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Showing 441 to 460 of 1354 Records
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2024 (3) TMI 914
Inclusion of certain elements of cost in assessable value and revision of the method of determining assessable value applicable to transactions between related persons - inclusion of advertisement and sales promotion costs - HELD THAT:- The finality, insofar as the first notice was concerned, was equally applicable to subsequent ones. The claim of higher precedent from decision of the Tribunal was also settled by the first appellate authority in later order despite which the obduracy on the part of the original authority continued to be manifested in remand proceedings. Even so, the finality accorded to that precedent by the Hon’ble Supreme Court in re P&B Pharmaceuticals P Ltd [2003 (2) TMI 68 - SUPREME COURT] should have sufficed for the original and first appellate authority in the latest round.
The orders passed in de novo proceedings by the original authority were not correct in law. That last which was upheld in the impugned order was also incorrect in law. The concurrence accorded to that impropriety by the first appellate authority piles gross impropriety on impropriety. We find no cause to allow this travesty of justice and judicial decorum to continue.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 913
CENVAT Credit - retention of credit that enabled obtaining of refund under rule 5 of CENVAT Credit Rules, 2004 - HELD THAT:- The appellant was exporting almost 98% of turnover for the period upto March 2010 and about 87% thereafter is a finding in the impugned order that has not been controverted in appeal of Revenue. That such exports should not have to bear the burden of duties inhering in the goods is undeniable and, therefore, if not refund under rule 5 of CENVAT Credit Rules, 2004, rebate was allowable under Central Excise Rules, 2002 with option left to assessee. The denial of credit was not enforced immediately upon grant of exemption; instead resort was had to section 11A of Central Excise Act, 1944 and, consequently, rebate was not an available option. This militates against the contention of Learned Authorized Representative that the cited Explanation has retrospective effect.
The denial of credit was not enforced immediately upon grant of exemption; instead resort was had to section 11A of Central Excise Act, 1944 and, consequently, rebate was not an available option. This militates against the contention of Learned Authorized Representative that the cited Explanation has retrospective effect. We, therefore, examine the entitlement in terms of operation under the CENVAT credit scheme. As we have premised, this is a dispute about eligibility for retention of credit availed validly under rule 3 of CENVAT Credit Rules, 2004. It is only upon deployment of such goods in the production of ‘exempted goods’, which ‘menthol crystal’ was since 1st March 2008, that rule 6(1) of CENVAT Credit Rules, 2004 is brought to bear - to the extent that ‘inputs’ were deployed in goods that have been exported, availment of credit is not faulted. Even if exempted goods were removed on bond for export after March 2010, that procedural lapse, with its own attendant consequence, has no bearing on eligibility for retention of credit. Therefore, only the availment of credit in relation to ‘inputs’ used in production of domestically cleared goods remain.
There can be no dispute on availment of credit of duty paid on attributable goods till March 2010 as these were cleared on payment of duty. For the period thereafter, it is on record that the default provision in rule 6(3) of CENVAT Credit Rules, 2004 for payment of 10% of value of exempted goods cleared domestically would entitle retention of credit. The impugned order, and appeal of Revenue, appear to have, in their respective contentions which do not relate to the same ‘input’, misconstrued the meaning of ‘common’ and the bar on ‘retention’ which are applicable to both categories of inputs – raw materials and consumables – that are used in production - None of the goods in the dispute are consumables and, owing to export as well discharge of duty liability or liability of 10% on value of domestically cleared goods, there is no scope for recovery under rule 14 of CENVAT Credit Rules, 2004 or section 11A of Central Excise Act, 1944. Other consequences too fail.
The demand fastened on assessee in the impugned order does not sustain. Appeal of assesse is allowed.
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2024 (3) TMI 912
Non-reversal of credits availed in respect of exempted services - waste and scrap of packing materials viz. corrugated boxes, cartoons, MS scrap, plastic, industrial refuse etc. - Rule 6(3) of CENVAT Credit Rules, 2004 - HELD THAT:- No demand is raised on the Appellant in the Show-cause notices on the ground that it was engaged in trading which was treated as an exempted service against which it cannot avail credits on inputs but the demand was solely based on the ground that out of two varieties of manufacturing waste, one is exempted from payment of Excise Duty for which demand is raised against non-reversal of the allegedly inadmissible credit availed on those exempted products and it is a settled principle of Law, which has been affirmed by the Hon'ble Supreme Court through various decisions including that of MARUTI SUZUKI INDIA LTD. VERSUS COMMISSIONER OF C. EX., DELHI-III [2015 (12) TMI 1598 - CESTAT CHANDIGARH], that duty is not payable on waste and scrap of packing material of inputs and demand is not sustainable if it had travelled beyond the Show-cause notice or made contrary to it, as has been held in the COMMISSIONER OF CENTRAL EXCISE VERSUS GAS AUTHORITY OF INDIA LTD. [2007 (11) TMI 276 - SUPREME COURT].
The order passed by the Commissioner of Central Excise, Customs & Service Tax, Aurangabad are thereby conformed - Appeal dismissed.
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2024 (3) TMI 911
CENVAT Credit - denial of credit on the ground that the appellant has incorrectly considered the electrodes as “inputs” and availed full credit whereas they are capital goods, in respect of which only 50% of CENVAT Credit is available in the year of receipt as per the CENVAT Credit Rules, 2004 - HELD THAT:- Circular No. B22/51/86-TRU dated 21.10.1986 clarified the position that It is only for the purposes of Notes 1 to 4, Section XVI that the word 'machine' (used in Notes) refers to any machine, machinery, plant, equipment, apparatus or appliance mentioned in the heading of Chapter 84 or 85. Otherwise, the whole phrase "machine, machinery, plant, equipment, apparatus, etc." would have to be used wherever the word "machine" is used in the Notes. As carbon electrode is essential for manufacture of aluminum, it should be eligible for Modvat credit, as it would satisfy the criterion of input.
Also, the issue whether electrodes can be treated as ‘input’ for availment of CENVAT Credit or ‘capital goods’ came before the Tribunal in the case of THE COMMISSIONER OF GST & CENTRAL EXCISE VERSUS M/S. CHEMFAB ALKALIES LTD. [2023 (7) TMI 947 - CESTAT CHENNAI] wherein the Tribunal observed The Tribunal in the case of COLLECTOR OF C. EX. VERSUS METTUR CHEMICALS & INDUSTRIALS [1990 (12) TMI 243 - CEGAT, MADRAS] held that cathodes used in the electrolytic process being incidentally consumed in the manufacture of caustic soda is an ‘input’ as defined under erstwhile Rule 57A of Central Excise Rules, 1944 and eligible for modvat credit.
As the issue is no longer res integra in view of the clarifications issued by the C.B.E.C. by way of Circulars from time to time and the decision in the case of M/s. Chemfab Alkalies Limited, it is held that on all the items which have been used by the appellant in the process of manufacture of their final product, the appellant is entitled to avail CENVAT Credit, as inputs.
There are no merit in the impugned orders and accordingly, the same are set aside - appeals filed by the appellant are allowed.
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2024 (3) TMI 910
Method of valuation - calcined alumina - to be valued in accordance with Rule 4 or 11 of Central Excise Rules, 2000 by considering normal transaction value of sale of calcined alumina (Smelter) of normal transaction value? - invocation of extended period of limitation - HELD THAT:- On going through the technical specifications, it is clear that technical specification of both the products is different as having variation in the composition. Moreover, the calcined alumina (sale) is sold by the assessee in in PP bags of 50 kgs each whereas the calcined alumina (Smelter) is sold in bulk or loose form.
Both the products are two different products and there is no allegations in the impugned showcause notice that the assessee is clearing calcined alumina (smelter) to independent buyers. Therefore, the valuation adopted by the assessee under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules,2000, is correct and they have paid duty correctly - Otherwise also, the assessee is clearing the said goods to their sister unit, therefore, it is the situation of revenue neutrality. In that circumstances also, the differential duty cannot be demanded.
There are no merit in the impugned order demanding duty from the assessee for the normal period of limitation - also there are no merit in the appeal filed by the Revenue to demand duty from the assessee by invoking extended period of limitation - the appeal filed by the assessee is allowed.
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2024 (3) TMI 909
Violation of principles of natural justice - Validity of assessment order - bills to indicate that no form 'C' was ever issued not considered - erroneous observation that sale took place - no opportunity of hearing has been accorded to the revisionist at any stage by the authorities.
Revisionist was having three copies of the bills in his bill book which has not been appreciated by the competent authority - HELD THAT:- Perusal of the assessment order dated 24.03.2011 would indicate that the version of the revisionist has been considered by the assessing authority and he has observed that he himself has examined the bill book upon being produced by the revisionist but the bill book is not having the original bill contained in the bill book. Thus, the said ground is rejected. Incidentally, this finding of the bill book having been examined by the Authority has not been denied anywhere by the revisionist upon filing of either the first appeal or the second appeal.
The learned Tribunal has erroneously observed in the judgment dated 14.12.2012 that sale took place with respect to bill no. 107 dated 01.01.2008 and bill no.121 dated 30.01.2008 of which all three copies are available in the bill book as per the list of sales produced before the Tax Assessing Authority - HELD THAT:- No denial to the said finding has been given by the revisionist while filing the instant revision of the said sales being indicated in the list of sales produced before the Assessing Authority. As such, the said ground is rejected.
No opportunity of hearing has been accorded to the revisionist - HELD THAT:- The said ground is also misconceived considering that the assessment order dated 24.03.2011 has been passed after issuing notice to the revisionist and thereafter the revisionist had ample opportunity while filing the first and second appeal of rebutting the specific finding that had been given by the assessing authority which he himself failed to do - while considering the revision filed by the revisionist and even considering the grounds as raised by the learned counsel for the revisionist, no perversity or illegality emerges and consequently no case for interference is made out.
The instant revision as well as the connected revision is dismissed at the admission stage.
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2024 (3) TMI 908
Application allowed under Section 11(6) of the Arbitration & Conciliation Act 1996 - appointment of Sole Arbitrator to adjudicate the dispute between the parties to the present lis - HELD THAT:- A perusal of sub-section (5) of Section 7 of the Arbitration Act itself would reveal that it provides for a conscious acceptance of the arbitration clause from another document, by the parties, as a part of their contract, before such arbitration clause could be read as a part of the contract between the parties - It is thus clear that a reference to the document in the contract should be such that shows the intention to incorporate the arbitration clause contained in the document into the contract.
The present case is a ‘two-contract’ case and not a ‘singlecontract’ case.
In view of Clause 1.0, the documents stated therein shall also form part of the agreement. In view of Clause 2.0, all terms and conditions as contained in the tender issued by the DVC to the NBCC shall apply mutatis mutandis except where these have been expressly modified by the NBCC. Clause 7.0 specifically provides that the redressal of dispute between the NBCC and the respondent shall only be through civil courts having jurisdiction of Delhi alone. Clause 10.0 further provides that the L.O.I. shall also form a part of the agreement - the intention between the parties is very clear. Clause 7.0 of the L.O.I. which also forms part of the agreement specifically provides that the redressal of the dispute between the NBCC and the respondent shall only be through civil courts having jurisdiction of Delhi alone. It is pertinent to note that Clause 7.0 of the L.O.I. specifically uses the word “only” before the words “be through civil courts having jurisdiction of Delhi alone”.
When there is a reference in the second contract to the terms and conditions of the first contract, the arbitration clause would not ipso facto be applicable to the second contract unless there is a specific mention/reference thereto - the present case is not a case of ‘incorporation’ but a case of ‘reference’. As such, a general reference would not have the effect of incorporating the arbitration clause. In any case, Clause 7.0 of the L.O.I., which is also a part of the agreement, makes it amply clear that the redressal of the dispute between the NBCC and the respondent has to be only through civil courts having jurisdiction of Delhi alone.
The learned single judge of the Delhi High Court has erred in allowing the application of the respondent. The impugned orders are quashed and set aside - Appeal allowed.
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2024 (3) TMI 907
Framing of charges - Owning of assets disproportionate to known sources of income - Whether the courts below were justified in refusing to quash and set aside the order on charge dated 21.02.2006 and the charges as framed on 28.02.2006? - Case against the Additional Chief Architect in New Delhi Municipal Corporation - HELD THAT:- In the present case, the probative value of the Orders of the Income Tax Authorities, including the Order of the Income Tax Appellate Tribunal and the subsequent Assessment Orders, are not conclusive proof which can be relied upon for discharge of the accused persons. These orders, their findings, and their probative value, are a matter for a full-fledged trial. In view of the same, the High Court, in the present case, has rightly not discharged the appellants based on the Orders of the Income Tax Authorities.
In RADHESHYAM KEJRIWAL VERSUS STATE OF WEST BENGAL [2011 (2) TMI 154 - SUPREME COURT], this Court was concerned with a fact situation where the Petitioner therein was being prosecuted under the Foreign Exchange Regulation Act, 1973 for payments made by him in Indian currency in exchange for foreign currency without any general or specific exemption from the Reserve Bank of India. The Enforcement Directorate had commenced both an adjudication proceeding and a prosecution under the provisions of the Foreign Exchange Regulation Act, 1973. It so transpired that the Adjudicating Officer found that no documentary evidence was available to prove the foundational factum of the Petitioner therein entering into the alleged transactions which fell foul of the Act and thereafter directed that the proceedings be dropped.
There are no merit in these appeals and the appeals are dismissed.
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2024 (3) TMI 906
Dishonour of Cheque - vicarious liability of directors - sufficient averments to issue process against the directors, including the Petitioners or not - HELD THAT:- The liability under Section 141 of the Act, 1881 for commission of the offence punishable under Section 138 of the Act, is in the nature of a vicarious liability. It is trite that vicarious liability for an offence is required to be strictly construed. From the text of Section 141 of the Act, it becomes evident that the liability is incurred not on account of the position a person holds, but by reason of the role such person plays in the management of the affairs of the company. Liability does not depend upon the designation or status of the person sought to be roped in. Conversely, it could be shown that though a person does not hold a particular designation, yet he was in-charge of and responsible to the affairs of the company, and, therefore, liable to be prosecuted by invoking the constructive criminality under Section 141 of the Act.
In the case of POOJA RAVINDER DEVIDASANI VERSUS STATE OF MAHARASHTRA & ANOTHER [2014 (12) TMI 1070 - SUPREME COURT], the Supreme Court enunciated that the law laid down by the Supreme Court is that for making a director of a company liable for the offence committed by the company under Section 141 of the Act, there must be specific averments against the director showing as to how and in what manner, such director was responsible for the conduct of the business of the company.
The facts in the case of SUNITA PALITA & OTHERS VERSUS M/S PANCHAMI STONE QUARRY [2022 (8) TMI 55 - SUPREME COURT], appear to be on all four with the case at hand, as the Appellants therein were also shown to be independent and non-executive directors of the company. Non-executive directors are not involved in the day to day affairs of the company or in running of its business. The endeavour of Mr. Kumar to bank upon the information disclosed in the annual statement of account does not advance the cause of the Respondent No. 1 – complainant. The very fact that the Petitioners were made members of the audit and corporate social responsibility committee appears to be in consonance with the role of the Petitioners as independent non-executive directors of Isinox Ltd.
The complaints singularly lack any averment that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, the Petitioners. In the absence of such averments, the prosecution of the Petitioners by invoking the provisions contained in Section 141(2) of the Act also, would be legally impermissible.
The conspectus of aforesaid discussion is that the prosecution of the Petitioners who are the independent non-executive directors of Isinox Ltd. for an offence punishable under Section 138 read with Section 141 of the Act, 1881 would amount to abuse of the process of the court and wholly unjustifiable - Petition allowed.
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2024 (3) TMI 905
Dishonour of Cheque - legally enforceable debt or not - insufficiency of funds - seeking leave of the Court to summon bank officials along with record pertaining to the concerned bank account for the financial years 2019-2020 and 2020-2021 - Section 311 Cr.P.C. read with Section 91 Cr.P.C. - HELD THAT:- The singular reason for filing an application under Section 311 Cr.P.C. by the Petitioner was to prove through the bank officials and the financial statements that there were sufficient funds in the bank account pertaining to which the dishonoured cheques were issued, so as to set up a defence against the alleged offence under Section 138 of the NI Act. As rightly pointed out by counsel for Respondent No. 2, learned MM has noted in the impugned order itself that the dishonour of cheques was not on account of insufficiency of funds or exceeding arrangement. In fact, the learned Court has categorically noted, after referring to bank return memos Exs. CW-1/8, CW-1/9, CW-1/10 and CW1/11 and the evidence of Respondent No. 2’s witness CW-1 that reason for dishonour of the cheques in question was ‘payment stopped by drawer’.
The apprehension of the Petitioner is misplaced and no infirmity is found with the impugned order, warranting interference by this Court. Moreover, Respondent No. 2 has reiterated its stand that the funds maintained by the Company/accused were neither insufficient nor the amounts under the impugned cheques exceeded arrangement.
Petition disposed off.
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2024 (3) TMI 904
Levy of stamp duty on schemes of amalgamation or restructuring - Validity of the Circular dated 20.11.2018, issued by the Inspector General of Registration in No. 49282/P1/2018 and / or G.O.(Ms.) No. 29, Commercial Taxes and Registration (J1) dated 01.03.2019 and G.O.(Ms.) No. 47, Commercial Taxes and Registration (J1) dated 19.02.2020.
Whether or not the order of the Court sanctioning the scheme of amalgamation / restructuring or merger can be deemed to be an instrument? - HELD THAT:- The Hon'ble Supreme Court in the HINDUSTAN LEVER VERSUS STATE OF MAHARASHTRA [2003 (11) TMI 335 - SUPREME COURT] dealt with the similar definition of the term 'instrument' under the Bombay Stamp Act and held that on a consideration of Section 394 of the Companies Act, it is clear that upon such Orders of the Court, the undertaking of the transferor company stood transferred to the transferee company with all its movable, immovable and tangible assets and on presentation of certified copy of the said Order of the Court to the Registrar of Companies, the transferor of company stands amalgamated in the transferee company along with all its assets and liabilities and as such the Court Order along with the amalgamation scheme appended to it, is an instrument - In the present context, whereunder the Registrar being a public officer, under Section 35 is mandated not to act upon in the scheme of amalgamation, unless it is duly stamped, the said argument of certified copy will not hold good. Therefore, the submissions made on behalf of the petitioners in this regard is rejected and the question is answered that the Orders of Court/Tribunal sanctioning schemes of amalgamation/restructuring/de-merger etc., along with such schemes appended thereto, shall be ‘instruments’ within the meaning for the purposes of the Act.
Whether or not amalgamation / restructuring can be termed as a transfer inter vivos amounting to conveyance? - HELD THAT:- The scheme of amalgamation results in transfer of the rights, assets and liabilities of the transferor company vesting in the transferee company in praesenti and therefore there is a transfer inter vivos - it can be seen that amalgamation, merger or other such arrangements shall be within the meaning of ‘conveyance’ in more than one sense. As a matter of fact, such schemes, originally being dealt with under Sections 391-394 of the Companies Act, 1953 and now under Chapter XV (Sections 230-240) of the Companies Act, 2013. Except doing away with the definition of ‘transferor company’ and ‘transferee company’ in respect of amalgamation and imposing certain additional requirements of disclosure etc., the essential features of the transactions remains the same - the order sanctioning amalgamation / restructuring appended by the scheme as such is an instrument of conveyance liable to duty under Article -23 of the Act and no further legislative action is necessary to bring the same within the ambit of duty.
As far as the impugned circular dated 20.11.2018 is concerned, it only attempts to clarify the existing position by quoting the relevant Judgments and addressing the registering officers that they should be aware that the scheme of amalgamation submitted by the Companies and sanctioned by the High Court are classifiable as ‘Conveyance’ and will be subject to duty under Article -23 of Schedule -I of the Act - there are no illegality in the said Circular dated 20.11.2018.
If the Orders are instruments amounting to conveyance, then whether the levy in the present manner, that is, prescription through an executive order is valid? - HELD THAT:- As far as the notification in G.O.Ms.No.29 dated 01.03.2019, it states that it is to reduce the duty chargeable under the Act. Therefore, the State of Tamil Nadu is well within its powers to reduce or remit the duty chargeable under the Act. So long as the power is exercised to reduce the duty chargeable under the Act, the same would be perfectly in order. When it is only a question of reduction or remitting, it can be by an Order passed in exercise of power under Section 9(1)(a) of the Act.
If so, the mode of computation, that is, 2 % of the value of the immovable property or 0.6 % of the net value of the shares transferred whichever is higher is in order? - HELD THAT:- While exercising the powers under Section 9(1)(a), reducing the duty from 5 % to 2 % of the market value of the property is a clear and fair exercise of power and it merely reduces the duty chargeable as per Article- 23. As far as the second limb of the notification, to compute the Stamp Duty on 0.6 % of the aggregate of the market value of the shares and then adopt the value whichever is higher is concerned, firstly it introduces a new mode of computation, which is not found in Article -23. Therefore, the same tantamounts to amending Article -23, which would require legislative action. Secondly, it was pointed out across the bar that there are several instances where the aggregate market value of the shares in respect of the transferee company which is amalgamated may run to several crores, whereas it may have an immovable property of a meagre value within the State of Tamil Nadu in which case, as per the notification if 0.6% of the aggregate market value of the shares which is higher would only be taken, then the same would result in increase in duty which would be more than 5 % of the duty chargeable under Article- 23 - to the last sentence of the notification contained in the impugned Government Order, in G.O.(Ms.) No. 29 dated 01.03.2019, i.e., “or 0.6 percent of the aggregate of the market value of the shares, whichever is higher” alone is struck down and rest of the notification shall stand.
Whether the retrospective application of the impugned Government Order with effect from 01.04.1956, by way of G.O.Ms.No.47 dated 19.02.2020 is valid? - HELD THAT:- Conveyance it was chargeable at various rates periodically prescribed and is presently at the rate of 5 % . It can be seen that from 01.04.1956 at no point of time, it was less than 2% and the G.O.(Ms.) No. 29 dated 01.03.2019 only reduces the duty to 2 %. Therefore the petitioners have no ground to complain of G.O.(Ms.) No. 47 dated 19.02.2020, which only makes the application of the beneficial provision of G.O.(Ms.) No. 29 dated 01.03.2019 as retrospective. As a matter of fact, Section 9(1) (a) of the Act itself expressly authorises the State to exercise such a power retrospectively. Thus, the retrospective applicability per se cannot be termed as illegal - the G.O.(Ms.) No. 47 dated 19.02.2020 is upheld.
Whether the stamp duty paid in other States, while registering the amalgamation orders are liable to be taken into account and set off as against the duty payable, while presenting the document for registration in the State of Tamil Nadu? - HELD THAT:- Once the instrument is already presented for registration in other States and again presented for registration within the State of Tamil Nadu, then, Section 19 -A of the Act, which is a Tamil Nadu amendment of the Indian Stamp Act, 1899, which will come into play - The very question was dealt with in detail by the Constitution Bench of the Hon'ble Supreme Court in New Central Jute Mills Co. Ltd. And Ors Vs. State of West Bengal and Ors., [1963 (1) TMI 65 - SUPREME COURT] while considering the identical provision 19 -A of the Uttar Pradesh amendment. The Hon'ble Supreme Court has held that though the execution of instrument may be in other States, when the instrument relates to any property situate within the State, then the liability also arises with reference to the State, where the property is situate also.
Thus, it is clear that upon presentation in the State of Tamil Nadu, the duty has to be calculated as per the rate payable in Tamil Nadu and thereafter, upon comparison, if the duty paid in any other State is higher than the State of Tamil Nadu, then the same has to be taken into consideration and no duty shall be payable. If the duty paid is lesser than what is payable in the State of Tamil Nadu, then whatever amount paid is to be set off and the balance duty is to be paid on the instrument of amalgamation.
Appeal disposed off.
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2024 (3) TMI 903
Breach of principles of natural justice - Validity of assessment order - mismatch between the GSTR 3B returns filed by the petitioner and the auto-populated GSTR 2A returns - HELD THAT:- The documents on record disclose that the liability pertains to alleged mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A returns. In recognition of difficulties faced in this regard, Circular No.183 was issued. The petitioner has also placed on record a certificate from the Chartered Accountant with regard to the reason for disparity between the above mentioned returns. Although the petitioner did not respond to the notices and participate in the assessment proceedings, the above facts and circumstances justify interference with the impugned orders, albeit by putting the petitioner on terms.
The impugned assessment orders are quashed and all these matters are remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand in respect of each assessment period within a period of 15 days from the date of receipt of a copy of this order - Petition disposed off.
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2024 (3) TMI 902
Validity of Assessment / Demand Order - tax liability with interest and penalty - turnover on Pan-India basis - Services of transportation of goods - Notification No.13/2017 - GST is leviable on the recipient of services on reverse charge basis - non application of mind - HELD THAT:- Although the petitioner had submitted the balance sheet and ITR details, it is evident from the records, assessing officer recorded findings contrary to the documents on record. It is also noticeable that in the penultimate paragraph at page 63, the assessing officer notices that the all India balance sheet discloses other income of Rs. 20,05,359/-. After noticing such other income, in the concluding table, tax liability with interest and penalty is imposed in respect of the turnover which, according to the petitioner, is taxable entirely on RCM basis.
Thus, the impugned assessment order is quashed and the matter is remanded for re-consideration. The petitioner is permitted to re-submit all relevant documents to the assessing officer within fifteen days from the date of receipt of a copy of this order.
W.P. is disposed of on the above terms.
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2024 (3) TMI 901
Violation of principles of natural justice - SCN does not give any reasons for cancellation - Appeal of the Petitioner seeking restoration of the GST registration has been dismissed solely on the ground that the same is barred by limitation - HELD THAT:- In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria.
It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer’s registration with retrospective effect is that the taxpayer’s customers are denied the input tax credit availed in respect of the supplies made by the taxpayer during such period. Although, it is not considered apposite to examine this aspect but assuming that the respondent’s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted.
The order dated 19.04.2022 cannot be sustained and is accordingly set aside. The GST registration of the petitioner is restored - petition disposed off.
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2024 (3) TMI 900
Violation of principles of natural justice - Defective SCN proposing to cancel the GST registration - SCN does not mention the name and designation of the concerned officer who has issued the same - SCN has not been signed by the proper officer but bears the digital signatures of Goods and Service Tax Network - HELD THAT:- A perusal of show cause notice dated 19.02.2024 shows that the same has been issued on the ground that registration has been obtained by means of fraud, willful misstatement or suppressing of facts. The notice is unclear as to which of the ground applies i.e. fraud, willful misstatement or suppressing of facts. The notice neither bears the name and designation nor the signatures of the issuing authority - As per the petitioner, notice was signed by the Goods and Services Tax Network. Further, we note that the notice states that the noticee is to refer to supporting documents attached to have case specific details, however, admittedly, no such documents were attached with the notice.
Rule 21A of the Central Goods and Services Tax Act, 2017, requires that the person who is alleged to be in contravention shall be intimated in Form GST REG 31 electronically on the common portal or by sending the communication to the e-mail address provided at the time of registration or as amended from time to time - Form GST REG 31 admittedly has not been uploaded on the portal or sent electronically over e-mail to the petitioner but is stated to have been sent to the petitioner by physical mail, which cannot be a mode of service, as prescribed under Rule 21A. In any event, Form that has been produced in Court today, is not the show cause notice, which was sent to the petitioner.
In view of the above impugned show cause notice dated 19.02.2024 as well as Form GST REG 31 also dated 19.02.2024 are set aside - Petition allowed.
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2024 (3) TMI 899
Demand - interest - lower Input Tax Credit (ITC) - Petitioner was unaware of proceedings commencing from the issuance of an intimation - show cause notice served on the petitioner by post and not merely uploaded on the GST portal - HELD THAT:- On perusal of the impugned assessment order, it is evident that the petitioner availed of a lower amount as ITC than the amount reflected in the auto-populated GSTR 2A return. In those circumstances, the conclusion that the petitioner wrongly availed of ITC indicates non application of mind. As regards the interest liability for belated filing of returns, the evidence on record reflects that the petitioner remitted sums of Rs. 3,97,353/- each towards CGST and SGST on 06.03.2024. In these circumstances, the impugned order calls for interference.
Therefore, the impugned assessment order is quashed and the matter is remanded to the assessing officer for reconsideration. The petitioner is permitted to file a reply to the show cause notice dated 24.07.2023 within a period of two weeks from the date of receipt of a copy of this order.
These writ petitions are disposed of on the above terms. There will be no order as to costs. Consequently, connected miscellaneous petitions are closed.
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2024 (3) TMI 898
Retrospective cancellation of GST registration of the petitioner - closure of business - SCN does not give any tenable reasons of cancellation - Violation of principles of natural justice - HELD THAT:- In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria.
It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer’s registration with retrospective effect is that the taxpayer’s customers are denied the input tax credit availed in respect of the supplies made by the taxpayer during such period. Although, it is not considered apposite to examine this aspect but assuming that the respondent’s contention in required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer's registration can be cancelled with retrospective effect only where such consequences are intended and are warranted.
In view of the fact that Petitioner does not seek to carry on business or continue the registration, the impugned order dated 03.07.2023 is modified to the limited extent that registration shall now be treated as cancelled with effect from 16.05.2023 i.e., the date when the Petitioner closed down his business activities. Petitioner shall make the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017.
Petition disposed off.`
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2024 (3) TMI 897
Seeking refund of the amount deposited as penalty - intent to evade tax or not - Challenged the physical inspection and verification report - Penalty - detention on the ground that address of the consigner not found during the inspection carried out at his place of business - HELD THAT:- It is well settled principle of law that in order to invoke proceedings u/s 129(3) of the Act, the intention to evade tax is mandatory. In this context, the judgment of the Hon’ble Supreme Court in Assistant Commissioner (ST) & Ors. v. M/s. Satyam Shivam Papers Pvt. Limited & Anr. [2022 (1) TMI 954 - SC ORDER] is relevant. The same view has been taken by different High Courts. It is also noted that under Rule 138A of the CGST Act, 2017, the person in charge of the conveyance shall carry (a) the invoice or bill of supply or delivery challan and (b) a copy of the e-way bill or the e-way bill number. In this case, the petitioner was carrying all the requisite documents as required in law at the time of carrying the goods.
It is the case of the petitioner that the seller has already made payments towards his tax liability. Hence, there is no question of any evasion of tax liability. This fact has not been disputed by learned counsel for the respondent.
Hence, this Court is of the considered view that no special purpose will be served by delegating the present matter to the appellate authority. In view thereof, this Court deems it appropriate to allow the present writ petition and set aside the impugned physical inspection and verification report dated 21.12.2023, detention order dated 23.12.2023, penalty order dated 25.12.2023 and all other purported proceedings initiated therein.
Thus, the writ petition is disposed of.
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2024 (3) TMI 896
Seeking revocation of provisional attachment of the Petitioner’s bank account - only contention urged on behalf of the Petitioner is that there was no reason to believe nor was there any tangible material for the Commissioner to confirm the provisional attachment of the Petitioner’s bank account in exercise of the powers under Section 83 of the the Central Goods and Service Tax Act, 2017 - HELD THAT:- There was substantial material for the Commissioner to form an opinion that the interest of the Revenue is required to be protected. Learned Counsel for the Petitioner has not contended that such material was not tangible material to form the opinion to attach the Petitioner’s bank account nor such a case is made out in the application filed by the Petitioner for revocation of the provisional attachment. Thus, merely relying on the decision of the Supreme Court in M/S RADHA KRISHAN INDUSTRIES VERSUS STATE OF HIMACHAL PRADESH & ORS. [2021 (4) TMI 837 - SUPREME COURT], would not suffice, in the absence of material available for the Petitioner to confront the department against an action under Section 83 of the CGST Act.
The Petitioner having failed to even make out a prima-facie case against the provisional attachment, it is difficult for us to be persuaded to take a different view in the matter. In any event, it is brought to notice by the learned Counsel for the Respondent that now a Show Cause Notice dated 29th February 2024, under the provisions of Sections 74(1) and 122 of the CGST Act, 2017 as also the Maharashtra GST Act, 2017 read with IGST Act, 2017 has been issued to the Petitioner - SCN has abundant material which has been gathered by the department in the investigation in making a tax demand of Rs. 3.63 crores against the Petitioner, along with the recovery of other amounts as set out in paragraph 40 of the Show Cause Notice.
There are no merit in this Petition. It is accordingly rejected.
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2024 (3) TMI 895
Breach of principles of natural justice and lack of jurisdiction - Excessive tax demand as a condition for remand - time lag of about two months between the show cause notice and the assessment order - Petitioner not participate in proceedings and contest the tax demand - HELD THAT:- On examining the impugned assessment order, it is noticeable that the assessing officer has taken into consideration the closing balance of creditors on all India basis. Similarly, based on the profit and loss account of the petitioner, the total revenue and expenditure of the corporate entity were made the basis for imposing GST. These conclusions clearly reflect non-application of mind. At the same time, it should be recognized that an intimation and show cause notice preceded the assessment order. There is also a time lag of about two months between the show cause notice and the assessment order. Therefore, it follows that the petitioner was negligent in not responding to the show cause notice and participating in proceedings.
Petitioner submits that the petitioner is ready and willing to remit a reasonable portion of the impugned tax demand as a condition for remand. However, he points out that 10% of the total disputed tax demand would be excessive in as much as this includes the all India turn over.
Therefore, the impugned assessment order is quashed subject to the condition that the petitioner remits 5% of the disputed tax demand as a condition for remand - Petitioner is permitted to file a reply to the show cause notice within a maximum period of two weeks from the date of receipt of a copy of this order along with 5% of the disputed tax demand.
Thus, petition is disposed of.
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