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TMI Tax Updates - e-Newsletter September 6, 2022 Case Laws in this Newsletter: GST Income Tax Customs Securities / SEBI Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Highlights / Catch Notes GST: Levy of penalty under Section 129(1)(b) of the CGST Act - jurisdiction to detain goods and vehicle - allegation is that the vehicles carried consignments under 'Bill to – Ship to' concept, but the drivers were not in possession of invoices to support transport to 'Bill to' address in Tamil Nadu - This Court quashes the impugned detention orders alone and directs the second respondent to forward all the documents to the concerned jurisdictional assessing officer, who shall take up the issue and decide the same after giving opportunity to the petitioner - HC Visit to Get Source GST: Classification of goods - applicable rate of tax - Agricultural manually hand operated Seed dressing, Coating and Treating drum - to be classified under HSN 8201 or under HSN 8437? - the GAAR has correctly classified the product in question under Chapter Heading 8436 and tariff item 8436 80 90. - liable to GST at 12% - AAAR Visit to Get Source GST: Exemption from GST - composite supply of services - milling of food grains into flour to Food & Supplies Department, Government of West Bengal for distribution under PDS - the supply of fortified wholemeal flour is exempt from GST - AAAR Visit to Get Source GST: Classification of supply of services - the applicant activity of fabrication and mounting of Tanker and Tripper on the chasis supplied and owned by the principal is supply of Service. The rate of GST /tax in both the cases is 18% - AAR Visit to Get Source GST: Levy of GST - canteen services - amount recovered by the company, from employees or contractual workers - In the case at hand, the applicant has established canteen facilities as mandated under Section 46 of the Factories Act, 1948 and supplies food at a subsidized cost through third-party-vendor. The supply of food by the applicant is 'Supply of Service' by the applicant to their contractual worker/s. The cost, which is recovered from the salary of contractual worker, as deferred payment is 'consideration' for the supply and GST is liable to be paid - AAR Visit to Get Source GST: Exemption from GST - car hiring services provided to Local Authority, Ahmedabad Municipal corporation - Ahmedabad Municipal Corporation has deducted TDS on the payment made to the supplier of service i.e. to applicant considering the service Taxable under GST - It shows that benefit of exemption s not available - AAR Visit to Get Source Income Tax: Bright Line Test - Whether ITAT has erred in relying upon the judgment of this Court in Sony Ericsson Mobile Communication [2015 (3) TMI 580 - DELHI HIGH COURT] as the Department has not accepted the decision passed in Sony Ericsson (supra) and has preferred an appeal against the said decision before the Supreme Court - Held No - Revenue appeal dismissed - HC Visit to Get Source Income Tax: Cognizance of offence u/s 276CC - non filing of ITR - requirement of mens rea - When the amount in question along with the interest has already been paid, no sentence can be imposed under that provision unless the element of mens rea is established and the intention of the Legislature is that the penalty should serve as a deterrent. In the Act, it has been provided how to proceed if a particular assessee is not filing the return on time, which suggests that it is civil obligation. - HC Visit to Get Source Income Tax: Revision u/s 263 - Capital gain computation - To us, it is a clear case of valuation being made by applying reverse indexation, i.e., by arriving at the value of land as on 01/04/1981, upon first determining the amount of capital gain that is to be disclosed. This is apparent from his order being sans any finding qua such basis, which also forms the reason for reassessment and, rather, without any deliberation thereon. - AT Visit to Get Source Income Tax: Additions towards amount of TDS deducted on interest - accrual of interest income but not received - Merely because the borrower has deposited TDS amount that itself will not fasten liability on the assessee to pay tax on the total interest income especially under the circumstances, when the other party has failed to repay the loan amount and interest thereupon and the litigation was going on. - AT Visit to Get Source Income Tax: Where the assessee has opted not to appear before the ld. Pr. CIT nor before this Tribunal and has merely filed the appeal but has not pursued the appeal so filed by it and in the given situation where we are unable to lay our hands on any of the details of the financial transactions carried out by the assessee during the year and whether such transactions have been examined by ld. AO in the manner directed by ld. Pr. CIT passed u/s 263 we fail to find any infirmity in the finding of the ld. Pr. CIT in the impugned order - AT Visit to Get Source Income Tax: On-money received in business of real estate development carried out - allegation that higher rate having been agreed to be paid, as compared to the contracted rate - The basis for holding that the assesseesse received on money clearly did not apply to maximum properties sold. The said facts and circumstances lead to the inescabable conclusion that the basis therefore was ill conceived. - AT Visit to Get Source Customs: Duty Drawback - whether the petitioner is entitled to duty drawback, confined to customs duty component, against deemed exports, even where it has claimed cenvat credit? - the petitioner was allowed to carry forward the advance authorization to the converted unit i.e., 100% EOU and thereafter fulfil the outstanding export commitment would, in our view, as correctly argued on behalf of the petitioner, furnish a clue that duty drawback for such goods should extend qua unutilized goods, which were available at the time of conversion of the DTA unit into a 100% EOU. - HC Visit to Get Source IBC: Replacement of the Resolution Professional - The decision taken by the CoC is a decision by vote of 66% and when the decision is by votes of a collective body, the decision is not easily assailable and replacement is complete as per Scheme of Section 27 when the resolution is passed with requisite 66% voting share - AT Visit to Get Source IBC: Scope of pronouncing of judgement - The law does not permit that the case is heard by one entity and the order is pronounced by another who has not heard the case at all. In such circumstances, the question posed is hereby answered in favour of the Appellant and it is held that the order dated 10.01.2018, having been passed by a bench in which one of the member was not a member of the bench who had heard the matter at the time when it was reserved, is patently illegal and void ab-initio. - AT Visit to Get Source IBC: Rejection of application for initiation of CIRP - Simply rejection of this Appeal may not serve the purpose. Instead it is intended to dismiss the present appeal with imposing heavy cost. There are many circumstances which have been discussed suggests that either lending loan by the appellants were only paper transaction/sham transaction or said loans were shown to be repaid within one or two days from the date of lending. - The Appellants are directed to deposit the cost of Rs.1 lakh in the account of PMNRF - AT Visit to Get Source Service Tax: Levy of service tax - receipt of intellectual property service from the overseas entity - consequence of merger - The adjudicating authority has failed to consider the deemed demutualization of amalgamated entity and amalgamating entities for the period prior to effective merger and has superficially applied the appointed date conundrum to the ‘no brainer’, and default, articulation in section 66A of Finance Act, 1994 without taking in the entire canvass of this special provision of law to charge tax on specifically intended transactions. - AT Visit to Get Source Service Tax: Benefit of exemption - services provided to SEZ - Recovery of service tax alongwith interest and penalty - It is on record that the required documentation was not available for the entire period of the dispute but, at the same time, it cannot be denied that at some point, the eligibility did exist. The procedural infirmities, for a shorter or longer time, does not in any way supplant the exemption accorded to the impugned supply of services - AT Visit to Get Source Service Tax: Valuation of service - service towards installation or commissioning - whether 33% of the price/ value should be treated as value of taxable service towards installation or commissioning? - the appellant cannot be burdened with the service tax liability, upon consideration of the fact that they had provided the taxable service of installation and commissioning to their customers. - AT Visit to Get Source Central Excise: Classification of goods - There is no doubt that the Hon’ble Supreme Court did not render a finality to the dispute over classification but the Tribunal, indubitably, has. That finality can be shaken only by a reversal in the highest court of the land and, until then, the law settled by the Tribunal prevails; failure to recognise that finality places orders of original authority and first appellate authorities in peril and for consequences of breach of discipline. - AT Visit to Get Source VAT: Non-disbursal of loan due to tax default - Since the disbursement of loan was based on the public money, considering the public interest and that of the Bank, withheld the loan granted to the petitioner, if the petitioner is able to provide equal alternate property as security without any encumbrance, the same can be considered, with the present property, the loan cannot be disbursed. - HC Visit to Get Source VAT: Recovery of dues of taxes - priority/precedence of dues - If the immovable property of the defaulter is shown to have been attached in accordance with law prior to Chapter IVA of the SARFAESI Act, or for that matter section 31B of the RDDB Act, being enforced, and such attachment is followed by a proclamation according to law, the ‘priority’ accorded by section 26E of the former and section 31B of the latter would not get attracted. - HC Visit to Get Source Articles LATEST CHANGES IN COMPANY LAW MATTERS RECENT DEVELOPMENTS IN GST Battery Waste Management Rules, 2022: Key Highlights SEBI Settlement Scheme 2022 with faq’s Notifications GST - States 06/2022-State Tax - dated 2-9-2022 - Delhi SGST Extend the due date of payment of tax, in FORM GST PMT-06, for the month of April, 2022 17/2022-State Tax - dated 6-8-2022 - Gujarat SGST Implementation of e-invoicing for tax payers having aggregate turnover exceeding Rs 10 Cr 16/2022-State Tax - dated 16-7-2022 - Gujarat SGST Amendment in Notification No. 14/2019-STR clarifying entry related to bricks 09/2022-State Tax (Rate) - dated 16-7-2022 - Gujarat SGST Amendment in Notification No. 5/2017-STR to restrict refund of accumulated ITC on edible oils and coal 08/2022-State Tax (Rate) - dated 16-7-2022 - Gujarat SGST Amendment in Notification No. 3/2017-STR to change rate of tax on goods w.r.t. Petroleum-Coal bed methane Operations 07/2022-State Tax (Rate) - dated 16-7-2022 - Gujarat SGST Amendment in Notification No. 2/2017-STR withdrawing exemption to Cheques, Maps and hydrographic or similar charts of all kinds, Parts of goods of heading 8801 06/2022-State Tax (Rate) - dated 16-7-2022 - Gujarat SGST Amendment in Notification No. 1/2017-STR to change in rate of tax on certain goods like Solar Water Heater, LED Lamps, Power driven pumps, Machinery used in milling industry, Printing, writing or drawing ink 1398-F.T. - dated 23-8-2022 - West Bengal SGST Amendment in Notification No. 611-F.T., dated the 12th April, 2022 1397-F.T. - dated 23-8-2022 - West Bengal SGST Seeks to Amend notification No. 1129-F.T. dated 28.06.2017 regarding no refund of ITC accumulated on account of inverted tax structure 1390-F.T. - dated 23-8-2022 - West Bengal SGST Seeks to make amendments (First Amendment, 2022) to the WBGST Rules, 2017 which inter alia Seeks to amend rule 21A to provide for automatic revocation of suspension of registration upon furnishing of all the pending returns, rule 87 to provide for payment through UPI and IMPS, rules 89 and 96 relating to procedure for application for refund, return Form GSTR-3B etc. News Supreme Court allows 4 weeks extension to open common portal for Tran 1 & Tran 2 MoS Smt. Anupriya Patel lays foundation stone of 'Chunar Logistics Park' in Mirzapur, UP 28th edition of Status Report on India’s External Debt 2021-22 released Centre in collaboration with Government of Manipur organizes in-store export promotion show in Dubai for pineapples Case Laws: GST 2022 (9) TMI 211 Detention of goods alongwith the vehicle - goods transported without E-way bill - Section 129 of CGST Act - HELD THAT:- Considering the submissions made at the Bar and on perusal of the three orders which are impugned, the authorities were of the impression that the goods were being transported without E-Way bill and thus, an assessment was arrived at to come out with a figure of 200% of the tax payable on such goods. The appeal against the said order has been dismissed. The matter requires consideration - Considering the submissions made at the Bar, as an interim measure, it is provided that goods of the petitioner shall be released on his paying half of the amount demanded i.e. half of Rs.61,76,793/-. For the other half, the petitioner shall submit a indemnity bond as security. Application disposed off. 2022 (9) TMI 210 Levy of penalty under Section 129(1)(b) of the CGST Act - jurisdiction to detain goods and vehicle - allegation is that the vehicles carried consignments under 'Bill to Ship to' concept, but the drivers were not in possession of invoices to support transport to 'Bill to' address in Tamil Nadu - HELD THAT:- It is not in dispute that the petitioner is a sub-contractor to M/s.ITD Cementation India Ltd., for the supply of jetty and pipe conveyor system together with allied electrical instrumentation and control works on EPC back to back basis between TANGEDCO and ITD Cementation India Limited. ITD Cementation India Limited had given letter of indent to the petitioner on 28.02.2019. The petitioner had issued purchase order to procure materials from M/s.Phoenix Conveyor Belt India Private Limited for the purchase of pipe conveyor belts and its accessories to be used for the work at TANGEDCO. TANGEDCO is in the process of establishing of 2 x 660 MW Super Critical Thermal Power Project at Udangudi, Thoothukudi District. All India Road Transport Agency name was not recorded in the transport invoices. But, the consignment notice has been rightly recorded, which finds place in the bills. The e-way bill is dated 26.07.2022, in which, the other details such as, e-way bill number, GSTIN number of the supplier and recipient, place of despatch, place of delivery, document number and code are all properly recorded. It is seen that for calculation of applicable penalty, valuation has been done, thereafter, the freight charge at the rate of 2% and gross profit at the rate of 10% taken into account and penalty imposed against the petitioner. As per the Circular of the Commissioner, the Intelligence/Roving Squad detained the vehicles and thereafter, all the records to be handed over to the Jurisdictional Officer or to the Review Cell and thereafter, it is for the Jurisdictional Officer to pass orders on the point of classification and valuation - it is not in dispute that the pipe conveyor belt is a customized article, which is used exclusively for the project of TANGEDCO at Udangudi. This being so, there is no possibility of diversion of the material and thereby, evasion of duty would arise. Considering the nature of contract business, the only mistake committed by M/s.Phoenix Conveyor Belt India Private Limited is that, in the invoice, instead of ITD Cementation India Limited, the petitioner's name is mentioned, except the said mistake, all other particulars properly recorded and 14 vehicles already reached the destination, five vehicles are in detention and 15 vehicles are in transit. It is seen that the petitioner already uploaded the particulars in the G.S.T. Portal even before the detention - petitioner to produce all the documents to the jurisdictional assessing officer, give his explanation and it is for the assessing officer to see whether the triangular transaction 'Bill to', 'Ship to' is complete and thereafter, process the same. This Court quashes the impugned detention orders alone and directs the second respondent to forward all the documents to the concerned jurisdictional assessing officer, who shall take up the issue and decide the same after giving opportunity to the petitioner - Petition disposed off. 2022 (9) TMI 209 Revocation of cancellation of registration of petitioner - petitioner failed to file the returns for continuous period of six months - Section 29 (2) (C) of the CGST Act - HELD THAT:- Perusal of the materials, it is seen that the petitioner during the Covid-19 pandemic period had not filed his returns and thereafter, he had not conducted any business so that he filed only nil returns. Further this case is quite similar to the cases of the petitioners in TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. [ 2022 (2) TMI 933 - MADRAS HIGH COURT] . There some of the petitioner had filed an appeal beyond the period of limitation either for filing application for revocation of cancellation, while some of them had directly filed a writ petition against the order cancelling the registration. While some of them filed appeal beyond the statutory period of limitation, there was further delay in filing the writ petition. However, considering the over all facts and circumstances of the case, it was held that no useful purpose will be served by keeping those petitioners out of the Goods and Services Tax regime, as such assessee would still continue to do business and supply goods/services. Petition allowed. 2022 (9) TMI 207 Revocation of erroneous refund claim - refusal of personal hearing - violation of principles of natural justice - HELD THAT:- This Court not going into the merits contested by both the petitioner and the respondents, finds the petitioner had sent a detailed representation dated 07.01.2022 which received by the respondents on 10.01.2022 which is not disputed. The only objection of the Department is that the postal/physical reply not considered, since it was not sent through portal. The petitioner deserves personal hearing so that his objections can be heard. This case is for erroneous refund. In such circumstances, it would be appropriate that personal hearing is given and the documents considered, thereafter the Department to proceed further. In view of the same, the Department to give opportunity of personal hearing to the petitioner, hear the objections, peruse the documents submitted and the explanations. The Department submits that now the file of the petitioner transferred to the second respondent. The second respondent is directed to fix the personal hearing date for the petitioner, give him an opportunity, receive any documents if produced and thereafter proceed with the show cause notices issued earlier in SCN Reference No.223011210520025 dated 30.11.2021 for the tax period July 2017 to March 2018 and in SCN Reference No. 223011210520145 dated 30.11.2021 for the tax period April 2018 to May 2018. Petition disposed off. 2022 (9) TMI 206 Rectification of mistake - seeking opening of common portal for filing concerned forms for availing Transitional credit through TRAN-1 and TRA-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022 - transitional credit through TRAN-1 - HELD THAT:- Similar matters were considered by the Hon ble Apex Court in UNION OF INDIA ANR. VERSUS FILCO TRADE CENTRE PVT. LTD. ANR. [ 2022 (7) TMI 1232 - SC ORDER] and goods and service Tax Network(GSTN) is directed to open common portal for filing concerned forms for availing Transitional credit through TRAN-1 and TRA-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022. Petitioner pray for similar benefit be given to it. There is no reason why the benefit given under the Hon ble Apex Court judgment should not enure to the benefit of petitioner herein. Petitioner is permitted to revise/correct/amend TRAN-1 details filed by it with respondent No.4 between 01.09.2022 to 31.10.2022 and the respondent authorities shall consider the said revision/correction/amendment if any, in accordance with law - Petition disposed off. 2022 (9) TMI 205 Classification of goods - applicable rate of tax - Agricultural manually hand operated Seed dressing, Coating and Treating drum - to be classified under HSN 8201 or under HSN 8437? - HELD THAT:- The classification of goods under GST regime has to be done in accordance with the Customs Tariff Act, 1975, which in turn is based on Harmonized System of Nomenclature, popularly known as HSN . The General Rules of Interpretation, Section notes and Chapter notes as specified under the Customs Tariff Act, 1975 are also applicable for deciding classification of goods under the GST regime. However, once an item is classified in accordance with the Customs Tariff Act, 1975, the rate of tax applicable would be arrived at on the basis of notifications issued under GST by the respective Governments. On perusal of Chapter Heading 8201 and Note 1 to Chapter 82, it is clear that this heading includes tools which are used in hand like shovels, forks, pruners etc having blade, working edge and working surface and in view of above, appellant products viz. manually operated seed dressing drum, therefore by no stretch of imagination, can be said to be classified under Heading 8201. From the explanatory notes to HSN 8436, which explains the scope of the entry, it is found that, other agricultural machinery includes Seed dusting machines consisting of a revolving drum in which the seeds are coated with insecticidal or fungicidal powders - there is thus no doubt that the product in question is covered under heading 8436. Moreover heading 8437 specifically excludes farm-type machinery , further strengthening the classification of subject goods under heading 8436. The appellant s product viz. manually hand operated seed dressing, coating and treating drum is covered within the description provided under the HSN Code 8436. The appellant s product in its use as well as its function is as described under the said HSN code - The appellant s product viz. manually hand operated seed dressing, coating and treating drum is covered within the description provided under the HSN Code 8436. The appellant s product in its use as well as its function is as described under the said HSN code - the GAAR has correctly classified the product in question under Chapter Heading 8436 and tariff item 8436 80 90. Appeal dismissed. 2022 (9) TMI 204 Jurisdiction - power to remand the case - Exemption from GST - services provided by the applicant in affiliation to/partnered with Gujarat University - providing education for degree courses to students under specific curriculum as approved by the Gujarat University, for which degrees are awarded by the Gujarat University - exemption from GST vide Entry No.66 of the Notification No.12/2017-Central Tax (Rate) dated 28th June 2017 - HELD THAT:- The appellant has filed the application within six months of order passed by the GAAR as required under the provisions of Section 102 referred above. However GAAR did not pass any order on the appellant's application. The appellant for the first time has raised additional plea before this appellate authority that their services are exempted as they are also covered by Entry No.3 of Notification No.12/2017-Central Tax dated 28.06.2017. This plea has been raised for the first time before this authority and the same was never raised before the GAAR. The issues mentioned above need to be re-examined at the level of GAAR, in view of the fact that it appears that the principles of natural justice have not been followed. Hon'ble High Court of Gujarat at Ahmedabad in the case of COMMISSIONER OF SERVICE TAX VERSUS VERSUS ASSOCIATED HOTELS LIMITED [ 2014 (4) TMI 406 - GUJARAT HIGH COURT] has given its verdict as to whether the Commissioner (Appeals) exercising powers under Section 85 of the Finance Act, 1994 has the power to remand the proceedings back to the adjudicating authority. This is fit case to remand the matter to the Authority for Advance Ruling i.e. the GAAR in the present case for fresh decision. The GAAR will take into consideration all aspects of the matter and decide the case afresh after affording adequate opportunity of hearing to the appellant - appeal allowed by way of remand. 2022 (9) TMI 203 Exemption from GST - composite supply of services - milling of food grains into flour to Food Supplies Department, Government of West Bengal for distribution under PDS - Applicability of entry no. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - Rate of tax, if the supply is not exempt - HELD THAT:- It has already been accepted by the WBAAR in its ruling IN RE: M/S. SHIV FLOUR MILL [ 2022 (1) TMI 303 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL] , that the total value of composite supply will comprise both cash and non-cash considerations. The WBAAR did not consider the valuation of Rs.124/- per 100 kg wheat being supply consideration of gunny bags, refractor and bran. It erred in its opinion that the non-cash consideration will be the actual sum received from open market on supply of gunny bags, refractor and bran. The WBAAR failed to appreciate that the valuation of the composite supply is the agreed upon price between the flour millers and the Food Supplies Department. This agreed upon price includes the notional value of Rs.124/- of two gunny bags and 5 kg by-products (1 kg refractor and 5 kg bran) which are retained by the miller, irrespective of actual disposal price of those gunny bags and by-products in future. The supply value of milling of wheat in the instant case cannot be dependent on actual receipts by the miller in future from third parties in disposal of the retained goods - The value of goods in the composite supply is not more than Rs.60/- being cost of elements for fortification and packing materials. So the percentage of value of goods in the composite supply is established to be lesser than 25% of the total supply value. In the instant case the supply of fortified wholemeal flour to the Food Supplies Department, Government of West Bengal will fall under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (corresponding State Notification No. 1136 FT dated 28.06.2017) and exempt from taxation. Appeal disposed off. 2022 (9) TMI 202 Exemption from GST - composite supply of services - milling of food grains into flour to Food Supplies Department, Government of West Bengal for distribution under PDS - Applicability of entry no. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - Rate of tax, if the supply is not exempt - HELD THAT:- It has already been accepted by the WBAAR in its ruling in Order No. 18/WBAAR/2021-22 dated 31.12.2021 [ 2022 (1) TMI 305 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL] , that the total value of composite supply will comprise both cash and non-cash considerations. The WBAAR did not consider the valuation of Rs.124/- per 100 kg wheat being supply consideration of gunny bags, refractor and bran. It erred in its opinion that the non-cash consideration will be the actual sum received from open market on supply of gunny bags, refractor and bran. The WBAAR failed to appreciate that the valuation of the composite supply is the agreed upon price between the flour millers and the Food Supplies Department. This agreed upon price includes the notional value of Rs.124/- of two gunny bags and 5 kg by-products (1 kg refractor and 5 kg bran) which are retained by the miller, irrespective of actual disposal price of those gunny bags and by-products in future. The supply value of milling of wheat in the instant case cannot be dependent on actual receipts by the miller in future from third parties in disposal of the retained goods - The value of goods in the composite supply is not more than Rs.60/- being cost of elements for fortification and packing materials. So the percentage of value of goods in the composite supply is established to be lesser than 25% of the total supply value. In the instant case the supply of fortified wholemeal flour to the Food Supplies Department, Government of West Bengal will fall under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (corresponding State Notification No. 1136 FT dated 28.06.2017) and exempt from taxation. Appeal disposed off. 2022 (9) TMI 201 Classification of supply of services - Composite supply or not - applicable accounting code of such services - rate of GST - activity of fabricating and mounting Tankers, Tippers, etc. on the chassis provided by the owner of such chassis i.e. bus body building - what is principal supply? - Circular No. 52/26/2018-GST dated 9-8-18 issued by Government of India - HELD THAT:- It is evident from Para 12.2(b) of the said circular that if the body is built on the chassis provided by the principal/customer and the fabrication charges, has been charged then the activity amounts to Supply of Service and attracts 18% GST. In the instant case, the fabrication of body is built on the chassis provided by the owner and as stated fabrication charges are charged from the owner of the chasis. Therefore, the instant question is answered by the provisions of Para 12.2(b) of the said circular and the activity merits classification as supply of service attracting GST @ 18%. The applicant is engaged in the manufacturing of body building i.e. mounting of tanker, tripper on the chasis supplied by the owner of the chasis. Therefore, the said service would be classified under Service Accounting Code 9988 -Manufacturing Service on Physical Inputs (Goods) owned by others . -Manufacturing services on physical inputs (goods) owned by others . The sub-group would be 99888 i.e. Transport equipment manufacturing services further classifiable under Service Code 998882 i.e. Other transport equipment manufacturing services - the activity of fabrication and mounting of bus body on the chassis supplied by the owner of chasis i.e. Principal on delivery challan and collecting job work charges including inputs required for such fabrication work merits classification under SAC 998882 - Other transport equipment manufacturing services . Thus, the applicant activity of fabrication and mounting of Tanker and Tripper on the chasis supplied and owned by the principal is supply of Service. The rate of tax in both the cases if chasis is supplied by the registered person (principal) i.e. having GSTIN and un-registered person (principal) i.e. not having GSTIN would be 18% as per Entry No. 26 (ic) and 18% as per Entry No. 26(iv) respectively. This activity merits classification SAC 998882 'Other transport equipment manufacturing services' as per Annexure attached to Notification No. 11/2017-CT (Rate) dated 28-6-17. 2022 (9) TMI 200 Levy of GST - canteen services / catering services - amount recovered by the company, from employees or contractual workers - provision of third-party canteen service is obligatory under section 46 of the Factories Act, 1948 - input tax credit of GST paid on food bill of the Canteen Service Provider - HELD THAT:- These activities provided by M/s Troikaa to its employees to be an activity made in the course or furtherance of business to deem it a Supply by M/s Troikaa to its employees in view of the above clarification and therefore amount collected by M/s Troikaa from employees towards canteen charges in terms of the contractual agreement in lieu of providing canteen service i.e. food is not liable to GST. A person is deemed to have been employed as contract labour when he is hired in, or in connection with a particular work of the principal employer. Where a person is 'hired' specifically for the work of an establishment, his scope of work does not extend beyond the work of that establishment and he is considered to be a contract labour - The term 'employed' is not defined under the GST, therefore, we refer to the dictionary meaning. The Law Lexicon says that the word 'employed' means engaged or occupied in the performance of work or hired to perform labour. Security Firm/ Contractor pays the salary to the contractual worker i.e. Security personal. Theses contractual worker are supplied by the contractor to M/s Troika for carrying out activity in the premises. M/s Troika has paid gross amount for the moth to the labour contractor for supply of labours at factory premises. The gross amount includes allowances, leave encashment and Provident Fund. This shows that M/s Troika paid gross amount to the labour contractor and labour contractor being employer paid the wages per month to the workers being employees and also deduct Provident Fund - therefore, it is evident that the instant case does not pass the test of employer-employee relationship and is therefore does not fall under the ambit of entry I of Schedule III of CGST Act. In the case at hand, the applicant has established canteen facilities as mandated under Section 46 of the Factories Act, 1948 and supplies food at a subsidized cost through third-party-vendor. The supply of food by the applicant is 'Supply of Service' by the applicant to their contractual worker/s. The cost, which is recovered from the salary of contractual worker, as deferred payment is 'consideration' for the supply and GST is liable to be paid - the recovery of amount from contractual worker on account of third party canteen services provided by M/s Troika would come under the definition of 'outward supply' as defined in Section 2(83) of the CGST Act, 2017 and therefore, liable to tax as a supply under GST. ITC on canteen charges on the food supplied to employees of the applicant company - HELD THAT:- The proviso of Section 17 (5)(b) stipulates that ITC shall be available on the GST paid where it is obligatory to provide a benefit for an employer to its employees in terms of any law for the time being in force - ITC of the GST paid on canteen charges is available to the applicant on the food supplied to the employees of the applicant company as such under Section 46 of the Factories Act, it is mandatory to provide canteen facility to the employees. ITC on canteen charges on the food supplied to contractual worker - HELD THAT:- In the instant case the applicant company and contractual worker do not cover under the category of employer-employee relationship and also it is not obligatory on the applicant company to provide canteen facility to the Contractual worker as per the provisions of CLRA Act. Section 17 (5) allows ITC on food, beverages and outdoor catering only in case it is obligatory under any law for the time being in force. Thus applicant is not eligible of ITC on the food supplied by canteen service provider to contractual worker and is blocked under Section 17(5) (b) of CGST Act 2017 - the applicant company is not eligible to the ITC on food supplied to the contractual worker under Section 17 (5) (b) of CGST Act 2017. 2022 (9) TMI 199 Exemption from GST - A.C. car hiring services for Covid-19 third wave, for Emergency and for other important matter received by the Local Authority, Ahmedabad Municipal corporation - Services provided to Ahmedabad Municipal Corporation vide their work order No.445/1 dated 01-11-21 - exempt services as stated in Sr. No. 3 of Notification No.12/2017 (Central Tax Rate) dated 28th June 2017 or not HELD THAT:- The motor vehicles supplied on rent have been used for the administrative department team i.e. other than public health care work. The details of GST TDS deducted under Section 51 of CGST Act by Ahmedabad Municipal Corporation was obtained and it is observed that Ahmedabad Municipal Corporation has deducted TDS on the payment made to the supplier of service i.e. to applicant considering the service Taxable under GST - the applicant supply do not cover under the work listed in the Twelfth Schedule in relation to functions entrusted to a municipality under Article 243W of the Constitution of India and is not eligible to the exemption under entry No. 3 of Notification No. 12/2017-CT (Rate). Availability of ITC - HELD THAT:- The applicant is receiving services from the Registered Taxable person of same line of the business for rendering the car hiring service to the Ahmedabad Municipal Corporation. ITC shall be available on the input services used for making an outward taxable supply of the same line of business. Thus the applicant is eligible to avail the Input Tax Credit on receipt of the service from the same line of business entity subject to the condition prescribed under Notification No. 11/2017-CT (Rate) - in terms of the provision of 17 (5) (b) and entry No. 10 of Notification No. 11/2017-CT (Rate) dated 28-6-17 as amended hold that the applicant is eligible of ITC on receipt of the direct service from the same line of business subject to the conditions specified therein. Whether Direct input services of the same line of business received by the 'service provider' to render the above services as stated in work order No.445/1 dated 01-11-21 issued by Ahmedabad Municipal Corporation is also exempt? - HELD THAT:- The question of levy of GST is in relation to supply of Motor Vehicle by the third party to the applicant and supplier of service is third party not the applicant himself. In the instant transaction the applicant is recipient of the service and as per Section 95 of CGST Act this Authority can pronounce ruling in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. The ruling pronounce by this Authority will be binding on the applicant as per Section 103 of CGST Act who sought the ruling. Thus, this question is not maintainable. 2022 (9) TMI 198 Input Tax Credit - Scope of advance ruling - sub-judice matter - applicant has developed an infrastructure for being leased out against rental and the said rental is leviable to GST - Inputs and Input Services received for development of the said infrastructure by the applicant is admissible ITC or not - HELD THAT:- The powers to restrict flow of Input Tax Credit exist under Section 16 (1) of the CGST Act, 2017, which empowers the Central Government to impose conditions and restrictions on availing input tax credit. This shows a Legislative intent that input tax credit may not always be allowed partially or fully and also that the Input Tax Credit (ITC) a provision does not provide for, that each and every all of the GAT paid is eligible to be availed of as ITC. Admissibility and availability of some of the Credits have been restricted under Section 17 in the Act itself. GST is a new system of taxation which provides setting off of Input Tax Credit (ITC) against the output tax liability along the entire value chain till the final retail level. Under the earlier tax regime, credit of inputs was available for final product in respect of certain taxes/ duties only e.g. credit of duty of excise could not be utilised against VAT and vice versa. It can, therefore, be said that the GST is applicable only on value addition along the entire supply chain and thus cascading effect of taxes has been eliminated. Thus, under the GST regime, more input tax credit is available to tax payers along the entire supply chain as compared to the previous tax regime. Further, the transitional provisions under the CGST Act provide adequate credit of taxes accumulated under the erstwhile taxation regime to taxpayers in the GST regime - Section 17(5) (c) (d) of the CGST Act, 2017 prescribes denial of credit for certain class of taxpayers with certain conditions and limitations. This would mean that the legislature has decided in its wisdom the credit of taxes which would be allowed in credit as ITC and the tax that has not been allowed, as policy call of the Government, given effect through legislation, cannot be obtained through judicial review. This authority in IN RE: M/S. VARDHAN HOLIDAYS, [ 2021 (3) TMI 1380 - AUTHORITY FOR ADVANCE, UTTARAKHAND] while dealing with similar issue in the case of M/s Vardhan Holidays, Ramnagar, Uttarakhand, refrained from answering the said matter holding that the matter is sub-judice - the position has not changed since the passing of above ruling, in the case of M/s Vardhan Holidays, Ramnagar and the matter is still sub-judice. The question raised by the applicant is not answered as the matter is sub-judice. Income Tax 2022 (9) TMI 197 Validity of Reopening of assessment u/s 147 - sufficient time as per Section 148A(b) - whether respondent authority has not given sufficient time as per Section 148A(b)? - assessing authority can grant time from 7 to 30 days - HELD THAT:- As legislature has given time schedule to assessing authority from 7 days to 30 days, as such, there is no impediment on part of assessing authority to grant such time between 7 to 30 days, as the assessing authority has not considered the request of the petitioner for grant of 30 days time and also not assigned any reason why he has given the time prescribed under the Act, 1961 i.e. 7 to 30 days, considering the law laid down by Hon'ble High Court of Delhi in Ester Industries Ltd. [ 2022 (6) TMI 245 - DELHI HIGH COURT ] the impugned order dated 30.03.2022 (Annexure P/4) under clause (d) of Section 148A is set aside. The petitioner is directed to submit clarification within 15 days from today. Till the assessing authority passed order considering the clarification of the petitioner within 15 days and passed order under clause (d) of Section 148A of the Act, 1961, the notice dated 17.03.2022 (Annexure P/1) issued under Section 148A (a) of the Income Tax Act, 1961, shall not be given effect. Respondents are directed to open the e-portal to enable the petitioner to upload its reply. In the event, the assessing officer wants clarification or would like the petitioner's response to any specific information received by the revenue, it shall be open to give the supplementary notice - Also directed to pass a reasoned order within eight weeks after duly considering the reply filed by the respondent. 2022 (9) TMI 196 TP adjustment - Scope of judgments of High Court as challenged and pending adjudication before the Supreme Court - Bright Line Test Application as statutory mandate - applying the Bright Line Test to determine the existence of an international transaction involving AMP expenditure - whether ITAT has erred in relying upon the judgment of this Court in Sony Ericsson Mobile Communication [ 2015 (3) TMI 580 - DELHI HIGH COURT] as the Department has not accepted the decision passed in Sony Ericsson (supra) and has preferred an appeal against the said decision before the Supreme Court - HELD THAT:- This Court in the cases of Bausch Lomb Eyecare (India) (P.) Ltd. [ 2015 (12) TMI 1332 - DELHI HIGH COURT] following the decision in Sony Ericsson (supra) held that the question of applying the Bright Line Test to determine the existence of an international transaction involving AMP expenditure does not arise. Though the judgments of this Court have been challenged and are pending adjudication before the Supreme Court, yet there is no stay of the said judgments till date. Consequently, in view of the judgments passed by the Supreme Court in Kunhayammed and Others vs. State of Kerala and Another [ 2000 (7) TMI 67 - SUPREME COURT] and Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Association CSI Cinod Secretariat, Madras, [ 1992 (4) TMI 183 - SUPREME COURT] the present appeal is dismissed being covered by the judgments passed by the learned predecessor Division Bench in Sony Ericsson (supra) Bausch Lomb Eyecare India P. Ltd. (supra). 2022 (9) TMI 195 Cognizance of offence against the petitioner u/s 276CC - non filing of ITR - assessment u/s 153A - requirement of mens rea - criminal prosecution for an offence under a special statute - proof of willful failure on the part of the defaulter and the nature of penalty required - petitioner submits that a criminal prosecution for an offence under a special statute must not be initiated as a matter of course where the prosecution would involve intricate questions of interpretation of the Income Tax Act - whether once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276CC is automatic and the petitioner cannot be made to suffer and face the rigorous of criminal trial when the same cannot be sustained in the eyes of law HELD THAT:- It is an admitted fact that the petitioner's premises was searched on a particular date subsequent thereto, certain documents have been seized. The petitioner has not filed return on time. It is also an admitted fact that the petitioner has filed the return along with interest, which has been accepted by the authority concerned. The subsequent protective assessment has been laid upon the petitioner, which was the subject matter before the first appellate authority, which has exonerated entire further assessment of the petitioner vide order dated 03.07.2019, which has been brought on record by way of filing supplementary affidavit. This is a case arising out of the Special Act statute. Admittedly, no penalty proceeding has been initiated against the petitioner. There is provision of initiation of penalty proceeding. However, the Department has not chosen to invoke Section 271(1)(A) under the statute. When the amount in question along with the interest has already been paid, no sentence can be imposed under that provision unless the element of mens rea is established and the intention of the Legislature is that the penalty should serve as a deterrent. In the Act, it has been provided how to proceed if a particular assessee is not filing the return on time, which suggests that it is civil obligation. As held in Autofil case [ 1990 (4) TMI 50 - ANDHRA PRADESH HIGH COURT] that the willful failure occurring in Section 276CC of the Income Tax Act held that willfulness certainly brings in the element of guilt and thus the requirement of mens rea will come into force. In the case in hand, the first appellate authority has set aside the further assessment and it is an admitted fact as to whether the criminal proceedings can be sustained or not. In the similar circumstance, in the case of G.L. Didwania [ 1993 (11) TMI 3 - SUPREME COURT] has held that if that is the position then the Court is unable to see as to how criminal proceedings can be sustained. The same view was again taken in the case of K.C. Builders [ 2004 (1) TMI 7 - SUPREME COURT] The argument of Ms. Amrita Sinha, learned counsel for the opposite parties about willful delay in filing the return has been considered by the Calcutta High Court in the case of Gopal Ji Shaw (supra). Identical is the situation here as the authority concerned has accepted the return along with interest filed by the petitioner and subsequently the first appellate authority has set aside the further assessment. Thus on reasons and analysis, to allow the criminal proceedings to continue will amount to abuse of process of law. Accordingly, the entire criminal proceedings including the order taking cognizance passed by the learned Special Judge, Economic Offence, Dhanbad in connection with Complaint Case pending in the court of the learned Special Judge, Economic Offence, Dhanbad is, hereby, quashed. 2022 (9) TMI 194 Reopening of assessment - validity of impugned order u/s 148 A(d) being without jurisdiction and being barred by limitation - initiation of re-opening of the assessment has been made admittedly after six years from the end of the expiry of the period of relevant assessment year - HELD THAT:- As the respondent is not in a position to contradict the aforesaid factual and legal position. This writ petition is disposed of by quashing the aforesaid impugned order. 2022 (9) TMI 193 Reopening of assessment u/s 147 - Validity of impugned order u/s 148A(d) as without jurisdiction or illegal - unsecured loan and cash deposit in two bank accounts - HELD THAT:- Prima facie, the petitioner had an explanation with respect to cash deposits in the aforesaid two savings bank accounts. However, so far as unsecured loan is concerned, the petitioner could not submit any credible evidence alongwith its reply to establish credit worthiness of the lender i.e. M/s Arrow Netmart Pvt. Ltd. Therefore, prima facie, the Assessing Authority had some relevant material before him to assume jurisdiction for initiating re-assessment proceedings under Section 147/148 of the Act, 1961. Thus, since the Assessing Authority has some relevant material in his hands, therefore, the impugned order under Section 148A(d) of the Act, 1961 cannot be said to be without jurisdiction or illegal. Writ petition is dismissed leaving it open for the petitioner to participate in the proceedings pursuant to the impugned notice under Section 148 of the Act, 1961. 2022 (9) TMI 192 Revision u/s 263 - Capital gain computation - non-reference by the AO to the VO u/s. 55A - whether there has been due application of mind by the AO in accepting the returned value (cost)? - HELD THAT:- A non-reference u/s. 55A may be justified where the AO, for reasons stated in his order which are non-existent, opines on valuation independent of VR, and which coincides or agrees with that by the RV, while, on facts, the latters report itself is found as without basis. Rather, if only the AO had applied his mind, he would have been able to discern that the valuation report being relied upon by the assessee is, we are afraid to say, a hash report and, in any case, without any basis of valuation, much less a valid basis, even as observed by the Bench during hearing. To us, it is a clear case of valuation being made by applying reverse indexation, i.e., by arriving at the value of land as on 01/04/1981, upon first determining the amount of capital gain that is to be disclosed. This is apparent from his order being sans any finding qua such basis, which also forms the reason for reassessment and, rather, without any deliberation thereon. The basis of valuation of the subject land (as on 01/04/1981) thus remains unstated and un-opined, much less examined, and which prompted us to state earlier of our being at a loss to understand the same. We, accordingly, find no reason to interfere with the impugned order, and uphold the same. The matter of valuation, as evident, being principally and essentially factual, reliance by Shri Bardia during hearing on the decision in Pr. CIT vs. Om Rudrapriya Holiday Resort Pvt. Ltd. [ 2019 (7) TMI 989 - RAJASTHAN HIGH COURT] would be, for that reason, of no assistance. Even as observed by the Bench during hearing, in the facts of that case, the Hon'ble Court dismissed the Revenue s appeal in view of the finding by the Tribunal that the AO had taken a plausible view in respect of valuation, a matter of fact. In the instant case, on the contrary, we find a complete non-application of mind by the AO in the matter. Assessee appeal dismissed. 2022 (9) TMI 191 Validity of assessment u/s 153C v/s 153A - as submitted that the warrant of authorisation was in the name of the assessee, the premises of the assessee was searched and thus the assessee becomes a person searched and thus the assessment proceedings ought to have been done u/s 153A and AO has completed the assessment u/s 153C of the Act which is not in accordance with law - HELD THAT:- The notices were also issued by the AO and the assessee has participated in the assessment proceedings after the 15th March 2013. Therefore, it cannot be said that the order has been passed after 15th March, 2013. As per ground No.8 the assessee has contested that the seized material has not been provided to the assessee even after making request to the AO but during the course of hearing before us, he could not produce any evidence in this regard so tht it can be justified that the principal of natural justice has not been given and he has also not provided application for seeking copppy of seized documents from the AO. The case law relied on by the ld.AR is not applicable in the present facts of the case. Considering the totality of the facts and circumstances of the case as observed above we reject the legal issue raised by the assessee. Addition of URD cash purchases during the course of assessment proceedings u/s 153C - From the AO observation of the AO, it has been stated that the details of the URD vendors of Iron Ore was not submitted before the AO and even it was not submitted before us. Considering the totality of facts and circumstances of the case for substantiating the URD purchase made by the assessee, we think it fit to send back the issue to the file of the AO for verifying from the list of the URD vendors as stated before the AO and AO shall decide the issue in accordance with law. The assessee shall be given reasonable opportunity of being heard and he is directed not to seek adjournment for early disposal of the case. Unexplained source of deposit - We observe that the assessee has deposited cash of Rs.22.00/- lakhs on 29/3/2010 in Axis bank account. Since we are remitting the issues for the assessment years 2008-09 and 2009-10 to the file of the AO, we remit this issue also to the file of AO for fresh examination of the source of cash deposits of Rs.22.00 Lakhs. The Assessing Officer is directed to decide the issue as per law. The assessee shall be given reasonable opportunity of being heard and he is directed not to seek unnecessarily adjournment for early disposal of the case. A copy of this common order to be placed in the respective case files. Appeals of the assessee are allowed for statistical purposes 2022 (9) TMI 190 Revision u/s 263 - unexplained cash credit u/s 68 - bogus gain on sale of shares - HELD THAT:- PCIT does not state anywhere in his order as to why the purchase cost of shares would not be allowable as deduction while computing the income thereon. Without mentioning any of these facts, merely by placing reliance on the order passed by the ld. AO for Asst Year 2014-15, the ld. PCIT comes to the conclusion that the similar treatment ought to have been given by the ld. AO for Asst Year 2015-16 also. This in our considered opinion, is not the proper method for assuming revisionary jurisdiction u/s 263 of the Act. We also find that Explanation 2 to Section 263 of the Act has also not been invoked by the ld. PCIT in the instant case and hence we do not deem it fit to get into the applicability of the said Explanation to the facts of the present case before us. AO had made adequate enquiries on the gain on sale of shares of Vishwajyoti Finance Ltd during the course of assessment proceedings, on which fact, there is no dispute before us. As stated supra, the ld. PCIT had not brought any evidence on record as to why the cost of such shares would not be allowable as deduction. PCIT had merely relied on the assessment order framed for the Asst Year 2014-15. We find that the reliance placed by the ld. DR on the decision of Belazio Construction P Ltd v [ 2019 (9) TMI 198 - BOMBAY HIGH COURT] is not applicable to the facts of the instant case before us as it was rendered in the context of validity of reopening of assessment u/s 147 of the Act based on information obtained in earlier scrutiny assessment year. We hold that the ld. AO on examination of all the details filed before him, had taken a plausible view on the issue. Hence we have no hesitation in quashing the revision order passed by the ld. PCIT u/s 263 of the Act in the facts and circumstance of the instant case. Accordingly, the grounds raised by the assessee are allowed. 2022 (9) TMI 189 Revision u/s 263 - As per CIT assessment order passed u/s 147 of the Act erroneous - Revision made as AO had failed to verify the capital gain returned by the assessee on property sold during the year with respect to the provisions of Section 50C - As per CIT AO had failed to substitute the sale consideration of the property sold by the assessee with its stamp duty value which was higher, applying the provisions of Section 50C of the Act, while computing the capital gain earned by the assessee - HELD THAT:- We find merit in the contention of assessee that the assessment order passed by the AO could not be said to be erroneous since the issue of examination of long term capital gain on sale of land was beyond his domain as per section 147 of the Act. A bare perusal of the provisions of section 147 reveals that the jurisdiction of the AO is confined to assess issues on which he has reason to believe that income has escaped assessment and it is only if during the course of assessing these incomes that he is made aware of any other income escaping assessment that he can assess the other such income also. In the facts of the present case the issue raised by the Ld. PCIT being not the subject matter of reassessment nor it being the case of the Revenue that the issue had come to the notice of the AO during reassessment proceedings, the assessing officer could not have considered this issue in reassessment proceedings. Therefore the assessment order passed u/s 147 of the Act in the present case cannot be said to be erroneous on the ground of the AO not having examined an issue which clearly was beyond his powers. The order passed under section 263 of the Act is accordingly held to be not sustainable in law. - Appeal of assessee allowed. 2022 (9) TMI 188 Additions towards amount of TDS deducted on interest - accrual of interest income but not received - HELD THAT:- As in this case is that there is no finding that any amount in cash or cheques on account of interest from M/s. Anjani Technoplast Ltd., has been received by the assessee except the amount deposited as TDS by M/s. Anjani Technoplast Ltd.. Even the said TDS was not traceable as on the date of filing of the return of income by the assessee on 29/02/2012. Whether because of the deposit of the aforesaid amount as TDS by M/s. Anjani Technoplast Ltd., can the assessee be taxed on the interest income when the case of the assessee is that it has not received any amount during the year under consideration either on account of principal or on account of interest income from M/s. Anjani Technoplast Ltd. and even the litigation for the recovery of loan was also going on during the year. It will not be justified in this case to charge income tax from the assessee on the interest income when neither such amount has been paid by M/s. Anjani Technoplast Ltd. to the assessee nor there is any likelihood of the payment of the same to the assessee and even the litigation is going on between the parties. Merely because, M/s. Anjani Technoplast Ltd. has deposited TDS amount that itself will not fasten liability on the assessee to pay tax on the total interest income especially under the circumstances, when the other party has failed to repay the loan amount and interest thereupon and the litigation was going on. As held by the Higher Courts that only the real income should be taxed and not the hypothetical income as that will place the assessee in a disadvantageous position as on the one hand, the assessee is struggling to recover its principal amount without any hope of receiving interest income thereupon and then to fasten liability on the assessee on accrual basis of the interest income for which there did not seem any probability of recovery of the same. Addition made by the lower authorities in this case of the amount is not justified. The only addition which can be made by the lower authorities is of the actual income received by the assessee by way of TDS in his account - The Assessing Officer is directed to deduct admissible tax upon the aforesaid income and refund the remaining amount out of the said amount to the assessee as per the provisions of the I.T. Act. With the above observations, the appeal of the assessee is treated as partly allowed. 2022 (9) TMI 187 Expenses incurred by way of subscription/donation to various puja committees - Expenditure not allowable u/s 37(1) - HELD THAT:- Expenditure may not be incurred voluntarily and without any necessity and if it is incurred for promoting the business and to earn profits the assessee can claim the deductions u/s 10(2)(xv) of the Income Tax Act 1922( now section 37(1) of Act 1961) even though there was no compelling necessity to incur the expenses. The fact that somebody other than the assesse is also benefitted by the expenditure should not come in the way of an expenditure being allowed by way of deduction under the Act if it satisfies otherwise the tests laid down by law. Similarly the case of the assessee is also supported by the decision of Bata India Ltd. [ 1993 (3) TMI 89 - CALCUTTA HIGH COURT] wherein it has been held that contributions/subscriptions towards community celebrations to keep youth in the neighborhood of the shop happy to ensure smooth conduct of the business, the expenditure can be said to be expenditure required to maintain the business as the same is incurred to keep good relation with the population in the close neighborhood and not to as sales promotion or to solicit new customers - we are inclined to set aside the order of ld CIT(A) on this issue and direct the AO to delete the disallowance. Ground no 1 is allowed. Interest on loan - Disallowance on the ground that the same pertains to pre-commencement period of the hotels - HELD THAT:- Durgapur Hotel Project was completed and commissioned by the assessee on 16.05.2016 and the assessee has apportioned interest and other bank charges between two periods) relating to pre-commissioning period of 01.04.2016 to 16.05.2016 and ii) post commissioning from 16.05.2016 to 31.03.2017. We note that the interest expenses and other charges pertaining to period prior to the completion of project were capitalized under various heads of fixed assets as it is apparent from annual accounts and also the basis of capitalization interest on loan - In view of these facts, we are not in concurrence with the order of Ld. CIT(A) and accordingly we set aside the same and direct the AO to delete the addition - Decided in favour of assessee. 2022 (9) TMI 186 Revision u/s 263 - Addition u/s 68 - assessee failed to make any compliance to the show cause notice issued u/s 263 of the Act and even after being provided sufficient opportunities on multiple occasions, the assessee failed to reply or furnish any submission - HELD THAT:- In the first round of assessment proceedings No additions were made. In the second round of assessment proceedings carried out in direction to the order u/s 263 AO has stated to have examined the financial statements of the assessee and other documents relating the investments made in the company. However, no such details are placed on record. There is no information before us as to what was the amount of share application money, credit entries, details of identity of the share applicants, documents supporting the genuineness and creditworthiness of such transactions. The finding of AO in the assessment order is in a summary manner which is not indicating the details in a correct manner. Also, the order u/s 263 is not placed before us which would have helped us to know about the directions given by ld. Pr. CIT and whether such directions have been complied by the ld. AO. Where the assessee has opted not to appear before the ld. Pr. CIT nor before this Tribunal and has merely filed the appeal but has not pursued the appeal so filed by it and in the given situation where we are unable to lay our hands on any of the details of the financial transactions carried out by the assessee during the year and whether such transactions have been examined by ld. AO in the manner directed by ld. Pr. CIT passed u/s 263 we fail to find any infirmity in the finding of the ld. Pr. CIT in the impugned order - We, accordingly confirm the said finding setting aside the assessment order passed u/s 143(3) which is, thus, rightly held to be erroneous and prejudicial to the interests of the Revenue. Accordingly, all the grounds raised by the assessee in the instant appeal are dismissed. 2022 (9) TMI 185 Revision u/s 263 - overstatement of purchases made by the assessee - HELD THAT:- Books of account of the assessee are audited and necessary details have been furnished showing the tax audit report and the schedules annexed thereto. Assessee has incurred transportation charges paid to various transporters namely K.F. Farm Pvt. Ltd., Punjab Bengalore Carriers, U.P. Calcutta Goods Carrier and the Nurmahal Public Cariers Operator Union. The assessee is consistently showing the purchases in the trading account after including transportation charges in the purchase cost. As per the purchase register the total purchase is at Rs. 1,86,63,585/-, but after including the transportation charges i.e. carriage inward of Rs. 9,12,800/- and reducing the insurance chatai of Rs. 6,600/- which are already included in the purchase bills, the figure of total purchase will arrive at Rs. 1,95,69,785/- which matches with the figure of purchases shown in the audited trading account for the financial year 2012-13 at Rs. 1,95,69,785/-. Under these given facts and circumstances, as on reconciliation of the purchase figure as discussed above, there remains no case of over statement of purchases. Appeal of assessee allowed. 2022 (9) TMI 184 Additions towards On-money received - business of real estate development carried out - AO observed that higher rate having been agreed to be paid, as compared to the contracted rate - assessee had earned on money on booking/allotment of its properties - as contended by assessee that in all the three years involved the addition was based on a common premise and his arguments therefore were to be considered with respect to all the three years involved - document found during survey at the assesses premises revealed him to be the co-owner of 4 shops with his son ,though subsequently the allotment was made in the name of his wife and son - estimating profits for the said years by application of 17.5% rate on the accounted and unaccounted sales of the assessee. HELD THAT:- As no credence can be given to the statement of Mr.Sorathiya relating to the rate of Rs.2400/- per sq. ft being the actual rate at which the properties were sold by the assessee. The contention of the Revenue that the admission of on money received by other entities of the group to the settlement commission lends credence to the statement of Mr.Sorathiya, we find is also not acceptable. Nothing has been brought to our notice by the Revenue to demonstrate the parity of the facts and circumstances of those cases with that of the assessee. The Revenue has not even pointed out the facts and circumstances in which surrender/admission had been made by each such concern to the Settlement Commission. It appears to be a sweeping generalized exercise of the Revenue in treating the facts and circumstances of the assesses case being similar to the other group cases. Assessment of incomes cannot be done on this basis. There is no basis, therefore, we hold, for drawing an analogy from the group concerns admission before the settlement commission, with the assessee s case so as to derive that the assessee also had received on money. Contention of the Revenue that even applying the alternate basis of determining the on money received by the assessee by taking the maximum rate charged during the year as the actual rate , we find that the same also cannot be the basis. The logic applied that rates are constant during a particular period does not impress us, until demonstrated statistically. It is not to be forgotten that the exercise being indulged into by the Revenue authorities is determination and assessment of income of assesses. The said exercise may not require finding of income earned to be established with certainty to make any addition of the same, and can be made on the basis of surrounding facts and circumstances demonstrating to a large degree the fact of earning income, but still there has to be a substantial basis for the same. Pure assumptions , estimations and guess works cannot be the basis for determining incomes. The endeavour of the Revenue in treating the maximum rate for property sold during the year as being the actual rate for all properties sold, appears to be an exercise to this end only. This basis is also held to be unacceptable and thus rejected. Even otherwise the assessee has demonstrated that even as per the this exercise, in maximum cases no on- money was noted to be received by the assessee. The basis for holding that the assesseesse received on money clearly did not apply to maximum properties sold. The said facts and circumstances lead to the inescabable conclusion that the basis therefore was ill conceived. We hold that there was no basis warranting a finding of on money received by the assessee. The addition made by applying net profit rate to the total turnover of the assessee also does not survive since as stated above no other basis has been brought to our notice for rejecting the books of the assessee as not capable of presenting the true picture of profits earned. The addition made therefore by estimating profits for all the three years is deleted. Appeal of assessee allowed. 2022 (9) TMI 183 Addition u/s 69A - Cash found in search - HELD THAT:- We find that the ld CIT(A) has granted relief to the assessee on appreciation of the statement recorded during the search action, wherein the assessee has firmly stated that the amount of Rs. 5.00 lakhs belong to Shital Textile, wherein he is one of the partners. No contrary facts or evidence was brought to our notice to take other view; therefore, we affirm the order of ld CIT(A) on this issues. In the result, ground No.1 of the appeal is dismissed. Addition based on loose paper found in search - HELD THAT:- The hon ble Delhi High Court in CIT Vs Vivek Aggarwal [ 2015 (2) TMI 590 - DELHI HIGH COURT] held that where Assessing Officer made addition to assessees income on basis of a document seized in course of search, in view of fact that document seized was both undated and unsigned and even taken at face value did not lead to further enquiry on behalf of Assessing Officer, impugned order of Tribunal deleting addition was to be confirmed. Further in CIT Vs Maulikumar Shah [ 2007 (7) TMI 267 - GUJARAT HIGH COURT] also held that mere entries in seized material are not sufficient to prove that assessee has indulged in such a transaction in which 'on money' has been received. Thus, in view of the aforesaid factual and legal position, we are also of the considered opinion that absence of any cogent evidence on record, we do not find any infirmity or illegality in the order passed by ld CIT(A). In the result, ground No. 2 of the appeal is dismissed. Alleged violation of Rule 46A - HELD THAT:- We find that during first appellate stage no new or fresh evidence was filed by the assessee, except narration of facts. We further find that while restricting the addition under section 69, the ld CIT(A) specifically noted that new explanation offered before him, qua cash of M.D. Infra Developers of Rs. 2.00 lacs, was contrary to the initial statement and accordingly, new explanation was rejected. No new evidence relied by the assessee is specifically brought to our notice, thus, we do not find any merit in this ground of appeal. In the result, this ground of result is also dismissed. 2022 (9) TMI 182 Reopening of assessment u/s 147 - information from Investigation Wing of the I.T. Department was received with regard to the bogus accommodation entries - 'suspicion v/s 'reason to believe' - we thereby allow this ground of appeal filed by the assessee. assessee contended that the AO has erroneously stated that the assessee did not file its return of income for A.Y. 2009-10 in his reasons for reopening the assessee s case - HELD THAT:- Upon perusal of the reasons for reopening as stated by the AO wherein as specified that the assessee has failed to file his return of income for the impugned year has been rebutted by the assessee by furnishing the copy of the details of the returns. Assessing Officer ought to have verified the same. The balance-sheet filed by the assessee reflects the unsecured loan of Rs.65 lakhs availed in F.Y. 2008-09 from M/s Seven Star Gems Pvt Ltd. The bank statements also corroborates the said transaction. AO has the jurisdiction to reopen an assessment only when he has reason to believe that income chargeable to tax has escaped assessment. This reason must be on concrete facts. In the present case in hand, it is observed that the Assessing Officer was of the view that the assessee has failed to file its return of income for the impugned year under section 139(1), which, in itself was an incorrect fact. We would place our reliance on the decision of the Hon ble Apex Court in the case of NRA Iron Steel Pvt Ltd [ 2019 (3) TMI 323 - SUPREME COURT] wherein the assessee has discharged the onus by furnishing details regarding the identity, creditworthiness and genuineness of the impugned transaction, the onus shifts to the Revenue. In the present case in hand, the Assessing Officer has failed to prove beyond doubt that the impugned transaction pertaining to the unsecured loan given by M/s Seven Stars Gems Pvt Ltd was only an accommodation entry. We are of the considered opinion that the Assessing Officer has reopened the assessment only on the basis of suspicion and not on reason to believe , we thereby allow this ground of appeal filed by the assessee. 2022 (9) TMI 181 Delayed ESI and PF payment - Employees contribution to PF ESI beyond due date specified under the respective Acts - HELD THAT:- We are of the considered view that payments made to employees contribution to PF ESI beyond due date specified under the respective Acts, but within due date for filing of return of income u/s.139(1) is an allowable deduction u/s 36(1)(va) and we direct the AO to delete additions made towards disallowance of employees contribution to PF ESI u/s.36(1(va) r.w.s. 2(24)(x) - Decided in favour of assessee. 2022 (9) TMI 180 Penalty u/s 271(1)(c) - disallowance of loss on sale of assets - HELD THAT:- There is no dispute that the expenses incurred by the assessee on the rented premises were written off as loss on surrender of the rented property on discontinuance of running business. It is also not in dispute that all the entries were duly recorded in the books of account of the assessee. The ratio laid down by the Hon'ble Supreme Court in the case of Reliance Petro Products [ 2010 (3) TMI 80 - SUPREME COURT ] wherein held rejection of claim would not result in penalty consequences to the appellant, squarely apply on the facts of the case in hand - The penalty is therefore not sustainable and is deleted - Decided in favour of assessee. 2022 (9) TMI 179 Reopening of assessment u/s 147 - Unexplained credits u/s 68 - treating the LTCG as not a genuine transaction - grievance of the assessee that the assumption of jurisdiction u/s 148 is not in accordance with law hence, vitiated - HELD THAT:- The assessee has not filed any supporting evidences regarding notice u/s 148 being defective and also in respect of the transaction which is treated to be not genuine by the authorities below. In the absence of any supporting evidences by the assessee, we do not see any reason to interfere in the finding of CIT(A), the same is hereby affirmed hence, rejected. Thus, grounds raised by the assessee are dismissed. 2022 (9) TMI 178 Penalty levied u/s 271(1)(c) - assessee made claim for deduction of expenses which were not allowable - CIT-A deleted penalty levy - HELD THAT:- As section 271 (1) (c) applies where the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income . The present was not a case of concealment of the income. As regards the furnishing of inaccurate particulars, no information given in the Return was found to be incorrect or inaccurate. The words inaccurate particulars mean that the details applied in the Return are not accurate, not exact or correct, not according to truth or erroneous. In the absence of a finding by the AO that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false, there would be no question of inviting penalty u/s 271(l)(c). The argument of the revenue that submitting an incorrect claim for expenditure would amount to giving inaccurate particulars of such income is not correct. By no stretch of imagination can the making of an incorrect claim in law tantamount to furnishing inaccurate particulars. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. If the contention of the Revenue is accepted then in case of every Return where the claim made is not accepted by the AO for any reason, the assessee will invite penalty u/s 27I(l)(c). That is clearly not the intendment of the Legislature. The law laid down in Dilip Shroff [ 2007 (5) TMI 198 - SUPREME COURT ] as to the meanings of the words conceal and inaccurate continues to be good law because what was overruled in Dharmendra Textile Processors [ 2008 (9) TMI 52 - SUPREME COURT ] was only that part in Dilip Shroff where it was held that mens rea was an essential requirement for penalty u/s 271(l)(c). The judgment of Reliance Petroproducts [ 2010 (3) TMI 80 - SUPREME COURT ] clearly shows the rejection of claim would not result in penalty consequences to the appellant. The penalty is therefore not sustainable and is deleted - Decided in favour of assessee. 2022 (9) TMI 177 Bogus Purchases - CIT-A deleted the addition - HELD THAT:- CIT(A) has rightly observed that the disallowance of expenditure claimed by the assessee does not have any implications on its income which has been accounted for as work-in-progress. By observing so, he deleted the addition made by the AO. At the same time, we further observe that the AO in para 5 of the assessment order had observed that the assessee has claimed expenditure on account of purchase from certain parties who are involved in merely issue of purchase bills and effecting payments through banking channels for commission and not actually supported with the physical transfer of goods. From first appellate order, we observe that the CIT(A) concluded the issue in favour of the assessee by observing and directing the AO to make available all adverse material and to allow opportunity to the assessee to explain/rebut the evidence and this may be undertaken during AY 2012-13 and subsequent years when the said expenditures embedded in the work-in-progress will be considered for computing the income of the assessee as per POC method and also directed the AO to take action as per law. CIT(A) passed impugned order on 11.07.2014, much water have flown till today including conclusion of assessment proceedings for the several assessment years to AY 2011-12, including AY 2012-13 and outcome of these orders has to be taken care by the authorities below in view of controversy arose during AY 2011-12. Therefore, we find it appropriate and necessary to restore the issue to the file of the CIT(A) to consider the adjudication of the issue in AY 2012-13 and relevant subsequent assessment years - Appeal allowed for statistical purposes. Customs 2022 (9) TMI 176 Duty Drawback - Validity of Policy Circular No.9(RE-2013)/2009-14 dated 30.10.2013 - DTA converted to 100% EOU - whether the petitioner is entitled to duty drawback, confined to customs duty component, against deemed exports, even where it has claimed cenvat credit? - HELD THAT:- It is apparent that the AIR duty drawback schedule published by the DOR is, inter alia, available concerning the goods in issue i.e., Sulphamethoxazole - Clearly, what emerges is that the schedule has two columns i.e., Column A and Column B, apart from columns concerning tariff items, description of goods and unit of measure. The two columns i.e., A and B represent two eventualities:- First, the rate at which drawback is available when the cenvat facility has not been availed. Second, the rate at which drawback is available when the cenvat facility has been availed. Insofar the goods in issue are concerned, (i.e., Sulphamethoxazole) the rate at which the duty drawback is available in both situations i.e., when cenvat facility has not been availed and when cenvat facility has been availed, is the same. Whether rate of duty drawback given in column B; which envisages a situation where cenvat credit has been availed of, concerns only the customs duty component? - HELD THAT:- The answer to this conundrum is found in the notes and conditions appended to notification no.92/2012-Customs (N.T.) dated 04.10.2012 and notification no.98/2013-Customs (N.T.) dated 14.09.2013. Although the 04.10.2012 notification was superseded by the 14.09.2013 notification as the Central Government, it appears, carried out a fresh determination of rates of drawback, the notes and conditions more or less remained the same. Since AIR for duty drawback in respect of the goods in issue is available and the rate stipulated in columns A and B of the schedule is the same, the condition stipulated in the 2013 Circular, that duty drawback on customs duty would be available only upon fixation of brand rate, which, in turn, is based on actual duty- paid documents, cannot apply to the petitioner. The said condition contained in the 2013 Circular is otiose insofar as the petitioner is concerned. The petitioner is right, that the restriction against the claim of concession in duties and taxes applied only vis- -vis plant, machinery and equipment that had already been installed. Thus, the fact that the petitioner was allowed to carry forward the advance authorization to the converted unit i.e., 100% EOU and thereafter fulfil the outstanding export commitment would, in our view, as correctly argued on behalf of the petitioner, furnish a clue that duty drawback for such goods should extend qua unutilized goods, which were available at the time of conversion of the DTA unit into a 100% EOU. It is thus concluded that:- (i) The petitioner is not required to have a brand rate of duty drawback fixed, based on actual duty-paid documents for the return of basic customs duty. To that extent, the 2013 Circular is read down. (ii) Since the impugned order dated 26.04.2016 is based on the 2013 Circular, in particular, the part which we have read down, the same cannot be sustained and is, hence, set aside. (iii) Consequentially, the order dated 17.11.2016 will also stand quashed. Petition disposed off. Securities / SEBI 2022 (9) TMI 175 Chit funding schemes/scam - Investigation Done by the CBI - Petitioner challenged Investigation of the petitioners by the Central Bureau of Investigation (CBI) on the ground of lack of jurisdiction - HELD THAT:- The scale and magnitude of the scam commonly termed as the Chit Fund Scam deserves investigation by an agency operating at a national level such as the CBI, since the tentacles of such financial scam, which has adversely affected numerous common citizens, have apparently spread over several states of India. Only the investigation and the trial of the CBI case, on its completion, shall reveal whether the source of money involved in the chit fund scam and rerouting of the huge sums involved can be traced to the petitioner no.1- Company, even if the petitioner, it is assumed is not a chit fund company in the strict sense of the term. Mere investigation by the CBI, that too, when the criminal proceedings are at the stage of trial and after such a long time subsequent to the unsuccessful challenge to the charges framed, cannot be a violation of any legal or fundamental right of the petitioners. Hence, it cannot be observed that the CBI investigation of the petitioners and the framing of charges are vitiated in any manner, sufficient for the writ court to quash the same. Even if it is assumed for the sake of argument that the list furnished by the SEBI in connection with this writ, containing the name of the petitioner no. 1 company, has not been proved to have been furnished before the Supreme Court in Subrata Chattaraj [ 2014 (10) TMI 328 - SUPREME COURT] , due to the reasons as discussed above, even without relying on such list, and irrespective of the fact that the petitioners were not parties to the said litigation, the petitioners clearly come within the broad sweep of the Supreme Court s directions for investigation relating to the chit fund scam, since charges have been framed against the petitioners long back and after due investigation, the trial of the case is going on at present. Inasmuch as the formation of the One-Man Committee consisting of a retired Hon ble Judge of this Court is concerned, there cannot be any rhyme or reason for this Court, sitting in writ jurisdiction, to direct the said committee, out of the blue, to return all documents in its custody to the petitioners, particularly, since such efforts of the petitioners have failed before every competent forum. The petitioner no.2 is in custody for a considerable span of time and since the trial of the CBI case, upon investigation is going on in full swing, there is no substance in the present writ petition. Insolvency & Bankruptcy 2022 (9) TMI 174 Replacement of the Resolution Professional - Adjudicating Authority passed the impugned order without giving any opportunity of hearing and without issuing any notice to the Appellant - Section 27 of the I B Code - HELD THAT:- In the present case, the CoC in its meeting dated 04.06.2022 with 100% vote has decided to replace the Appellant with another Resolution Professional. When we look into the scheme of Section 27 as delineated by the statute, it does not contemplate any opportunity of hearing to the Resolution Professionals be given by the Adjudicating Authority before approving the proposal of new Resolution Professional. Section 27 requires the CoC to forward the name of proposed Resolution Professional to the Adjudicating Authority and the Adjudicating Authority is required to forward the name of the proposed Resolution Professional to the Board for its confirmation. The scheme of Section 27 does not indicate that Resolution Profession is to be made party and is to be issued notice before taking decision to appoint another Resolution Professional. Looking to the purpose and object of the I B Code, where timeline is the essential factor to be taken into consideration at all stages, there is no warrant to permit a Lis to be raised by the Resolution Professional challenging his replacement by the CoC. The decision taken by the CoC is a decision by vote of 66% and when the decision is by votes of a collective body, the decision is not easily assailable and replacement is complete as per Scheme of Section 27 when the resolution is passed with requisite 66% voting share - thus, it is clear that replacement of Resolution Professional is complete when required decision is taken by the CoC in its meeting with requisite majority. There are no error in the order of the Adjudicating Authority allowing replacement of Resolution Professional. There is no merit in the Appeal - Appeal is dismissed. 2022 (9) TMI 173 Scope of pronouncing of judgement - Whether a member of the bench who has not heard the arguments can pronounce the order of a reserved Judgment? - HELD THAT:- Audi alterm partem is a salutary principle of natural justice which means that nobody should be condemned unheard. It is equally important that the decision should not be taken by a Judge who has not heard the case on facts and the law. The law does not permit that the case is heard by one entity and the order is pronounced by another who has not heard the case at all. In such circumstances, the question posed is hereby answered in favour of the Appellant and it is held that the order dated 10.01.2018, having been passed by a bench in which one of the member was not a member of the bench who had heard the matter at the time when it was reserved, is patently illegal and void ab-initio. Time Limitation - HELD THAT:- The appeal filed by the Appellant is well within the period of limitation even against the order dated 10.01.2018 because the said order was never pronounced to the knowledge of the Appellant and by the bench competent to do so and as such it could not have been challenged by the Appellant earlier within the time prescribed by Section 61 of the Code. Appeal allowed. 2022 (9) TMI 172 Rejection of application for initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Shell/fictitious companies - existence of financial debt or not - HELD THAT:- On examination of the impugned order and material available on record there is serious doubt on the actual entity of the appellants as company incorporated for doing legal business. There is serious doubt on the so called companies lending to the corporate debtor. The appellants are under the serious cloud of shell/fictitious companies. Of course without proper detailed enquiry or investigation, a specific finding may not be recorded on the issue but facts remain that there was lack of existence of financial debt. Accordingly, it is difficult to find any defect in the impugned order. The impugned order assigns detailed reasons and discussing every fact the Learned Adjudicating Authority has rightly rejected the application filed by the Appellants under Section 7 of the IB Code. Simply rejection of this Appeal may not serve the purpose. Instead it is intended to dismiss the present appeal with imposing heavy cost. There are many circumstances which have been discussed suggests that either lending loan by the appellants were only paper transaction/sham transaction or said loans were shown to be repaid within one or two days from the date of lending. In case of Appellant No.1, this fact has already been established and noticed - it is considered that the appellants have abused the process of the Court and as such it is a fit case which can be dismissed with imposition of a cost of Rs.1 lakh. The Appellants are directed to deposit the cost of Rs.1 lakh in the account of Prime Minister s National Relief Fund within one month from the date of this order - The Appeal stands dismissed with cost of Rs.1 lakh on the Appellants. 2022 (9) TMI 171 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - whether the outstanding lease rental will be considered as operational debt under the Code or not? - HELD THAT:- Hon ble National Company Law Appellate Tribunal (NCLAT) in the case of Anup Sushil Dubey vs. National Agriculture Co-operative Marketing Federation of India Ltd. and Ors. [ 2020 (10) TMI 331 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where it was held that A dispute does not truly exist in fact between the Parties and, therefore, this Tribunal holds that the communication on record specifically the letter dated 19.09.2018, addressed by the Appellant themselves prior to the issuance of the Demand Notice clearly establishes that there is a Debt due and payable and there is no Pre-Existing Dispute . Thus, this Tribunal, therefore, is satisfied that the outstanding lease rental in case of a property so leased for commercial purposes, as in the instant case, will be covered under operational debt within the meaning of section 5(21) of the Code. In the instant matter, the Corporate Debtor has established that there were existing disputes in relation to the debt before the receipt of the demand notice by the Corporate Debtor. Further, the Operational Creditor was notified of such pre-existing disputes by the Corporate Debtor in its reply to the said demand notice - In the instant matter, the Operational Creditor has failed to satisfy the Adjudicating Authority regarding the insolvency of the Corporate Debtor and therefore the need to initiate insolvency resolution process against it. This Adjudicating Authority is satisfied that the instant petition is liable to be rejected - petition dismissed. 2022 (9) TMI 170 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - pecuniary limit for filing application - time limitation - condonation of delay of 84 days under Section 5 of the Limitation Act, 1965 r/w Section 238A of the, IBC, 2016 - HELD THAT:- The Applicant had placed its reliance on the judgment passed by the Hon'ble Supreme Court of India wherein, exclusion was granted in Cognizance for extension of limitation, In [ 2021 (3) TMI 497 - SC ORDER ] and the same was followed by the Hon'ble National Company Law Appellate Tribunal, Delhi in Suo-Moto-Competition Appeal [ 2020 (6) TMI 495 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] for the period from 15.03.2020 till 14.03.2021 - the delay of 84 days in filing the Section 9 Petition is condoned, following the said decision. Reliance placed in the Judgment of Hon'ble NCLAT in the matter of Jumbo Paper Products V. Hansraj Agrofresh Pvt. Ltd. [ 2021 (10) TMI 1279 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] wherein it was held that statute/law can be applied retrospectively only if explicit provision regarding its retrospective application is made in the statute. It is seen that notification of MCA dated 24.3.2020 makes it unambiguously clear that the threshold limit to be considered for filing application under section 7 or 9 will be Rs. 1 crore. This threshold limit will be applicable for application filed u/s. 7 or 9 on or after 24.3.3020 even if debt is of a date earlier than 24.3.2020. Since the instant application filed under section 9 of the Code which is the subject matter of our consideration was filed on 27.11.2021 and even the statutory demand notice U/s. 8 was sent on 28.10.2021, therefore the pecuniary threshold limit of Rs. 1 crore of debt will be applicable in the present case. Hence, the present Application as not maintainable. Application dismissed. 2022 (9) TMI 169 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - Adjudicating Authority upon perusing the record prima facie observes that the outstanding amount of US$ 228,924 as claimed in Part-IV of Form-5 of the petition is barred by limitation - HELD THAT:- On perusal of pt. 2 of Part-IV of the Form -5, it is observed that according to the Applicant, a total of 5 invoices dated 10.09.2009, 10.09.2009, 11.09.2009, 22.09.2009 and 22.09.2009 raised by the applicant were in default and as per the terms of the invoice, the debt became payable 90 days after B/L date. It is further observed that the applicant sent demand notice dated 05.03.2012 under Section 433(e), 434 of the Companies Act, 1956 to the corporate debtor demanding the alleged outstanding dues, pursuant to which the applicant had filed winding up petition under Section 433 and 434 of the Companies Act, 1956 being Company Petition No. 464/2012 against the corporate debtor in the Hon'ble High Court of Delhi. The Hon'ble Supreme Court in B.K. Educational Services (P) Ltd. v. Parag Gupta Associates [ 2018 (10) TMI 777 - SUPREME COURT ] held that the Limitation Act would apply to applications filed under Sections 7 and 9 of the IBC. The Hon'ble Supreme Court in a catena of Judgement has laid down the principle that pre-existing dispute which may be ground to thwart an application under Section 9 has to be real dispute, a conflict or controversy. A conflict of claims or rights should be apparent from the reply as contemplated by Section 8. The Corporate Debtor is not to raise bogie of disputes but there has to be real substantial dispute - The existence of dispute when the Demand Notice was issued is mandatory condition for exercising jurisdiction to reject the Application by the Adjudicating Authority as is referred to in sub-section (5) of Section 9. There exists dispute between the parties with regard to the same cause of action i.e., outstanding payment of operational debt of USD 228,924 as claimed in Part IV of the Form 5 and the applicant is indulging in the act of forum shopping by pursuing the present petition before this Tribunal. Further, from the series of acts we infer that the applicant is trying to waste the valuable time of this Adjudicating Authority, which practice is required to be deprecated - in order to dissuade the practice of consciously filing petition under Section 9 of the Code by willfully concealing the fact that there exists a pre-existing dispute between the parties and also filing multiple proceedings before other fora for the same cause of action, and thereby wasting the valuable time of this Adjudicating Authority, the present Application entails an imposition of Costs. The application stands dismissed with the costs of Rs. 1,00,000/- to be paid by the applicant. PMLA 2022 (9) TMI 168 Money Laundering - proceeds of crime - Withdrawal/cancellation/ quashing/discontinuation/recalling of the Look Out Circular issued in the name of the Petitioner - seeking permission to Petitioner to return to his home in the United Kingdom - principles of res-judicata - HELD THAT:- The rule of res judicata is based on public policy as finality should attach to the binding decisions pronounced by courts of competent jurisdiction. This is applicable to writ proceedings through the process of judicial interpretation and a party is precluded from initiating fresh legal in respect of same cause of action. If a writ petition is filed in a High Court or Supreme Court and is rejected on merits then a subsequent writ petition cannot be moved on the same cause of action. Even if in the first petition a plea which could have been raised is pot raised, the matter cannot be agitated in a subsequent petition because of constructive res judicata. It is also based on public policy and to prevent harassment and hardship to the opposite party - The principle of res judicata applies not only when an issue has actually been adjudicated by a court of competent jurisdiction but also when the issues that were actually raised but in fact not decided. It is correct that as per Status Report filed by the respondents no. 4 5/CBI a case was registered vide RC 13/2016/EOW Mumbai on 19.09.2016 at CBI/EOW/Mumbai Branch for commission of offences under section 120-B IPC read with section 420 IPC and section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988 against Hasan Ali Khan, unknown public servants, and others and said case is still under investigation by GBI/AG-VI/SIT, New Delhi but the petitioner has not been implicated as an accused in said FIR/RC and during investigation the role of the petitioner was not clearly established and the petitioner was not made an accused by CBI in any FIR registered at Mumbai. Whenever a suit/writ is instituted before the court, the initial issue is to be decided whether the court has jurisdiction to deal with the matter. If the court does not have jurisdiction then it will be recognized as lack of jurisdiction and irregular exercise of jurisdiction. If the court does not have jurisdiction to decide the case then such decision would be regarded as void or voidable depending upon the circumstances. Jurisdiction is not defined and explained in Code of Civil Procedure, 1908. Jurisdiction is power and competence of the court to adjudicate case. Jurisdiction is boundary of court in exercise its judicial authority. The respondent no. 4/CBI, EOW, Mumbai registered FIR bearing no. RCD682016E0013 dated 19.09.2016 under section 120-B read with section 420 of the Indian Penal Code, 1860 read with Section 13(1) (d) of Prevention of Corruption Act, 1988 and thereafter the respondent no. 2 considering nature of scheduled offences and involvement of proceeds of crime of Rs. 36000 crores initiated investigation under PMLA vide ECIR/HQ/02/2017 dated 24.01.2017 at Delhi. Mere fact that the respondent no. 2 through the respondent no. 6 on the request of the respondent no. 3 issued LOC dared 10.02.2016 at Delhi does not create or vest territorial jurisdiction in courts at Delhi. No cause of action either wholly or in part has ever been arisen in Delhi for filing the present petition. This court is lacking territorial jurisdiction to entertain the present petition. Petition dismissed. Service Tax 2022 (9) TMI 167 Levy of service tax - receipt of intellectual property service from the overseas entity - consequence of merger on the appointed date was tantamount to acknowledging the overseas transfers as their own or not - HELD THAT:- In any case, deeming that the amalgamated entity came into being on 1st April 2009, the status of the amalgamating entities outside India needs to be borne in mind and it is not seen from the records that they have ceased to operate at those locations after the appointed date. That would have been impossible considering that the effective merger occurred in April and May 2010. Therefore, the consequence of deemed amalgamation from 1st April 2009 would be to deem the foreign companies as overseas offices of the appellant. Section 66A(2) of Finance Act, 1994 and the Explanation therein make it abundantly clear that, for the purposes of the levy thereof, such units are to considered as independent; in such circumscribing circumstances, the procurement of services outside India by the branch or office of an Indian assessee does not fall within the purview of rule 3 of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. The impugned order has failed to identify the taxable service' that the erstwhile foreign entities had obtained from the foreign service provider without which the test of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 is not met. The adjudicating authority has failed to consider the deemed demutualization of amalgamated entity and amalgamating entities for the period prior to effective merger and has superficially applied the appointed date conundrum to the no brainer , and default, articulation in section 66A of Finance Act, 1994 without taking in the entire canvass of this special provision of law to charge tax on specifically intended transactions. The impugned order has failed to be in compliance with the mandate of section 66A of Finance Act, 1994 warranting it to be set aside - Appeal allowed - decided in favor of appellant. 2022 (9) TMI 166 Recovery of service tax alongwith interest and penalty - services rendered to units in special economic zones (SEZ) - rendering of taxable service or not - adjudication order had failed to appreciate that the services rendered by them to M/s Credit Suisse Services (India) Pvt Ltd was not taxable owing to the privileges conferred upon the recipient by Special Economic Zones Act, 2005 - period from 1st March 2011 to 14th June 2011 - HELD THAT:- The issue stands settled by the decision of the Hon ble High Court of Telengana and Andhra Pradesh in GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [ 2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT] where it was held that the SEZ Act 2005 defines the word prescribe under Section 2(w) to mean the rules framed by the Central Government under the SEZ Act, 2005. The space is also not left unoccupied, as the Central Government has issued a set of Rules known as the Special Economic Zones Rules, 2006 , wherein the Central Government has prescribed the terms and conditions for grant of exemptions under Rule 22. Therefore, there is no question of comparing the terms and conditions prescribed in Rule 22 with the terms and conditions prescribed in the notifications issued under any one of five enactments listed in Section 26(1) to find out whether there was any inconsistency. It is on record that the required documentation was not available for the entire period of the dispute but, at the same time, it cannot be denied that at some point, the eligibility did exist. The procedural infirmities, for a shorter or longer time, does not in any way supplant the exemption accorded to the impugned supply of services - Furthermore, the findings of the adjudicating authority do not arrive at a conclusion that, but for the said procedural infirmities, the eligibility of the appellant to render such services without payment of tax was in question. The demand for allegedly rendering of services within India does not sustain. Appeal allowed - decided in favor of appellant. 2022 (9) TMI 165 Valuation of service - service towards installation or commissioning - whether 33% of the price/ value should be treated as value of taxable service towards installation or commissioning? - Department entertained a view that the activity of installation of weighing scales/machines at the customers premises should be considered as a taxable service, defined under Section 65 (39) of the Finance Act, 1994 - HELD THAT:- The appellant had not separately charged, billed or received any amount from the customers towards installation charges for installing the weighing machine at the customer site. Since on the entire value of excisable goods, the appellant had discharged the Central Excise duty liability in terms of Section 4 of the Central Excise Act, 1944 and had not claimed any deduction, exclusion, abatement towards installation charges, they cannot be taxed under the provisions of Section 65 (39) ibid, considering the appellant as a service provider. It is an admitted fact on record that on the entire value including installation of the machine, the Central Excise duty had been paid by the appellant and retained by the Government under such heads of account, the appellant cannot be burdened with the service tax liability, upon consideration of the fact that they had provided the taxable service of installation and commissioning to their customers. In the case of ALIDHARA TEXSPIN ENGINEERS VERSUS COMMR. OF C. EX. CUSTOMS, VAPI [ 2010 (8) TMI 145 - CESTAT, AHMEDABAD] , the Tribunal has held that when the assessee was primarily and mainly engaged in the manufacture of textile machinery and the contract was entered by them with the customers for a lumpsum amount and the price was inclusive of installation and commissioning charges and when the assesse had paid central excise duty on the complete value and not claimed any deduction on account of installation/commissioning charges, the question of demanding service tax on ad hoc value of installation/commissioning charges was untenable in law. In an identical case, in the matter of COMMR. OF C. EX., VAPI VERSUS ALIDHARA TEXTOOL ENGINEERS PVT. LTD. [ 2009 (1) TMI 129 - CESTAT AHMEDABAD] , it has also been held by the Tribunal that the process of erection and commissioning at the byers premises is incidental to the manufacture of the machine and therefore, the erection and commissioning services provided can also be said to be in relation to the manufacture and not a service, in order to fall within the purview of service tax net. The issue arising out of the present dispute is no more open for any debate. Therefore, the impugned order cannot be sustained for judicial scrutiny - Appeal allowed - decided in favor of appellant. Central Excise 2022 (9) TMI 164 Classification of goods - non-alcoholic beverage bases/concentrates - to be classified under sub-heading 3302 10 of Schedule to Central Excise Tariff Act, 1985 or under sub-heading 2108 10 of the Schedule to Central Excise Tariff Act, 1985? - recovery of differential duty - HELD THAT:- It is not in dispute that the show cause notices disposed off were periodical demands in continuation of the first show cause notice and the dispute therein had been carried to the Tribunal in BRITCO FOODS COMPANY LTD. VERSUS COMMISSIONER OF C. EX., PUNE [ 2000 (10) TMI 76 - CEGAT, MUMBAI] and the appeal of Revenue before the Hon ble Supreme Court was dismissed on the acknowledgement that the classification exercise was academic in the light of the consequence being revenue neutral. The scope of appellate remedy is unambiguously clear the challenge should be to an order for not being legal and proper and solecism in articulation or inaccuracies of expression are not sanctioned as grounds for appeal. There is no doubt that the Hon ble Supreme Court did not render a finality to the dispute over classification but the Tribunal, indubitably, has. That finality can be shaken only by a reversal in the highest court of the land and, until then, the law settled by the Tribunal prevails; failure to recognise that finality places orders of original authority and first appellate authorities in peril and for consequences of breach of discipline. Thus, no case has been made out by Revenue for an alternate approach to the classification as settled - appeal dismissed. CST, VAT & Sales Tax 2022 (9) TMI 208 Non-disbursal of loan due to tax default - loan have not been granted, for the reasons that there is arrears of tax by the petitioner's father - When the petitioner applied for encumbrance certificate with respect to the property, it was found that no such charge has created, made as reflected in the encumbrance certificate - HELD THAT:- Finding that the family property is being produced as collateral security and huge sums of loan around Rs.4,56,00,000/- to be obtained based on the property, and the Department will be left with no source for recovery, hence they have taken precautionary measure on sending the objections, for creating any charge, lien or alienation to the property and send representation dated 22.08.2022 to the Sub Registrar Office, Eranial, which is recorded and the same is also reflected in the Encumbrance Certificate. Hence in the interest of revenue, such restriction has been imposed. The Document No.455/2001 was found without any Encumbrance. Hence processed the loan application, at that time, a communication received from the second respondent on 03.06.2022 informing about the lien and restriction created on the property based on which the loan put on hold. Since the disbursement of loan was based on the public money, considering the public interest and that of the Bank, withheld the loan granted to the petitioner, if the petitioner is able to provide equal alternate property as security without any encumbrance, the same can be considered, with the present property, the loan cannot be disbursed. Petition disposed off. 2022 (9) TMI 163 Recovery of dues - priority/precedence of dues - does a secured creditor (as defined in the SARFAESI Act and the RDDB Act) have a prior right over the relevant department of the Government [under the BST Act/MVAT Act/MGST Act] to appropriate the amount realized by the sale of a secured asset? - whether dues accruing to a department of the Government ought to be repaid first by reason of first charge created over any property by operation of law (viz. the legislation in force in Maharashtra) giving such dues precedence over the dues of a secured creditor? - HELD THAT:- Bare perusal of the 2016 Amending Act would show that the dues of the Central/State Governments were in the specific contemplation of the Parliament while it amended the RDDB Act and the SARFAESI Act, both of which make specific reference to debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority and ordains that the dues of a secured creditor will have priority , i.e., take precedence - The rights of such of the first charge holders accorded by several legislations enacted by the State, having regard to the language in which section 26E is couched, would rank subordinate to the right of the secured creditor as defined in section 2(1)(zd) subject, of course, to compliance with the other provisions of the statute. Acceptance of the contra-arguments of learned counsel for the State/respondents would undo what the Parliament has chosen to do. The RDDB Act and the SARFAESI Act are Central Acts. If any provision therein is discerned to be seemingly inconsistent with any provision in a State legislation, reconciliation of the same ought to be attempted failing which the Central Acts will prevail over the State legislations, in view of the principle of repugnancy that Article 254 of the Constitution contemplates - Subject to compliance of the terms of Chapter IV-A, section 26E of the SARFAESI Act would, thus, override any provision in the MGST Act and the BST Act in case of a conflict with the SARFAESI Act. There are no hesitation to hold that the dues of a secured creditor (subject of course to CERSAI registration) and subject to proceedings under the I B Code would rank superior to the dues of the relevant department of the State Government. Whether the provisions, inter alia, according priority in payment of dues to a secured creditor for enforcing its security interest under the provisions of the SARFAESI Act prospective? - HELD THAT:- Actions taken under Chapter III of the SARFAESI Act including measures to take over possession of the secured asset prior to Chapter IV-A becoming operational, i.e., without CERSAI registration of the security interest sought to be enforced, could be challenged as ultra vires the SARFAESI Act itself. If such a challenge were to succeed, there could be sort of a cloudburst of complications. A reading that Chapter IV-A applies prospectively would, however, save all such exercises of enforcement of unregistered security interest, thereby not being liable to interdiction on the ground of absence of registration of the security interest upon a challenge being thrown by a defaulting borrower. The provisions of Chapter IV-A of the SARFAESI Act would have application prospectively from the date the same was brought into force, i.e., January 24 2020. Whether section 31B of the RDDB Act can be pressed into service for overcoming the disability that visits a secured creditor in enforcing its security interest under the SARFAESI Act upon such creditor s failure to register the security interest in terms of the amendments introduced in the SARFAESI Act? - HELD THAT:- A secured creditor, finding that it is disabled from obtaining the benefit of priority in terms of section 26E of the SARFAESI Act for want of CERSAI registration, cannot fall back on section 31B of the RDDB Act to claim priority - the overwhelming factor of determination of a lis by the DRT has to be given its due worth and hence, the benefit of priority that section 31B envisages is for a secured creditor who institutes proceedings under the RDDB Act and is successful in having an interim or final determination in its favour that a sum is due and payable (in section 31B) as distinguished from the debts due (in section 26E). Section 31B of the RDDB Act being a substantive provision, it cannot be invoked by a secured creditor faced with the disability posed by section 26E of the SARFAESI Act - without recourse having been taken to the procedure envisaged in the RDDB Act for recovery of its dues and without there being a determination of its claim by the DRT to the effect that any sum due from the borrower is payable to it, a secured creditor is not entitled to invoke the provisions of section 31B. Whether the priority of interest contemplated by section 26E of the SARFAESI Act could be claimed by a secured creditor without registration of the security interest with the Central Registry? - HELD THAT:- On the face of the express provisions in sections 26D and 26E of the SARFAESI Act and in the absence of any discussion on the object of introduction of Chapter IV-A of the SARFAESI Act by the Division Bench in ASREC (India) Ltd. [ 2019 (12) TMI 633 - BOMBAY HIGH COURT] , we are constrained to hold that a law has been declared which runs clearly contrary to the statutory mandate and, therefore, paragraph 21 of such decision does not represent the correct position of law. The other Division Bench in STATE BANK OF INDIA AND ORS. VERSUS STATE OF KERALA AND ORS. [ 2019 (7) TMI 1684 - KERALA HIGH COURT] may not have considered sections 26D and 26E of the SARFAESI Act in such great depth in the absence of proper assistance from the parties while holding that even if the secured creditor does not register the mortgage under section 26D of the SARFAESI Act, such alleged non-registration, in view of the Division Bench s discussion on section 31B of the RDDB Act, would not affect the legal position on the issue of priority. The views expressed by the Division Benches in ASREC (India) Ltd. and State Bank of India, on the question under consideration are not the correct exposition of law and, to that extent, stand overruled. When, and if at all, can it be said that the statutory first charge under the State legislation, viz. the BST Act, the MVAT Act and the MGST Act, as the case may be, stands displaced having regard to introduction of Chapter IV-A in the SARFAESI Act from 24th January 2020? - HELD THAT:- Unless attachment of the defaulter s immovable property is ordered in the manner ordained by the MLR Code and as prescribed by the MRLR Rules and due proclamation thereof is made, even the creation of charge on such immovable property may not be of any real significance, not to speak of demonstrating with reference to evidence that the transferee had actual or constructive notice of such charge. If there has been an attachment and a proclamation thereof has been made according to law prior to 24th January 2020 or 1st September 2016, i.e., the dates on which Chapter IV-A of the SARFAESI Act and section 31B of the RDDB Act, respectively, were enforced, the department may claim that its dues be paid first notwithstanding the secured dues of the secured creditors; but in the absence of an order of attachment being made public in a manner known to law, i.e., by a proclamation, once Chapter IV-A of the SARFAESI Act or section 31B, as the case may be, has been enforced, the dues of the secured creditor surely would have priority . If the immovable property of the defaulter is shown to have been attached in accordance with law prior to Chapter IVA of the SARFAESI Act, or for that matter section 31B of the RDDB Act, being enforced, and such attachment is followed by a proclamation according to law, the priority accorded by section 26E of the former and section 31B of the latter would not get attracted. Whether an auction purchaser of a secured asset would be liable to pay the dues of the department in order to obtain a clear and marketable title to the property having purchased the same on as is where is and whatever there is basis ? - HELD THAT:- Notwithstanding the duty of the authorized officer to indicate in the sale advertisement inviting bids the encumbrance(s) attached to the immovable property, i.e., the secured asset, as known to the secured creditor, if at all any detail in regard to such encumbrance(s) is not indicated but the sale is expressly made on as is where is, whatever there is basis , the transferee shall be duty bound to deposit money for discharge of the encumbrance(s) provided, of course, that such liability may be overcome if he is in a position to disprove the claim of the department that he had no constructive notice of the charge, far less actual notice. Petition disposed off. 2022 (9) TMI 162 Levy of penalty under Section 27(3)(c) of the TNVAT Act - suppression of purchase values - turnover was found to be disproportionate to the return submitted - HELD THAT:- Considering the submissions and perusal of materials, it is seen that admittedly, no details given, the counter is silent about the Circular of the Commissioner, dated 24.02.2021, which is primarily issued to follow principles of natural justice. The principles not followed. It is seen that the petitioner has received a show cause notice and due to illness, he was unable to reply to the show cause notice. Hence, the impugned assessment order is passed without hearing the petitioner collecting any particulars. There is no specific allegation that, in Annexure - II of Vendors, certain entries made mismatched with Annexure - I and II of the petitioner's tax returns. It is the duty of the Assessment Officer to give particulars as per the Circular of the Commissioner. In this case, the Commissioner's Circular not followed. Hence, the impugned order is set aside. The respondent is to give the mismatch particulars, so that the petitioner can make his reply, affording personal hearing to the petitioner - Petition allowed. 2022 (9) TMI 161 Violation of principles of natural justice - Acceptance of extracts obtained from the check posts without any corroborative evidence in support thereof by Sales Tax Appellate Tribunal (STAT) - Affirmation of estimation of turnovers with reference to sales with no corresponding consumption of power - denial of opportunity to the Petitioner for cross-examination of witnesses - HELD THAT:- The stated Question of Law was fairly discussed by a Division Bench of this Court in M/S VEEKAY OIL PRODUCTS VERSUS STATE OF A.P. [ 2015 (4) TMI 1345 - TELANGANA HIGH COURT ], which was dismissed on 07.04.2015, confirming the judgment of the Appellate Deputy Commissioner and the Sales Tax Appellate Tribunal - The Division Bench held that The assessment order clearly speaks with reasons that was confirmed by the Appellate Deputy Commissioner of said version is untrue from the recorded evidence, but intentionally for evasion of tax by filing Nil returns or returns with utterly low turnover, there is for this Court while sitting in revision against the impugned order of the Sales Tax Appellate Tribunal in the two respective revisions nothing to interfere. Since the issue on hand is identical to the one decided by a Division Bench of this Court, which according to the learned Counsel for the Petitioner, has become final and as the same is not challenged; the present Tax Revision Case is dismissed. 2022 (9) TMI 160 Condonation of delay in filing an appeal - Input Tax Credit - reopening of assessment - time limitation - proper reasons for delay, given or not - HELD THAT:- It is seen that admittedly there have been deemed assessment thereafter the assessment have been reopened, considered and I.T.C credits have been verified refund order, thereafter, again it was revisited and the refund had been considerably reduced and orders have been passed in appeal. This case, though the assessment is pending from the year 2008-2009, 2009-2010 and 2013-2014, all have been considered simultaneously and the issues are common. The period of limitation contended by the petitioner may not arise in this case. In view of the pendency of the assessment, the authorities ought to have given adequate opportunities to the petitioner in this case which is not so. Further, the appeal is a statutory appeal and no person can be denied of statutory appeal. Further, there is a provision for condonation of delay. In view of the same, this Court directs the first respondent to consider the petitioner's appeal on merits. The delay alone is condoned. The Writ Petitions are disposed of.
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