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Showing 121 to 140 of 1354 Records
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2024 (3) TMI 1234
Entitlement to the percentage of fee in respect of the sales effected by appellant (liquidator) - The appellant, who served as the liquidator for over a year, contends that his fee should be based on the total amount realized from asset sales during the liquidation period. The main contention revolves around the interpretation of Regulation 4 of the IBBI (Liquidation Process) Regulation, 2016, and a circular issued by the IBBI clarifying the term "amount realized." - HELD THAT:- There is an error in the approach of the Tribunal while rejecting the application filed by the appellant which deserves to be reconsidered in terms of the order being passed herein. The issue in the present case is that the appellant effected various sales during the period he remained the liquidator of the Corporate Debtor which has been set up by the appellant in the claim application filed before the present Liquidator in which it is shown that total amount of sale is Rs. 78,47,31,778/- and the appellant is accordingly entitled to the percentage of fee in respect of the sales effected in the first six months, next 6 months, next one year and thereafter etc.
However, this aspect of the matter has not been taken into consideration either by the present Liquidator or by the Ld. Tribunal whereas it is very much clear not only from Regulation 4 (3) (unamended provision) that the amount realized is to be considered but also from Circular dated 28.09.2023 by which the term “amount realized” has been further clarified.
The impugned order is hereby set aside whereby the application filed by the appellant has been dismissed. The matter is remanded back to the Learned Tribunal which restoring the application - Appeal allowed by way of remand.
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2024 (3) TMI 1233
Seeking grant of regular bail - Money Laundering - Scheduled Offences - proceeds of crime - illegal transfer of the land - creation of fabricated documents - twin condition as per section 45 of PMLA satisfied or not - grounds of parity - HELD THAT:- The Hon’ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. [2022 (7) TMI 1316 - SUPREME COURT] has been held that the Authority under the 2002 Act, is to prosecute a person for offence of money-laundering only if it has “reason to believe”, which is required to be recorded that the person is in possession of “proceeds of crime”. Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process.
This court has “reason to believe” that prima-facie the involvement of the present petitioner is fully substantiated by the tangible and credible evidences which is indicative of involvement of the present petitioner in activity connected with the proceeds of crime.
The conditions enumerated in Section 45 of P.M.L.A. will have to be complied with even in respect of an application for bail made under Section 439 CrPC. That coupled with the provisions of Section 24 provides that unless the contrary is proved, the authority or the Court shall presume that proceeds of crime are involved in money-laundering and the burden to prove that the proceeds of crime are not involved, lies on the appellant.
The “offence of money-laundering” means whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering and the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever - on the basis of the discussion made the contention of the learned counsel for the petitioner that even if the entire ECIR will be taken into consideration, no offence will be said to be committed so as to attract the ingredients of Sections 3 & 4 of the P.M.L. Act, 2002, is totally misplaced in the light of accusation as mention in prosecution complaint dated 01.09.2023.
Ground of parity - HELD THAT:- Law is well settled that the principle of parity is to be applied if the case of the fact is exactly to be similar then only the principle of parity in the matter of passing order is to be passed but if there is difference in between the facts then the principle of parity is not to be applied - It is further settled connotation of law that Court cannot exercise its powers in a capricious manner and has to consider the totality of circumstances before granting bail and by only simple saying that another accused has been granted bail is not sufficient to determine whether a case for the grant of bail on the basis of parity has been established.
The Hon’ble Apex Court in Tarun Kumar Vs. Assistant Director Directorate of Enforcement [2023 (11) TMI 904 - SUPREME COURT], where it has been held that parity is not the law and while applying the principle of parity, the Court is required to focus upon the role attached to the accused whose application is under consideration - It has further been held in the said judgment that the principle of parity is to be applied in the matter of bail but equally it has been laid down therein that there cannot be any negative equality, meaning thereby, that if a co-accused person has been granted bail without consideration of the factual aspect or on the ground said to be not proper, then, merely because the co-accused person has been directed to be released on bail, the same will not attract the principle of parity on the principle that Article 14 envisages positive equality and not negative equality.
On comparative assessment of the allegation as per the material collected in course of investigation as referred hereinabove, it is evident that against the said Bishnu Kumar Agarwala, the allegation of purchase of the land in question has been alleged and further allegation against him is that he is involved in the activities connected with the acquisition, possession, concealment and use of the proceeds of crime and claiming and projecting the proceeds of crime as untainted property.
The twin condition as provided under Section 45(1) of the Act, 2002 is not being fulfilled so as to grant the privilege of bail to the present petitioner - Even on the ground of parity as per the discussion made hereinabove, the same on the basis of the role/involvement of the present petitioner in the commission of crime in comparison to that of the said Bishnu Kumar Agarwala, is quite different.
Having regard to the facts and circumstances, as have been analyzed hereinabove as also taking into consideration the statements made in the counter affidavit, the applicant is failed to make out a prima-facie case for exercise of power to grant bail, hence, this Court does not find any exceptional ground to exercise its discretionary jurisdiction under Section 439 of the Code of Criminal Procedure to grant bail - this Court is of the view that the bail application is liable to be rejected.
Bail application dismissed.
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2024 (3) TMI 1232
Violation of principles of natural justice - non-service of impugned order - no proof of service of order - HELD THAT:- On examining the Order-in-Original, it follows that the Special Leave Petition filed by the tax authorities against the order of the Telangana and Andhra Pradesh High Court was dismissed by the Hon'ble Supreme Court in [2019 (7) TMI 1975 - SC ORDER]. Consequently, the judgment of the Telangana and Andhra Pradesh High Court holds the field as on date. In these circumstances, it is just and appropriate that the petitioner be provided with an opportunity to contest the tax demand. It should also be noticed, in this regard, that there is no proof of service of the impugned order on the petitioner.
The impugned order is quashed and the matter is remanded for reconsideration by the 1st respondent. The 1st respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of a copy of this order - Petition disposed off.
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2024 (3) TMI 1231
Levy of service tax - Business Support Service - joint venture - setting up clean development mechanism electricity (CDM) Co-generation plant of 20 MW on Build, Own, Operate and Transfer (BOOT) basis to improve energy efficiency and to reduce steam consumption - HELD THAT:- On going through the definition of the taxable service it appears that the term “Infrastructure Support Service” includes providing of office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services etc. A clear takeaway from the definition of “Business Support Service” is that it is in the nature of outsourced work which necessarily presupposes deployment of services as well as personnel to help the business of the other person. In the instant case, no such outsourcing of work by M/s a2z Ltd to the appellant is visible. It is clear from the wordings of the definition that one party, the provider of the service should render service to support the business of the other party, that is the recipient of the service. However, in the instant case, it is found that no such arrangement is visible.
The MOU between the appellants and the M/s a2z is on a principal-to-principal basis and not on the basis of a service provider and the client. We find that while rendering a service may result in the payment of a consideration, monetary or otherwise, the vice versa is not true. Department seriously erred in viewing every consideration to be necessarily for rendering a service.
On going through the provisions of the statute, board’s clarification and the terms of the MOU, it is opined that deposit of Rs. 50,00,000/- received by the appellants from M/s a2z is not any consideration for the provision of any service. The nature of relationship between the appellant and M/s a2z is on the principal-to-principal basis and therefore, similar to a “Joint Venture”. The arrangement is mutually beneficial.
The impugned order does not stand the scrutiny of law and therefore is not legally maintainable and requires to be set aside - Appeal allowed.
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2024 (3) TMI 1230
Claim of Interest on Refund of pre-deposit (amount as was deposited in terms of Section 35F of the Finance Act) - rejection on the ground that the amount of interest on the refund claim as was already sanctioned to the appellant - HELD THAT:- It is held that Commissioner (Appeals) has wrongly relied upon the pre amended Section 35FF for denying the entitlement of interest to the appellant. The appellant is held entitled for the same. The decision of Hon’ble Apex Court in the case of Commissioner of Customs (Import), Raigad vs M/s. Finacord Chemicals (P) Ltd. [2015 (5) TMI 371 - SUPREME COURT] while discussing the liability of the department to pay the interest has referred to Departments' own circular dated 02.1.2002 wherein the Board clarified that the matters of refund other than the amount of duty would not be covered under the provisions of Section 11B of Customs Act or Section 35FF of Central Excise Act. It was held by the Hon'ble Apex Court that in such cases of refund even the concept of unjust enrichment is not applicable.
Rate of interest - HELD THAT:- No doubt the department has relied upon a notification of 2014 and as per the Section 35FF also, the rate of interest has to be more than 5% but less than 36%, however, subject to a re-notification. The above decision of Hon’ble Apex Court in M/s. Finacord Chemicals (P) Ltd. [2015 (5) TMI 371 - SUPREME COURT] which is subsequent to the said notification. Applying the said matrix, the appellant entitled for interest at the rate of 12%. The decision of Hon’ble High Court is found not applicable to the given set of circumstances. The provision involved in the said decision is the Section 129 EE of the Customs Act - the appellant is held entitled for interest from the date of deposit to the date of payment at the rate of 12%.
Appeal allowed.
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2024 (3) TMI 1229
Refund of Service Tax - Principles of unjust enrichment - Department took the view that the Appellant has not discharged onus of showing that unjust enrichment clause is not applicable in that case - HELD THAT:- The Credit Notes issued by the Public Limited Company is a proper document wherein the transaction towards credit given to their customers is properly recorded. These Credit Notes form part of their P & L Account and Balance Sheet. Therefore, the Credit Notes cannot be taken as a piece of paper as has been held by the Commissioner (Appeals). However, the veracity of the same can definitely be checked and verified before it is accepted as a proper document.
As per judgment in COMMISSIONER OF CENTRAL EXCISE, MADRAS VERSUS M/S ADDISON & CO. LTD. [2016 (8) TMI 1071 - SUPREME COURT], since the person who has initially bought the goods would have already charged the full amount on the end customer, if subsequent discount is granted to the person, there is no possibility for that discount to be passed on the end customer. Because of this reason, the Supreme Court has held that unjust enrichment clause will be applicable and no refund can be granted in that case - In the present case, the refund is purely on account of erroneously paid Service Tax. The only way unjust enrichment can get attracted is if the receiving client takes the Cenvat Credit. If it is established that no Cenvat Credit has been taken by the client, there would be no case of unjust enrichment. Therefore, it is found that in the present case, the case law of Addison is not applicable.
From the documentary evidence produced, it is felt that they should be given an opportunity to produce all these documents before the Adjudicating Authority. In view of the forgoing, the matter remanded to the Adjudicating Authority directing him to follow the principles of natural justice and decide the issue within four months from the dated of communication of this order.
Appeal disposed off by way of remand.
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2024 (3) TMI 1228
Clandestine removal - concealment of information of production capacities of its machines installed in the premises - manufacture and production of cigarettes - Evasion of GST and cess which is payable to the respondents - HELD THAT:- The power of judicial review under Article 226 of the Constitution of India is to ensure whether the processes through which a decision is taken by the competent authority is in consonance with the Act and Rules or not, but not the decision itself. Thus, all disputed facts and circumstances are to be adjudicated before the competent authority or before the appellate authority concerned. This certainly is the reason why the High Courts are not entertaining a writ petition against the show cause notices and competent authorities and notices. The demand notices are issued based on initial determination made by the original authorities.
A writ petition need not be entertained at this stage and High Court cannot adjudicate the issues relating to huge economic offence of stealthily procuring raw materials clandestine manufacturing and fraudulent supply of filter cigarettes of various brands during a particular period without payment of taxes, as alleged by the respondents resulting into issuance of show cause notices which were issued after conducting a detailed investigation in the matter by them. Even if the procedures are not followed by the authorities before issuance of show cause notices, they are bound to do so in accordance with the provisions of the Act and Rules.
The interim order granted by this Court stands vacated. However, the petitioner would be at liberty to avail the statutory alternative remedy in accordance with law, if so advised - Petition dismissed.
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2024 (3) TMI 1227
Valuation - brake shoes supplied by them to M/s SAL - Job workers of M/s SAL - whether the appellants are job-workers for M/s SAL and whether the valuation of the Brake Shoes manufactured by the appellant needs to be done taking recourse to CEVR,2000? - Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods), Rules 2000 or CEVR, 2000 - HELD THAT:- The appellants submitted the correspondence between them and M/s SAL, which indicates that though M/s SAL are making payments to the suppliers of ingots, the same is but on behalf of, the appellants, by debiting to the account of the appellants. It is seen that this is only a financial arrangement and it in itself does not render the appellants to be the job-workers of M/s SAL.
There is no indication either in the orders placed by M/s SAL on the appellants or in the invoices issued by the appellants to M/s SAL, that the whole arrangement is of any job-work - the argument of the appellant that if they were job-workers for M/s SAL, M/s SAL would have availed the benefit of notification no. 214/86 - there is no reason for M/s SAL to pay for the full value of Brake Shoes rather than job charges, if the manufacture by the appellant was only on job-work basis.
Revenue has not made out any case for rejection of declared value and fixing it at 110% of the cost of production as it is not established the appellants are job-workers of M/s SAL - the impugned order cannot be legally sustained - Appeal allowed.
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2024 (3) TMI 1226
Refund of duty paid in excess - Admitted tax or not - Valuation - freight from the factory of the appellant to the destination (customer’s premises) has to be added to the assessable value or not - place of removal - period 2014-15, April 2015, May 2015 and 1.6.2015 to 8.6.2015 - HELD THAT:- It is found that so far the fact of the not including freight in Assessable value is concerned, the same were not disputed by Revenue in the ROM Application. What was disputed by Revenue was that the said amount has been paid by way of admitted tax or self assessed tax and hence, it was not refundable unless the order of self assessment was modified in accordance with law.
The said amount of Rs.4,22,85,418/- does not form part of the self assessed tax or admitted tax of the appellant/assessee and accordingly, allowing the appeal of the assessee, it is held that they are entitled to refund of the said amount with interest as per Rules - appeal allowed.
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2024 (3) TMI 1225
Job-worker or manufacturer - Clearance of excisable goods of machine made dipped splints without payment of Central Excise duty and without following the job work procedures - whether the demand, interest and penalties imposed against the appellant is legal and proper? - HELD THAT:- From the facts narrated in the impugned order, it can be seen that the appellant was supplied with raw materials by another manufacturer. The appellant is only engaged in manufacture of machine made dipped matches. They have not manufactured any packing materials. At the time of interference by the department officers at the site of the appellant they have obtained delivery challan which evidences that the goods were being sent to the principal manufacturer. Merely because the procedure adopted for job work as per Notification No.214/86-CE is not followed, the department cannot demand duty from the job worker.
The Tribunal in the case of SREE RAYALASEEMA DUTCH KASSENBOUW LTD. VERSUS CCE., TIRUPATHI [2006 (6) TMI 505 - CESTAT, BANGALORE] has held that unless it is proved that the raw materials were not supplied by the principal manufacturer, the department cannot demand duty from the job worker.
It is also seen that the department had issued preliminary show cause notice to the principal manufacturer viz. M/s.Anja Lucifer Industries. The said party had filed an appeal before the Tribunal. The said party had opted for benefit of the Sabka Vishwas Scheme and had discharged duty as per the scheme. The principal manufacturer was thus issued discharge certificate and the appeal filed before Tribunal was dismissed accordingly. The goods therefore have already suffered duty at the hands of principal manufacturer.
The demand against the present appellant cannot sustain and requires to be set aside - Appeal allowed.
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2024 (3) TMI 1224
CENVAT Credit - input services utilized by them at the port of export like Port Services, CHA Services, CHA Services and Clearing & Forwarding Services - case of Revenue is that under N/N. 17/2009, the Appellant was eligible to get the exemption from payment of Service Tax on such services - HELD THAT:- There is no compulsion on the part of the appellant to avail the exemption as given under Notification No.17/2009.
In the case of M/S. SHYAM METALICS & ENERGY LTD. VERSUS COMMR. OF CGST & CENTRAL EXCISE, BHUBANESWAR COMMISSIONERATE [2023 (2) TMI 1030 - CESTAT KOLKATA], this Bench has relied on the final order in the case of M/S. ELECTROSTEEL CASTING LTD. VERSUS COMMR. OF CENTRAL EXCISE KOLKATA-III [2019 (2) TMI 1023 - CESTAT KOLKATA] and has held that the services rendered was within the definition of Rule 2(l) of Cenvat Credit Rules, 2004.
There are no merit in the Appeal filed by the Revenue - appeal dismissed.
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2024 (3) TMI 1223
Additional interest u/s 244A(1A) not granted - whether the assessee is entitled to additional interest as prescribed under Section 244A(1A) of the Act or not? - HELD THAT:- A bare reading of Section 244A(1A) of the Act would reflect that once the assessee’s right of refund originates as a result of an appeal effect order under Section 250 of the Act, whereby, fresh assessment or reassessment has not been undertaken, then the assessee is entitled to receive an additional interest of three per cent per annum apart from the interest accrued under Section 244A(1) of the Act, for the duration starting from the date following the date of expiry of time as permitted u/s 153(5) of the Act to date on which the refund is granted.
Section 244A(2) of the Act would manifest that the only contingency in which the statutory interest can be denied to the assessee is the circumstances where the delay is attributable to the assessee itself.
The reasons for non-issuance of the refund alongwith additional interest which is statutorily prescribed u/s 244A(1A) of the Act should be weighed on the anvil that those reasons are attributable to the assessee or not.
In the instant case, it is seen that the additional interest of three percent per annum as mandated u/s 244A(1A) of the Act is the statutorily prescribed interest and can only be denied if the statute so permits. It is also evident that the contingency for the denial of additional interest u/s 244A(1A) is envisaged u/s 244A(2) of the Act and only on the ground where the delay is attributable to the assessee. In any case, it is not the case of the Revenue that the COVID-19 pandemic is attributable to the assessee.Revenue may have had some difficulties in dealing with such instances, however, the same would not absolve the Revenue from the rigour of Section 244A(1A) of the Act.
Notably, since the Revenue has already granted the interest under Section 244A(1) of the Act without attributing any reason of delay to the assessee, we do not find any cogent reason for not granting additional interest as mandatorily prescribed under Section 244A(1A) - reasons of delay attributed to the assessee are without any logical explanation and lack merit. Therefore, taking into consideration the abovenoted facts and legal position, we find no reason to sustain the impugned order.
Allow the writ petition and hereby quash and set aside the order dated 18 November 2022. We further direct the Revenue to grant the statutorily prescribed interest as mandated under the Section 244A(1A) of the Act to the assessee, with due expediency.
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2024 (3) TMI 1222
Addition u/s 14A - Disallowance of expenditure towards earning interest income exempt u/s 10(15) - After referring the tax free funds the assessee submitted that no disallowance u/s 14A should have been made - HELD THAT:- Since it is undisputed fact that during the year under consideration also the available tax free funds were more than the investment made on which exempt income was earned therefore, following the decision of ITAT on the similar fact and identical issue as discussed supra we direct the assessing officer to delete the disallowance made u/s 14A r.w.Rule 8D in the case of the assessee. Accordingly, this ground of appeal of the assessee is allowed.
Expatriate Salary - AO was of the view that the aforesaid expenses had been incurred as overseas salaries of the expatriate was in the nature of head office expenditure, therefore, same was disallowed u/s 44C of the Act - HELD THAT:- We find that the lower authorities has not contrary disproved the material fact that both these employees have continually worked for the Indian branches of the assessee bank and both have offered their global income in India for tax. The assessee has also provided copy of document showing that necessary approval as per Sec. 35B of the Banking Regulation Act, 1949 for appointment of Mr. Danis Vaz as Chief Executive Officer of the India branches was obtained. The assessee has demonstrated from the return of income filed in the case of both these employees that their global income has been offered to tax in India for the assessment year 2005-06 to the amount of Rs.60,43,321/- in respect of Mr. Denis Vaz and amount of Rs.45,65,652/- in the case of Mr. Terry Watkins. The assessee has brought on record the relevant return of income of both the employees showing that global income was offered to tax in India in accordance with provision of Sec. 5 and Sec. 6 of the Income Tax Act for remaining present in India on secondment with Indian Branch of BNS. The revenue has not brought on record any relevant materials to disprove these material facts and evidences - Decided in favour of assessee.
Applicability of Sec. 115A to interest income from Foreign Currency Loan - CIT(A) holding that the interest u/s 115A has to be computed on the gross interest income and not on the net interest income - HELD THAT:- As per decision of ITAT for assessment year 2004-05 [2024 (1) TMI 414 - ITAT MUMBAI] as held the legislature has intended to tax the interest only on gross basis. Further in support of his arguments ld. A.R has also cited Article 10& 11 of DTAA with Canada. Notification No.10503(F No.505/2/87-FTD) - Further it has also been mentioned that section 90(2) of IT Act also provides that the provisions of this Act shall apply to the extent they are more beneficial to that assessee.- Decided in favour of assessee.
Deduction of interest paid by Indian branch to Head Office - Indian branches of the assessee bank has paid interest to the head office/overseas branches - AO had not allowed the deduction in respect of payment of interest to the HO - HELD THAT:- We have gone through the decision of ITAT for A.Y. 2004-05 [2024 (1) TMI 414 - ITAT MUMBAI] Tribunal decided the issue in favour of assessee and dismissed the ground raised in appeal by the Revenue.
Restriction of Claim of bad debts in terms of the proviso to Sec. 36(1)(vii) - HELD THAT:- As per decision of ITAT for assessment year 2004-05 [2024 (1) TMI 414 - ITAT MUMBAI] wherein Tribunal placing reliance on the decision in the case of CIT vs.UTI Bank Ltd [2013 (1) TMI 209 - GUJARAT HIGH COURT] and CBDT Instruction No.17/2008 dated 26/11/2008 dismissed the ground raised in appeal by the Department.
TP adjustment - administrative support services in relation to inter bank indemnities - assessee’s overseas branches have executed interbank indemnities against which assessee has issued guarantees on behalf of the clients of overseas branches and vice versa - MAM selection - TNMM OR CUP - HELD THAT:- Assessee has given the analysis of the aforesaid transactions that Inter-Bank indemnity is a financial arrangement wherein a bank branch will be compensated for any financial liability that it incur on behalf of its co-branch. The issuance of these arrangement is standard practice in international banking service. The assessee explained that by issuing a guarantee on behalf of the clients of BNS overseas branches, the assessee did not fall under any default/credit risk as it is secured by a back to back inter-bank indemnity issued by overseas BNS branches to the assessee. In a reverse scenario where the associated enterprises of the assessee issues guarantees on behalf of the assessee, the remuneration charges by them to the assessee was only the administrative services provided by them and not based on the rates that would have been charged to third parties.
We find in the case of BNS India no public information on third party to third party transaction of similar or identical services was found that reflects the characterstics of the services provided by BNS India. Further as per provision of Rule 10B of the I.T Rules comparables for provision of interbank indemnity services would have to be companies which provide same or similar services as BNS India, and are comparable in terms of function performed, risk assumed and asset utilized. As per the information provided by BNS India it had earned operating margin of 25.41% on operating cost which was higher than the arm’s length margin of 15.28% on operating cost. The lower authority has not brought on record any relevant material to contrary to the material facts as discussed supra in this order.
We have gone through the decision of ITAT in the case of Australia & New Zealand Banking Group Ltd. Vs. [2022 (4) TMI 1438 - ITAT MUMBAI] wherein it is held that where TPO observed that assessee had earned processing fees for issuing guarantees on behalf of its associated enterprises and rejected TNMM adopted by the assessee and proceeded to benchmark guarantee transaction using external CUP method, since data under CUP method was not available and data margins under TNMM was readily available and held that it would be appropriate to apply TNMM as most appropriate method. In the aforesaid decision it is held that TNMM method would be the most appropriate method in the facts and circumstances of the case and CUP could not be applied because of non-availability of data.
We have also perused the decision of Bank of Tokyo Mitsubishi UFJ Ltd. [2020 (5) TMI 665 - ITAT DELHI] wherein identical issue on similar fact was decided in favour of the assessee.
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2024 (3) TMI 1221
Seeking grant of regular bail u/s 439 of CrPC - Offence punishable u/s 132(1)(i)(i) of GST Act - GST registration was either suspended or cancelled - bogus purchasers - invoice of none existing suppliers - HELD THAT:- The fact that the compliant has been filed and further investigation which was pending in pursuance of the complaint has also been completed and the applicant has no previous criminal antecedents and as the complaint has already been submitted, there is no chances of tampering with the evidences and further that the applicant is in jail since 05.11.2023, I am of the opinion that the applicant is entitled to be released on bail in this case without commenting on the merits of the case.
However, this Court hopes and trusts that the trial Court shall make earnest endeavour to conclude the trial as expeditiously as possible, if there is no legal impediment.
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2024 (3) TMI 1220
Seeking to revoke the cancellation of GST registration - which was accepted by the portal and was also issued a Form DRC-03 under Rule 142(2) and 142(3) of the GST Rules, 2017 but has not issued any DRC-03 - Petitioning university paid the taxes - HELD THAT:- Learned counsel for the petitioner, today, undertakes that the petitioner shall move an application for revocation within a period of two weeks from today. Though, it is beyond the prescribed time limit u/s 30 of the Act, the petitioner is willing to pay whatever late fee/penalty be imposed for the delay in submission of the returns, and the respondents, upon such receipt of application from the petitioner, shall immediately revoke the cancellation of registration.
Given the said factual matrix of the case as also the judicial pronouncements that are referred to in the preceding paragraphs, if the default on the part of the petitioner is only so far as non-furnishing of the returns, we are of the considered opinion that subject to the petitioner making good the default, the said GST registration of the petitioner-university would get restored which would enable the petitioner to process the affiliation proceedings in respect of the various colleges under the petitioner-university, which would also generate GST revenue to the respondent authorities as well.
Thus, this Writ Petition stands allowed.
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2024 (3) TMI 1219
Validity Of Show cause notice - No reasonable opportunity provided - tax demand as a condition for remand - HELD THAT:- On examining the show cause notice and impugned order, it is clear that the entire tax liability is with regard to disparity between the GSTR-3B and GSTR-2B returns. The petitioner has, albeit subsequent to the issuance of such order, explained that ITC was validly availed of by submitting documents in support thereof. Undoubtedly, the petitioner was negligent in not doing so upon receipt of the intimation and show cause notice. Nonetheless, if the explanation of the petitioner is valid, the interest of justice would be prejudiced unless the petitioner is provided an opportunity to explain the alleged disparity.
Thus, albeit by putting the petitioner on terms, the impugned order calls for interference. Therefore, the impugned order is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order.
W.P. is disposed of on the above terms.
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2024 (3) TMI 1218
Validity of Tax demand - Non consideration of reply submitted by the petitioner / assessee - works contractor and registered dealer under applicable GST enactments - Pre-deposit - HELD THAT:- The petitioner's reply has been placed on record. Although such reply is terse, the petitioner requested for two months' time to reply by citing the pending proceedings at the instance of the central GST authorities. The petitioner also pointed out that a deposit of Rs. 1,50,00,000/- was made with regard to three assessment periods. Thus, the petitioner's reply was not taken into account and the petitioner was not provided time as requested in the said reply. In these circumstances, albeit by putting the petitioner on terms, the petitioner should be provided another opportunity.
Therefore, the orders impugned herein are quashed. Since the bank account of the petitioner was attached pursuant to a communication from the respondent to the Bank, the respondent is directed to appropriate 10% of the disputed tax demand in respect of each assessment year from such bank account. The petitioner is permitted to submit a reply to the show cause notice within a period of three weeks from the date of receipt of a copy of this order.
These writ petitions are disposed of on the above terms.
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2024 (3) TMI 1217
Assailing the order-in-original passed by the Commissioner - Violation of Principles of natural justice - HELD THAT:- We are of the clear opinion that the respondent before passing the impugned order, ought to have adopted the procedure not only to serve the show cause notice in the manner known to law, but also grant a fair and sufficient opportunity to the petitioner by issuing appropriate notices and only after granting an opportunity of a hearing and placing of all materials on record, an endeavour should have been made to pass appropriate orders. The principles of law in this regard are well settled. Thus, as the impugned order is passed in breach of the principles of natural justice, the same cannot be sustained.
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2024 (3) TMI 1216
Proper officer - Jurisdiction of Initiate investigation proceedings by the Central GST and State GST authorities simultaneously - Absence of a proper Notification u/s 6 of the respective GST Enactments for cross-empowerment - Challenged the Jurisdiction of Central Authorities - Whether the petitioners who are assigned to either the Central Tax Authorities or the State Tax Authorities under respective Central Goods and Services Tax Act, 2017 (CGST Act, 2017) and/or Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act, 2017) can be subjected to investigation and further proceeding by the counterparts under the respective GST Enactments - Validity of notices issued under Sections 62 & 67 of the TNGST Act, 2017 and orders passed u/s 73 and 74 of the TNGST Act, 2017 -
HELD THAT:- The returns to be filed by the Assessee's under the respective GST Enactments are same. They capture all the details under the respective GST Enactments applicable to an assessee. The returns are to be filed in the common portal as defined in Section 2(26) of the respective GST Enactments. As per Section 2(26) of the respective GST Enactments “Common portal” means the common goods and services tax electronic portal referred to in Section 146.
That apart, the payment of tax whether under the CGST Act, 2017 or under TNGST Act, 2017 are at the same rate. The only difference that may arise at the time of payment of tax due to utilization of the Input Tax Credit (ITC) availed on the inward supplies and their cross utilization for discharging the tax liability in terms of Chapter-X of the respective GST Enactments r/w Chapter-IX of the respective GST Rules, 2017.
As per Section 49A of the CGST Act, 2017, Input Tax Credit availed on account of Central Tax, State Tax or Union Territory Tax can be utilized towards payment of Integrated Tax, Central Tax, State Tax or the Union Territory Tax as the case may be, only after the Input Tax Credit available on account of Integrated Tax Credit has been first available on such cases. Section 49A of the CGST Act, which was inserted with effect from 01.02.2019 and notified vide Notification No.2/2019-CT 29/1-2019 as amended by GST (Amendment) Act 2018 (31 of 2018) has to be read in conjunction with Rules 88 A of the CGST Rules, 2017 as inserted by Notification No.16/2019-CT.
A similar provision is absent under the TNGST Act, 2017 and TNGST Rules 2017.
As per Section 88A of the TNGST Rules, 2017, Input tax credit on account of integrated tax shall first be utilised towards payment of integrated tax, and the amount remaining, if any, may be utilised towards the payment of central tax and State tax or Union territory tax, as the case may be, in any order. Provided that the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully.
Under Section 3 of the respective Central and State GST Enactments of 2017, both the Central Government and the State Government have appointed a “class of officers” for the purpose of enforcement of the respective GST Enactments of 2017. Apart from the officers mentioned u/s 4(1) of the respective Central GST Act, 2017 and TNGST Act, 2017, the Board (the Central Board of Indirect Taxes and Customs [CBIC]) as defined in Section 2(16) of the CGST Act, 2017 and the Government as defined in Section 2(53) of TNGST Act, 2017, can appoint such officers as they may deem fit to be the officers under these GST Enactments.
Thus, the Board can authorize any officer referred to in clauses (a) to (h) of Section 3 of CGST Act, 2017 to appoint any officers of the Central Tax below the rank of Assistant Commissioner of Central Tax to be the Central Tax Officer for the administration of the CGST Act, 2017 alone. Thus, u/s 4(2) of the CGST Act, 2017, these can be only a linear delegation.
Under Section 4(2) of the TNGST Act, 2017, all other officers shall have jurisdiction over the whole of the State or over such local areas as the Commissioner may, by an order, specify, in respect of all or any of the functions assigned to them, subject to such conditions as may be specified. Thus, the Commissioner has power to delegate powers under the Act to other Officer specified in Sub-clause (c) to (f) to Section 3 of the TNGST Act, 2017. There is no cross-empowerment u/s 4(2) of the TNGST Act, 2017.
Thus, neither the Board u/s 4(1) and (2) of CGST Act, 2017 nor the Government and/or the Commissioner u/s 4(1) and (2) of SGST Act, 2017 can appoint such officers in addition to the officer notified under Section 3 of the respective Act. Thus, the Board can appoint and delegate only to Central Tax Officers appointed under the CGST Act, 2017 for CGST Act, 2017 and the Government and/or the Commissioner can appoint and delegate only to State Tax Officers appointed under the TNGST Act, 2017 for TNGST Act, 2017.
These provisions are pari materia with Section 4 of the Customs Act, 1962 and Section 12(E) of the Central Excise Act, 1944.
Section 6(1) of the respective GST Enactments empowers Government to issue notification on the recommendation of GST Council for cross-empowerment. However, no notification has been issued except u/s 6(1) of the respective GST Enactments for the purpose of refund although officers from the Central GST and State GST are proper officers under the respective GST Enactments.
Since, no notifications have been issued for cross-empowerment with advise of GST Council, except for the purpose of refund of tax under Chapter-XI of the respective GST Enactments r/w Chapter X of the respective GST Rules, impugned proceedings are to be held without jurisdiction. Consequently, the impugned proceedings are liable to be interfered in these writ petitions.
Thus, if an assessee has been assigned administratively with the Central Authorities, pursuant to the decision taken by the GST Council as notified by Circular No.01/2017 bearing Reference F.No.166/Cross Empowerment/GSTC/2017, the State Authorities have no jurisdiction to interfere with the assessment proceedings in absence of a corresponding Notification u/s 6 of the respective GST Enactments.
Similarly, if an assessee has been assigned to the State Authorities, pursuant to the decision taken by the GST Council as notified by Circular No.01/2017 bearing Reference F.No.166/Cross Empowerment/GSTC/2017, the officers of the Central GST cannot interfere although they may have such intelligence regarding the alleged violation of the Acts and Rules by an assessee.
The manner in which the provisions have been designed are to ensure that there is no cross interference by the counterparts. Only exception provided is u/s 6 of the respective GST enactement. Therefore, in absence of a notification for cross-empowerment, the action taken by the respondents are without jurisdiction. Officers under the State or Central Tax Administration as the case may be cannot usurp the power of investigation or adjudication of an assesse who is not assigned to them.
Therefore, the proceedings initiated by the respondents so far against the respective petitioners by the Authorities other than the Authority to whom they have been assigned to are to be held as without jurisdiction. Therefore, the impugned proceedings warrants interference.
At the same time, it is noticed that there is possibly case made out against each of the petitioners and since same power ought to have been exercised by the respective counterparts of the respondents, namely the Central Authority/State Authority as the case may be, to whom the respective petitioners have been assigned, proceedings should be initiated against each of the petitioners by the Authority to whom they have been assigned for the purported loss of Revenue under the respective GST Enactments.
Therefore, while quashing the impugned proceedings, there shall be a direction to the Central Authority/State Authority as the case may be to whom the respective petitioners have been assigned for administrative purpose to initiate appropriate proceedings afresh against them strictly in accordance with the provisions of the respective GST Enactments and GST Enactments Rules and Circular issued thereunder. The time between the initiation of the proceedings impugned in these writ petitions and time during the pendency of the present writ petitions till the date of receipt of this order shall stand excluded for the purpose of computation of limitation.
These writ petitions are disposed with the above observations.
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2024 (3) TMI 1215
Seeking refund of amount deposited - department coerced to deposit the tax amounts - whether it is genuinely a coercion or it was a voluntary deposit - HELD THAT:- At the outset, it needs to be noted that the petitioner is a legal person, it is described to be a company registered under the Companies Act, 1956. As a legal person, the petitioner certainly cannot be physically coerced. The question is which of the representatives of the petitioner or its officers who were incharge of the day to day affairs of the petitioner, whether were coerced into such act. This is certainly a question of fact.
It appears that not only the petitioner decided to voluntarily deposit an amount of Rs. 2,50,00,000/-, but also, agreed that the “balance tax payment scheduled” would be made within 10 days. It also appears that the search and seizure operations revealed that an amount of more than Rs. 5 crores was due and payable towards the outstanding tax which was very well realized by the petitioner. Thus, the case of the petitioner in the present facts, in regard to any coercion or allegation of any criminal act against the respondent cannot be accepted, not only on account of the petitioner’s letter dated 13 October 2022, addressed by the petitioner to respondent No. 1, but also on the petitioner’s own conduct which does not inspire any confidence for the writ Court to accept such contention.
In our opinion, in reality or genuinely if the petitioner was to be coerced, as a prudent legal person would resort, the petitioner could have made complaints and/or representation on such actions of the officers, which in law can certainly be regarded as highhanded and illegal. However, the petitioner did not even whisper anything of such kind, in the several letters addressed to the authorities including in answering the summons, to say that such amount was recovered by the department under coercion, much less to raise the same before the appropriate police authorities. Hence, a case of such nature being directly made out in the writ petition de hors any material to that effect would not give any impetus to the petitioner’s case of any coercion by the department. In this view of the matter, such factual dispute as to whether any coercive methods were adopted by the respondents and that such amounts were deposited under duress and coercion certainly cannot be conclusively ascertained and/or gone into in the proceedings of a writ petition under Article 226 of the Constitution.
In the present case, it appears that several summonses were issued to the petitioner and that the investigation is in progress, it therefore, appears that the show cause notice, is yet not issued. It is in these circumstances, the petitioner by approaching this Court, for the first time, has made a grievance of a coercive recovery, which in our opinion, cannot be accepted.
We may also observe that when an assessee comes before the Court invoking jurisdiction under Article 226 of the Constitution and that too making a serious grievance that the department had coerced the assessee to deposit the tax amounts, certainly as to whether it is genuinely a coercion or whether it was a voluntary deposit, as seen in the present case, is purely a disputed question of fact. Such question cannot be gone into and appreciated in the proceedings under Article 226 of the Constitution.
As a result of the discussion, in our opinion, the petition is thoroughly misconceived. It is accordingly, rejected.
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