year 2012-13. Admittedly, at that point of time, there was a lockdown declared by the Central Government and the State Government which was in force and naturally the petitioner would be disabled from attending the personal hearing before the 3rd respondent. The 3rd respondent, therefore, ought to have adjourned the matter - But, apparently, since the limitation was going to expire for making Revision by 30.03.2020, the impugned Assessment Order was passed by the 3rd respondent. The respondent are unable to explain why the impugned revisional order passed by the 3rd respondent contains no reasons and he frankly admitted that in view of the limitation getting expired for Revision by 30.03.2020, the 3rd respondent passed the revisional order without affording a personal hearing to the petitioner though the petitioner requested for the same on 29.03.2020 through email. The impugned revisional order passed by the 3rd respondent as well as the consequential order passed by the 5th respondent are both set aside - the matter is remanded to the 3rd respondent to pass a fresh revisional order - petition allowed by way of remand.
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2020 (8) TMI 219
Validity of Estimation of turnover - estimation made purely on assumptions and presumptions and not on the basis of any material - HELD THAT:- There is no material available to the Assessing Officer as to any brand having been sold at a higher rate than that disclosed in the bills. What was before the Assessing Officer was only the actual invoices from which two of the highest in the respective licensed premises were picked up to compute the average for the purpose of estimation. We do not think that the Assessing Officer adopted a rational basis for making such estimation when admittedly the assessee had sold different brands which have different purchase value; as seen from the sale value disclosed in the sale invoices. The assessee sells liquor on retail, after purchasing the same from the Kerala State Beverages Corporation. The purchase value cannot be a reference to decide on the assessee's sale price since the assessee offers a premises for the customer to consume alcohol. The estimation has been made on mere surmises and conjectures. There is absolutely no rational basis to reject the books of accounts and the estimation made has no nexus to the nature of the business and transactions carried out in the two licensed premises of the assessee - revision allowed - decided in favor of assessee.
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2020 (8) TMI 218
Demand and computation of belated payment of tax - TNVAT Act - availability of transition of the entry tax to credit ledger - petitioner has filed a TRAN 1 Declaration under GST - HELD THAT:- Let a computation of interest under Section 42(3) of Act be furnished to the petitioner forthwith - The petitioner will either effect payment of the interest if the computation found to be in order or file its objections/response to the computation of interest furnished to it, including the request for interest on the available credit. Petition disposed off.
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Indian Laws
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2020 (8) TMI 217
Maintainability of petition - Usage of acronym ICOAI instead of the acronym ICAI - desisting from encroaching into the domains earmarked for the third Respondent - whether the Appellant/Petitioner had the locus standi to maintain the writ petition? - HELD THAT:- The third Respondent is a body corporate established by statute and conferred with perpetual succession, the right to a common seal and the right to sue and be sued in its name. The party-in-person has not filed the writ petition in his personal capacity or as a public interest litigation. Instead, it is in the nature of an action for and on behalf of the third Respondent. In effect, using a private law analogy, the present writ petition and the appeal arising there from appear to be in the nature of a derivative action. Even in the realm of private law, derivative actions cannot be maintained unless it is established that the entity on whose behalf such action is initiated is unable, for justifiable reasons, to prosecute proceedings to protect its interest - Neither the party-in-person nor the third Respondent have pleaded nor raised any contention to the effect that the third Respondent was disabled for some valid reasons from initiating proceedings in order to protect its rights and interests. A fortiori, a discretionary public law action cannot be maintained in this situation. Therefore, we concur fully with the findings of the learned Judge in the impugned order that the Appellant/Petitioner does not have locus standi and that the writ petition was not maintainable at his instance. The second plank on which the Appellant's case rests is that the third Respondent obtained a trade mark registration for the acronym ICAI and that consequently, the third Respondent is entitled to restrain the use of the acronym ICAI by the first Respondent. The Trade Marks Act enables the registered proprietor of a trade mark to sue for infringement. Even with regard to an unregistered trade mark, it recognizes the right of the proprietor to initiate an action for passing off under common law - By letter dated 17.06.2020, the Ministry of Corporate Affairs had advised the first Respondent that it is not desirable for the first Respondent to use the acronym ICAI. However, by subsequent letter dated 26.06.2020, the earlier letter was modified and paragraph 7, which dealt with the non-desirability of using the acronym ICAI, was withdrawn by the Ministry of Corporate Affairs. By relying upon these documents, the party-in-person had contended that the Ministry of Corporate Affairs is of the view that the first Respondent should desist from using the acronym ICAI, and that a direction should be issued to that effect. This correspondence was exchanged after the writ petition was filed and in light of the conclusions that we have set out above, we do not propose to issue any such direction. Appeal dismissed.
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2020 (8) TMI 216
Dishonor of Cheque - prosecution under section 138 of the Negotiable Instruments Act - rebuttal of prosecution - HELD THAT:- It is clear that the complainant issued Ext.D1 and Ext.D2 notice. In Ext.D3 reply dated 3.11.1999, it is specifically stated by the accused that two blank cheques are with the complainant. The number of Exhibit P1 was specifically mentioned. The case of the complainant is that the accused issued Ext.P1 cheque on 10.11.1999. This itself creates doubt about the case of the complainant. The counsel for the complainant submitted that Ext.D4 plaint is not related to the cheque involved in this case. Even if Ext.D4 excluded, in the light of Exts.D1 to D3, it is clear that the accused rebutted the presumption under Sections 138 and 139 of the Negotiable Instruments Act. The trial court considered all the aspects of the case and acquitted the accused. There is nothing to interfere with the judgment of the trial court. Appeal dismissed.
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2020 (8) TMI 215
Dishonor of cheque - insufficiency of funds - acquittal of accused - Section 141 of the Negotiable Instruments Act - HELD THAT:- Explanation (a) to Section 141 of the Negotiable Instruments Act clearly says that 'Company' means any body corporate and includes a firm or other association of individuals. Explanation (b) says that 'Director' in relation to a firm means a partner in the firm. The 2nd accused also contented that there is no evidence in this case to prove the execution of the cheque. Therefore, even though this is an appeal against the acquittal, an accused can take any contention in his favour before this Court. It is an admitted case that, the 1st accused in this case is M/s. Sea Wings Shipping Others, Willingdon Island represented by its Managing Partner Mr. Varghese Philip. Mr. Varghese Philip is the 2nd accused - Since 1st accused is a firm, only fine was imposed. The conviction and sentence imposed on the 1st accused is not challenged by the 1st accused. 1St accused is represented by the 2nd accused. The conviction and sentence imposed on the 1St accused became final. In such circumstances, the 2nd accused, who is actually representing the 1st accused cannot contend in an appeal against acquittal of the 2nd accused to the effect that, the execution of the cheque is not proved, especially when the conviction and sentence against the 1st accused under section 138 of the Negotiable Instruments Act became final. The 2nd accused also committed an offence under section 138 of the Negotiable Instruments Act. The trial Court imposed a fine of ₹ 5,000/- to the 1st accused because 1st accused is a partnership firm. 2nd accused is the Managing Partner of the firm - the 2nd respondent/2nd accused is convicted under section 138 of the Negotiable Instruments Act - appeal allowed.
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2020 (8) TMI 214
Dishonor of Cheque - insufficiency of funds - the opposite party no. 2 has pointed out about all the orders by which the revisionist has directed to deposit forty per cent of the fine amount, but still he has not deposited the same - HELD THAT:- Perusal of the provisions of Section 148 N.I. Act as well as the fact that the revisionist has approached this Court by means of filing several applications in which also he was given sufficient time to deposit the penalty amount still the same has not been complied by the revisionist. The revisionist is directed to deposit 50 per cent of the fine amount, preferably, within a period of 30 days from today - After the aforesaid amount will be deposited by the revisionist, concerned court below is directed that the appeal may be heard on merits and may be decided, in accordance with law, by means of reasoned and speaking order within a further period of two months from the date of first hearing of appeal. Application disposed off.
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2020 (8) TMI 213
Dishonor of Cheque - insufficiency of funds - time limitation - first contention of the revisionist is that the notice of the complainant dated 09.03.2015 does not fulfill the condition as provided under the proviso 'b' to Section 138 of Negotiable Instruments Act - interpretation given to proviso (b) of Section 138 of NI - HELD THAT:- The argument extended by the learned counsel for the revisionist is that the notice dated 09.03.2015 issued by the complainant only contained 7 days' time period, which was provided to the revisionist to pay the amount in compliance of the provisions contained under proviso 'c' to Section 138, is absolutely a misconception, which has been drawn by the revisionist attracting the implications of the proviso 'b' of Section 138 of the Negotiable Instruments act for the purposes of complying the conditions of the proviso 'c' to Section 138. Both the proviso had been legislated to meet the different intention and purposes to be complied prior to initiation of proceedings by registering the complaint - Both the provisos are independent to one another. The intention and purpose of the proviso 'b' is only a liability or the limitation, which has been imposed and casted upon the complainant for filing the complaint on the receipt of information from the Bank of the dishonour of cheque. Hence, the 30 days' period would start running against him, i.e. the complainant, immediately after the receipt of notice issued by the Bank, its not for the purposes of fulfilling the conditions of proviso 'c' of Section 138 of Negotiable Instruments Act. On simple reading of the proviso, the Court is of the opinion that, the said proviso 'b' does not provide that it is a 30 days' time period, which has to be mentioned in the notice issued by the complainant to the revisionist for complying with the conditions under the proviso 'c' to Section 138 as a condition precedent for filing of complaint provided in proviso 'b'. The proviso 'c' to Section 138 it only provides that as soon as the notices are received by the accused the conditions contained therein has to be complied with by the revisionist within period of 15 days from the date of its receipt, i.e. the notice - The very fact that the proceedings itself was initiated at a much belated stage, i.e. only on 03.04.2015, the implications drawn from clause 'c' to the proviso to Section 138 will not be attracted in the instant case. Consequently, the said argument of the learned counsel for the revisionist is turned down and is not accepted by this Court. Non-reference of the amount claimed by the complainant in the proceedings under Section 138 of the Negotiable Instruments Act - HELD THAT:- The said contention is also not accepted. Hence, both the fault in the proceedings held concurrently before the courts below, which was sought to be pressed upon by the revisionist to the effect that the complaint itself would be defective in the absence of there being mentioning of the amount claimed by the respondent in his notice dated 19.03.2015 is otherwise also not sustainable and contrary to the documents on record. Besides the above two issues, no other ground has been pressed by the revisionist. Criminal revision dismissed.
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