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Showing 181 to 200 of 1396 Records
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2021 (4) TMI 1216
Grant of regular bail - Smuggling - Heroine - Cocaine - Methaempthaine - Service of valid notice or not - HELD THAT:- Notice U/s 50 of the NDPS Act is a defective notice, it requires deep scrutiny of the statement of the witnesses and the documents and at the stage of bail, it would not be proper to minutely analyze the statement of the prosecution witnesses and the documents and in depth analysis of the case of the prosecution is not to be undertaken as it might prejudice the case of either of the parties. The question as to whether the petitioner and his co-accused were having common intention is also to be seen during the course of trial.
The allegations against the petitioner are that of dealing with the commercial quantity of the contraband and therefore, rigors of Section 37 NDPS Act are applicable. In the present case, there is nothing before this Court to believe that the petitioner/accused is not guilty or he would not commit the offence once granted bail. It is also pertinent to mention that the statements recorded U/s 67 of the NDPS Act are not exculpatory - no ground for bail is made out, the bail application is, therefore, dismissed.
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2021 (4) TMI 1215
Levy of Sales Tax - works contract or not - conversion of corrugated box - addition made only on estimation without having any rational nexus with materials on record - HELD THAT:- A careful perusal of the agreement between the Petitioner and IDL would show that what was entrusted by IDL to the Petitioner was in sum and substance, a job work. The quality of paper and the material to be supplied for making of the corrugated boxes was pre-determined. M/s. IDL also determined the dimensions of the boxes. The minutes of the meeting make it clear that after conversion of the material into corrugated boxes, they had to be sent back to M/s. IDL. What was paid for the job work was the conversion rate of ₹ 5.25 per box. Freight was borne separately by M/s. IDL. At no point in time was there any transfer of property in the boxes to the Petitioner.
After referring to the decisions in THE ASSISTANT SALES TAX OFFICER AND OTHERS VERSUS BC. KAME [1976 (12) TMI 164 - SUPREME COURT]; THE STATE OF PUNJAB VERSUS ASSOCIATED HOTELS OF INDIA LTD. [1972 (1) TMI 80 - SUPREME COURT]; HINDUSTAN AERONAUTICS LTD. VERSUS STATE OF KARNATAKA [1983 (12) TMI 259 - SUPREME COURT]; HINDUSTAN AERONAUTICS LIMITED VERSUS STATE OF ORISSA [1983 (12) TMI 260 - SUPREME COURT] and STATE OF TAMIL NADU VERSUS ANANDAM VISWANATHAN [1989 (1) TMI 359 - SUPREME COURT], this Court came to the conclusion that the very wording of the agreement made it clear that it was a job work. It was concluded that the photo identity cards supplied to the CEO are not commercial commodities and the same cannot be used or sold by the Petitioner to any other person. The material purchased and utilized in preparation of photo identity cards was very negligible and incidental.
The agreement between the Petitioner and M/s. IDL does not answer the characteristics of a works contract as defined in Section 2 (jj) of the OST act. There is also no element of sale as defined under Section 2 (g) thereof. The dominant object is indeed skill and labour to convert paper and board into corrugated cartons or boxes - Decided in favor of assessee.
Appeal allowed.
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2021 (4) TMI 1214
Application u/s 245D (4) to Settlement Commission rejected - learned Senior Standing Counsel is of the opinion that in the present case, the Settlement Commission formed an opinion that the petitioner had not made full and true disclosure with reference to certain incriminating evidence. Therefore, the order of rejection is in consonance with the provisions of the Act - HELD THAT:- This Court is of the considered opinion that it is a pre-requisite condition that an assessee, who approaches the Settlement Commission under Section 245C of the Act, must disclose true and full income. How to form an opinion regarding true and full disclosure of the assessee.
Undoubtedly, it is a difficult procedure to be adopted and further, various facts and circumstances are also to be ascertained. Thus, the procedures are contemplated under Section 245D of the Act. Various stages are provided for the purpose of deciding the application filed under Section 245C. While the process of adjudication of an application is in progress, the Authorities Competent are empowered to provide additional informations, report enabling the Commission to decide the issues in a proper perspective.
The application filed under Section 245C is a special provision contemplated for the purpose of settling the cases in a speedy manner, only in the event of furnishing the true and full disclosure of income by an assessee along with the application.
Doubts raised based on incriminating evidence by the Department and the particulars produced by the assessee are sufficient enough to form an opinion that there was no true and full disclosure. The true and full disclosure contemplated under the provision must be understood that the said disclosure must be an acceptable disclosure with reference to the documents and evidences available with the Department. The very settlement is a consensus to arrive a settlement and the parties are expected to be fair and honest. With this idea, the concept of true and full disclosure is contemplated in the provision.
As far as the writ proceedings are concerned, such disputed facts and circumstances with reference to the documents and evidence cannot be adjudicated under Article 226 of the Constitution of India. Such an adjudication must be done by the Competent Authority by conducting a fullfledged enquiry/trial. In the event of rejection of an application filed under Section 245C, the matter shall go before the Assessing Officer before whom the assessee would get an opportunity to submit his explanation or documents or otherwise. Thus, the High Court under Article 226 cannot adjudicate or made any finding with reference to the disputed facts. Thus, the contention raised by the writ petitioner in this regard need not be considered.
The entire findings of the Settlement Commission reveal that certain contra materials were produced by the Department before the Settlement Commission and disputed statements are also made. All such disputed statements and evidences cannot be adjudicated by the High Court.
This being the factum, this Court is not inclined to entertain the writ petition and further, the procedures followed for deciding the issues as well as the decision arrived are in consonance with the provisions of the Act and there is no perversity or infirmity as such. Accordingly, the writ petition stands dismissed.
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2021 (4) TMI 1213
Refund of IGST - goods exported out of India - grievance of the petitioner is that exports were made in September 2017, but till date, IGST is not refunded to the petitioner - HELD THAT:- The issue involved decided in case of M/S. PRECOT MERIDIAN LIMITED VERSUS THE COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS [2020 (1) TMI 90 - MADRAS HIGH COURT] where it was held that respondents are directed to refund the amount of IGST paid by the petitioner for the goods exported from India which are zero rated supplies, within a period of six weeks from the date of receipt of a copy of this order.
The first respondent herein is directed to sanction the refund of IGST of ₹ 2,54,449/- paid by the petitioner in respect of the goods exported i.e 'Zero Rated Supplies' made vide shipping bills mentioned herein above along with entitled interest @ 9% to the petitioner till the date of actual refund, within a period of six weeks from the date of receipt of a copy of this order - petition allowed.
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2021 (4) TMI 1212
Refund of IGST - Export of goods - zero rated supplies - grievance of the petitioner is that exports were made in September 2017, but till date, IGST is not refunded to the petitioner - HELD THAT:- The issue involved decided in case of M/S. PRECOT MERIDIAN LIMITED VERSUS THE COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS [2020 (1) TMI 90 - MADRAS HIGH COURT] where it was held that respondents are directed to refund the amount of IGST paid by the petitioner for the goods exported from India which are zero rated supplies, within a period of six weeks from the date of receipt of a copy of this order.
The first respondent herein is directed to sanction the refund of IGST of ₹ 2,35,008/- paid by the petitioner in respect of the goods exported i.e 'Zero Rated Supplies' made vide shipping bills mentioned herein above along with entitled interest @ 9% to the petitioner till the date of actual refund, within a period of six weeks from the date of receipt of a copy of this order - petition allowed.
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2021 (4) TMI 1211
Reopening of assessment u/s 147 - assessee has claimed erroneous reduction in the value of inventory being flats under construction as per joint venture development, which will be complete on receipt of share of flats apart from cash by the assessee company as agreed in the Joint Venture document which has not taken place during the year - HELD THAT:- In the reasons given for reopening the assessment, it is stated that the issue of reduction in respect of inventory was not considered during the course of scrutiny proceeding.
As further stated that the Tripartite agreement dated 12.3.2012 and the financial submitted by the petitioner are itself tangible materials for reopening of the assessment and there was no change of opinion by the AO.
The impugned order further states that the assessment were scrutinised to find out the difference between the opening stock of the current year with the closing stock of the previous year and the details and evidence were called for were restricted to that issue only and that the issue relating to reduction in the value of inventory was not considered during the course of scrutiny and therefore the notice has been issued to reopen the assessment.
As find substantial merits in the submission of the learned counsel for the respondent. The assessment is driven based on the returns filed by an assessee and therefore it is for the assessee to make correct computation of income for the purpose of payment of income tax. If there is any irregular claim for deduction/exemption, the respondent assessing officer is well within his rights to reopen the assessment as long as which reopening of the assessment is not on account of any change of opinion as has been held by the Honourable Supreme Court has followed by all the High Courts.
It cannot be stated that the impugned notice has been issued merely on account of change of opinion. Further, the petitioner has also not clearly explained how a reduction in the value of inventory was made at the time of filing of the returns. In these proceedings, the petitioner is hiding behind the cloak of the few ratios of the Court which may not be applicable to the facts of the case. Therefore, In my view, the respondent Income tax Department was justified in reopening the assessment under section 148 of the Income Tax Act, 1961. It is still open to the petitioner to substantiate its defence before the respondent by filing suitable reply and explain how the computation of the income was made for the purpose of payment of tax and thus, the taxable income was correctly determined.
Therefore, am inclined to dismiss this writ petition. I however give liberty to the petitioner to participate in the proceedings pending before the respondent. The petitioner may therefore file additional reply, if any, within a period of 30 days from date of receipt of copy of this order before the respondent explaining its stand. The respondent is directed to examine the issue a fresh and pass an assessment orders on merits in accordance with law within a period of 90 days from the date of receipt of copy of this order.
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2021 (4) TMI 1210
Validity of SCN - Case of petitioner is that the SCN was issued by an incompetent authority, not having jurisdiction under the provisions of the Customs Act, 1962, and therefore, the entire proceedings are liable to be set aside - proper authority as contemplated under Section 28(4) of the Customs Act - HELD THAT:- The High Court cannot adjudicate the facts and merits with reference to documents and evidences. Trial is not entertainable under Article 226 of the Constitution of India. All such procedural aspects are to be followed by complete adjudication/trial by the original authorities as well as by the appellate authorities under the provisions of the Statute and the powers under Article 226 of the Constitution of India is limited to find out whether the processes contemplated under the Statutes and the procedural aspects are followed by the competent authorities as well as the appellate authorities or not. The High Court, under Article 226 of the Constitution of India, is not expected to usurp the powers of the appellate authorities by adjudicating the merits of the matter on certain documents and evidences - Powers of the High Court under Article 226 of the Constitution of India cannot be extended nor widened so as to allow lay hands on the facts and circumstances by conducting the trial, nor certain facts and circumstances with reference to documents and evidences can be assumed or presumed or inference can be drawn, which is not preferable.
Usurping the powers of the appellate authorities by the High Court by invoking its powers under Article 226 of the Constitution of India is certainly unwarranted. The parties must be provided an opportunity to approach the appropriate authorities for redressal of their grievances in the manner known to law. In the event of entertaining all such writ petitions, the High Court will not only be over-burdened, but usurping the powers of the appellate authority is certainly not desirable - Jurisdictional error should not result in exoneration of liability. Jurisdictional error, if any committed, is technical, and thus, rectifiable. In such circumstances, the Courts are expected to quash the order passed by an incompetent authority and remand the matter back for fresh adjudication. Contrarily, if an assessee is exonerated from liability, undoubtedly, the purpose and object of the Act is defeated.
Large number of writ petitions are filed without exhausting the statutory appeal remedies and High Court is also entertaining such writ petitions in a routine manner. Keeping such writ petitions pending for long time would cause prejudice to the interest of the assessee also. Thus, such statutory provisions regarding the appeal are to be decided at the first instance, enabling the litigants to avail the remedy by following the procedures as contemplated under law. Such writ petitions are filed may be on the ground of jurisdiction or otherwise.
This Court has no hesitation in arriving at a conclusion that the petitioners are bound to exhaust the appellate remedy, either under Section 128 or Section 129 of the Customs Act, respectively - Petition dismissed.
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2021 (4) TMI 1209
Levy of GST - license fee granted to the Private Contractors to run parking of vehicles - HELD THAT:- The license, rental, lease amounts to supply and as per Schedule II of the Act, license to occupy the land and renting of an immovable property, are also supply of services - It is an admitted fact that all the writ petitioners are Contractors, who were granted license to run parking areas for vehicles in the Railway premises by the Southern Railway. All the writ petitioners participated in the tender process and were successful in the tender and entered into an agreement with the Southern Railway, agreeing certain terms and conditions stipulated.
When there is no provision to collect the GST from the contractors on the license fee, then the terms and conditions of the agreement became null and void and therefore, the conditions imposed in the agreement would not be binding on the contractors. In this regard, the learned counsel for the petitioner relied on Section 32 of the CGST Act and sub-clause (2) to Section 32 stipulates that “no registered person shall collect tax except in accordance with the provision of this Act or the Rules made thereunder” - In the present cases, even before the introduction of the present CGST Act, the Contractors were paying the taxes based on the erstwhile Act, mainly Service Tax Act. After the implementation of the CGST Act, when there is prohibition of unauthorised collection of tax, the demand now made by the Southern Railways is in violation of the provisions of the CGST Act and therefore, the writ petitions are to be allowed.
When there is a specific bar under the Act, more specifically, under Section 32, there is no reason whatsoever to make a demand for recovery of GST from the writ petitioners. Such a collection of tax is unauthorised and it is clarified that the collection of tax in such circumstances, more specifically, from the licensees are impermissible - In these cases, the respondent-Railways have treated the parking as rented out of property and therefore, the same would not fall under the provisions of the CGST Act and the writ petitioners are not liable to pay the tax.
This Court is of the considered opinion that, the liability regarding tax regime is concerned, the Courts are expected to adopt strict interpretation of law. Liberal interpretation is impermissible, which can be adopted only in respect of certain welfare legislations and as far as the tax laws are concerned, it is to be borne in mind that strict interpretation of provisions are to be adopted, so as to recover taxes from the assessees by following the procedures contemplated - In the present cases, liability of the licensees are well enumerated with reference to Section 7 and Schedule II to the Act. As discussed above, when the liability is unambiguous and the nature of services are also falling within the scope of Section 7 r/w Schedule II, then there is no reason to consider the claim of the writ petitioners for invoking Section 32 of the Act.
It is made very clear that the Southern Railways is liable to pay service tax for the license fee collected from the respective contractors and the respective contractors are liable to pay service tax for the collections made from the end users/customers in respect of the parking slot services. Such contractors are bound to register their name under the CGST Act, by following the procedures contemplated therein there are two services involved in the entire transactions and the first service is from the Railway to the contractors and the second service is from the contractors to the customers/end users - there are two services involved in the entire transactions and the first service is from the Railway to the contractors and the second service is from the contractors to the customers/end users.
Petition dismissed.
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2021 (4) TMI 1208
EPCG Scheme - fixation of annual average turnover - export fabrics - issuance of Export Obligation Discharge Certificate - HELD THAT:- To discharge the export obligation for import of capital goods for a sum of ₹ 2,88,57,944.00.( ₹ 57,73,588 x 8) in eight years, the average export performance of the petitioner per year would be only ₹ 36,07,243/-. Therefore, it would have been sufficient for the petitioner to maintain an average export performance of ₹ 36,07,243/- per annum only i.e [₹ 2,88,57,944.00/8] - However, the average export performance to be achieved by the petitioner in a year was fixed in the EPCG license dated 6.1.2005 at ₹ 1,97,93,333.33 per annum. The said average export performance of ₹ 1,97,93,333.33 per annum almost equivalent to 68% of the total export obligation to be achieved by the petitioner over a period of eight years for a value of ₹ 2,88,57,944.00 under the said license. Thus, the calculation of average export performance of ₹ 1,97,93,333.33 per annum in the licence was skewed.
Failure of the petitioner to achieve a average export performance for the appellant to ₹ 1,97 93,333.33 per annum cannot be to the disadvantage of the petitioner, if the petitioner was in a comfortable position to achieve the export obligation of ₹ 2,88,57,944.00 - In this case, it is the case of the petitioner that between 2002-2003 and 2004-2005 the petitioner had exported goods worth ₹ 39,55,76,700.00 which exceeded the overall export obligation to be achieved by the petitioner for a sum of ₹ 2,88,57,944.00. This would require a proper examination both by the officers of the Ministry of Commerce i.e. the respondent Nos.1 and 3.
Case remanded back to the respondents under the Ministry of Commerce and the Ministry of Finance to re-examine the issue a fresh in the light of the above observation and after considering the submission of the petitioner. Benefit of several amnesty schemes which were issued by the Ministry of Commerce from time to time may also be extended if the petitioner is otherwise entitled to the same - petition allowed by way of remand.
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2021 (4) TMI 1207
Maintainability of petition - availability of alternative remedy - order passed against a dead person - HELD THAT:- The contention that the order was passed against a dead person is incorrect, as the legal representative/son of the deceased participated in the enquiry proceedings and thereafter, the final order was passed by the Commissioner and a copy of the same was also communicated to the son of the deceased. This being the factum, the grounds raised in the writ petition deserve no merit for consideration.
It is clear that the petitioner has to exhaust the statutory remedy provided under the Act and this Court, under Article 226 of the Constitution of India, cannot adjudicate disputed facts, which are all to be adjudicated with reference to the documents as well as the evidences to be produced before the competent authority and before the Appellate Tribunal. In the absence of establishing such facts with reference to the records, High Court cannot place appreciation on those facts now raised by the petitioner in the present writ petition.
The petitioner has to exhaust the statutory remedy, if at all chosen to do so. This being the factum established, the petitioner is at liberty to approach the Tribunal under Section 86 of the Act by following the procedures contemplated - Petition disposed off.
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2021 (4) TMI 1206
Application for contempt proceedings - Interest on Refund of duty - principles of unjust enrichment - case of appellant is that the amount of refund was directed to be credited to the Consumer Welfare Fund under Section 27(2) of the Customs Act, 1962 but the claim for interest was rejected - HELD THAT:- The Court has extracted the observations from the order-in-original dated 29.11.2019, which was impugned in the petition. The Court held and observed that “the process involved in processing the refund casts serious duty upon the concerned officer to advert to the facts pleaded before the authority for coming to the conclusion that though refund is payable but the same is required to be deposited and paid in the Consumer Welfare Fund for want of any document or other evidence to indicate that the payment of refund would not result into unjust enrichment to the recipient”. The Court found complete silence in the order impugned qua the contention of the applicant and accordingly, held that on the face of it, the order impugned indicated that the machinery in question, on which duty was paid and duty was sought to be claimed as refund, was not in any manner capable of being dealt with or for passing on, so as to pass on the burden of duty to the consumer or end-user.
The Court was quite annoyed by the fact that the contention raised by the applicant in relation to the duty paid on the machinery, which was sought to be claimed as refund, was not addressed since the contention of the applicant was all along that there was no consumer or end user and therefore, in no manner, goods were capable of being dealt with or passed on, so as to pass on the burden of duty to the consumer or the end-user. This being a vital aspect and as there was complete silence in answering this vital issue, the Court directed the authority to decide this issue which would have a bearing on the issue of refund given to the consumer welfare fund and interest. Thus, both the aspects of refund and interest, after affording opportunity to the applicant were to be concluded instead of ordering consideration of the aspect of interest alone.
The act, alleged to be willful and in complete defiance of the Courts directions, is an act which based on the interpretation of the order and on law and the same cannot be said to be in willful disobedience of the order of this Court. The jurisdiction under the Contempt of Courts Act is not to be invoked unless the Court finds that the act on the part of the authority is deliberate and in willful disobedience of the order of this Court. Unless a real and serious prejudice is shown, which can be regarded as a substantial interference with the due course of justice, this jurisdiction would not be available - in the instant case addresses the contention of the applicant, which, according to the Court, had not been dealt with in the previous order and if the same has also been addressed by giving cogent reasons, what all the applicant is expected to do is to question the outcome before the appellate authority or by way of appropriate legal challenge.
The non-grant of refund to the applicant and instead to the Consumer Welfare Fund and denial of interest are not the realms which need to be gone into in this application for contempt under the Contempt of Courts Act - application dismissed.
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2021 (4) TMI 1205
Revision u/s 263 - Tribunal quashing the order of the Commissioner of Income Tax passed u/s 263 as non-speaking and cryptic order - HELD THAT:- The first reason cited in the show cause notice was that deduction under Section 10B has been allowed without excluding other incomes. The assessee placed on record the copy of the assessment order dated 30.12.2011 passed under Section 143(3) read with Section 147 wherein AO has categorically stated that the assessee has not claimed deduction under Section 10B. Therefore, the finding of the Commissioner of Income Tax that the assessee has claimed deduction under Section 10B is factually incorrect.
So far as the genuineness of the expenditure claimed in the profit and loss account were not verified by the Assessing Officer and the Balance Sheet items and details of annexure were not examined at the time of assessment. The Tribunal, while setting aside the order of Commissioner of Income Tax, held that the Commissioner of Income Tax cannot direct the AO to conduct roving enquiry without any specific directions with regard to specific expenditure or income claimed or suppressed by the assessee. Tribunal observed that the order passed by the Commissioner of Income Tax is a non-speaking and cryptic order. Commissioner of Income Tax has not given any valid reason to come to the conclusion that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue.
No error or irregularity in the order passed by the Tribunal. - Decided in favour of assessee.
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2021 (4) TMI 1204
Refund of deposit - the deposit was paid under protest - refund of Additional Duty - HELD THAT:- There is nothing, which may prevent the respondent Department from granting the refund of ₹ 71,64,592/- (rounded off to ₹ 71.65 Lacs) made by the petitioner as Pre-deposit. The said amount was claimed by way of Pre-deposit during the investigation and was deposited by the petitioner “under protest”. It is his further say that the additional amount of Duty of ₹ 77,54,237.40 (rounded off to ₹ 77.54 Lacs) was deposited by the petitioner “under protest” for the purpose of getting the goods cleared under the various Bills of Payment. Thus, the total amount which needs to be refunded to the petitioner is ₹ 1.49 Crores (rounded off) - there being no objection on the part of the respondents in granting the refund of the amount of Pre-deposit of ₹ 71.65 Lacs (rounded off), we direct the respondents to refund the said amount of Pre- deposit within a period of Two Weeks from Today. The said amount shall be deposited in the Bank Account of the petitioner, details of which shall be furnished by the petitioner to the Department, on its Official Email ID.
Refund of amount of additional Duty collected by the respondent - HELD THAT:- The respondent Department cannot be a Judge in its own cause, more particularly, when no stay was sought for by the Department against the operation of the order passed by the Tribunal. Thus, subject to the petitioner, through its Managing Director – Shri Gyanchand Fulchand Jain, filing an Undertaking before this Court within a week that it would abide by the decision of the Apex Court eventually, the said amount of additional Duty of ₹ 77.54 Lacs (rounded off) shall be refunded to the petitioner within a period of Four Weeks from Today.
In absence of clarity in the affidavit in reply and for want of necessary instructions at the ends of learned Standing Counsel Mr. Priyank Lodha as to why Provisional Assessment of the goods is still being made under the CTH 8528 and not under the CTH 8517 when the Tribunal has held in favour of the petitioner, let specific instructions be obtained by the learned Standing Counsel Mr. Lodha before the next date of hearing in that regard.
List on 22.03.2021.
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2021 (4) TMI 1203
Cancellation of petitioner's registration - no reasons cited for such cancellation - principles of natural justice - HELD THAT:- Whatever be the tax demand of the department against the petitioner, the action under challenge cannot survive the test of law. The impugned notice has been issued only for cancellation of registration, that too without citing any particular reason. The reason stated is picked up from the statute itself namely, non-compliance of any specified provisions of GST Act or the Rules made thereunder.
Without specifying which provisions of the Act or the Rules and in what manner the petitioner has approached, granting hearing to the petitioner would be an empty formality. This apart, admittedly, so far no order cancelling the petitioner’s GST registration has been passed. If that be so, without resorting to the power of suspending the registration, if there is any, the respondent surely cannot block the petitioner’s GST account on the official portal. Any such action would prevent the petitioner from carrying on his business in lawful manner. Such an action would have the effect of suspension of the petitioner’s registration.
SCN is quashed on the ground of being vague and imprecise - the respondents are directed to unblock the petitioner’s GST account on its official portal - Petition disposed off.
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2021 (4) TMI 1202
Scheduled offence - proceeds of crime - Indian citizen or not - offence under Section 420 IPC - DEPB Scheme - HELD THAT:- From a reading of Section 2(u) of the PML Act which defines the expression “proceeds of crime”, it is limpid that the profit derived or obtained must be a result of a criminal activity which relates to a schedule offence. Even if we take the allegations in the FIR in Cr.No.123 of 2008 as gospel truth and that Viswanathan (A.1) had committed a criminal activity of obtaining an Indian passport and has thereby committed an offence under Section 420 IPC, there is no scope for him to obtain or derive any property as a result of the said criminal activity. To put it more plainly, Viswanathan (A.1) represented to the passport authorities that he is an Indian citizen and obtained passport suppressing the fact that he is a Sri Lankan citizen.
The Directorate of Revenue Intelligence had found only irregularities in the exports and had not launched a criminal prosecution against the petitioners. Even the adjudication order that was passed by the Commissioner of Customs has been set aside in appeal by the CESTAT.
An illegal immigrant from Bangladesh enters Kolkata; obtains Aadhaar card and ration card from the authorities concerned by projecting himself as a local Muslim; carries on a lawful business and earns by working hard; pays income tax, GST, etc. and buys properties. Can the properties purchased by him be categorised as proceeds of crime on the ground that subsequently, an FIR is registered against him under Section 420 IPC, provisions of the Passports Act and Foreigners Act on the ground that he is not an Indian citizen? The answer to this question is an emphatic 'No', for, there should be a nexus between the criminal activity and the property acquired therefrom. In the absence of this nexus, the provisions of the PML Act cannot be invoked.
This criminal original petition stands allowed.
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2021 (4) TMI 1201
Disallowance of depreciation on Intangible assets - HELD THAT:- As decided in own case [2020 (2) TMI 936 - ITAT PUNE]Tribunal allowed depreciation on Intangible assets of Non compete fees, Distribution net work rights and Customer list (depreciation on Goodwill was suo motu allowed by the AO). The authorities below have relied on their respective orders for the earlier years, which have been adjudicated by the Tribunal. In absence of any distinguishing facts having been brought to our notice by the ld. DR, respectfully following the precedent, we hold the assessee entitled to depreciation u/s.32(1)(ii) of the Act on the opening written down value of Non compete fees, Distribution of net work rights and Customer list.
Depreciation o goodwill - The Hon’ble Supreme Court in Smifs Securities Ltd [2012 (8) TMI 713 - SUPREME COURT] has allowed depreciation on goodwill. Respectfully following the same, we direct to allow depreciation on Goodwill also. The impugned order is overturned pro tanto resulting into grant of depreciation on opening written down value of the intangible assets.
Addition to the Intangible asset of Non compete fees and claimed depreciation thereon also - AR submitted that the assessee, while entering into original agreement with CRIL, agreed for certain more payment in future years on the basis of a formula. The said amount of ₹ 1.00 crore was stated to be pursuant to such formulae - HELD THAT:- No calculation in accordance with the formula has been placed on record. In these circumstances, we set aside the impugned order on this score and remit the matter to the file of the Assessing Officer for examining true nature of ₹ 1 crore. If the same is found out to be correct in accordance with the terms of the agreement as to the quantum and nature, then deprecation on such additional amount of ₹ 1 crore should also be granted. In the otherwise scenario, the AO is free to decide the issue as per law. Needless to say, the assessee will be granted reasonable opportunity of hearing.
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2021 (4) TMI 1200
CENVAT Credit - input services - Outward Transport Service which is used for transportation of goods from the factory of the appellant to their various depots - place of removal - HELD THAT:- There is no dispute that in the present case Outward Transportation Service was used for transportation of goods from the factory of the appellant to their own depot. In this case even as per section 4 of the Central Excise Act, the place of removal is the depot and not the factory gate. Moreover, the valuation of goods is on MRP basis. In such circumstances as per the plain reading of the Input Service definition Cenvat Credit on Outward Transportation Services is admissible up to the place of removal. In the present case depot being the place of removal, outward transportation service was used undisputedly up to the place of removal.
The appellant are entitled for the Cenvat Credit in respect of the Outward Transportation Service - Credit allowed - appeal allowed - decided in favor of appellant.
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2021 (4) TMI 1199
Refusal for grant of registration u/s 12A - Charitable activity u/s 2(15) - HELD THAT:- Though the assessee university was formed in 2008, till the A.Y 2014, it was not required to file any return of income and therefore, the assessee’s contention that it was not aware of the requirement of filing returns of income appears to be bonafide - the assessee has made an application for registration only w.e.f. A.Y 2019-20 onwards. In such circumstances, the requirement of law is that the CIT (E) has to consider whether the objectives of the assessee were charitable in nature and if the activities have already begun, then whether the assessee is carrying on its activities in accordance with such objectives.
Therefore, we agree with the learned Counsel for the assessee that the CIT (E) has not looked into the objectives of this University while considering its application for registration u/s 12A of the Act. Further, from the very next A.Y i.e. 2020-21 onwards, the assessee has been granted registration u/s 12A - it is evident that the CIT (E) while granting the registration, was satisfied about the charitable nature of assessee’s activities. In view of the same, we deem it fit and proper to remand the issue to the file of the CIT (E) with a direction to grant registration u/s 12A if the objectives and activities of the assessee are the same as were considered by the CIT (E) while granting registration u/s 12A of the Act for the A.Y 2020-21 onwards - Assessee’s appeal is treated as allowed for statistical purposes.
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2021 (4) TMI 1198
Rectification u/s 154 - AO erred in taxing the same income of assessee twice, once at special rate of 15% under Double Taxation Treaty between UK and India as per Article 13 of the said treaty and again as normal business income at the rate of 40% being the rate applicable to foreign companies - HELD THAT:- On perusal of the original as well as return of income filed in compliance to defective memo under section 139(9), we find that the assessee was having very casual approach towards filing returns of income. The return of income filed by the assessee on 30/09/2014 contains parts A and B.
After these two parts, there is a verification by the assessee and thereafter different schedules are available in the return of income. In the part A-TI (computation of income), the assessee declared [in the row 2(i)] profit and gains from business other than speculative business at ₹ 26,43,090/-. The assessee also declared income chargeable to special rates as per schedule ‘SI’ at ₹ 26,43,090/-. The Learned Counsel has claimed before us that income of the assessee was liable under section 44D has been but in the return of income filed on 30/03/2015 in the row 34(vi) (on page 58 of the paper-book) the income again section 44D reported as nil. Thus, definitely, return of income has been filed in negligent and casual manner with errors and omissions.
On perusal of the order under section 143(1) dated 10/03/2016 , available on page 78 to 83 of the paper-book, we find that in row having serial No. 10, income chargeable to tax at a special rate has been reported NIL in both columns, i.e., as provided by the taxpayer as well as computed under section 143(1) of the Act. Despite nil income reported in both columns, against Serial No. 10, the Assessing Officer in serial No. 22 has computed tax at special rate of ₹ 3,96,464/- in both the columns for taxpayer as well as under section 143(1) of the Act. Thus, there is an apparent mistake of computing tax at a special rate without any income reported for tax at a special rate.
This apparent mistake in the order under section 143(1), the finding of the Ld. CIT(A) that there is no mistake in the order of the Assessing Officer, is not correct. It is evident that the assessee is at fault for not reporting the income in proper columns, but the Assessing Officer, has also committed apparent mistakes of computing tax without considering the income for special rate. In view of the above observation and in the interest of the substantial justice, we set aside the order of the Learned CIT(A) on the issue in dispute and restore the matter back to the file of the Assessing Officer for deciding the rectification application of the assessee on merit keeping in view the cardinal principle that assessee cannot be taxed twice for the same income, one under the head “profit and gain of business and profession” and other under “special rate specified in DTAA”. It is needless to mention that the assessee shall be provided adequate opportunity of being heard. The grounds of the appeal of the assessee are accordingly allowed for statistical purposes.
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2021 (4) TMI 1197
Rectification u/s 254 - denial of deduction u/s 80-IA on interest on Income Tax refund and interest earned by the assessee on Fixed Deposits (FDs) held with the bank - HELD THAT:- We find that that the circumstances under which deposits were kept with the bank were duly noted in para 5.4 as well as in para 7 of the order. The argument that FDR would have direct nexus with assessee’s business activities and therefore, the same should be treated as part and parcel of the business activities was duly taken note of in para 7 of the order. However, the point of dispute was not the circumstances under which the deposits were held by the assessee and whether the same were part & parcel of business activities.
The same is evident from the fact that Ld. AO, in all the years, had accepted interest on FDR as Business Income only. Rather the point of dispute was whether the assessee was eligible for deduction on interest on FDR within four corners of Sec. 80-IA or not. In fact, the assessee has claimed deduction u/s 80-IA even on interest on Income Tax refund which is ultimately assessed as ‘Income from Other Sources’. Therefore, the fact that FDRs were kept out of commercial expediency and the same was part and parcel of business activities was not under dispute. The assessee claimed deduction u/s 80-IA on interest on FDRs which was assessed as ‘Business Income’ and also claimed similar deduction on interest on Income Tax Refund which was assessed as ‘Income from other sources’. Therefore, the first agreement would not convince us to alter the order, in any manner.
So far as the case laws are concerned, the decision of Hon’ble Apex Court in Liberty India Ltd. [2009 (8) TMI 63 - SUPREME COURT] was rendered on 31/08/2009 and it was concerned with deduction of DEPB Credit / duty drawback in the context of Sec.80-IB read with Sections 80-I and 80- IA. A principle was laid down therein that the words “derived from” is narrower connotation as compared to the words “attributable to” and by using the words “derived from”, the parliament intended to cover sources not beyond the first degree.
During the course of hearing of the appeal, Ld. Sr. Counsel primarily relied upon the decision of Hon’ble Delhi High Court in CIT V/s Eltek SGS (P) Ltd.[2008 (2) TMI 17 - DELHI HIGH COURT] which was rendered on 19/02/2008
However, following Liberty India, the decision of Hon’ble Delhi High Court in Eltek SGS stood reversed by Hon’ble Apex Court on [2010 (3) TMI 1255 - SC ORDER] Therefore, the ratio of this decision rendered by Hon’ble Delhi High Court and other decisions, which followed this decision, was no longer applicable.
Lastly, the two decisions of Hon’ble Rajasthan High Court and Hon’ble Madras High Court have been cited for the first time during the hearing of this application. These decisions are from non jurisdictional High Court and the same were not cited during the hearing of the appeal. Therefore, non consideration of these decisions would not make the order erroneous which would call for any interference in terms of mandate of Section 254(2).
We find that the provisions of Section 254(2) have narrow application and envisage rectification of mistakes which are apparent from record. There is power to rectify but not to review the order. The arguments of Ld. Sr. Counsel, if accepted, would amount to review of the order which is impermissible.
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