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2023 (8) TMI 1394
Doctrine of proportionality - Exemption under the Advance Authorisation Scheme - import of pepper was free under the Foreign Trade Policy 2015–2020 or not - competence of the DGFT to issue the notifications - Applicability of N/N. 42/2015-20 dated 06/12/2017 and N/N. 50/2015-2020 dated 05/02/2018, N/N. 53/2015- 2020 dated 21/03/2018 and N/N. 21/2015-20 dated 25/07/2018.
HELD THAT:- The notifications explicitly declare that they are issued by the Central Government in exercise of powers conferred by Section 3 of FT(D&R) Act, 1992, read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy. It is also pertinent to note that, vide S.O.211(E) dated 16.01.2002, the President of India, in exercise of the powers conferred by clause(2) of Article 77 of the Constitution, has issued the Authentication(Orders and Other Instruments) Rules, 2002. By virtue of the said rules, the orders and other related instruments relating to the Directorate General of Foreign Trade made executed by the President can be authenticated by the DGFT, Additional DGFT, Export Commissioner or the Joint DGFT.
As evident from the file notes pertaining to the impugned notifications, the decision to issue the notification was taken after discussing the matter with the Minister. Hence, there is substance in the contention that the notifications were issued by the Central Government in exercise of the powers conferred under Section 3 of the FT(D&R) Act and the DGFT had only undertaken the ministerial act of publishing the notification. In such circumstances, mere publication of the notifications by the DGFT cannot lead to the presumption that the notifications were issued without the concurrence of the Central Government. Therefore, the challenge on the premise that the notifications were issued by the DGFT and not the Central Government is unsustainable.
Section 19(3) of the FT(D&R) Act also does not envisage the placing of the Orders and Rules before the Parliament to be a condition precedent. The provision also does not provide any consequence for non-compliance with the requirement. As such, the requirement can be perceived only as directory. Being so, its non-compliance cannot result in nullification of the notifications.
Fixing of minimum piperine content of black pepper at 6%, contrary to the prescription of 4% in the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 - HELD THAT:- Irrefutably, the FT(D&R) Act is not a food related law for the FSS Act to have an overriding effect. Yet another relevant aspect is that, under the impugned notifications, the piperine content of light black pepper berries imported into India under Advance Authorisation Scheme for oleoresin alone is fixed as 6%. As the pepper imported under the Advance Authorisation Scheme is used for manufacturing oleoresin for the purpose of export, the article of food is not for consumption in India. Hence, Section 25 of the FSS Act is not attracted.
It is to be noted that the entire quantity of pepper imported by the above three category of traders are exported whereas pepper imported by importers falling outside the categories is consumed in India itself. within the country. As such, there is clear distinction between the exempted category and the other importers. It is trite that only similarly circumstanced persons are entitled to equal treatment. Moreover, Article 14 will not come into play when the distinguishing rationale is based on justifiable reasons and the choice of differentiating one set of persons from the another has a reasonable nexus to the objective sought to be achieved. The objective behind the impugned notifications is to prevent the import of cheap quality pepper into India. As such, the differentiation between two classes of importers has nexus with the objective.
There are no merit in the challenge based on Article 19(1) (g) also, since the effect of the notifications is only to restrict the import of black pepper and not to prohibit its import. The law imposing restrictions has to be treated as proportional if it is meant to achieve a proper purpose and the measures taken are rationally connected to the purpose. Applying the proportionality principle, the restriction against import of pepper is found to be justified and unassailable.
Petition dismissed.
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2023 (8) TMI 1393
Challenging the order of the Income Tax authority - HELD THAT:- By hook and crook the petitioner wants to avoid income tax procedure. From the operative portion of the order of the appellate authority it appears that the appellate authority has dealt with such facts as to the agricultural produce and bank assets and we do not find that there is any violation of natural justice or any procedural defects wherefore this order can be interfered with by the writ court. The procedure has been followed by the appellate authority for hearing and this writ court is not sitting over the appeal heard by the appellate authority.
Accordingly, this writ application is not entertained by this writ court and the petitioner is directed to comply with all the directions of income tax authority within a period of one month from the date.
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2023 (8) TMI 1392
Input tax credit - genuineness of the transactions of its sister concern - order passed without verifying the books of accounts of its sister concern - HELD THAT:- It is the submission of the learned counsel for the appellant Sri. Anil D. Nair that Ext.P9 order having been passed without verifying the books of account of the sister concern from whom the appellant had purchased goods on which input tax credit was taken, the appellant was prejudiced since it had no way of establishing that the credit was correctly availed. On a consideration of the said submission, it is found that the said argument on merits is one that can be taken by the appellant in proceedings before the appellate authority, and hence the learned Single Judge was not in error while dismissing the Writ Petition for the existence of the alternate remedy.
There are no reason to interfere with the judgment of the learned Single Judge - appeal dismissed.
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2023 (8) TMI 1391
Income taxable India - Addition as income by treating the receipts on account of subscription, professional and training services as Fee for Technical Services (FTS) - meaning of expression ‘make available’ - assessee is a foreign company incorporated under the laws of Netherlands, engaged in the business of providing enterprise cloud computing solutions that define structure, manage and automate services for global enterprises - HELD THAT:- We find that Article 12(5)(a) above is not applicable in the instant case. Article 12(5)(b) insist on make available clause to fall within the ambit of FTS. In the instant case, the assessee has only access to software. There is no transfer of technology by the assessee. We are unable to persuade ourselves to accept to the argument of the ld. DR in this regard wherein it was argued that services provided by assessee are standard and customized services and that ‘make available’ clause is not relevant for the second part of Article 12(5)(b) i.e it is not relevant for development and transfer of a technical plan or technical design. In our considered opinion, ‘make available’ is for the entire expressions mentioned in Article 12(5)(b) of the India Netherlands Treaty.
In the instant case, we find that the assessee had merely granted only access to software and there is no transfer of technology by the assessee. Hence we have no hesitation to hold that the services rendered by the assessee does not fall within the definition of FTS as per the Treaty. In any case, we find that the since assessee had merely granted access to software, it does not fall within the definition of FTS even as per the Act.
In this regard, analogy could be drawn from the decision of Kotak Securities Ltd [2016 (3) TMI 1026 - SUPREME COURT] wherein it was held that service made available by Bombay Stock Exchange [BSE Online Trading (BOLT) System] for which transaction charges are paid by members of BSE are common services that every member of Stock Exchange is necessarily required to avail of to carry out trading in securities in Stock Exchange; such services do not amount to 'technical services' provided by Stock Exchange, not being services specifically sought for by user or consumer and, therefore, no TDS would be deductible under section 194J on payments made for such services.
Thus we hold that the subscription, professional and training services rendered by the assessee does not fall within the definition of FTS both under the Act as well as under the DTAA and accordingly the same cannot be taxed in India. Accordingly, the Grounds 1 to 3 raised by the assessee are allowed.
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2023 (8) TMI 1390
Seeking Liquidation of the Corporate Debtor Company - HELD THAT:- There are no good grounds and reasons to interfere with the impugned judgment and hence, the appeal is dismissed.
It is clarified that the impugned judgment/order and the dismissal of the present appeal would not come in the way of M/s Cantors Fitzgerald from applying and submitting Expression of Interest in terms of sale notice dated 06.08.2023.
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2023 (8) TMI 1389
Abduction - Relevance and admissibility of the FIR - Conduct of the Accused - Status of the Bayan Tahriri/Written Statement of the deceased - testimony of a Prosecution Witness.
Whether the Supreme Court, in appeal against acquittal, can consider the High Court's judgment dated 13.03.2007 passed in the Habeas Corpus Writ Petition, which was not part of the evidence produced (although it was part of the Trial Court record) and was not relied upon by the prosecution before the Trial Court, as a piece of incriminating evidence in the nature of a Public Document and, if yes, up to what extent? - HELD THAT:- The judicial notice of any fact is generally not taken in criminal matters, but the present matter stands on an altogether different footing in view of what has been noted hereinbefore. It falls in the category of rarest of rare cases and hence, it requires a different approach. This Court, in its considered opinion, finds that the judgment in the Habeas Corpus Petition was passed on the basis of notes of the Inspecting Judge of the High Court, the report of Additional Director General of Police, statement of CW-1 Smt. Lalmuni Devi recorded in Court before the Magistrate under the directions of High Court, her affidavit filed before the High Court, her statement/disclosure in Bhojpuri before one of Judges hearing the Habeas Corpus petition and several other authoritative materials after giving the opportunity of hearing to the parties, including the Accused of the crime in question.
The judgment dated 13.03.2007, which is a public document, is well discussed and is based upon authoritative materials and was passed in consonance with the doctrine of audi alteram partem. Moreover, it has a torch bearer effect over the facts of the case. Thus, it qualifies the requirement of law for the purpose of taking judicial notice thereof, and this Court takes judicial notice of the inferences, observations and findings arrived at by the Division Bench and the directions issued in its judgment dated 13.03.2007 to the extent of the subsequent conduct of the Accused, deplorable functioning of the Public Prosecutor, Police Administration and the Presiding Officer of the Trial Court to extend undesirable favour to the Accused.
Whether the previous or subsequent conduct of the Accused, established on record, can be treated as a circumstance against the Accused in view of Section 8 of the Evidence Act? - HELD THAT:- The obvious question pops up in the mind of any prudent person, as to why he was instrumental, when he was not guilty of the offence to which he was being tried. The obvious answer to this would reasonably come to mind of any prudent person that his guilty mind was fearful about the result. All these aspects leave no room for doubt that the subsequent conduct of Respondent No. 2 is one of the major circumstances pointing towards his guilt for the incident that occurred at 9AM on 25.3.1995.
Whether the FIR or Bayan Tahriri can be said to be proved as a piece of reliable prosecution evidence and if so, what would be the position of law on the issue of treating the FIR or Bayan Tahriri as the Dying Declaration? - HELD THAT:- Considering the failure of State machinery and failure of the Trial Court to ensure a fair trial from the perspective of the victim side, the aspect of non-marking of the FIR and Bayan Tahriri as an exhibit, non-production of the formal witnesses, i.e., the Constable Clerk and Investigating Officer to prove the lodging of FIR/Bayan Tahriri and the flimsy rejection of application filed by Kishori Rai seeking his examination as a witness along with the examination of Nagendra Singh and Sanjeev Kumar Singh (who had signed said written statement/Bayan Tahriri as attesting persons) as witnesses in the Trial proceeding do not vitiate the genuineness of the FIR and Bayan Tahriri, and we refuse to give any discount to the Accused persons for non-exhibition thereof - In the present case, the FIR, being a public document and a dying declaration of the informant, is the foundation of the entire prosecution case. However, in the present matter, we have to find out the 'evidence of those persons who can vouchsafe for the truth of the facts in issue'.
Whether the testimony of a Prosecution Witness (an old feeble, rustic, illiterate lady and mother of the deceased and an eye-witness of the incident), who stated in the end of her cross-examination that "her son (another alive son) had asked her to take the name of Accused before the Court," can be treated to be a reliable evidence against such Accused, especially in view of the checkered and abnormal history of the case? - HELD THAT:- This Court finds that the testimony of CW-1, Lalmuni Devi (mother of deceased Rajendra Rai), corroborates the same and makes it reliable. The narration about the incident's time, place and manner, the specific role attributed to the Accused persons, etc, as described by Lalmuni Devi (CW-1), conforms with the contents of the FIR/Bayan Tahriri - This Court is conscious of the fact that a path different from the normal is being adopted to determine the guilt of the Accused.
The Trial Court and the High Court miserably failed to notice the sensitivity and intricacies of the case. Both the Courts completely shut their eyes to the manner of the investigation, the Prosecutor's role, and the high- handedness of the Accused as also the conduct of the Presiding Officer of the Trial Court, despite observations and findings having been recorded not only by the Administrative Judge but also by the Division Bench deciding Habeas Corpus petition. They continued with their classical rut of dealing with the evidence in a manner as if it was a normal trial. They failed to notice the conduct of the Public Prosecutor in not even examining the formal witnesses and also that the Public Prosecutor was acting to the advantage of the Accused rather than prosecuting the Accused with due diligence and honesty - Both the courts below ignored the administrative reports as also the judgment of the High Court in the Habeas Corpus petition. In fact they should have taken judicial notice of the same. They completely failed to take into consideration the conduct of the Accused subsequent to the incident, which was extremely relevant and material in view of Section 8 of the Evidence Act. They failed to draw any adverse inference against the Accused with respect to their guilt.
In the present case, unfortunately the Trial Court as well as the High Court failed to exercise their powers under the aforesaid provisions to summon the witnesses of the charge-sheet to prove the police papers. Despite applications being filed to summon persons who were not shown as witnesses to the charge-sheet, the Trial Court repeatedly rejected the said applications in 2006 and again in 2008 on the flimsy grounds that were not named in the charge-sheet or that the Public Prosecutor had not filed such application in gross violation of Section 311 Code of Criminal Procedure.
Accused-Respondent No. 2 is thus convicted Under Sections 302 and 307 Indian Penal Code for the murders of Daroga Rai and Rajendra Rai and also for attempt to murder of injured Smt. Devi - The Secretary, Department of Home, State of Bihar and the Director General of Police, Bihar are directed to ensure that Prabhunath Singh (Respondent No. 2) is taken into custody forthwith and produced before this Court to be heard on the question of sentence in view of Section 235 Code of Criminal Procedure.
Let the matter be listed again on 1st September, 2023. On the said date, Accused Prabhunath Singh (Respondent No. 2) be produced before this Court in custody for the aforesaid purpose.
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2023 (8) TMI 1388
Fraudulent use of Colocation facility in NSE - possible violation pertaining to dark fibre connectivity provided by Sampark in connivance / collusion with employees of NSE, with the stockbrokers and the role of the stockbrokers who allegedly benefited from the preferential access to colo facility by way of P2P connectivity from an un-authorised service provider - direction to disgorge an amount alongwith interest and other directions have been issued to ‘NSE - noticee nos. 1, Way2wealth Brokers Pvt. Ltd.- noticee nos. 8 and GKN Securities Pvt. Ltd. noticee nos. 12 - With regard to other noticees, a restraint order has been passed for different periods restraining the said noticees / appellants directly or indirectly from holding any position or being associated with any listed company.
HELD THAT:- As on a reading of the provisions of Section 12A of the SEBI Act and Regulation 3 & 4 of PFUTP Regulations, it is apparently clear that the object of Section 12A & PFUTP Regulations is to curb “market manipulations”. The manipulative and deceptive devices must be in relation to “securities” and must be by a person “dealing in securities”. The Supreme Court has enlarged the scope of “fraud” under the PFUTP Regulations to cover an action or omission even without deceit if such act or omission had the effect of inducing another person to deal in securities. Thus, “inducement” became more significant where ‘fraud’ was required to be proved. The Supreme Court held that fraud can be inferred on a preponderance of probabilities. However, the inferential conclusion must be arrived at from proven and admitted facts.
Further, fraud cannot be proved only on alleged negligence, as amounting to collusion and connivance. The Supreme Court in Kanaiyalal’s case [2017 (9) TMI 1269 - SUPREME COURT] has categorically held that the element of “inducement” must exist and should be proved before holding that a person is guilty of fraud. In the instance case, there is no finding that NSE had induced someone and thereby played a fraud in the securities market. There is no cogent evidence to show that the NSE is guilty of “inducement”. In the absence, of any evidence, the charge of fraud is not proved, nor the provisions of Regulation 3 and 4 of PFUTP Regulations applicable.
We find that the charge of fraud is not made out under any circumstances. In order to establish the charge of fraud, SEBI is required to establish that the fraud was induced which, in the instant case, is missing. Merely on surmises and conjunctures one cannot come to a conclusion that a fraud was committed by NSE and that was induced in connivance with the two stockbrokers.
In the instant case, we find that it was the two stockbrokers who came forward with an application to get P2P connectivity through Sampark and, thus, on this short point, the question of NSE inducing W2W or GKN to subscribe to the co-location facility with the promise of faster access does not arise.
There is no relevancy of the latency advantage from P2P connectivity as no trading or live data was transmitted on these lines and, therefore, the question of NSE facilitating laying of cable, etc. and, therefore, depicting fraudulent or unfair trade practices does not arise.
Due diligence was not carried out by NSE while allowing Sampark to provide P2P connectivity without finding as to whether Sampark had a valid license for that purpose. We have held that there was lack of due diligence and, thus, negligence on the part of NSE. Lack of due diligence and / or negligence cannot amount to fraud as defined under Regulation 2(c) unless there is evidence to show that there was a deliberate intention on the part of NSE to commit a fraud by misrepresentation or by concealment of fact or by such act or omission under any other law specifically declares it to be fraudulent. In the absence of any such evidence, we are of the opinion that the charge of fraud under Regulations 3 and 4 of the PFUTP Regulations read with Section 12A of the SEBI Act is not proved.
Order of disgorgement - Disgorgement means that the act of giving up something, namely profit obtained by illegal or unethical acts. It is a repayment of ill-gotten gains by the wrong doer. Disgorgement is also an equitable remedy that is designed to prevent a wrongdoer from unjustly enriching himself as a result of his illegal conduct. It is not necessary that in each and every case there should be a direction to disgorge profits merely because the provisions of the Act or Regulations have been violated. Disgorgement should be ordered only where persons have made gains or averted loss/losses as a result of their illegal / unethical acts.
The disgorgement can be of an amount equivalent to the amount earned or gain made or loss averted by such contravention. Before an order of disgorgement could be issued, the WTM has to arrive at a specific finding that NSE had made a wrongful gain. In the absence of any finding that NSE had made a wrongful gain, the question of disgorgement does not arise. In the instant case, the WTM in paragraph nos. 70.1 without giving any finding that NSE had made a wrongful gain through P2P connectivity deemed it proper to direct NSE to deposit a reasonable portion of the revenue earned through its colo facility which has nothing to do with the alleged P2P connectivity. The two are totally different. There is no finding that NSE has charged an additional fee or revenue for P2P connectivity.
Portion of the revenue earned by NSE through its colo facility cannot be made part of disgorgement. Revenue earned by NSE from colo facility is not an unlawful gain and, thus, the direction to disgorge an amount from the revenue earned is wholly erroneous and illegal.
We have found that NSE was negligent in not carrying out due diligence while allowing an unauthorized vendor to provide P2P connectivity to its TMs. For this negligent act, direction under Section 11 and 11B of the SEBI Act other than disgorgement could be issued.
In view of the aforesaid, the direction to disgorge an amount of Rs. 62.58 crore alongwith interest cannot be sustained and to that extent is quashed and other directions given under Section 11 and 11B read with Section 12A of the SEBI Act are sustained and are appropriate for the violations found by us.
Denial of services to certain stockbrokers resulting in dissemination and non-adherence to principles of fairness - Chitra Ramkrishna – Noticee Nos. 3 - As given the lack of due diligence and negligence committed by NSE in not verifying the license, we are of the opinion that in the given circumstances, it is presumed that when the matter came to the light that Sampark did not have a valid license, it must have brought this fact to the knowledge of the MD. In any case, the appellant noticee nos. 3 is morally responsible for this lapse which she cannot escape.
WTM directed that Chitra Ramakrishna shall not hold any position in any stock exchange, clearing corporation, depository for a period of three years. Further she will not hold any position in a listed company for three years.
The powers conferred on SEBI under Section 11 and 11B is to protect the interests of investors in securities and to promote the development of and to regulate the securities market. Therefore, the measure to be adopted by SEBI is remedial and not punitive. In a given case a measure of debarring a person from entering the securities market will be justified, but in our view, by no stretch of imagination debarring noticee nos. 3 for the alleged lapse could be remedial in nature. A remedial action is to correct a wrong or a defect. Preventive measure can be issued in a given case of unfair trade practice or where fraud is proved. In the instant case, the above is lacking and debarring the noticee would be clearly punitive and violation of Article 19(1)(g) of the Constitution of India as it takes away the fundamental right to carry on its business.Thus, the direction to debar the appellant noticee nos. 3 cannot be sustained and is quashed. At best penalty could be imposed upon appellant noticee nos. 3.
Mr. Ravi Varanasi (Noticee nos. 5), Mr. Nagendra Kumar SRVS (Noticee Nos. 6) and Mr. Deviprasad Singh (Noticee Nos. 7) - non-verification of Sampark’s license and, therefore, there was lack of due diligence and negligence on their part - The direction that the appellants shall not hold any position either directly or indirectly or be associated directly or indirectly with any stock exchange, clearing corporation or depository or any intermediary registered with SEBI for a period of two years is harsh and excessive and cannot be sustained and is quashed. Such direction if implemented would lead to automatic termination of their services which can never be the intention of the Regulator. In addition to the aforesaid, the additional direction against Mr. Ravi Varanasi of being debarred from holding any position either directly or indirectly or have been associated directly or indirectly with any listed company in any of the stock exchanges recognized by SEBI for a period of three years also cannot be sustained and is quashed. However, for the violation found by us, a penalty, if any, can be imposed.
The contention that there has been a gross violation of principles of natural justice as permission to cross-examine those persons whose reports, statements, mails, letters were considered by NSE becomes immaterial as it does not touch upon the issue in which the appellant has been found guilty.
Way2Wealth Brokers Pvt. Ltd., noticee nos. 8 and Mr. M. R. Shashibhushan, noticee nos. 9 - W2W had given an undertaking to NSE that the end line of P2P connectivity will terminate at their office which was located in the BSE premises. Instead of terminating at their office the P2P connectivity was directly connected to its colo rack at BSE premises. This direct connection was in violation of the undertaking given by them to NSE. The contention that W2W was unaware is patently erroneous. The contention of noticee nos. 9 that he was not aware of such irregularities is patently erroneous. Their internal correspondence between noticee nos. 9 and its employee Rima Shrivastav clearly indicates that they were aware of the irregularities. We, thus, find that the broker W2W and its Chief Executive Officer noticee nos. 9 to be guilty of these irregularities.
For the reasons stated earlier on the issue of disgorgement with NSE and for the same reason, we find that the direction to disgorge a sum of Rs. 15.34 crore alongwith the interest cannot be sustained and is quashed. For the violations committed by the broker, the direction of the WTM not to accept, induct or enroll any new client for a period of one year and not to undertake any trades in its proprietary account for a period of two years was appropriate. The direction against noticee nos. 9 Mr. Shashibhushan not to hold any position with any stock exchange, clearing member, etc. for a period of two years is harsh and inappropriate and cannot be sustained and is quashed. However, for the violation found by us, appropriate penalty could be imposed, if any.
GKN Securities noticee nos. 12, Ms. Sonali Gupta noticee nos. 13, Mr. Om Prakash Gupta noticee nos. 14 and Mr. Rahul Gupta noticee nos. 15 - As already held that preferential treatment was not given by NSE to GKN nor latency advantage was given in the P2P connectivity. Further, inspite of knowing that Sampark did not have the requisite license, it does not point out to collusion between GKN and NSE and, therefore, the finding of preferential treatment, discrimination to others and collusion between NSE and GKN cannot be sustained and, to that extent, the charges cannot be sustained.
In view of the aforesaid, the question of disgorgement of unlawful gains does not arise and for the reasons stated aforesaid, while considering the case of NSE, the direction to disgorge unlawful gain of Rs. 4.9 crore against GKN does not arise and cannot be sustained. However, the direction restraining the noticee from accepting new client for a period of one year and not to undertake any trades in its proprietary account for a period of two years is justified. Appropriate penalty, if any, can be imposed.
Appeal is partly allowed. The direction to disgorge an amount of Rs. 62.58 crore alongwith interest cannot be sustained and to that extent the order is quashed. Other directions passed by the WTM under Section 11 and 11B read with 12A of the SEBI Act are affirmed and are appropriate for the violations found by us.
Since we have set aside the unlawful gains, we direct SEBI to refund a sum of Rs. 62.58 crore along with interest accrued on it to the appellant within four weeks from today. We further vacate the direction given to the appellant for depositing the revenues emanating from colocation facility, etc. in an escrow account and the details to be submitted to SEBI from time to time.
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2023 (8) TMI 1387
Jurisdiction to initiate the proceedings - it is contended that Special Tehsildar Recoveries, Srinagar has no jurisdiction at all to initiate the proceedings, inasmuch as, as per the statute, it is the Collector who has the authority - HELD THAT:- The petitioner can appear before the Special Tehsildar Recoveries, Srinagar and raise all the objections including the lack of jurisdiction on the part of Special Tehsildar Recoveries, Srinagar. We are also making it clear that the Special Tehsildar Recoveries, Srinagar shall first decide the issue on the maintainability of the impugned notice and jurisdiction before proceeding on merit. The petitioner, if aggrieved by the decision, may approach this Court again.
The writ petition stands disposed of.
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2023 (8) TMI 1386
Criminal breach of trust - deficiency of currency notes in the currency chest - HELD THAT:- In order to prove the offence under Section 409 of the IPC, the prosecution is undoubted to prove that the accused, public servant or a banker or agent was entrusted with the property which he is duly bound to account for and that he committed criminal breach of trust - The finding in the departmental proceeding indicates that the petitioner was not entrusted the property. Thus, the basic ingredients of offence punishable under Section 409 of the IPC is lacking. In addition thereof, there is ten years of yawning and unexplained gap for registration of the FIR.
No doubt, while exercising the powers under Section 482 of the Cr.PC the complaint / FIR has to be read as a whole. However, if reading of the FIR as a whole does not constitute the elements of alleged offence, the Court owes the duty to scuttle such vexatious proceedings.
FIR being I CR No. 80 of 2016 registered with Dehgam Police Station for the offences punishable under Sections 409 and 114 of the IPC and the further proceedings arising out thereof are quashed and set aside - Petition allowed.
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2023 (8) TMI 1385
Validity of notice for recovery of demand - after the lapse of more than four years, petitioners try to cover up the lapse and inordinate delay by taking the plea of making representations against the initial recovery notice - HELD THAT:- It a well settled principles of law that stale cause of action cannot be revived by way of representations. Petitioners have no proper explanation for inordinate delay in approaching this writ court against the impugned demand for recovery raised on 24th April, 2019, which is the basis and foundation by filing this writ petition on 14th of July, 2023, i.e. after more than four years without any proper and cogent explanation and considering that the petitioners are not lay persons or illiterate or a person of no means to approach the writ court within a reasonable time.
This petition cannot be entertained and is dismissed.
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2023 (8) TMI 1384
Invocation of Extended Period of Limitation - failure to deposit the service tax as a service recipient on import of the service - suppression of facts - intent to evade tax - HELD THAT:- There is no finding by the Commissioner (Appeals) that this fact had been suppressed by the appellant with an intent to evade payment of service tax. Suppression of a fact is not enough to invoke the extended period of limitation, for there has also to be an intent to evade of payment of service tax. Though the Commissioner (Appeals) has referred to the verification carried out on 11.04.2017, but the Commissioner (Appeals) completely failed to appreciate that if this was the position, then the department could have issued the show cause notice promptly soon after 11.04.2017 and there was no necessity at all to wait till 23.06.2020 to issue the show cause notice.
The contention of the learned counsel for the appellant is that the necessary ingredients for invoking the larger period of limitation contemplated under the proviso to section 73 (1) of the Finance Act, namely wilful suppression of facts with an intent to evade payment of service tax do not exist and, therefore, the extended period of limitation could not have been invoked.
In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [1995 (3) TMI 100 - SUPREME COURT], the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts.
It would transpire from the aforesaid decision that mere suppression of facts is not enough and there must be a deliberate and wilful attempt on the part of the assessee to evade payment of duty. In the absence of any intention to evade payment of service tax, which intention should be evident from the materials on record or from the conduct of the assessee, the extended period of limitation cannot be invoked. Thus, mere non disclosure of the receipts in the service tax return would not mean that there was an intent to evade payment of service tax.
In the present case, the Commissioner (Appeals) did not even record a finding that the appellant had any intention to evade payment of service tax since all that has been recorded in the impugned order by the Commissioner (Appeals) is that the appellant did not disclose the correct facts in the service tax returns. In the absence of such a finding, which is absolutely necessary, the extended period of limitation could not have been invoked - The Tribunal in M/S GD GOENKA PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX, DELHI SOUTH [2023 (8) TMI 995 - CESTAT NEW DELHI] had clearly held that self assessment cannot be a ground to invoke the extended period of limitation in the absence of the ingredients contemplated under the proviso to section 73 (1) of the Finance Act. The entire demand confirmed by the Commissioner (Appeals) falls in the extended period of limitation.
The impugned order dated 25.08.2021 passed by the Commissioner (Appeals), therefore, deserves to be set aside and is set aside - Appeal allowed.
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2023 (8) TMI 1383
Delayed deposit of employee’s share of contributions towards ESI/PF - Intimation u/s.143(1) - whether or not the delayed deposit by the assessee of the employee’s share of contributions towards ESI/PF could have been summarily disallowed by the AO prior to the judgment of Checkmate Services P. Ltd. [2022 (10) TMI 617 - SUPREME COURT] while processing his return of income vide intimation u/s.143(1)(a)
HELD THAT:- As decided in SATPAL SINGH SANDHU [2023 (5) TMI 1274 - ITAT RAIPUR] issue involved in the present appeal is squarely covered by the order of Kalpesh Synthetics (P) Ltd. Vs. DCIT [2022 (5) TMI 461 - ITAT MUMBAI] wherein held that when the due date under Explanation to Section 36(1)(va) is judicially held to be not decisive for determining the disallowance in the computation of total income, there is no good reason to proceed on the basis that the payments having been made after this due date is “indicative” of the disallowance of expenditure in question. While preparing the tax audit report, the auditor is expected to report the information as per the provisions of the Act, and the tax auditor has done that, but that information ceases to be relevant because, in terms of the law laid down by Hon’ble Courts, which binds all of us as much as the enacted legislation does, the said disallowance does not come into play when the payment is made well before the due date of filing the income tax return under section 139(1).
Thus reporting of payment beyond this due date in the tax audit report constituted “disallowance of expenditure indicated in the audit report but not taking into account in the computation of total income in the return” as is sine qua non for disallowance of Section 143(1)(a)(iv).
We thus respectfully follow the same and vacate the addition as summarily made by the A.O, CPC u/s.143(1)(a) - Decided in favour of assessee.
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2023 (8) TMI 1382
Dishonour of Cheque - when the statement of accused under Section 313 of Cr.P.C. is required to be recorded - HELD THAT:- On plain reading of the proviso to Section 313(1)(a) and (b) of Cr.P.C., it would be manifestly clear that the statement of accused under Section 313 of Cr.P.C. has to be recorded after the witnesses for prosecution have been examined and before he is called on for his defence in every enquiry or trial. The object and purpose behind it is to enable the accused personally to explain any circumstances appearing in the evidence against him. The non-compliance of this mandate of law is not a mere irregularity as observed and held by the First Appellate Court in terms of Section 465 of Cr.P.C.
In view of the principles enunciated in the aforementioned judgments of Hon'ble Apex Court in INDIAN BANK ASSOCIATION AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2014 (5) TMI 750 - SUPREME COURT], recording of statement under Section 313 of Cr.P.C. on the day of appearance of accused is a serious irregularity which renders the entire proceedings from the stage of recording accused's plea vitiated.
The procedure adopted by Trial Court recording statement of accused under Section 313 Cr.P.C. on the day of appearance much before the conclusion of complainant side cannot be legally sustained in view of clear mandate of law in terms of Section 313(1)(b) of Cr.P.C. The Courts below have recorded contrary finding regarding the procedure adopted by Trial Court for trial of summons case and in recording statement under Section 313 of Cr.P.C. Therefore, interference of this Court is required.
The Criminal Revision petition filed by the revision petitioner is hereby allowed.
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2023 (8) TMI 1381
Levy of Service Tax - business auxiliary services - subsidy received by the appellant from Tata Tele Services on the sale of mobile handsets purchased by the appellant from independent vendors - HELD THAT:- The issue decided in the case of in the absence of BALAJI ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, JAIPUR-I [2020 (3) TMI 17 - CESTAT NEW DELHI] where it was held that any services provided by the Appellant to Tata Tele Services, service tax could not have been levied on the amount of subsidy received by the Appellant.
The impugned order set aside - appeal allowed.
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2023 (8) TMI 1380
Amendment to cause title - merger of companies - HELD THAT:- Since the first respondent is stated to have been merged with TATA Steel Limited pursuant to an order dated 29 October 2021 of the National Company Law Tribunal, Mumbai, liberty is granted to the petitioners to amend the cause title to implead the successor entity.
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2023 (8) TMI 1379
Approval of acquisition plan submitted by the Respondent Nos. 5 to 8 - rejection of appointment of Independent Forensic Auditor - It was held by Arbitral Tribunal that Adjudicating Authority did not commit any error in passing the Order dated 11th May, 2022 approving the Auction of Corporate Debtor as a going concern in favour of Respondent Nos. 5 to 8. The Adjudicating Authority also did not commit any error in rejecting the Application filed by the Appellant praying for appointment of ‘Independent Forensic Auditor’ for conducting a forensic audit. The said application has rightly been rejected by the Adjudicating Authority.
HELD THAT:- There are no reason to interfere with the impugned order of the National Company Law Appellate Tribunal, since no substantial question of law is involved in the appeal. - appeal dismissed.
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2023 (8) TMI 1378
Rejection of Section 7 application - threshold limit involved in the appeal - deduction of interest amount - application rejected on the ground that Company Petition was filed below the threshold limit as per the Notification issued by the Ministry of Corporate Affairs vide Notification dated 24.03.2020.
Whether if the interest payments accrued during the Section 10A period whether the said interest amount is to be deducted while computing the threshold?
HELD THAT:- The Section 10 A provides that no application/proceedings under Section 7,9 & 10 is to be initiated for a default which is committed during Section 10A period. What is bar is initiation of proceedings when Corporate Debtor commits default in Section 10 A period. If the default is committed prior to Section 10A period and continues in the Section 10 A period the initiation of proceeding is not barred.
In the Judgment of this Tribunal delivered in RAGHAVENDRA JOSHI VERSUS AXIS BANK LIMITED; MR. AMIT CHANDRASHEKAR PODDAR [2023 (8) TMI 1376 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI] it is already held that if default was committed prior to Section 10 A period, Section 10 A shall not be applicable.
If the default is committed prior to Section 10 A period and default continues there is no prohibition in initiating proceedings under Section 7 and we are not persuaded to accept the submission of the counsel for the respondent that the liability of interest which accrued during Section 10 A period should be ignored or should not be computed in the amount while finding the threshold. Liability to pay interest which default committed prior to Section 10 A period continues and is not obliviated by Section 10 A - Adjudicating Authority committed error in rejecting the Section 7 application the threshold being complete.
The Adjudicating Authority is directed to pass fresh order admitted Section 7 application within 30 days from today - appeal allowed.
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2023 (8) TMI 1377
Income taxable in India - taxability of sum received by the assessee from Vodafone for interconnect services - royalty receipts or not? - consideration was paid by Vodafone without deduction of tax at source in India on the ground that the said sum is not chargeable to tax in India - India-Belgium DTAA - HELD THAT:- As decided in Vodafone India Ltd. [2023 (7) TMI 1164 - KARNATAKA HIGH COURT] had decided all the questions of law in favour of the assessee and held that payments to non-resident telecommunication operators for providing interconnectivity services and transfer of capacity in foreign countries is not chargeable to tax as ‘royalty’ and also that the income does not accrue or arise in India in the hands of the non-resident telecommunication operators such as the assessee in the instant case.
Thus sum received by the assessee from Vodafone as interconnectivity services are not chargeable to tax in India as “Royalty”.
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2023 (8) TMI 1376
Rejection of Section 7 application - NPA was declared on 19th July, 2016 but the Corporate Debtor’s OTS was sanctioned on 14.02.2020 under which OTS, default was committed during Section 10A of IBC Period - applicability of section 10A on default under the OTS - HELD THAT:- The focus of the law which was brought by Section 10A was that when the Corporate Debtor suffers default on account of Covid-19, they should be protected from the filing of any Insolvency Application in the default committed during the said period - Section 10A never intended to cover the default which is continuing before Section 10A period. The present is a case where admittedly default has been committed by the Corporate Debtor since 2016. Admittedly NPA was declared on 19th July, 2016. Learned Counsel for the Respondent has rightly referred to acknowledgement made by the Corporate Debtor in its balance sheets for the financial year 2018-19, 2019-20 and 2020-21 where the dues were clearly acknowledged. Thus, the present is the case where default was committed prior to commencement of Section 10A period.
The submission that since default was also committed by the Corporate Debtor during the Section 10A period of the OTS amount which ultimately withdrawn on 25th January, 2021, the Application should be barred by Section 10A does not commend here. There being categorical default by the Corporate Debtor prior to Section 10A period, the Appellant was not clearly entitled for the benefit of Section 10A Period.
There are no merit in the contention of Learned Sr. Counsel for the Appellant that Application under Section 7 of I&B Code, 2016 was barred by Section 10A. The Adjudicating Authority did not commit any error in admitting Section 7 Application - appeal dismissed.
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2023 (8) TMI 1375
Income taxable in India - taxability of IUC[Interconnect Usage Charge] u/s 9(1)(vi) and 9(1)(vii) and under the article 13 of DTAA - addition as royalty receipts/ FTS - Assessee is a telecom company incorporated and a tax resident of Spain as engaged in the business of providing telecommunications services, interconnection services, internet services, etc - HELD THAT:- Tribunal in Year 2010-11 [2023 (9) TMI 280 - ITAT BANGALORE] has passed a detailed order after considering several judicial precedents including the case of Vodafone [2023 (7) TMI 1164 - KARNATAKA HIGH COURT] and Vodafone South Ltd. [2015 (1) TMI 1018 - ITAT BANGALORE] which have held that interconnectivity charges are not taxable as royalty and FTS respectively.
As the contention of learned DR placing reliance on the section 5 of the Act is rejected. Thus we hold that the IUC charges do not qualify as royalty or FTS and hence is not taxable in India. Decided in favour of assessee.
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