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Showing 201 to 220 of 590 Records
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2011 (10) TMI 583
Issues involved: Determination of entitlement to refund of Service Tax u/s 35G of the Central Excise Act based on the transfer of title to exported goods to a merchant-exporter before export.
Summary:
The High Court of Bombay heard the respective counsels regarding the transfer of title to exported goods by the appellant to the merchant-exporter, who then effected the export and received payment from the ultimate purchaser. The appellant had paid the Service Tax in question. The appellant's counsel argued for a broader definition of exporter and referred to a Departmental Circular and the concept of sale under the Central Sales Tax Act, 1956. The Asstt. Solicitor General supported the impugned order, stating that since the title had passed to the merchant-exporter before export, the appellant was not entitled to relief.
The Court noted that the title had indeed been transferred to the exporter before export, rendering previous judgments irrelevant. Consequently, no Substantial Questions of Law were found to arise under Section 35G of the Central Excise Act. The Court did not delve into the entitlement of the merchant-exporter, leaving it to be addressed by the competent authorities. The appeals were dismissed with no costs incurred.
In conclusion, the High Court of Bombay dismissed the appeals concerning the entitlement to refund of Service Tax u/s 35G of the Central Excise Act, as the title to the exported goods had been transferred to the merchant-exporter before export, leading to the appellant being deemed ineligible for relief. The Court highlighted the lack of Substantial Questions of Law and deferred the consideration of the merchant-exporter's entitlement for potential refund to the competent authorities.
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2011 (10) TMI 582
Issues Involved:
1. Constitutionality of Amendments: Whether the amendments to the U.P. Cinemas (Regulation of Exhibition by means of Video) Rules, 2011, are ultra vires to the Indian Telegraph Act, 1885, and the Constitution.
2. Legislative Competence: Whether the State Government has the legislative competence to regulate DTH services.
3. Licensing Requirements: Validity of the requirement for Television Signal Receiver Agencies to obtain licenses.
4. Nature of Fees: Whether the license fees imposed are regulatory or compensatory and if they violate constitutional provisions.
Analysis of the Judgment:
Constitutionality of Amendments:
The petitioners challenged the amendments to the U.P. Cinemas (Regulation of Exhibition by means of Video) Rules, 2011, asserting that they were ultra vires to the Indian Telegraph Act, 1885, and the Constitution, specifically Articles 14, 19(1)(g), 246, and 265. The amendments brought DTH services under the purview of licensing and regulation by the State Government, which the petitioners argued was beyond the State's legislative competence, as telegraph and broadcasting fall under the Union List.
Legislative Competence:
The court examined the legislative competence of the State Government under Entry 33 of the State List, which includes theaters, dramatic performances, cinemas, sports, entertainments, and amusements. The court held that the State has the legislative power to regulate entertainment, including modern means of entertainment achieved through technological advancements such as DTH services. The court emphasized the distinction between the regulation of telegraphy (a Union subject) and the regulation of entertainment (a State subject), concluding that the State's amendments were within its legislative competence.
Licensing Requirements:
The petitioners argued against the requirement for Television Signal Receiver Agencies to obtain licenses, as mandated by the U.P. Cinemas (Regulation of Exhibition by means of Video) (4th Amendment) Rules, 2011. The court upheld the licensing requirement, stating that the State Government has the authority to regulate the place of business where these agencies operate, maintain records, and ensure compliance with entertainment tax provisions. The licensing was deemed necessary to regulate entertainment activities and ensure proper tax collection.
Nature of Fees:
The petitioners contended that the license fees imposed were excessive, arbitrary, and amounted to a tax rather than a regulatory fee. The court distinguished between regulatory and compensatory fees, stating that the license fees in question were regulatory in nature, intended to control and supervise the entertainment activities of Television Signal Receiver Agencies. The court held that the fees were not compensatory, and thus, the State was not required to justify them on the principles of quid pro quo. The fees were deemed reasonable and not violative of Articles 14 and 19(1)(g) of the Constitution.
Conclusion:
The court dismissed all the writ petitions, upholding the legislative competence of the State Government to amend the U.P. Cinemas (Regulation of Exhibition by means of Video) Rules, 2011, to include DTH services within its regulatory framework. The licensing requirements and the nature of the fees imposed were found to be valid and within the State's authority to regulate entertainment activities. There was no order as to costs.
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2011 (10) TMI 581
Computation of capital gain - Held that:- Assessee has sold the shares of the same company on the same date and at the same price. Thus we are of the view that for computation of capital gain in the present case, the AO shall work out the capital gain/capital loss on the basis of consideration received by the assessee. We direct the AO accordingly.
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2011 (10) TMI 580
Whether after dismissal of Civil Appeal No.84 of 2007 of the Union of India against the order dated 07.07.2006 of the Tribunal, by this Court by order dated 19.01.2007, the Union of India can re-agitate the question decided in the order dated 07.07.2006 that the Adjusted Gross Revenue will include only revenue arising from licensed activities and not revenue from activities outside the license of the licensee?
Whether the TRAI and the Tribunal have jurisdiction to decide whether the terms and conditions of license which had been finalised by the Central Government and incorporated in the license agreement including the definition of Adjusted Gross Revenue?
Whether as a result of the Union of India not filing an appeal against the order dated 07.07.2006 of the Tribunal passed in favour of some of the licensees, the said order dated 07.07.2006 had not become binding on the Union of India with regard to the issue that revenue realised from activities beyond the licensed activities cannot be included in the Adjusted Gross Revenue?
Whether the licensee can challenge the computation of Adjusted Gross Revenue, and if so, at what stage and on what grounds?
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2011 (10) TMI 579
Issues involved: Assessment under section 143(3) of the Income Tax Act, 1961 for the assessment year 2006-07 involving valuation of shares and treatment of non-compete fees as business income.
Valuation of Shares:
The Assessing Officer challenged the CIT(A)'s order adopting earning capitalization method for valuation of shares instead of the method based on the Wealth Tax Act. The Tribunal referred to a previous case and held that the consideration attributable to non-compete obligations should be taxed as capital gains, not as business income. The Tribunal emphasized that the entire consideration for the sale of shares had already been included as capital gains, making the bifurcation academic and unnecessary. It was noted that the assessee was not actively engaged in the business, further supporting the decision to tax the consideration under the head of capital gains.
Treatment of Non-Compete Fees:
The Tribunal analyzed the Share Purchase Agreement and relevant legal provisions to determine the tax treatment of non-compete fees. It was observed that the consideration towards non-compete fees was not correctly assigned by the Assessing Officer, and the Tribunal held that such amounts should be taxed as capital gains, in line with established principles of valuation of shares. The Tribunal upheld the assessee's position of treating the entire consideration received on the sale of shares as taxable under the head of capital gains, rejecting the partial relief granted by the CIT(A) regarding the quantum of amount attributable to non-compete obligations.
Conclusion:
The Tribunal allowed the appeal of the assessee and dismissed the appeal of the revenue, following the decision in a similar case. The Tribunal upheld the action of the CIT(A) and declined to interfere, ultimately dismissing the appeal and confirming the tax treatment of the consideration related to shares and non-compete fees as capital gains.
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2011 (10) TMI 578
Issues Involved:
The issues involved in this case are the deletion of trading addition u/s 145 of the Income Tax Act, reduction of car maintenance expenses, deprecation on car, and telephone expenses from 20% to 10%.
Deletion of Trading Addition u/s 145:
The Appellate Tribunal considered the case where a survey u/s 133A revealed incomplete books of accounts and the absence of a stock register. The Assessing Officer (AO) rejected the books u/s 145 and recomputed the trading results by applying a 20% gross profit rate. The Tribunal found that the AO did not provide a basis for adopting the 20% profit rate. Consequently, the Tribunal upheld the order of the Ld. CIT(A) in deleting the addition made by the AO.
Reduction of Car Maintenance Expenses, Depreciation on Car, and Telephone Expenses:
The AO had disallowed 20% of car maintenance expenses, depreciation on car, and telephone expenses for personal use. The Ld. CIT(A) reduced this disallowance to 10%. The Tribunal found that the reduction made by the Ld. CIT(A) was reasonable and appropriate based on the facts and circumstances of the case. Therefore, the Tribunal upheld the order of the Ld. CIT(A) in this regard and dismissed the appeal of the revenue.
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2011 (10) TMI 577
Issues:
- Eligibility for duty drawback on hangers exported along with readymade garments
- Interpretation of Circular No. 5/2001-Cus., dated 19-1-2001
- Applicability of Circular No. 19/2005-Cus., dated 21-3-2005
- Compliance with Customs Act, 1962 and Customs, Central Excise Duties and Service Tax Drawback Rules, 1995
Analysis:
1. Eligibility for duty drawback on hangers: The case involved a dispute regarding the eligibility of an exporter for duty drawback on hangers exported along with readymade garments. The exporter claimed drawback on the full FOB value of garments, including the value of locally procured hangers. However, the department contended that exporters were not eligible for drawback on the value of hangers as per Circular No. 5/2001-Cus., which required suitable deductions for hangers not declared separately and deducted by the exporter.
2. Interpretation of Circular No. 5/2001-Cus., dated 19-1-2001: The Circular clarified that duty drawback is not admissible on the value of hangers exported with readymade garments. The adjudicating authority confirmed the demand of erroneously sanctioned drawback based on this Circular. The government upheld this decision, emphasizing that there was no ambiguity in the provisions of the Circular and that the exporter failed to comply by not declaring and deducting the cost of hangers separately.
3. Applicability of Circular No. 19/2005-Cus., dated 21-3-2005: The Commissioner (Appeals) relied on Circular No. 19/2005-Cus., which addressed the fixation of All Industry Rates for drawback. However, the government deemed this reliance improper as the issue at hand was specific to allowing drawback on plastic hangers at the All Industry Rates applicable to readymade garments. The government supported the adjudicating authority's interpretation of Circular No. 5/2001-Cus.
4. Compliance with Customs Act, 1962 and Rules: The government's decision was based on the adherence to Circular No. 5/2001-Cus., dated 19-1-2001, and the interpretation that hangers exported with garments were not eligible for duty drawback. The case highlighted the importance of complying with customs regulations and circulars to determine the correct amount of duty drawback admissible to exporters.
In conclusion, the government set aside the order-in-appeal and upheld the order-in-original, confirming the demand of erroneously sanctioned drawback on hangers exported with readymade garments. The judgment emphasized the significance of following circulars and regulations in determining duty drawback eligibility and calculation.
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2011 (10) TMI 576
Issues involved: Application to dispense with pre-deposit of penalty u/s 112 and 114A imposed on CHA for alleged involvement in smuggling and mis-declaration of goods.
Summary:
The judgment dealt with an application seeking to waive the pre-deposit of penalty imposed on a Customs House Agent (CHA) under sections 112 and 114A. The Commissioner imposed a penalty of Rs. 2 lakhs on the CHA for allegedly collaborating in the smuggling of goods through mis-declaration and avoiding investigation proceedings. The Commissioner noted the CHA's negligence in questioning the undervaluation of goods and highlighted the lack of inquiry by the CHA regarding the valuation aspect of the imported goods. The Commissioner found the CHA's negligence supported the importers in attempting clearance under gross mis-declaration. However, the Tribunal observed that there was no positive evidence indicating the CHA's knowledge of the mis-declaration. The adjudicating authority's reasoning that the CHA should have inquired about the correctness of the value before filing the Bill of Entry was deemed unjustifiable. The Tribunal held that the CHA cannot be held liable without direct evidence reflecting active participation in the misdeclaration. Therefore, the Tribunal dispensed with the pre-deposit requirement of penalty and stayed the recovery during the appeal process.
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2011 (10) TMI 575
Issues:
Rebate claim rejection based on non-submission of disclaimer certificate from merchant-exporter.
Analysis:
The case involves a revision application filed against an order-in-appeal rejecting a rebate claim by a manufacturer and exporter of cotton yarn. The applicant exported goods through a merchant-exporter and claimed rebate of duty, which was rejected by the Assistant Commissioner for not producing a disclaimer certificate from the merchant-exporter. The Commissioner (Appeals) upheld the rejection, leading to the revision application before the Central Government.
The applicant argued that all necessary documents, except the disclaimer certificate, were submitted along with the rebate claim and that the submission of the disclaimer certificate should not be a mandatory requirement. They contended that they had fulfilled the mandatory requirements for claiming the rebate as per the Central Excise Rules and relevant notifications. However, the government observed that the submission of a disclaimer certificate from the merchant-exporter is mandatory as per the Central Board of Excise and Customs (C.B.E.&C.) Excise Manual of Supplementary Instructions, 2005. Despite being given opportunities to provide the certificate, the applicant failed to do so, leading to the rejection of the rebate claim.
After careful consideration of the case records and relevant orders, the government found no merit in the revision application. The Central Government upheld the order-in-appeal rejecting the rebate claim, stating that the applicant's failure to submit the mandatory disclaimer certificate justified the rejection. Consequently, the revision application was deemed devoid of merit and rejected by the Central Government.
In conclusion, the judgment emphasizes the importance of compliance with procedural requirements, such as submitting a disclaimer certificate from the merchant-exporter when claiming rebates under the Central Excise Rules. The decision underscores the significance of fulfilling all mandatory requirements for claiming benefits and upholds the rejection of the rebate claim due to the applicant's failure to provide the necessary disclaimer certificate. The judgment serves as a reminder of the essential documentation and procedural obligations in excise matters to ensure the proper administration of duties and benefits.
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2011 (10) TMI 574
Issues: Stay applications for early hearing, waiver of pre-deposit of duty, interest, and penalties
Stay Applications for Early Hearing:
The applicants filed applications for early hearing of their stay applications due to the Revenue's pressure for recovery. However, since the stay applications were already listed for hearing, the request for early hearing was deemed infructuous and dismissed.
Waiver of Pre-deposit of Duty, Interest, and Penalties:
The applicants, involved in manufacturing Chlorination Plants, sought waiver of pre-deposit of duty amounting to Rs. 88,15,196, interest, and penalties. The dispute arose from whether the plants, permanently embedded in the earth after assembly, should be considered movable property liable for duty. The applicants argued that certain parts of the plant were cleared after duty payment, and service tax was charged for erection and commissioning. The Revenue, citing a Supreme Court case, contended that the plants were not permanently attached to the earth and should be considered movable. However, the Tribunal found that the plants were permanently attached to various sites and not intended for marketability without dismantling. Relying on legal precedents, including the requirement for goods to be marketable without dismantling, the Tribunal held that the applicants established a strong case for waiver of pre-deposit. Consequently, pre-deposit of duty, interest, and penalties were waived, and recovery stayed during the appeal proceedings.
Conclusion:
The Tribunal allowed the stay petitions, granting the waiver of pre-deposit and staying the recovery of duty, interest, and penalties. The judgment highlighted the importance of the marketability test and the permanency of attachment to earth in determining the liability for duty on the Chlorination Plants.
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2011 (10) TMI 573
Addition under S.69A - unexplained investment made in the construction - Held that:- We are of the view that it would be judicious and reasonable to allow a deduction of 15% from the estimated cost of construction as determined by the DVO and then to allow a further deduction of 10% towards selfsupervision. In the valuation report, the DVO has allowed rebate for self-supervision at 6%. However, as per the decisions of the Tribunal in similar cases, the rebate towards self supervision at 10% would be reasonable. Hence, further deduction on account of self-supervision has to be allowed. If these deductions are allowed, the estimated cost of construction would work out to a figure which is less than what the assessee has shown in its books of account as cost of investment in construction of building. Thus, it is seen that the amount as shown by the assessee as cost of construction in the books, is at a higher amount than the cost of construction estimated by the DVO as modified in accordance with the ratio of the rulings of the jurisdictional Tribunal in similar cases noted above. Under these circumstances, respectfully following the decisions of the coordinate Benches of the Tribunal in similar maters, we hold that no addition is called for towards unexplained investment in the construction of the building for the assessment years 2000-01, 2002-03, 2003-04, 2004-05 and 2005- 06.
Disallowance of interest - Held that:- Perusing the factual matrix of the matter, we are of the pinion that the CIT(A) has rightly allowed as Revenue expenditure, the amount of interest, which related to the period after commencement of business from the Mall during the previous year. Hence, grounds of the Revenue on this issue are rejected.
Entitled to relief under S.80IB - Held that:- Income from PAS system can be said to have been derived from the hotel business of the assessee for the purpose of allowing deduction under S.80IB. Hence, order of the CIT(A) is confirmed on this aspect - scrap sales relating to sale of empty liquor bottles, empty cartons, we appreciate that large value of such scrap has to be disposed of, periodically by the hotel and hence these receipts are also directly linked with the business of the assessee and hence, the same are also eligible for deduction under S.80IB - Miscellaneous receipt is from telephone and fax sale are installed in the rooms and are amenities which are required to be provided in a hotel to the guests. These receipts also form part of the assets of the undertaking and income therefrom have a direct nexus with the business/profits of the assessee’s business, eligible for deduction under S.80IB - miscellaneous receipt from laundry it is taken for granted that in any hotel, laundry facility would be provided Without this facility, hotel business cannot be successfully conducted. Similarly with respect to miscellaneous from sale of various items like shaving kits, toilet kits, provision of secretarial assistance, these are all amenities having a direct nexus with the running of the hotel intertwined with the business of hospitality and making the guests comfortable and taken care of and therefore, have direct nexus with the which is derived from such undertaking and as such, such miscellaneous income is eligible for relief under S.80IB. Hence, order of the CIT(A) is confirmed on this aspect.
Income by way of lease rentals, has been derived by the assessee from letting out a portion of the building. We do not find any link between the hotel business of the assessee and the letting out of the building.
Addition on account of profits attributable to the advances received - Held that:- No infirmity in the order sf the CIT(A) in holding that the addition of ₹ 66,56,500 made by the assessing officer towards accrued profit on advances, after rejecting the method consistently followed by the assessee is not sustainable in law. We also find that the amounts received by the assessee as advances cannot be cancelled and the advances will then have to be returned. There is no debt created in favour of the assessee to receive these amounts as income till the buyer pays the full amount or the property is registered in the name of the buyer.Therefore even under the mercantile system these advances cannot be considered as income.
Addition on account of lodge rent receipts - Held that:- As find that under S.145(1) from assessment year 1997-98 onwards, income chargeable under the head ‘profits and gains of business or profession’ has to be considered either in accordance with cash or mercantile system of accounting regularly employed by the assessee, and therefore, it is not open to the assessee to adopt hybrid method of accounting, i.e. to account for receipts from lodge alone on cash basis. We accordingly uphold the order of the CIT(A) and reject the grounds of the assessee on this aspect.
Interest attributable to advances made to sister concerns without interest - Held that:- We set aside this issue to the file of the assessing officer insofar as it related to investment in share application money of ₹ 4 crores, we delete the disallowance relatable to balance amount of interest free advances of ₹ 4.37 crores.
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2011 (10) TMI 572
Issues:
Cenvat credit denial based on invoices not in the name of the appellant.
Analysis:
The judgment revolves around the denial of Cenvat credit amounting to Rs. 2,04,498/- on service tax paid on input service from October 2003 to September 2006, along with the imposition of interest and penalty under Section 78 of the Finance Act, 1994. The appellant argued that the credit was disallowed solely because the invoices were in the name of Akshar Enterprises, a dummy unit created for specific service providers' requirements. The appellant contended that Akshar Enterprises and Akshar Couriers were the same entity, supported by a letter from First Flight Couriers confirming the same. The Commissioner (Appeals) acknowledged Akshar Enterprises as a dummy unit and stated that the absence of the appellant's name on the invoices was the sole reason for disallowance and penalty imposition. The appellant invoked Rule 9(2) of the Cenvat Credit Rules, 2004, asserting that the service receiver's name was not an essential requirement and requested credit allowance.
The Departmental Representative argued that Rule 3 of the Cenvat Credit Rules mandated the service to be received by the credit claimant, emphasizing that if the invoice was not in the appellant's name, credit could not be granted. Additionally, the Department contended that the service receiver's name was a fundamental requirement, making Rule 9 inapplicable in this case, rendering the credit inadmissible. However, the Tribunal analyzed Rule 9(2) which allows credit if the document contains certain particulars and the service has been accounted for in the receiver's books. The Tribunal noted that the service tax had been properly accounted for by the appellant and that the essential details were present in the document, satisfying the proviso to Rule 9(2). Considering these factors, the Tribunal found a prima facie case in favor of the appellant, granting an unconditional stay on the pre-deposit of service tax, interest, and penalty during the appeal's pendency.
In conclusion, the judgment highlights the interpretation and application of Cenvat Credit Rules concerning the essential requirements for credit allowance, emphasizing the importance of proper documentation and accounting for services received. The Tribunal's decision to grant a stay on recovery underscores the significance of establishing a prima facie case for credit eligibility, even in scenarios where invoices may not directly reflect the appellant's name.
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2011 (10) TMI 571
The Supreme Court of India dismissed Civil Appeal No. 9045 of 2011 filed by Commissioner of Central Excise, Surat-II against CESTAT Final Order No. A/1632/2010-WZB/AHD on 31-10-2011. The appeal was dismissed on the ground of delay as well as on merits.
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2011 (10) TMI 570
Issues involved: Interpretation of tax entries under the M.P. Commercial Tax Act, 1994 regarding classification of chewing gums and bubblegums as "lozenges" for taxation at 12% instead of 8%.
Judgment Summary:
The petitioner, a company manufacturing toffees, chewing gums, and bubblegums, challenged an assessment order treating chewing gums and bubblegums as "lozenges" and levying tax at 12%. The petitioner argued that these items should be taxed at 8% under the residuary entry. The High Court analyzed the relevant tax entries and common parlance meanings to determine the correct classification.
The Court emphasized that tax entries should be interpreted based on common understanding, not technical or scientific views. It noted that chewing gums and bubblegums differ from lozenges in ingredients, taste, and common understanding. Referring to a Supreme Court case, the Court highlighted the unique characteristics of bubblegum, supporting the distinction from sweetmeats.
The Court referenced a Full Bench decision of the M.P. Commercial Tax Appellate Board, which concluded that chewing gums and bubblegums do not fall under the specific entry for lozenges but are covered by the residuary entry. Previous assessment orders for the petitioner were set aside based on this interpretation.
Considering the common parlance meanings and previous legal precedents, the High Court held that chewing gums and bubblegums should not be classified as "lozenges" for taxation purposes. The impugned assessment and revisional orders were set aside, directing reassessment under the residuary entry at 8% tax rate.
In conclusion, the writ petition was allowed in favor of the petitioner, with no costs incurred.
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2011 (10) TMI 569
Issues: Interpretation of sales tax rate on aluminum conductors under a specific notification for the assessment year 1996-97.
Analysis:
1. The revision petition was filed by the petitioner-Revenue against the order of the learned Tax Board, which dismissed the Revenue's appeal regarding the correct sales tax rate applicable on the sale of aluminum conductors manufactured by the respondent-assessee for the assessment year 1996-97.
2. The petitioner argued that aluminum conductors being electrical goods should be taxed at 12 per cent based on a Division Bench decision, while the respondent contended that rectification powers under section 37 could not be used for a debatable issue like this.
3. The respondent further argued that the aluminum conductors did not fall under the specific entry in the notification, and thus, were rightly taxed at 10 per cent under the residuary entry, not warranting the additional two per cent tax under entry 81.
4. The court held that the aluminum conductors for power transmission did not fit the description of electrical goods under entry 81 of the notification, and the assessing authority misapplied the Division Bench decision in imposing the higher tax rate, leading to the rejection of the Revenue's appeal.
5. The court found that the assessing authority misinterpreted the Division Bench judgment and applied the incorrect tax rate, concluding that the rectification under section 37 was not justified, and the additional tax of two per cent was not applicable to the respondent-assessee.
6. Consequently, the court dismissed the revision petition by the Revenue, upholding the decision of the Tax Board, and ruled that no interference was warranted in the revisional jurisdiction under section 86 of the RST Act.
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2011 (10) TMI 568
Issues Involved:
1. Whether the petitioner's transactions with Bangalore-based companies constitute the sale of software in the course of inter-State sales attracting tax under the Central Sales Tax Act, 1956.
2. Whether the software, if sold, was developed and sold in Bangalore and not in the course of inter-State sales, making the levy of tax under the Act impermissible.
3. Whether the matters should be remitted back to the assessing authority for fresh assessments considering all the contentions raised by the petitioner.
Issue-wise Detailed Analysis:
1. Sale of Software in Inter-State Sales:
The primary contention raised by the petitioner was that their business transactions with Bangalore-based companies did not constitute the sale of software in the course of inter-State trade. The petitioner argued that it provided only software services by deploying personnel at the client companies' business places in Bangalore, and there was no sale of software on any media or through any other mode. The assessing authority, however, concluded that the petitioner developed and delivered software programs to Texas Instruments (India) (P) Ltd. (TI) in the course of inter-State sales, based on the Master's Software Development Agreement (MSDA) and work orders. The petitioner contested this, asserting that the services provided did not involve the transfer of software/goods as defined under the APVAT Act.
2. Development and Sale of Software in Bangalore:
The petitioner contended that even if software or goods came into existence during business transactions, they must be deemed to have come into existence at the client companies' business places in Bangalore, belonging to them under the terms of agreements. Therefore, there was no movement of software/goods from Andhra Pradesh to Karnataka, making the levy of tax under the Act impermissible. The assessing authority did not adequately address this contention, nor did it provide clear reasoning for considering the items developed as software.
3. Remand for Fresh Assessments:
The court observed that the assessing authority did not consider the matters in their proper perspective and failed to provide clear reasoning for its conclusions. The appellate authority also did not address the issues adequately. The court noted that the petitioner's services were subjected to service tax by the Central Government, an aspect not considered by the assessing authority. Given the shortcomings in the assessment orders, the court decided to set aside the impugned assessment orders and remit the matters back to the primary assessing authority for fresh assessments in accordance with law, considering all materials and contentions raised by the petitioner.
Conclusion:
The court allowed both writ petitions, set aside the impugned assessment orders, and remitted the matters back to the second respondent for fresh assessments. The assessing authority was instructed to proceed without being influenced by the observations made in this order and to consider all aspects, including the petitioner's case law and contentions. The court did not express any opinion on the merits of the matter, emphasizing the need for a detailed examination by the assessing authority. No costs were imposed, and the writ petitions were disposed of accordingly.
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2011 (10) TMI 567
Input tax credit - refund claim - genuinity of dealers - Held that: - so long as the purchasing dealer has complied with the requirements as given under rule 10(2), the claim of the purchasing dealer cannot, by any length of reasoning, be denied by the Revenue. The mere fact that the Revenue had not made an assessment on the assessee's vendor, per se, cannot stand in the way of the assessing officer considering the claim of the assessee under section 19 of the Tamil Nadu Value Added Tax Act. Going by section 17 of the Tamil Nadu Value Added Tax Act that the burden on the purchasing dealer rest to the extent of showing that he is not liable to tax under the Act and read in the context of the fact that the assessee had given his sellers' TIN number and had also produced the invoices evidencing the purchase of materials of payment of tax, I do not think that the Revenue can successfully canvass its claim that the assessee is not entitled to have the refund - petition allowed - decided in favor of petitioner.
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2011 (10) TMI 566
Issues:
Challenge to order passed by Value Added Tax Tribunal regarding penalty imposition under sections 51(7)(b) or 51(4) of Punjab Value Added Tax Act 2005.
Analysis:
The appellant argued that since there was no finding of an attempt to evade tax or tax liability, the imposition of penalty was unjustified. They relied on a Supreme Court judgment to argue against remanding the case to the authority who had already decided on the issue. However, the Assistant Excise and Taxation Commissioner found the documents produced by the appellant to be not genuine and imposed a penalty under section 51(7)(b) of the Act. The Deputy Excise and Taxation Commissioner upheld the penalty under section 51(4) for sending goods out of Punjab with improper documents.
The Tribunal remitted the matter back to the Deputy Excise and Taxation Commissioner to decide whether the penalty should be imposed under section 51(7)(b) or section 51(4) of the Act. The appellant contended that without any finding of tax liability or evasion, the question of penalty imposition did not arise for consideration.
The High Court noted that the matter being remitted back to the Deputy Excise and Taxation Commissioner did not cause any prejudice to the appellant as they were allowed to raise all contentions. The court emphasized the need for the authority to determine tax liability, evasion, or technical breaches before deciding on the penalty under sections 51(7) and 51(4) of the Act.
Referring to a Supreme Court judgment, the High Court clarified that remanding the matter for re-determination by the Deputy Excise and Taxation Commissioner was not barred by statute or precedent. The court concluded that there was no merit in the appeal and dismissed it, allowing the appellant to present all legal and factual arguments before the Deputy Excise and Taxation Commissioner for further consideration.
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2011 (10) TMI 565
Issues:
Challenge to order of Haryana Tax Tribunal, validity of review petition dismissal.
Analysis:
The petitioner contested the order of the Haryana Tax Tribunal dated April 28, 2010, and the subsequent dismissal of the review petition on June 17, 2011. The assessing officer had initially framed an assessment under the Haryana General Sales Tax Act, 1973, and the Central Sales Tax Act, 1956, on April 10, 2002. An appeal against this order was accepted, leading to a remand for re-determination of issues on August 2, 2006. Subsequently, on March 28, 2007, the assessing officer imposed a penalty under section 46 of the Act but allowed other contentions of the petitioner. The revisional authority intervened and set aside the assessing officer's order by essentially reproducing the original order from 2002 in its revisional order dated January 14, 2008.
The petitioner, dissatisfied with the revisional authority's decision, filed an appeal before the Haryana Tax Tribunal, which remanded the case back to the revisional authority for a fresh examination. The Tribunal emphasized the need for a fair assessment, pointing out any illegalities or improprieties. Despite this, the petitioner's subsequent review petition was dismissed on June 17, 2011, prompting the writ petition before the High Court.
The petitioner argued that the revisional authority's order contained patent illegality, deviating from its intended role of identifying errors in the assessing officer's decision. However, the High Court found no merit in the petitioner's challenge to the Tribunal's decision. The Tribunal had set aside the revisional authority's order due to lack of proper hearing and application of mind, leading to a remand being the appropriate course of action. The Court clarified that the Tribunal's decision to remand the matter did not render the exercise of jurisdiction under section 40 of the Act void. It upheld the Tribunal's authority to instruct the revisional authority to reconsider the issues and make a determination regarding the assessing officer's order.
Consequently, the High Court dismissed the present petition, affirming the Tribunal's decision and finding no error in its judgment.
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2011 (10) TMI 564
Rate of tax - potato chips - entry No. 6 of Schedule II(B) of the Act - 4% or 12.5%? - whether potato chips is a processed vegetable or not, and consequently liable to be taxed at four per cent or at 12.5 per cent? - Held that: - A perusal of entry No. 6 of Schedule II(B) of the Act indicates that all processed and preserved vegetables would be taxed at 4%.
Potato is a vegetable after going through the process of slicing, frying and spicing, potato chips does not cease to be a vegetable. It is irrelevant as to whether it becomes a snack item or not. A processed vegetable can also be a snack item, but then it does not take the snack item outside the entry of processed vegetables. The characteristics of the potato remains the same and if, by processing potato, it becomes a potato chip, it still remains a processed vegetable and, consequently, will be taxed at 4% under Schedule II(B) of the Act.
It is well-settled what is not excluded would be held to be included - from a reading of entry No. 6 of Schedule II(B) of the Act to be an inclusive entry. The use of word "all" and "including" makes it apparently clear that it is an inclusive entry. The effect of the words "all" and the words "including fruit jams, jellies, fruit squash, paste, fruit drinks and fruit juices and achar (whether in sealed containers or otherwise)" under entry No. 6 of Schedule II(B) of the Act and the absence of any exclusion of potato chips within the said entry gives a clear legislative intent of inclusion of potato chips under entry No. 6 of Schedule II(B).
Revision allowed - decided in favor of revisionist-assessee.
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