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2025 (2) TMI 77
Distribution of distribution mechanism - Whether CoC was justified in approving the Resolution Plan on the basis of security interest of the Financial Creditor and not approving the distribution mechanism on the basis of vote share of the financial creditors? - HELD THAT:- The amended provisions clearly empower the CoC to vote after considering its feasibility and viability. The manner of distribution proposed which may take into account the order of priority amongst creditors as laid down in sub-section (1) of Section 53, including the priority and value of the security interest of a secured creditor. After the amendment of sub-section (4) of Section 30, the priority and value of the security interest of a secured creditor has also become one of the factor which may be considered by the CoC for approval of a plan.
Section 30(2)(b) also provided that the Financial Creditor who do not vote in favour of the Resolution Plan shall be paid an amount not less than the amount to be paid to such creditors in accordance with sub-section (1) of Section 53 in the event of a liquidation of the corporate debtor takes place. In the present case, the Resolution Plan was submitted by the SRA which contains provision for pertaining to mechanism for payment amongst the Financial Creditors and payment to the dissenting financial creditor.
Judgment of the Hon’ble Supreme Court in India Resurgence ARC (P) Ltd. [2021 (6) TMI 684 - SUPREME COURT] which has been relied by both the parties clearly has laid down the law on the subject. In case before the Hon’ble Supreme Court, the CoC has approved the Resolution Plan approving the distribution as per the vote share of the financial creditor. The Appellant who was a financial creditor with vote share of 3.94% expressed reservations on the distribution mechanism. The CoC, however, approved the Resolution Plan with 95.35% vote shares which decision was challenged by the Appellant. The Adjudicating Authority approved the Resolution Plan and rejected the objection and Appeal filed by Appellant was also dismissed by this Tribunal against which the matter was taken by the Appellant before the Hon’ble Supreme Court.
As per liquidation value of the Appellant, he was to receive Rs.97 Crores and as per the plan approved by the CoC he has been offered Rs.1.05 Crores, thus, provision of Section 30(2)(b) are fully satisfied.
Conclusion - i) It is clear that after amendments made in Section 30(4), the CoC have been given jurisdiction to take a decision as to distribute the amount as per vote share of the financial creditor or as per the security interest which is in their commercial wisdom and decision taken by requisite vote share by the CoC is final and binding on all including the dissenting financial creditors and dissenting financial creditors at best is entitled for minimum of liquidation value. The use of expression “may” in Section 30(4) clearly indicate the discretion vested in the CoC to take into account of the matter of security interest of the secured creditors in approving the Resolution Plan. ii) There are no error has been committed by the Adjudicating Authority rejecting the application filed by the Appellant seeking direction to distribute the amount as per security interest. The decision of the CoC approving the Resolution Plan as per security interest was in accordance with Section 30(4) and has rightly been not interfered with by the Adjudicating Authority in the impugned order.
There are no error in the impugned order warranting interference by this Tribunal. There is no merit in the Appeal. The Appeal is dismissed.
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2025 (2) TMI 76
Prayer for stay of effect and operation of the impugned order - jurisdiction of Competition Commission of India (CCI) to initiate suo moto proceedings against WhatsApp LLC and Meta Platforms for the 2021 update of WhatsApp's Privacy Policy under the Competition Act, 2002 - breach of Section 4 of the Competition Act, 2002 - HELD THAT:- The decision of Supreme Court [2022 (10) TMI 1269 - SUPREME COURT] clearly supports the submissions of the CCI that suo moto proceeding initiated by the CCI was not to be interfered with. However, the Hon’ble Supreme Court has observed that the proceedings shall be decided and disposed of in accordance with law and on its own merits. The initiation of proceeding was thus, not interfered but the ultimate order passed by the Commission has to be tested on its own merits.
The directions which have been issued in paragraph 247.1 and 247.2 are with respect to “for advertising purposes” and “for purpose other than advertising”. Insofar as sharing of user data for advertising purposes, the said is going on from 2016 when 2016 privacy policy was enforced. The ban of five years which was imposed in paragraph 247.1 may lead to the collapse of business model which has been followed by WhatsApp LLC. It is also relevant to notice that WhatsApp is providing WhatsApp services to its user free of cost - the ban of five years imposed in paragraph 247.1 need to be stayed. We, however, are of the view that the directions issued by the CCI under paragraph 247.2 and 247.3 need not be stayed and they need to be complied with. The only limited interim order which we are inclined to grant is to stay the direction in paragraph 247.1 by which five years’ ban has been imposed. The direction in paragraph 247.1 are stayed.
Penalty - It is submitted by Appellant that 25% penalty has already been deposited - HELD THAT:- Subject to deposit of 50% of penalty (after taking into consideration 25% already deposited), the direction in paragraph 263 need to be stayed. The Appellant is directed to deposit 50% of penalty as indicated above within two weeks from today.
Conclusion - The five-year ban on sharing user data for advertising purposes stayed, subject to conditions imposed. The other directions and penalties imposed by the CCI upheld.
Application disposed off.
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2025 (2) TMI 75
Levy of service tax - service received from AFL and other foreign bank - service provided to an account holder or not - applicability of Rule 3 of the Place of Provision of Services Rules, 2012 - reverse charge mechanism.
Whether the appellant has received payment processing services from AFL engaged by M/s. C&A Buying, Germany-the foreign buyer to process payments to the appellant and if so, whether the demand of Service tax under Reverse Charge Mechanism is sustainable? - HELD THAT:- The identical issues as involved in the present case, were also involved in the case of M/S. AKR TEXTILE AND OTHERS VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX COIMBATORE [2020 (10) TMI 479 - CESTAT CHENNAI] wherein Chennai Tribunal has allowed 22 appeals of the exporters by setting aside the impugned orders. It is pertinent to reproduce the relevant findings of the Tribunal where it was held that 'If at all, the Hong Kong entity is an “intermediary‟ within the meaning assigned in Place of Provision of Service Rules, 2012 to render the service, it has been performed in Hong Kong and, thus, not in the taxable territory. The demand for the period after 1st July 2012 also fails. Consequently, the liability for allegedly having received services provided by M/s Amsco Finance Ltd also does not sustain.'
The service of remittance by a foreign bank to Indian bank of the exporter is not liable to service tax at the hands of the exporter. In this regard, reference is drawn to the decision of Chennai Bench of the Tribunal in the case of M/S. SKM EGG PRODUCTS EXPORT (I) LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE (APPEALS) , ANNAI MEDU SALEM. [2023 (3) TMI 1384 - CESTAT CHENNAI] wherein the Tribunal after relying upon the decision of M/S DILEEP INDUSTRIES PVT. LTD. VERSUS CCE, JAIPUR [2017 (10) TMI 1231 - CESTAT NEW DELHI] has observed 'it appears that while exporting their goods, they lodged their bills for collection to the Indian Bankers who in turn send the same to the foreign banks. The foreign banks while remitting the money to the Indian Bank, deduct their charges for collection of bills which in turn are charged by the Indian Banks from the appellants. When it is so, then the appellant are not entitled to pay the service tax.
Conclusion - For a service tax liability to arise under the Reverse Charge Mechanism, there must be a direct service provider and service recipient relationship. The deduction of charges by foreign entities as part of a trade arrangement does not constitute a taxable service to the appellant. The appellant was not liable for service tax on the services allegedly received from AFL and foreign banks.
Appeal allowed.
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2025 (2) TMI 74
Adjustment of excess duty paid by the Appellant against the demand for differential duty - applicability of doctrine of unjust enrichment to reject the claim for a refund of the excess duty paid upon the finalization of provisional assessment? - HELD THAT:- Sub-rule 6 ibid safeguards the right of the assessee to claim refund in case any amount is found paid in excess. However, this right is subject to the applicability of principle of unjust enrichment. Rule 7 nowhere talks about adjustment of excess duty paid towards the duty short paid. The view held by the Larger Bench in the Excel Rubber Limited case [2011 (3) TMI 527 - CESTAT, NEW DELHI (LB)] relied in the impugned order is that before grant of adjustment, the authority finalizing the provisional assessment will have to ascertain whether such excess amount is to be actually refunded or is liable either wholly or partly to be credited to the Consumer Welfare Fund and only thereafter make an order of adjustment to the extent the amount found to be actually refundable.
Hon’ble High Court of Karnataka in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. [2011 (10) TMI 201 - KARNATAKA HIGH COURT] where it was held that when there is provisional assessment, the same is applicable to the entirety of the goods and to arrive at final duty liability, adjustments of duty excess paid against short payment will have to be made.
Conclusion - In cases of provisional assessment, adjustments of excess duty paid against shortfalls should be made in a consolidated manner, and the doctrine of unjust enrichment does not apply when the duty incidence has not been passed on. The Appellant was entitled to adjust excess duty payments and was not subject to the doctrine of unjust enrichment.
Appeal allowed.
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2025 (2) TMI 73
Interpretation of statute - Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, in conjunction with Section 4 of the Central Excise Act, 1944 - inclusion in the assessable value, cost of specifications provided by the manufacturer of the final products manufactured by the appellant and cleared to the manufacturer along with interest and penalty - invocation of extended period of limitation - HELD THAT:- The issue raised in the case of Denso India Pvt Ltd. [2024 (3) TMI 686 - CESTAT NEW DELHI] was whether the notional cost of specifications in the form of drawings and designs supplied free of cost by Maruti to the potential vendors should be included in the assessable value of the parts or components manufactured by the vendors and cleared to Maruti for their motor vehicles. To appreciate the said issue, the Principal Bench considered the provisions of section 4 of the Central Excise Act, 1944 and Rule 6 of the Valuation Rules and observed that anything which is supplied by the buyers to the manufacture before even identifying the potential seller/ manufacturer cannot be treated as additional consideration for sale. It was, therefore, held that something can be treated as an additional consideration for sale of goods only when there exists a contract of sale or an agreement to sale between two parties and in terms thereof the buyer pays something over and above the price agreed.
It is also pertinent to take note of the fact that the Principal Bench had noted the distinction between mere specification and detailed engineering drawing as considered in the earlier decision in Mangalore Refinery & Petrochemicals Ltd. Vs. CC, Mangalore [2012 (9) TMI 712 - CESTAT, BANGALORE], where the Tribunal has held that there is a distinction between mere specifications and detailed engineering drawing. It is only the latter which is covered under rule 9(1)(b)(iv) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (which is now rule 10(1)(b)(iv) of the 2007 Customs Valuation Rules).
Conclusion - The specifications in the nature of design/drawings provided by MSIL were merely layout or dimensions of the desired parts and components as they have to be necessarily manufactured as per the requisite dimensions so that they can be fitted in the vehicle manufactured by the Maruti.
Appeal allowed.
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2025 (2) TMI 72
Challenge to Arbitral Award - reduction in the compensation awarded by the Motor Accidents Claims Tribunal to the appellants for the death of their parents in a motor vehicle accident - assessment of income of the deceased parents - HELD THAT:- The Court finds that the Award rendered by the Tribunal is well-considered. Though the claimed compensation was Rs.1,00,00,000/- each with regard to the father and the mother, the Tribunal granted Rs. 58,24,000/- re the father and Rs.93,61,000/- the mother. The documents produced by the appellants and the reasoning given by the Tribunal as well as the Karnataka High Court’s Division Bench judgment in B Parimala [2000 (7) TMI 1016 - KARNATAKA HIGH COURT] indicate, and, rightly so, that merely because the appellants stepped into the shoes of the deceased, by such factum itself, the appellants would not be capable of running the Mill. It would be of relevance as to whether due to their lack of experience and maturity, real/expected downfall in the profitability of the firm or the business would ensue. Such factor, while considering a claim pertaining to loss of future income/earnings, would have to be dealt with.
In the present cases, even the monthly incomes of the parents as claimed by the appellants i.e.. income of the father being Rs.25,00,000/- per year and the mother’s being Rs.20,00,000/- per year, the notional income fixed by the Tribunal of Rs.60,000/- each per month, is much more reasonable. It is no longer res integra that Income Tax Returns are reliable evidence to assess the income of a deceased, reference whereof can be made to Amrit Bhanu Shali v National Insurance Co. Ltd. [2012 (4) TMI 839 - SUPREME COURT]; KALPANARAJ AND ORS. VERSUS TAMIL NADU STATE TRANSPORT CORPN. [2014 (4) TMI 1332 - SUPREME COURT], and K. RAMYA AND ORS. VERSUS NATIONAL INSURANCE CO. LTD. AND ORS. [2022 (9) TMI 1654 - SUPREME COURT].
It is satisfying that between the formula applied by the Tribunal vis-a-vis the approach adopted by the High Court, the view of the Tribunal rendered in the form of the Award satisfies judicial conscience. The High Court’s reasoning militates against settled law - the Impugned Judgment of the High Court deserves to be interfered with.
Appeal disposed off.
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2025 (2) TMI 71
Admission of section 7 application - Validity of the amended default date cited by the respondent and the applicability of Section 10A of IBC - change of date of default after filing the petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) - determination of date of default.
Whether the date of default can be changed after filing the petition under Section 7 of the Insolvency and Bankruptcy Code (IBC)? - HELD THAT:- The Corporate Debtor had availed various credit facilities from Bharat Cooperative Bank through successive sanction letters dated 21.03.2017, 14.08.2018, and 11.03.2020. Despite these agreements and restructuring efforts, the CD failed to meet payment deadlines, resulting in the debt claimed by ASREC - ASREC (India) Limited/R-1 initially filed its Section 7 petition stating a default date of 31.10.2020, which was later amended to 02.08.2019. The tribunal permitted this amendment on 13.10.2023. The revised date is crucial as it aims to establish that the default occurred outside the Section 10A exemption period (introduced to protect defaults during the COVID-19 pandemic).
In Dena Bank v. C. Shivakumar Reddy and Another [2021 (8) TMI 315 - SUPREME COURT] Dena Bank sought to initiate insolvency proceedings against a corporate debtor by filing a Section 7 application with the NCLT. The bank' s petition was based on the default date related to a Non- Performing Asset (NPA) declared years earlier. Dena Bank later sought to rely on new documents and amendments. Hon’ble Supreme Court vide judgement ruled that amendments to the application or submission of additional documents could be made before the final order admitting or rejecting the petition under Section 7. The Court clarified that the law does not explicitly bar such amendments, as they support the IBC's goal of comprehensive debt recovery. However, the Court noted that such amendments should not manipulate the limitation period, but may reflect new acknowledgments of debt or judgments creating a fresh cause of action.
In the present case, Unlike Plus Corporate Ventures [2022 (10) TMI 1273 - NCLAT], where the default date clearly fell within the Section 10A period, there is dispute in the current case, over whether the default indeed occurred during this period. The respondent asserts that the default date was August 2, 2019, which predates the Section 10A moratorium period. This amended default date, places the present case outside the protective scope of Section 10A. As such, the ratio of Plus Corporate Ventures to this case does not apply.
As per the provisions of the Code, the NCLT is empowered to allow the parties to amend the pleadings before the final orders in CIRP proceedings are passed. This would however be subject to the procedure laid down in the code, as confirmed by Dena Bank (Supra). We have observed that the Adjudication Authority in this case has correctly followed the laid down process and the judgement of Dena bank is applicable squarely in this case. The amendment of date of default has been correctly allowed by AA.
Whether the date of default has been correctly identified in this case? - HELD THAT:- It is seen that RBI as the regulatory authority during the inspection of the bank found that compliance with the conditions laid down in the sanction letters were not met and hence the CD was ineligible for restructuring. Accordingly, due to noncompliance the extent sanction letter dated 17.03.2020 became void ab-initio and the same was not tenable in the eyes of law. Banks have to mandatorily comply with the guidelines of the RBI in this regard. Therefore, the date of NPA became 01.11.2019 and the original date of default would be 02.08.2019 i.e., 90 days prior the date of NPA as per RBI IRAC Guidelines. The amended date of 02.08.2019 is also supported by records from the National EGovernance Services Limited (NESL) database, which confirms the occurrence of a default prior to the COVID-19 moratorium period.
Section 10A of the IBC was introduced to provide relief to businesses affected by the economic impact of the COVID-19 pandemic by precluding insolvency proceedings for defaults occurring between 25.03.2020 and 25.03.2021. The appellant’s reliance on Section 10A is premised on the initial default date of 31.10.2020, which falls within this protected period. However, the respondent’s assertion of a default on 02.08.2019 predates the moratorium period, rendering Section 10A inapplicable - The respondent’s actions in initiating CIRP are consistent with the objectives of the IBC, which prioritize the resolution of insolvency cases in a time-bound manner to maximize asset value and ensure the equitable treatment of creditors. The evidence presented demonstrates the corporate debtor’s prolonged financial incapacity and failure to fulfill its debt obligations despite multiple opportunities to restructure and repay. The respondent, as a financial creditor, is entitled to seek relief under the IBC when defaults are established and substantiated by documentary evidence.
Conclusion - The amendment of the default date was correctly allowed and that the default date of 02.08.2019 was valid, rendering the protections under Section 10A inapplicable.
There are no infirmity in the impugned order of the Adjudicating Authority - appeal dismissed.
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2025 (2) TMI 70
Recovery of outstanding dues in cases wherein first appeal has been disposed of, till Appellate Tribunal comes into operation - Circular No.224/18/2024-GST dated 11th July, 2024 issued by the Ministry of Finance - HELD THAT:- Having considered the materials on record as also taking note of the fact that the Appellate Tribunal is yet to be constituted, the petition should be heard. Since, the petitioner has been able to make out a prima facie case, there shall be an unconditional stay of the demand of the Appellate order dated 14th June, 2023, for a period of two weeks from date.
In the event, the petitioner makes payment of 10% of the balance amount of tax in dispute, in addition to the amount already deposited in terms of Section 107(6) of the said Act, within two weeks from date, the interim order passed herein, shall continue till the disposal of the writ petition or until further order, whichever is earlier.
Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date, reply, if any, be filed within one week thereafter.
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2025 (2) TMI 69
Violation of principles of natural justice - no opportunity of hearing was granted while passing order under Section 73 of GST Act which is mandatory in terms of Section 75(4) of GST Act - challenge to order passed under Section 73 of GST Act - HELD THAT:- Considering the fact, prima-facie, the impugned order is without following the mandate of Section 75(4) of GST Act and is also in violation of principles of natural justice, thus, both the impugned orders i.e. 25.04.2024 & 10.12.2024 are quashed.
Considering the said fact, prima-facie, the impugned order is without following the mandate of Section 75(4) of GST Act and is also in violation of principles of natural justice, thus, both the impugned orders i.e. 25.04.2024 & 10.12.2024 are quashed - Petition allowed by way of remand.
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2025 (2) TMI 68
Challenge to order passed u/s 129(3) of the U.P.G.S.T. Act, 2017 - detention of goods - violation of principles of natural justice - HELD THAT:- It is apparent that the notice, Annexure-10, has been issued to the petitioner on 19.12.2024 giving seven days time to respond to the said show cause notice, however, the order dated 19.12.2024, Annexure-1, determining the same as is reflected from summary of rectification of order, the order passed earlier on 13.12.2024 in the name of the driver, has been rectified in the name of the petitioner.
The very fact that a fresh show cause was issued to the petitioner, it was incumbent on the respondents to have waited for the response to the show cause notice and thereafter, even if the rectification order was required to be passed, the same could only be passed after receipt of the reply - Passing of the order on the same day without waiting for response to the show cause notice by the petitioner was in gross violation of principle of natural justice and therefore, the order impugned passed on 19.12.2024, Annexure-1, cannot be sustained.
Petition allowed.
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2025 (2) TMI 67
Determination of tax and other liabilities relating to the petitioner as per the provisions of section 73 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Petitioner is engaged in the business of trading, leasing apart from construction of shopping malls. In the decision in Chief Commissioner of Central Goods and Service Tax & Ors. v. M/s Safari Retreats Private Ltd. & Ors [2024 (10) TMI 286 - SUPREME COURT], the Supreme Court had considered the scope and purport of section 17(5) of the CGST Act and held that the expression ‘plant or machinery’ used in section 17(5)(d) of the CGST Act cannot be given the same meaning as the expression ‘plant and machinery’ as defined in the explanation to section 17. It was further observed that the question whether a mall, warehouse or any building other than a hotel or a cinema theatre can be classified as a plant within the meaning of the expression 'plant or machinery' used in section 17(5)(d) is a factual question which has to be determined keeping in mind the business of the registered person and the role that building has in the said business.
As the impugned order has not taken into consideration the impact of the principles of law laid down in Safari Retreat’s case, this Court is of the view that the impugned order is liable to be set aside and a de novo reconsideration should be directed. The question relating to the 8 invoices and the inconsistency in the ITC reported in Table 4D(1) of Form GSTR-3B and Table 7E of Form GSTR-9 and all other contentions raised by the petitioner are left open for consideration again.
Hence Ext.P3 order dated 30.08.2024 is hereby set aside and the respondent is directed to reconsider the matter afresh - Petition allowed by way of remand.
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2025 (2) TMI 66
Requirement to deposit 10% of the disputed amount of tax on filing the appeal and further 20% of remaining disputed tax, for the impugned order to be stayed - HELD THAT:- There was notification dated 16th August, 2024 made by Central revenue reducing latter deposit to 10%. Now, State revenue has correspondingly notified on 29th October, 2024. In the circumstances, the writ petition be disposed of as covered by order dated 16th February, 2024 with modification for deposit of 10% of remaining disputed tax for impugned order to remain stayed.
The submission made on behalf of petitioner accepted, regarding corresponding notification reducing requirement of the deposit to 10% of disputed tax for impugned first appellate order to remain stayed. The deposit be made accordingly.
Petition disposed off.
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2025 (2) TMI 65
Maintainability of petition - availability of alternative remedy - Challenge to SCN - requirement to issue separate show cause notice for two separate years as they constitute difference cause of action - HELD THAT:- It is seen that the petitioner is having an alternative and efficacious remedy under Section 107 of the Central Goods and Services Tax Act, 2017. However, it is seen that single notice has been issued to the petitioner in respect of short payment of GST in respect of two financial years, which is erroneous.
The writ petition is hereby dismissed reserving liberty to the petitioner to approach appropriate appellate authority in the manner known to law, and if an appeal were to be filed, the petitioner would be entitled to the benefit of Section 14 of the Limitation Act, 1963.
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2025 (2) TMI 64
Refund of the differential tax amount under the GST regime for a works contract awarded by the opposite party - HELD THAT:- The refund be made to petitioner, as said it will be in the counter. Opposite party no.2 is do all things required to ensure that the refund is disbursed within six weeks from date. For the purpose opposite party has liberty of producing certified copy of this order to concerned authority.
Petition disposed off.
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2025 (2) TMI 63
Rejection of rectification application - petitioner’s specific contention is that there can be no computation of 40% of the actual turnover, since his gross turnover within the State of Bihar has been specifically shown in the annual return - HELD THAT:- It is found that no statutory sanction for an assessment made of the 40% of the total turnover, which is taken as the taxable transaction within the State of Bihar. In that circumstance, we find absolutely no reason to sustain the order dated 20.08.2024 itself.
On the above finding, the order of assessment (Annexure P/6) and order of rectification (Annexure- P/10) set aside. The petitioner is directed to appear before the Assessing Officer with all substantiating documents on 20th of December 2024. The Assessing Officer on the same date or on an adjourned date, the acknowledgment of which will be taken from the assessee or the authorized representative who appears on the 20th of December 2024, afford opportunity for hearing and finalize the assessment.
Petition disposed off.
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2025 (2) TMI 62
Violation of principles of natural justice - service of SCN - no opportunity of personal hearing granted - HELD THAT:- Considering the facts and circumstances of the present case and the provisions of Section 73 read with Section 75(4) of the WBGST/CGST Act, 2017, this Court is of the view that proper officer is bound to afford an opportunity of hearing, where either a request in writing is received by him from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. To afford opportunity of hearing is a statutory mandate which cannot be violated by proper officer and in the event such of violation, the order passed by the proper officer cannot be sustained.
Under the circumstances, the impugned order dated 29th August, 2023 passed by the proper officer for the period 2022-2023 cannot be sustained and deserves to be quashed and the matter deserves to be remanded to the concerned authority to pass an order afresh in accordance with law after affording reasonable opportunity of hearing to the petitioner.
Petition disposed off by way of remand.
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2025 (2) TMI 61
Vires of the provisions of Section 16(2)(c) of the State Goods and Services Tax Act, 2017 (SGST Act) identical to the Central Goods and Services Tax Act, 2017 - seeking entitlement for Input Tax Credit - It was submitted that the purchaser will be required to show that the seller has in respect of all past transaction made by him in relation to goods supplied by him, had utilized the input tax credit, which was in respect of such supplies.
HELD THAT:- Issue Rule returnable on 04.12.2024. By way of ad-interim relief, no coercive steps shall be taken by the respondent authorities during the pendency of this petition.
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2025 (2) TMI 60
Supply or not - levy of GST - payment of settlement fees against demand made by ANP - HELD THAT:- The payment by the appellant of USD 80,00,000/- to ANP, is a consequence of breach of PSC and not in pursuance of the deed of settlement & release agreement between the appellant and ANP and certainly not related to ANP's obligation to supply services to GSPC viz ANP performing certain obligations towards GSPC such as release of its performance guarantee.
The liquidated damages are paid only to compensate for loss due to breach of PSC in terms of clause 4.5(a)(iii). There is no position to pinpoint any agreement, express or implied between ANP and the six concessionaire that on receiving the liquidated damages, ANP will refrain from or tolerate an act or do an act for the concessionaires [including the appellant] paying the liquidated damages. This being the factual matrix, the liquidated damages, in terms of the aforementioned circular are merely a flow of money and such payments do not constitute consideration for a supply and hence, are not taxable. On going through the documents produced, it is difficult to establish that the impugned payments constitute consideration for another independent contract envisaging tolerating an act or situation or refraining from doing any act or situation or simply doing an act. Nonetheless, we also find that the impugned ruling dated 6.9.2021 erred in holding that the settlement amount [liquidated damages] is not due to breach in PSC but due to ANPs obligation to supply services to the appellant.
Conclusion - GSPC (JPDA) Ltd. is not liable to pay GST on the settlement fees demanded by ANP.
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2025 (2) TMI 59
Levy of GST - contract between the Applicant and IOCL is a divisible contract or a single and composite contract? - whether the component imported goods will be taxable as a supply of goods at the time of importation or as a service at the time of incorporation in the works contract i,e. when the erection, commission and installation of goods takes place? - supply of goods at the time of importation in the hands of the recipient / importer and a second time as a component of supply of service in the hands of the supplier of EPC contract service at the time of incorporation of the imported goods in a works contract by way of erection, commission and installation - value of goods sold on a high seas can be added to the value of a works contract merely because such duty and IGST paid goods are incorporated in the works contract by way of erection, commission and installation or not.
Whether the contract is a divisible contract or single and a composite contract? - HELD THAT:- The contract entered into by the applicant with IOCL is not a divisible contract, notwithstanding the fact that the turnkey contract, constitutes two different work orders, the performance of which is interconnected and interdependent.
Whether the component of imported goods will be taxable at the time of supply at the time of importation or as a service at the time of incorporation in the works contract ie when the erection, commission and installation of goods takes place? - HELD THAT:- In terms of Schedule III, read with section 7 (2) of the CGST Act, 2017, supply on HSS basis, is treated as neither a supply of goods nor a supply of services. Thus, the question of levy of GST on such supply, does not arise.
Now the taxation of goods post HSS sale to IOCL, at the time of importation, is not within the jurisdiction of this Authority as it is a matter to be decided by the jurisdictional Customs Authority in terms of Customs Act, 1962 and Customs Tariff Act, 1975. It is not required to entertain the question it being beyond the jurisdiction of this Authority.
What will be included and excluded in the value of supply, is governed by sub-sections 15 (2) & (3) of the CGST Act, 2017. In terms of sub-section 15 (2), ibid, the value of supply shall include any amount that the supplier is liable to pay in relation to such supply which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both. The EPC contract encompasses both the supply of goods and services.
The applicant, in terms of the contract, is liable to provide the goods [supplied on HSS basis to IOCL] and thereafter in terms of the work order these goods are supplied back by to the applicant as “Free Issue Materials” - the submission that this value is not to be included in the transaction value in respect of works contract service is legally not tenable more so since the applicant is contractually bound/liable to supply both the goods and the services. Therefore, in terms of section 15, ibid, the value of such imported goods would form a part of the transaction value for payment of GST.
Whether the supply of goods can be subjected to GST twice, first as supply of goods at the time of importation and secondly as component of supply of service in the hands of the supplier of EPC contract, in this case, the time of supply in respect of imported goods is when the goods land in the customs frontier? - HELD THAT:- The contract entered into by the applicant with IOCL, is a turnkey EPC contract, which is a composite works contract in terms of section 2 (119), ibid. In terms of Sr. No. 6 of Schedule II, such composite works contracts, involving transfer of property in goods (whether as goods or in some other form) involved in the execution of the said project is a composite supply & in terms of Schedule II, would be treated as supply of service and leviable to GST accordingly. Even otherwise, there is no bar in adding the value of goods sold on HSS, if subsequently, the supply undertaken is a composite works contract in view of the findings above. In-fact, in view of section 15 of the CGST Act, 2017, it is found that the law mandates addition of such value to compute the transaction value.
Conclusion - i) The contract between the Applicant and IOCL is a not a divisible contract but a single and composite contract. ii) The component of imported goods will form part of the transaction value for computation of value of works contract service. iii) The value of imported goods will form the part of transaction value for computation of value of works contract service. iv) The value of goods sold on a HSS basis will have to be added to the transaction value for computation of the value of a works contract.
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2025 (2) TMI 58
Reopening of assessment - threshold limit for initiating proceedings against an assessee - Under invoicing of exports of iron ores - addition on the basis of the report of Inquiry Commission of Justice M.B. Shah
Revenue points out the SLP [2020 (12) TMI 1403 - SC ORDER (LB)] was dismissed on the ground of low tax effect. But the contention is that the present should be treated as an exception under the relevant Circular issued by the Ministry of Finance. It is also contended that the issue here is the threshold limit for proceeding un/s 147 of the Income Tax Act but this is only the trigger point for initiating necessary proceedings against the assessee, in due course.
To receive further instruction, the counsel for the petitioner and also for the assessee jointly pray for and are granted three weeks’ time.
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