|
Advanced Search Options
Case Laws
Showing 101 to 120 of 1409 Records
-
2020 (12) TMI 1312
Sanction of Scheme of Arrangement - convening and holding separate meetings of certain Creditors of the Applicant Company - Section 230 and other applicable provisions of the Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening of various meetings issued - directions with regard to issuance of various notices also issued.
The scheme is approved - application allowed.
-
2020 (12) TMI 1311
Application for extension of time to file the written statement affirmed - Seeking 120 days time for filing the written statement under the amendment made to Order VIII Rule 1 of The Code of Civil Procedure after coming into force of The Commercial Courts Act, 2015, ended on 31st March, 2020 - application for extension of time was filed by the defendant before the Master on 5th February, 2020 seeking 8 weeks time for preparing and filing the written statement - Whether the initial period of 30 days is the prescribed period for the purposes of limitation? - HELD THAT:- The words of the amendment make it clear that the additional period allowed to a defendant comes into play only after the defendant has failed to file its written statement within the prescribed period under Order VIII Rule 1 which is 30 days. Hence, the 90 days additional window following the prescribed period is the additional period and not the prescribed period of limitation under Order VIII Rule 1.
Whether the defendant can take refuge under the order of 23rd March, 2020 passed by the Supreme Court? - HELD THAT:- This Court is therefore of the view that the order of the Supreme Court dated 23rd March, 2020 would apply only to the first 30 days for filing written statement under Order VIII Rule 1 of The CPC and not to the additional 90 days which follows the prescribed period for matters covered by the 2015 Act. Besides the orders of the Supreme Court should be seen in their specific factual context and that the orders were passed in exercise of the power under Article 142 of The Constitution of India. The order dated 18th September, 2020 also restricts the window to vigilant litigants. In this case the application was filed beyond the prescribed period of 30 days.
Whether the defendant showed promptness in pursuing its right of filing the written statement? - HELD THAT:- The prescribed period of 30 days ended on 2nd January, 2020 and the additional 90 days (120 days under the Amendment) ended on 31st March, 2020. The application was filed by the defendant for extension of time on 5th February, 2020 seeking a further period of eight weeks for filing of its written statement thereby extending the time till 5th April, 2020 - It should also be noted that paragraph 16 of the application filed by the defendant states that judicial functions and listing of urgent matters started in phases on and from June, 2020 and matters taken up in the regular course in this Court resumed only on and from 7th December, 2020. This is clearly an incorrect statement since The High Court at Calcutta commenced its judicial business intermittently from April, 2020 and in right earnest from June, 2020 which continues as on date. The defendant therefore cannot take recourse to this ground at all.
This Court does not find any ground either provided under Order VIII Rule 1 or the amendment thereto or by the orders of the Supreme Court for allowing the application for extension of time to file the written statement - application dismissed.
-
2020 (12) TMI 1310
Reopening of assessment u/s 147 - Non disposing the objections raised by the Petitioner - HELD THAT:- Having regard to the fact that the reasons for re-opening had been furnished by Respondent on 10.05.2017 and the Petitioner had not promptly raised objections, the Respondent cannot be faulted for proceeding further to take final decision. When this view was expressed, Learned Counsel for the Petitioner has sought permissions of this Court to withdraw the Writ Petition with liberty to the Petitioner to apply for reviving the appeal against the impugned order before the Commissioner of Income Tax (Appeals)-4, Chennai, so as to raise all contentions including the factual aspects in the objections in the letter dated 22.11.2017 sent to the Respondent. He has also filed a memo dated 22.12.2020 through e-mail to that effect, which is placed on record.
-
2020 (12) TMI 1309
Seeking grant of bail - Input tax credit - issuance of fake invoices - Section 132 (1)(b)(c) of the Central Goods and Services Act, 2017 - HELD THAT:- It appears that the investigation is in progress and the allegations are about substantial evasion of tax to the extent of ₹ 541 Crores by availing Input Tax Credit without actual trading / movement of goods which is an offence under Section 132 of the CGST Act. A perusal of the order passed by the learned Magistrate would prima facie indicate that what has principally weighed with the learned Magistrate was that the applicant had given an undertaking seeking permission to compound the offence before the Commissioner, on payment of the tax amount as per rules. The learned Magistrate has observed that even though the offence leveled against the applicant is serious in nature, “no purpose would be served by keeping him behind bars, that too when he is willing to pay the evaded amount and compound the offence”. In the opinion of the learned Magistrate “sitting behind bars, he (the applicant) might not be able to pay the evaded amount.” Prima facie, it appears that the investigation being under progress, the exact amount evaded is not yet ascertained.
Matter remanded to the learned Magistrate and therefore it is neither necessary nor appropriate to appreciate the material in details or to record any final conclusion lest it would prejudice either the applicant or the prosecution before the learned Magistrate - application dismissed.
-
2020 (12) TMI 1308
Seeking grant of bail - creation of fake firms to claim Input Tax Credit - Section 132(1)(b) and (c) of Central Goods and Service Tax Act, 2017 - HELD THAT:- The Ld. Trial Court based its conclusion on the aspect of compounding the offence as per Sec. 138 of the GST Act. It is also noted accused shall deposit some amount before appropriate authority to show readiness and willingness to compound the offence. It is also taken into considerations accused has given undertaking and approach before the Trial Court seeking permission to compound the offence before commissioner on payment of Tax as per rules. It is further observed when accused is willing to pay the evaded amount and compound the offence no purpose will be served by keeping him behind the bar.
It is worth to be noted the offence as alleged is an economic offence, whereby the applicant since July, 2017 till the date has been evading the Tax as alleged by receiving and issuing the bogus bills and invoices without actual sale or transportation of Goods. Total amount of evasion is ₹ 541 Crores. There is also an allegation as to creating fake firms to claim Input Tax Credit. There are 9 bogus firms as shown created and had issued fake invoices.
In the present case in hand the main allegations of the department against the accused is that they are guilty of circular trading by claiming fake invoices on the materials never purchased and passing on input tax credit to companies to whom they never sold any goods. There are allegations as to fake companies were also formed to execute smooth illegal trading. The department has estimated that the fake GST invoices were issued to the total value of about ₹ 541 Crores - It is settled law supervening circumstances for the cancellation of bail, must be of such a nature as to lead to the conclusion that the accused does not deserve to be at liberty either by reason of a violation of the conditions of bail or due to supervening conduct which bears upon the misuse of the liberty by the accused.
Application allowed in part.
-
2020 (12) TMI 1307
Maintainability of application - HELD THAT:- The pleadings are complete. Written submission have also been filed. Learned counsel for the Appellant may provide copy of the rejoinder to learned counsel for Respondent No. 1 during the course of the day.
Let the matter be listed ‘for admission (after notice)’ on 8th January, 2021.
-
2020 (12) TMI 1306
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- On perusal of the record, it is found that the Demand Notice was issued by the applicant on 15.03.2019, under Section 8 of the I&B Code, through registered post on 19.03.2019. However, the same was returned with a postal remark “Not Delivered Addressee Left without instructions”. The applicant has also issued Demand Notice through email on the same date demanding the arrears of the Annual Listing Fee. However, no dispute is raised by the corporate debtor - Admittedly, the petitioner received the last payment on 31.05.2013 amounting to ₹ 44,944/- for the Financial Year 2013-2014. However, the petitioner in Form-S has stated that debt fell due on 01.04.2015. Further, on perusal of page no. 12, at para-2.10 of the petition, it is found that the respondent has made payment of annual listing fee to the applicant till Financial Year 2013-2014 only. The last payment being received on 31.05.2013 for an amount of ₹ 44,944/-. Thereafter, the corporate debtor did not pay any amount in respect of Annual Listing Fee to the petitioner. Since the debt fell due on 01.04.2015 as admitted by the petitioner, that itself is barred by Law of Limitation.
In view of the judgment of the Hon’ble Supreme Court in B.K. Educational Services [2018 (10) TMI 777 - SUPREME COURT], the limitation period is three years, which is to be counted from the date of default. As such, the instant application is hit by the law of limitation.
On perusal of the application, it is found that the applicant has annexed one affidavit along with a Form-5 in support of initiation of Corporate Insolvency Resolution Process. Admittedly, in para-2.2 (page no. 8), it is stated that the respondent company was earlier known as “Kosha Cubidor Containers Ltd.” and the same came to be replaced by “KCCL Plastic Ltd.” on 29.02.2012. In support of the said contention, the applicant annexed master data received from the MCA website. However, even after the change of name of the corporate debtor, the applicant has not entered into a fresh agreement with KCCL Plastic Ltd. (corporate debtor).
The application so filed, under Section 9 of the Insolvency and Bankruptcy Code, 2016, is bad in the eye of law and is not maintainable, hence, it does not deserve for admission - Petition dismissed.
-
2020 (12) TMI 1305
Scope of Advance Ruling application - question raised by the Applicant before the Authority is pending with the DGGEST - Classification of services - rate of tax on sub contractor, where, he executes works contract pertaining to dam, wherein the principal contractor is liable for tax @ 12% - period from 22-01-2017 to 25-01-2018 - N/N. 11/2017 as amended - HELD THAT:- The question raised by the Applicant before the Authority is pending with the DGGEST and proceeding against the Applicant have already been started by the DGGST Intelligence Regional Unit Indore.
As per the proviso to Section 98 (2) of CGST Act, the Authority shall not admit the application where the question raised in the application is already decided in any proceedings in the case of an applicant - as per the proviso to Section 98 (2) of CGST Act, the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant.
It is concluded that the application is liable to be rejected as per the proviso of section 98(2) of CGST Act.
-
2020 (12) TMI 1304
Determination of liability to pay tax - double-taxation on freight portion of imported goods - Goods imported and IGST levied on CIF Value (which includes freight) Basic Custom Duty + Social Welfare Cess - levy of IGST again on the freight component (Ocean Freight) on reverse charge basis - HELD THAT:- While the question proposed before the Authority is whether the liability to pay tax exists or not. the applicant himself is not denying the existence of such a liability. The only assertion is whether the existence of such a liability creates irregularities in respect of tax laws outside the limited applicability of the IGST Act. In other words, the existence of such a liability is not being challenged by the applicant in the current application. rather the constitutional validity of the liability is being questioned - the applicant himself admits that the liability to pay tax exists. and is saying that the liability ‘should not exist since it is against the fundamental principles established by various Hon’ble Courts based on their interpretations of the various statutes and the Constitution of India. Therefore, the question proposed before the Advance Ruling Authority is not whether the liability exists or not, but whether such a liability is constitutionally valid or not.
This Authority is of the view that based on the detailed reading and understanding of Section 97 of the CGST Act. an application for Advance Ruling can only be made to determine the “liability to pay tax” on any goods or services or both. Therefore, no application can be made to determine whether the liability is constitutionally valid or not. Such power rests only with the courts.
-
2020 (12) TMI 1303
Classification of supply - contracts towards construction, O&M and other ancillary contracts which are in relation to work entrusted to MPPGCL by the State Government - composite supply as per Schedule II of CGST Act 2017 - rate of GST - Construction contracts awarded by MPPGCL (list enclosed) which are in relation to work entrusted to MPPGCL by the State Government as per Notification No. 11/2017 CT(R) as amended - O&M and other ancillary contracts awarded by MPPGCL (list enclosed) which are in relation to work entrusted to MPPGCL by the State Government as per Notification No. 11/2017-CT(R) - HELD THAT:- The definition states that the question should be in relation to supply and not about supply. There is nothing in the text of the section that states that the question can only be about supply. Once this assumed pre-condition is done away with it becomes clear how subject matter of the questions listed in Section 97(2) get covered under an Advance Ruling as per Section 95(a). The definition of Advance Ruling contains the term “in, relation to”, which enlarges the scope of a provision.
The definition states that the question should be in relation to supply and not about supply. There is nothing in the text of the section that states that the question can only be about supply. Once this assumed pre-condition is done away with, it becomes clear how subject matter of the questions listed in Section 97(2) get covered under an Advance Ruling as per Section 95(a). The definition of Advance Ruling contains the term “in relation to”, which enlarges the scope of a provision - Rule of Harmonious Construction is used to avoid any inconsistency and repugnancy within a section or between a section and other parts of a statute. The rule follows a very simple premise that every statute has a purpose and intent as per law, and should be read as a whole. The interpretation which is consistent with all the provisions and makes the enactment consistent shall prevail. The doctrine follows a settled rule that an interpretation that results in injustice, hardship, inconvenience and anomaly should be avoided.
MPPGCL has been established by M.P. Government with the objective of carrying out power generation in the state of Madhya Pradesh State Government of Madhya Pradesh holds 100% shares of MPPGCL. The State Government is also exercising full control over the activities of the said company. Therefore, M/s. MPPGCL qualifies to be called and termed as a 'Government Entity' for the purpose of GST law, as it fulfils the necessary and sufficient conditions laid down under notification supra in terms of Explanation to Notification No. 11/2017-C.T. (Rate). and also as per Notification No. 31/2017-C.T. (Rate), dated 13-10-2017 - Entry No. 3(vi) to the Notification No. 11/2017-C.T. (R) refers to different nature and type of Construction Services as composite supply.
The provisions relating to Advance Ruling are to assist the applicants in making compliance under the Act and prevent litigation. This provision is not for the applicant to use as advisory service for GST matters. The applicant has furnished list of 68 contracts and sought the rate of GST applicable on those 68 contracts. From a perusal of the list it appears that the supplies under the contracts are not identical.
Regarding classification of supply in Entry No. 6 of Schedule II to the GST Act we are unable to answer the question on account of insufficient information provided by the applicant. Further in respect of first question, regarding applicability of the Advance Ruling in the matter of Kalyan Toll Infrastructure Ltd - regarding the rate of GST on supplies made under different contracts.
-
2020 (12) TMI 1302
Assessment of trust - addition in respect of profit from business undertakings - setting off the loss incurred by the Trust from the profits of business undertakings - THAT:- Hon’ble Uttarakhand High Court in Assessee’s case for A.Y. 2009- 10 [2019 (2) TMI 1616 - UTTARAKHAND HIGH COURT]has held that the Assessing Officer was not justified in denying the assessee exemption under Section 11/12 of the Act which is confirmed by the Hon’ble Apex Court [2019 (8) TMI 535 - SC ORDER] Besides this, for A.Y. 2010-11, 2011-12, 2012-13 and 2013-14 as well the Tribunal has decided the identical issue in favour of the assessee. There is no change in facts in the present assessment year and no distinguishing facts were pointed out by the Ld. DR. Therefore, the CIT(A) rightly allowed the appeal of the assessee. There is no need to interfere with the findings of the CIT(A). Hence, appeal of the Revenue is dismissed.
-
2020 (12) TMI 1301
Entitlement to take GST Credit - service provider has filed GSTR-1 within the time limit of section 39, but he has amended only invoice number after time limit provided under section 39 of the CGST Act, 2017 - restriction in terms of Section 16 (4) of the CGST Act, 2017 - If the Service receiver can not avail ITC on these invoices, then can we get refund of the tax paid on these from the government or issue credit notes against these amended invoices to the service receiver and claim the credit back?
HELD THAT:- The procedure to prepare invoices and for filing of returns is mentioned in the Section 31 and section 39 of the CGST Act, 2017. Further in respect of refund of ITC, the circumstances under which the refund is to be claimed has been mentioned under the provision of Section 54/55 of CGST Act, 1944. Hence, the question raised before this authority is purely a procedural and not covered under any of the provisions of Section 97(2) of the CGST Act.
It is observed that the question (i) and (ii) raised for admissibility of itc to service receiver by the applicant before the authority is not for the applicant but is related to service receiver who receive the services from the Applicant. As per the Section 103 of the CGST Act, 2017, the applicability of advance ruling should be binding only on applicant whereas in this case applicant wants reply for the problem raised/faced by the service receiver not applicant.
This Authority is of the view that based on the detailed reading and understanding of Section 97 of the CGST Act, an application for Advance Ruling can only be made to determine the "admissibility of input tax credit" on any goods or services or both. Therefore, no application can be made to admissibility of Input tax credit on the procedural issue.
-
2020 (12) TMI 1300
Set-off of losses of a 10A/10AA unit against other business income - Whether tribunal was right in excluding the computer software sales made to STP/SEZ units in India from 'export turnover' for the purpose of computing deduction under Section 10A/10AA - excluding the VAT / GST from export turnover and total turnover for the purpose of computing deduction under Section 10A/10AA - tribunal concluding that 80% of the up linking charges had to be excluded from the definition of turnover, when even the respondent had limited such exclusion to 5% of the telecommunication charges in earlier years? - Tribunal concluding that purchase and sales of monitors constituted a trading activity and thus excludible from the profits of the Pondicherry unit for the purposes of computing deduction under Section 80-IB of the Act, when such monitors were part of the computers manufactured and sold by the units - HELD THAT:- When the matter was taken up today, learned counsel for the assessee submits that this appeal may be disposed of in terms of the judgment passed in [2020 (12) TMI 687 - KARNATAKA HIGH COURT].
-
2020 (12) TMI 1299
Classification of supply - Supply of Goods or Supply of Service - job work service or not - Rate Contract for Fabrication and Transportation of 20 KL &70 KL Horizontal Tanks including transportation of Steel Plates from its Depot to Applicant’s works - rate of tax - applicability of Circular No. 126/45/2019-GST dated 22/11/2019 - HELD THAT:- The applicant is presently classifying the same supply of goods and charging GST @ 18% under HSN code 7309 and there is no change in composition of final product and process of fabrication of steel tanks. As per submission of the applicant, only steel plates are being provided by IOCL on free of cost basis to the applicant and all other structural items/material & fittings required for the tank are to be arranged by the applicant - The applicant had also submitted that the proportion of weight and value of the components and material used by them in the process of fabrication of tank on the steel plates provided on FoC basis by IOCL is quite substantial (Para 1.10 of Statement of relevant facts). As such, it is not a case that entire inputs required for fabrication of tanks are provided by M/s IOCL but substantial items are used by the applicant during the process. The nature of supply in the instant case is supply of goods.
The activity performed by the applicant in the process of supply of tank is not covered in the services by way of job work or in manufacturing service under Notification No. 11/17-CT(Rate) date 28.06.2017. The legislature has defined job-work and manufacture separately. As such, the legislature does not intend to cover a treatment or process resulting into a distinct commodity under the scope of job work. The steel plates and tank are different commodities and after processing on steel plates, a new product Tank has been manufactured which is distinct in name, character and use.
The fabrication of tank from steel plates supplied free of cost froth M/s IOCL is manufacture as per CGST Act, 2017. Accordingly, supply of tanks by the applicant is supply of goods.
-
2020 (12) TMI 1298
Benefit of lower rate of GST under CLSS Scheme - entitlement to get interest Subvention certificate and/or Interest subsidy in his / her bank - adjustment of GST Credit if builder does not have future GST liability in this project - entitlement to GST refund if amount is not adjustable from future liability of GST under the project - Section 54 of Central Goods & Services Tax Act, 2017 read with Rule 89 of Central Goods & Services Tax Rules, 2017.
If any Flat buyer otherwise qualified to get lower rate of GST under CLSS Scheme, get interest Subvention certificate and/or Interest subsidy in his / her bank account after: a). Tower / Building get Completion Certificate from Competent Authority, or b). Expiry of six months from end of financial year Can builder pass-on benefit of lower rate of GST to this flat buyer in such situation? And How? - HELD THAT:- The excess tax is to be adjusted as per clarification issued by Tax Research Unit, Ministry of Finance, Govt. of India vide F.No. 354/52/2018/TRU dated 07.05.2018. Even then if the applicant is unable to adjust the same, the applicant may approach to appropriate forum which is GST Policy Wing.
How can builder get GST Credit adjustment if builder does not have future GST liability in this project? - HELD THAT:- The question is out of purview of advance ruling authority. As such, the question raised by the applicant is not answered.
Will builder be entitled to GST refund if amount is not adjustable from future liability of GST under the project? - HELD THAT:- The question is out of purview of advance ruling authority. However, whether the applicant is entitled for refund or not under Section 54 of Central Goods & Services Tax Act, 2017 read with Rule 89 of Central Goods & Services Tax Rules, 2017 would be decided by the jurisdictional authority subject to fulfillment of necessary conditions of refund.
The questions raised by the applicant are in nature of procedural clarification which is to avail benefit of reduced rate of GST under CLSS scheme as explained in clarification issued by the Tax Research Unit, Ministry of Finance, Govt. of India. As due to time limit to issue credit note and also applicant's inability to adjust excess tax paid due to reduced tax liability, the applicant is not getting benefit of reduced tax liability under CLSS. It creates a very peculiar condition but the authority of advance ruling is not an appropriate authority for seeking procedures or clarifications in such exceptional circumstances. If the applicant is unable to issue credit note or unable to adjust their reduced tax liability due to any reason, they may approach to the GST Policy Wing for remedial measures.
-
2020 (12) TMI 1297
Classification of goods - rate of GST - Namkeen - use of unregistered brand, name, symbol etc - CSH/HSN Code alongwith applicable Tax rate of the final product namely Extruded raw stick - HELD THAT:- Heading 2106 is an omnibus heading covering all kind of edible preparations, not elsewhere specified or included. Chapter Note 5 provides an inclusive definition of this heading and covers preparations for use either directly or after processing, for human consumption. Chapter Note 6 pertaining to Tariff Item 2106 90 99 also provides inclusive definition and products mentioned therein are illustrative only. Taking all these aspects into consideration, the product 'raw extruded stick' is appropriately classifiable under Tariff Item 2106 90 99.
Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 issued under the CGST Act, 2017, issued under the GGST Act, 2017 covers “Food preparations not elsewhere specified or included [other than roasted gram, sweetmeats, batters including idli/dosa batter, namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, khakhra, chutney powder, diabetic foods]” falling under Heading 2106. The product raw extruded stick is not ready for consumption and the same has to be fried before consumption. Therefore, Goods and Service Tax rate of 18% (CGST 9% + GGST 9% or IGST 18%) is applicable to the product 'raw extruded stick' as per Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate) slated 28.06.2017, as amended, issued under the CGST Act, 2017 issued under the GGST Act, 2017.
If the applicant voluntarily forego their actionable claim or enforceable right on brand name on the final product namely “Namkeen” in the manner as prescribed under the Notification No. 01/2017-CT(Rate) dated 28.06.2017, the applicable rate of Central Tax and State Tax would be 2.5% each (cumulatively 5%) - The CSH/HSN code of the Final Product namely “Extruded raw stick” is 21069099 attracting rate of tax @ 9% each under Central and State Tax.
-
2020 (12) TMI 1296
Money laundering - Hawala Transactions - scheduled offences under Section 2(1)(y) of PML Act - continuing offence or not - proceeds of crime - sub-section (4) of Section 8 of PML Act is violative of Article 14 and Article 300A of the Constitution of India or not - offence of money laundering under Section 3 of PML Act is a stand alone offence or not - procedural lapse prescribed under Sections 5 and 8 of PML Act or not - notice/s issued by the authorities to take possession of the property on provisional order of attachment - maintainability of petition on account of petitioners having not availed the alternate remedy of appeal available under Section 25 and under Section 42 of PML Act.
HELD THAT:- Time and again, Hon'ble Apex Court in catena of judgments has held that whenever it is possible to do so, it must be done to construe the provisions which appear to conflict so that they harmonise. The court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute.
Hon'ble Apex Court in SHASHIKANT SINGH VERSUS TARKESHWAR SINGH & ANR. [2002 (4) TMI 958 - SUPREME COURT] has held that it is the duty of courts of justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be construed.
A conspectus reading of sub-sections (3), (4), (5), (6) of Section 8 along with Sections 20 and 21 of the PML Act and Rule 5 of Possession Rules 2013, it would clearly emerge that the stages of confirmation of an order of provisional attachment, retention of the property so attached and the seizure of the attached property and its possession being taken are all intermediatory stages prior to confiscation. Thus, where the property is provisionally attached or record is seized from the ownership, control or possession, of a person accused of an offence under Section 3 or not so accused, the attachment, retention and the eventual authority to order confiscation of the property would be dependent and contingent upon proof of guilt and finality of an order of conviction of a person of the offence of money laundering under Section 3 or on conclusion arrived at by the Special court that property so attached, retained and possession taken thereof was the property which had been used for the commission of the offence of money laundering. The scheme of the Act empowers the authorities under the Act to tentatively assume or form opinion after having recorded their reasons to believe that any person is in possession of any proceeds of crime to provisionally attach the property, its confirmation thereof, as well as taking possession of such property to secure the interests of the State.
PML Act was brought to prevent money laundering and confiscation of property derived from or involved in money laundering - The PML Act envisages attachment of all properties involved in the offence of money laundering and the proceeds of such crime would also come within the sweep of the PML Act.
Under Section 8(5) of the PML Act the Special Court is empowered to confiscate such property after arriving at a conclusion that the offence of money laundering has been committed or such property has been used for commission of the offence of money laundering. In that view of the matter, it cannot be gainsaid by any of the petitioners that property which has been provisionally attached and said provisional order of attachment having been confirmed, the possession of such property cannot be taken under Section 8(4) of the PML Act or frozen under sub-section (1A) of Section 17. It is only the beneficial enjoyment of the property by the owner or the occupier which is taken away by the authority by virtue of express provision namely Section 8(4) - this court is unable to accept the contention raised by learned Advocate appearing for petitioners that sub-section (4) of Section 8 of PML Act falls foul of either Article 14 of the Constitution of India or Article 300A of the Constitution of India.
The main thrust of the arguments advanced by the learned Advocates appearing for the parties is that the provisions of The Prevention of Corruption Act, 1988 did not find a place in the Schedule to the PML Act or in other words, Section 13 of PC Act came to be added to the Schedule of the PML Act with effect from 01.06.2009 by Act 21 of 2009 and as such the offences which had occurred prior to 01.06.2009 cannot be brought under the sweep of the PML Act or it cannot be made applicable retrospectively - The PML Act is a special enactment having been enacted to deal with ever increasing menace of money laundering. The provisions of the PML Act have over-riding effect over provisions in other statutes or in other words, the provisions of PML Act prevail over anything inconsistent contained in any other law. It is trite law that when two Acts are Special Acts, in such an event it is the later act which will prevail.
This Court is of the considered view that existence of a predicate offence for initiation of proceedings under the PML Act is not a condition precedent or in other words, the offence under Section 3 of the PML Act is a stand alone offence. Hence, the presence of a schedule offence as prescribed under the PML Act would not be condition precedent for proceeding against such person under the PML Act - reading of second proviso to clause (b) would clearly indicate that it excludes clause (b) of Section 5(1). In other words, the legislative intent to exclude clause (b) of Section 5(1) in the circumstances provided under the second proviso, is clear and unambiguous.
The proper and rational meaning to be attached to clause (a) in sub-section (3) of Section 8 is, that once the provisional attachment order passed under Section 5, is confirmed by the adjudicating authority under Section 8(3), the attachment would continue till the conclusion of proceedings relating to any offence under PML Act. It does not mean that confirmation of provisional attachment will not have any force if no proceedings relating to the offence of money laundering are pending before Special Court on the date of confirmation.
This court is of the considered view that contention of the petitioners with regard to applicability of unamended Section 8(3) (a) would not hold water and it is liable to be rejected and accordingly it stands rejected.
This Court is of the considered view that contentions raised by the petitioners to quash the proceedings on the ground of the proceedings initiated against them is without jurisdiction for want of either there being no predicate offence or on the date of launch of proceedings under the PML Act, the predicate offence referred to in the schedule was not incorporated in the schedule and as such, there would be retrospective application of law cannot be accepted, inasmuch as, the offence of money laundering as indicated under Section 3 of PML Act is a stand-alone offence.
The challenge is not only to the provisional order of attachment but also to the confirmation order of attachment, notice issued seeking information from the Banks and financial institutions, consequential notices issued to comply with the confirmation order of attachment, consequential notice for handing over possession of the properties issued, summons issued under Section 50(3) and the remand application filed before the Special Judge of PMLA Court and as such on the short ground of the petitioners having not availed the remedy provided under Section 8, 26 and 42 of the PML Act, the writ petitions are liable to be dismissed. However, this court desist from doing so for the reason, the grounds urged in some of the writ petitions would touch upon the very jurisdiction of the authority to adjudicate and the procedural aspects alleging violation of principles of natural justice being involved and as such this court has proceeded to adjudicate the writ petitions on merits also - the issue is answered in the negative.
The contentions raised by the petitioners challenging the action of the respondents in initiating the proceedings under the PML Act cannot be accepted and same stands rejected.
Petition disposed off.
-
2020 (12) TMI 1295
Seeking direction to respondents to permit the petitioner to get reappointed as Director of any Company or appointed in any other Company without any hindrance - HELD THAT:- The issue involved in this writ petition is no more a res integra. It is to be stated that the Registrar of Companies (RoC) has been disqualifying the Directors under Section 164(2)(a) of the Companies Act, 2013 by order dated 08.09.2017. Another list was published in the website of the first respondent on 01.11.2017 disqualifying the Directors. Yet another list of Directors were disqualified on 17.12.2018 by the RoC.
Issue decided in the case of MEETHELAVEETIL KAITHERI MURALIDHARAN, KAMAL ANEESMOHAMED, SATHISH KUMAR GOPAL, GOVINDASAMY BALASUBRAMANIAM, PAARI SENTHIL KUMAR, PAARI DHANALAKSHMI, VERSUS UNION OF INDIA, THE REGISTRAR OF COMPANIES TAMIL NADU, CHENNAI, [2020 (10) TMI 595 - MADRAS HIGH COURT] where it was held that if a person is a director of five companies, which may be referred to as companies A to E, if the default is committed by company A by not filing financial statements or annual returns, the said director of company A would incur disqualification and would vacate office as director of companies B to E. However, the said person would not vacate office as director of company A. If such person does not vacate office and continues to be a director of company A, it is necessary that such person continues to retain the DIN.
Following the decision of the Hon'ble First Bench of this Court in Meethelaveetil Kaitheri Muralidharan's case, the Writ Petition is allowed.
-
2020 (12) TMI 1294
Seeking early disposal of appeal - HELD THAT:- Since the NCLT is seized of the proceedings and is to shortly take up the applications for interim relief, we are not entertaining the present civil appeal. It has been agreed by the contesting parties who are represented by Mr Shyam Divan, Dr Abhishek Manu Singhvi, Mr. Mukul Rohatgi, Mr Darius Khambatta and Mr Navroj H Seervai, learned senior counsel that the parties shall proceed with the applications for interim relief before the NCLT so as to bring early closure to this aspect of the case. The NCLT is requested to endeavour an expeditious disposal of the interim applications, preferably within a period of eight weeks.
Appeal disposed off.
-
2020 (12) TMI 1293
Seeking order from this Tribunal to direct the respondent No. 2 to consider it as a ‘Financial Creditor’ - CIRP proceedings going on - related party or not - Applicants’ main grievance is that they have not been made part of the CoC as they have been considered as “related party” nor their amount invested with the Corporate Debtor is being considered as Financial Debt and, therefore, they have been denied proportionate voting in the Corporate Debtor Company - demand for a Forensic Audit of the Corporate Debtor Company.
HELD THAT:- The Bench has no hesitation in accepting the fact that together the Applicants hold about 48% shareholding of the Corporate Debtor and Applicants No. 2 and 3 are shareholders with shareholding of more than 3% each and also were Directors of the Company and now suspended Directors of the Company. They were not only the Directors but also in control of the affairs of the Company. This Bench therefore concludes that the Applicants are “Related Party” in terms of Section 5(24)(a) and also in terms of Section 5(24)(m)(i) - The Applicants were not only the directors of the Company and covered squarely under Section 5(24)(a) of the Code but they were also managing the day-to-day affairs of the Company as per their own submissions and therefore, they are perfectly covered under Section 5(24)(m)(i) of the Code. The Bench has no doubt in its mind that the Applicants were aware of this fact and it is for this reason that the Applicant No. 2, as brought out by the Resolution Professional, has attended the CoC meeting held on 24.06.2020 (1st CoC meeting) as well as the 2nd CoC meeting held on 12.09.2020, as “Suspended Director” of the Company.
The claim amount which the Applicants want to be treated as “Financial Debt” - HELD THAT:- The Bench is of the considered view that the payments given, as per MoU dated 10.12.2018, is only for acquisition of shares and not as financial debt - This Bench is aware of the fact that the sum of ₹ 50 Lakhs was paid by the Applicant on behalf of the Corporate Debtor to SIDBI. It has been paid to SIDBI towards settlement of dues of M/s E & G Global Estates Limited. The relevant Para of this letter of October 2019 mentions that “we will pay token amount of ₹ 50 Lakhs towards as token amount for settlement of case of ₹ 4 crores filed by SIDBI against M/s. E & G Global Estates Ltd.”. The Bench notes, subsequently ₹ 50 Lakhs was paid directly by the Applicants to SIDBI on behalf of the Corporate Debtor.
This Bench, therefore, have no doubt in its mind that any money given to the Corporate Debtor by the Applicants was only and only for the purpose of acquisition of the Company by way of incremental purchase of shares and not a “financial debt”. This Bench is also clear, as has been demonstrated in the other paragraphs, that the set of the Applicants are “related party”, therefore, have no business to be the part of the CoC. The Resolution Professional has rightly taken them as suspended directors of the Company.
Prayer to conduct the forensic audit of the Corporate Debtor Company - HELD THAT:- The Resolution Professional mentions that a forensic audit has already being conducted by M/s. Mazars Business Advisors Pvt. Ltd. and that the Auditors would be submitting their reports in next two months‟ time.
Other prayers of the Applicants, regarding the existing CoC, be quashed as it is of no consequence and cannot be considered.
Application dismissed.
............
|
9911796707
