TMI Tax Updates - e-Newsletter
October 22, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise Indian Laws

Highlights / Catch Notes

GST

• Restoring GST number, filing returns, tax payment in 7 days to avoid order lapse. High Court grants relief in delaying appeal filing.

  The High Court directed the petitioner to approach the Competent Authority for GST registration within seven days. The Authority shall restore the petitioner's GST number upon completing requisite formalities. The petitioner must file returns, deposit taxes, penalty, and interest within seven days. Failure to comply will render the order inoperative. The court exercised extraordinary jurisdiction under Article 226 regarding condonation of delay beyond one month after the three-month period for filing an appeal u/s 107(1) of the 2017 Act.
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• Educational publishers' royalty payments for printing NCERT books deemed supply of goods, not service.

  The court observed that the show cause notice did not specifically allege wrongful availment or short payment of tax due to fraud, willful misstatement, or suppression of facts to evade tax. Advance ruling authorities in Karnataka, West Bengal, and Chhattisgarh have held that printing books by publishers, where content is provided by educational boards like NCERT, amounts to supply of goods, and the payment of royalty makes the publishers copyright holders as well as printers. While the respondents argued that the writ petition challenging the show cause notice is not maintainable, the court noted that the Supreme Court has stated that interference at the show cause notice stage should be avoided in fiscal statutes, except in cases of violation of statutory provisions, principles of natural justice, or repealed provisions. The petitioner established a prima facie case, and the balance of convenience lies in favor of granting an injunction. The matter is listed for further hearing on December 17, 2024.
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• Unreasoned order blocking credit ledger quashed, remanded for fresh adjudication with personal hearing.

  The High Court set aside the adjudication order blocking the Petitioner's credit ledger due to lack of personal hearing and violation of principles of natural justice. The adjudicating officer failed to provide reasons for sustaining the demand or interest, merely stating conclusions without addressing the Petitioner's detailed response to the show cause notice. The Court emphasized the need for reasoned orders, considering furnishing reasons as an essential concomitant of natural justice and fair play, enabling the Appellate Authority to discern the basis for the decision. The impugned order, being unreasoned and non-speaking, could not be sustained. The matter was remanded to the adjudicating authority for fresh adjudication, with directions to hear the Petitioner and pass a speaking order within six weeks.
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• Authorities provisionally attached bank account over alleged ITC fraud. Court allows revocation plea within a week.

  The High Court addressed the issue of provisional attachment of a bank account by the authorities u/s 83 of the Central Goods and Services Tax Act, 2017, alleging wrongful availment of Input Tax Credit. Considering the nature of allegations against the petitioner, the Court granted liberty to move for lifting the provisional attachment as per Rule 159. The petitioner was allowed to file an application for revocation within one week, and the authorities were directed to examine and dispose of such application preferably within two weeks, in accordance with the law.
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• Tax liability for 2018-19 upheld; excuses rejected, appeals bypassed. Ignorance no defense for private firm.

  Writ petition challenging order u/s 73 of WBGST/CGST Act for tax period April 2018 to March 2019 dismissed. Court found petitioner's contention of consultant's unavailability unconvincing for not responding to pre-show cause and show cause notices. As a private limited company, petitioner cannot feign ignorance. Petitioner failed to avail statutory remedy of appeal u/s 107, hence not entitled to invoke extraordinary writ jurisdiction. Petition dismissed for lack of merit.
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• Wrongly availed ITC not utilized, interest & penalty quashed by court under GST Act.

  The petitioner challenged the levy of interest and penalty for wrongly availing and utilizing Input Tax Credit (ITC). The court held that unless ITC is wrongfully availed and utilized, interest cannot be levied u/s 50(3) of the GST Act, as amended retrospectively by the Finance Act 2022. The petitioner had debited its credit ledger for the wrongly availed ITC but did not utilize it. The court observed that payment of interest and penalty can only be made by debiting the electronic cash ledger, not the credit ledger, as per Sections 49(4), 50(1) proviso, and Rules 86 and 87. Since the petitioner had not utilized the wrongly availed ITC, the demand for interest and penalty was quashed, and the orders passed by the authorities were set aside.
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• Cancellation of GST registration unlawful due to lack of notice & reasons, violating natural justice principles.

  Registration of petitioner cancelled u/s 29(2)(a) of UP GST Act for willful misstatement and suppression of facts. Authorities failed to provide notice and opportunity regarding adverse material used against petitioner, violating principles of natural justice. Section 29(2)(a)-(e) prescribes grounds for cancellation, but no violation found nor reasons recorded by authorities. Cancellation of registration not in accordance with Section 29(2) of UP GST Act. Impugned orders quashed by High Court. Petition allowed.
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• Transitional ITC claim under GST - No refund of VAT credits, only set-off allowed within time limit.

  The High Court dismissed the petition seeking refund of Input Tax Credit (ITC) accrued under the Value Added Tax (VAT) regime upon transition to the Goods and Services Tax (GST) regime. The court held that Section 18(a) allows carrying forward ITC from the VAT regime to be availed as set-off under GST for inputs held in stock. However, Section 18(2) prohibits availing credit after one year from the date of tax invoice. Transitional claims are subject to the limitation prescribed as on 27.12.2017 and the Supreme Court's direction providing a two-month window. Unless the claim is made in Form GSTR TRAN-1 within the stipulated time, no claim for ITC refund can be raised. The petitioner can only claim ITC as set-off against output tax, not as a cash refund.
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• Proceedings against deceased person quashed, allowed against legal heirs if business closed.

  The High Court quashed an order passed against a deceased person, holding it a nullity. Section 93 of the CGST/SGST Act permits continuance of proceedings against legal heirs of a deceased person if the business is discontinued, but does not authorize proceedings against the deceased. The Court allowed the revenue authorities to continue proceedings against the legal heirs of the deceased person.
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Income Tax

• Exemption for Long-Term Capital Gains from Pre-1997 Share Purchase for Infrastructure Projects Upheld.

  The case pertains to the exemption u/s 10(23G) for long-term capital gains arising from the purchase of shares for creating infrastructure facilities. The key points are: The assessee claimed exemption for long-term capital gains from the sale of shares acquired before 1.4.1997 for setting up an infrastructure facility. The Assessing Officer granted the exemption. The appellant objected, arguing that Section 10(23G) was not applicable before 1.4.1997. However, the CBDT clarified through a press release that the exemption u/s 10(23G) would apply to investments made before 1.6.1998, even prior to the amendment. The Income Tax Appellate Tribunal correctly observed that the issue was resolved by the CBDT's clarification. The purchase of shares for creating an infrastructure facility is considered capital expenditure and not income, as per Explanation 2 to Section 10(23G) before its amendment. Therefore, no tax is payable on such capital expenditure. The High Court dismissed the appeal, upholding the Tribunal's order.
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• Reopening notice against non-existent amalgamating company invalid, despite assessee's participation - merger extinguishes entity.

  The High Court held that the reopening notice issued u/s 148 against a non-existent entity, i.e., the amalgamating company that had ceased to exist due to an approved scheme of amalgamation, was invalid and illegal. Despite being informed about the amalgamation, the Assessing Officer issued the jurisdictional notice solely in the name of the amalgamating company, which was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. The appellant's participation in the proceedings cannot operate as an estoppel against law. The Assessing Officer lacked legal basis and jurisdiction to issue the impugned notice u/s 148A(b), pass an order thereon, and further issue the impugned notice u/s 148 to a non-existing entity. Such notices were illegal, invalid, and non-est from the outset. The decision was in favor of the assessee.
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• Agricultural income wrongly added as income from other sources based on mere estimation.

  The Income Tax Appellate Tribunal held that the Assessing Officer cannot arbitrarily reduce agricultural income and add it as income from other sources based on mere estimation and assumption without any specific material evidence. Suspicion alone cannot substitute proof. The Assessing Officer acted on surmises and conjectures by adopting 50% of net agricultural income as income from other sources without any basis or further verification. The Tribunal observed that in the same assessee's case for other assessment years, the Assessing Officer accepted the source as agricultural income, passing assessment orders u/s 143(3) without drawing any adverse inference. Consequently, the Tribunal set aside the order of the Commissioner of Income Tax (Appeals) and allowed the assessee's appeal.
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• Reopening Assessment Beyond 4 Years Not Allowed. Potato Chips Manufacturing Eligible for 80IB(11A) Deduction.

  Assessment reopening beyond 4 years from end of assessment year not permissible as no failure by assessee to disclose material facts. Deduction u/s 80IB(11A) allowed for manufacturing potato chips/snacks as it constitutes processing of vegetable as per judicial precedents from Madras, Uttarakhand High Courts and ITAT decisions. Revenue's appeal dismissed, CIT(A)'s order upholding assessee's claim affirmed.
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• Legitimate stock sale exempt from tax; unexplained cash credit claim rejected due to banking trail.

  Bogus share transactions were alleged, and the Assessing Officer (AO) denied the assessee's claim for exemption u/s 10(38) by treating the sale consideration of shares as unexplained cash credit u/s 68. However, the Tribunal held that the AO failed to establish the assessee's involvement in price rigging, and the sale transactions were conducted on the stock exchange platform, with the sale consideration received through banking channels. Consequently, the sale consideration cannot be considered unexplained cash credit u/s 68. The Tribunal directed the AO to delete the addition u/s 68 and allow the exemption u/s 10(38). Regarding the violation of natural justice principles, the Tribunal agreed with the CIT(A) that not providing an opportunity for cross-examination did not violate natural justice, as the statements were not relied upon for making the addition. The assessee's appeal was partly allowed.
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• Cash advances from customers not unexplained if identity, sales details provided.

  Unexplained cash credits u/s 68 and the applicability of Section 115BBE for taxing such additions. The key points are: The Assessing Officer (AO) issued notices u/s 133(6) to verify the cash advances received from customers, with 69% of the notices duly served. While some parties confirmed the advances, the AO relied on a few negative replies to reject the entire amount as unexplained money. The Tribunal held that the assessee had provided all relevant details, supported by audited books of accounts, invoices for purchases and sales. The sales were accepted, and the source of funds for those sales cannot be treated as unexplained u/s 68 when the details were furnished. Applying the principle of preponderance of probabilities, the Tribunal ruled that once the assessee supports the contention with evidence, the department cannot unreasonably reject the explanation without contrary evidence. The fact that notices were issued and parties confirmed the advances is prima facie evidence supporting the assessee's claim. Therefore, the cash advances received from customers before the stock receipts, where identity and sales were not disputed, cannot be added as unexplained money when all details were provided. The Tribunal decided in favor of the assessee.
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• CIT questions legitimacy of penny stock gains, initiates fresh assessment.

  The Assessing Officer (AO) failed to conduct relevant inquiries regarding the shares held as penny stocks by the assessee in GCM Securities Ltd. The Principal Commissioner of Income Tax (PCIT) invoked Section 263, finding the assessment order erroneous and prejudicial to the Revenue's interests. The PCIT observed that the AO did not adequately verify the transactions involving GCM Securities Ltd. shares, which exhibited volatile price fluctuations. The PCIT relied on judicial precedents highlighting that abnormal price differences without corresponding changes in underlying security prices indicate manipulative objectives. Direct evidence of such manipulative activities is difficult to obtain. A holistic approach considering the preponderance of probabilities is required, especially when little-known companies experience steep share price rises within a short period. The assessee's argument that sale proceeds received by cheque and Securities Transaction Tax paid prove the genuineness of the long-term capital gains cannot be accepted due to adverse evidence collected by the Revenue. The PCIT set aside the issue for the AO to pass a fresh assessment order after providing adequate opportunities to the assessee. The Tribunal upheld the PCIT's directions, as the AO failed to conduct worthwhile inquiries regarding the GCM Securities Ltd. shares.
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• IBC trumps other laws; pending appeals dismissed post NCLT Resolution Plan approval.

  The Insolvency and Bankruptcy Code, 2016 (IBC) has overriding effects over other laws as per Section 238. After approval of the Resolution Plan by NCLT, pending appellate proceedings cannot continue and are liable to be dismissed as infructuous and violative of IBC provisions. This aligns with judicial pronouncements wherein after NCLT approval u/s 13(6) of IBC, the Assessing Officer lacks jurisdiction to reopen assessments. Post Resolution Plan approval, all proceedings against the Corporate Debtor are barred, and only claims as per the plan can be recovered. The Successful Resolution Applicant is entitled to pursue actionable claims favoring the Corporate Debtor after plan approval. Consequently, the assessee's appeal cannot continue and is dismissed as infructuous.
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Customs

• Clarifying invoice procedures in FTAs; third-party invoices acceptable for proving origin, not valuation.

  This instruction clarifies certain aspects of origin procedures under free trade agreements (FTAs), particularly regarding third-party invoicing. It emphasizes that the purpose of a certificate of origin (COO) is to serve as proof that goods qualify as originating under an FTA, irrespective of third-party invoicing. The seller's invoice, including a third-party invoice, is relevant for customs valuation. Where doubts arise about originating criteria, proper officers may seek information and supporting documents from importers, consistent with the FTA. If information is insufficient, verification with the issuing authority through the FTA Cell is triggered, following the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR). The process must align with the FTA, without obligating importers to provide commercially confidential information or requiring specific currencies. Preferential duty claims can be denied without verification only if permitted by the FTA. Non-compliance must be established through due process, natural justice, and FTA obligations. Merely pointing out ineligible value addition elements may be insufficient to reject claims unless demonstrated that the prescribed value addition threshold is not met.
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• Customs Dispute Over Alleged Warehouse Violations Dismissed.

  A case concerning the suspension of a warehousing operation, alleged breach of conditions for operating a public bonded warehouse, and imposition of redemption fine and penalty. The High Court upheld the CESTAT's findings that there was no breach of license conditions, based on the record and permissions granted by Customs authorities for unloading/storing goods under their supervision. The allegations of misinterpreting permissions were found baseless. The CESTAT correctly overlooked procedural issues not raised earlier regarding advance discharge permission and mandatory filing of Bills of Entry before vessel arrival. With no breach of license terms or confiscation of goods, the CESTAT rightly set aside penalties u/ss 117 and 112(b)(ii) of the Customs Act for alleged violations like non-reporting of time-expired bonds, storage of non-bonded goods, and lack of audit trail facilities. No substantial question of law arose, and the Appeal was dismissed.
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• Exporter penalized for frozen sheep meat export violation. Duty drawback recovery with interest.

  Export of frozen sheep meat contravening ITC(HS) regulations - Determination of prohibited goods status - Recovery of duty drawback with interest and penalty. Certificates issued in proceedings remain valid until declared void by competent authority. Customs officers lack authority to deem certificates fraudulent, as observed by Commissioner. No evidence presented of exported goods being returned by importing country due to substandard quality or non-conformity. Appeal dismissed by Appellate Tribunal due to lack of merits.
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• Imported Chillers Wrongly Classified - Claiming Wrong Exemption Not Grounds for Confiscation.

  Classification dispute involving imported SVPS Chillers - whether to be classified under CTH 84198940 or not, and eligibility for exemption notification dated 17.03.2012. Held that improper importation provisions u/s 111 of Customs Act apply when goods do not correspond in value or other particulars. Appellants filed Bill of Entry based on import documents, claimed correct classification. Claiming wrong exemption notification alone does not warrant confiscation u/s 111(m). Tribunal relied on precedents holding goods cannot be confiscated merely for erroneous classification or exemption claim if description and value match declaration. Confiscation of goods, redemption fine, and penalty set aside as appellants did not contravene Section 111(m) and (o) at import stage. Appeal allowed.
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• Retrospective duty exemption for NEEPCO's Kameng hydro power plant upheld by court.

  The retrospective effect of the Notification dated 26.12.2013, issued subsequent to the import date, was examined. The amendment inserted the phrase "113 Kameng Hydro Electrical Power Project, Arunachal Pradesh- 600 MW (North Eastern Electric Power Corporation Ltd.) (NEEPCO)." The appellant's power project, duly approved by the Ministry of Power, was eligible for duty exemption under the Notification dated 17.03.2012. Since the Notification dated 26.12.2013 was curative, incorporating the specific NEEPCO power project for duty exemption, and its effective date was not specified, it should be considered retrospective. The Supreme Court clarified that clarificatory notifications are retrospective, making explicit what was implicit. When the Government rectifies inadvertent errors through notifications, they are treated as corrective/clarificatory with retrospective effect. Consequently, the appellant should be granted the benefit under the Notification dated 26.12.2013, and their application for re-assessment should be considered by extending the exemption. The impugned order was set aside, and the appeal was allowed.
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Corporate Law

• Regulator can't alter appointed date in company merger plan without strong grounds &A.

  The NCLAT held that the NCLT erred in unilaterally changing the appointed date from 1.4.2019 to 1.4.2020 while admitting the scheme of arrangement. The application was filed on 1.12.2019, and as per the circular, the appointed date within a year of filing did not require any justification. Even if the appointed date was ante-dated beyond a year, mere justification that it was not against public interest was sufficient. Despite the Covid-19 pandemic delay, the appointed date should have remained 1.4.2019. The NCLT's role is supervisory, and if statutory compliance and no violation of law or public policy is found, it cannot sit in appeal over the commercial wisdom of the parties approving the scheme. Altering the appointed date would have serious financial implications. The NCLAT allowed the appeal, restoring the appointed date as 1.4.2019.
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IBC

• Tax dues of corporate debtor extinguished post-acquisition by resolution applicant under IBC.

  The judgment addresses the applicability of Section 31 of the Insolvency and Bankruptcy Code (IBC) concerning the recovery of tax dues from the successful resolution applicant who acquired the assets of the corporate debtor. The court held that once the petitioner acquired the assets through the auction process under IBC, any claims not raised earlier stand extinguished. The respondent cannot recover dues pertaining to the period prior to the petitioner's acquisition. Section 31 mandates that the approved resolution plan binds all stakeholders, including government authorities. The retrospective applicability of the 2019 amendment to Section 31, upheld by the Supreme Court, reinforces this position. The IBC aims to revive the corporate debtor, and the approved resolution plan must provide for payment of insolvency costs. Consequently, the demand notice issued by the respondent seeking pre-acquisition dues is arbitrary, violating Article 14, and the petitioner is not liable for outstanding tax dues prior to asset acquisition under IBC.
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Indian Laws

• Auction sale set aside, interest awarded for delayed refund.

  Court set aside auction sale on equitable grounds as entire amount due was deposited by respondents. Appellant deprived of using Rs.81,20,000 from 21.07.2019 till refund, entitled to interest at 6% per annum on said amount from deposit date till refund date. Auction conducted by respondent at bank's instance, hence bank liable to pay interest. Impugned judgments modified to direct bank to pay simple interest at 6% per annum on Rs.81,20,000 to appellant from 21.07.2019 till actual refund date instead of 5% solatium. Appeal partly allowed.
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• Advertisement royalty vs. taxation: Ad companies to pay enhanced rate but not without a legal basis.

  The Court held that the demand for levy/fee/royalty on advertisements made without legislative sanction is violative of Article 265 of the Constitution. The imposition of royalty cannot be equated with tax/levy. The advertising companies had agreed to pay a royalty of Re.1 per square foot in 2005, and the Corporation had the power to revise the rate. However, the Corporation's resolution to charge enhanced royalty u/s 431B of the Act was misplaced as royalty is not tax. Royalty and tax are distinct concepts. The Court balanced equities by directing the advertising companies to pay the enhanced rate of Rs.10 per square foot with 6% simple interest from the date of communication of the resolution. Any excess amount paid over Re.1 per square foot shall be adjusted towards the final liability determined by the Corporation.
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• Dishonored cheque presumption: Repeated presentation & notice allowed if NI Act requirements met.

  This legal case pertains to the dishonor of a cheque and the presumption of innocence. The High Court held that the First Appellate Court erred in acquitting the accused solely on the ground that repeated presentation of the cheque and issuance of notice are not permissible. It cited a Supreme Court precedent allowing repeated presentation and successive notices, as long as the requirements u/s 138 of the Negotiable Instruments Act are satisfied. The High Court set aside the acquittal and remitted the matter to the First Appellate Court for fresh disposal, as the accused had no opportunity to get findings on other grounds raised before the First Appellate Court. The scope of appeal against conviction is wider than against acquittal, necessitating a fresh consideration by the lower court.
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Service Tax

• Reverse Charge Credit Eligibility & Transition Under GST Debated.

  The summary focuses on the refund claim rejection based on the ground that the amount paid under Reverse Charge Mechanism (RCM) is not admissible u/r 9(1)(bb) of CENVAT Credit Rules 2004 and was hence ineligible for transition as input tax credit u/s 142(8)(a) of CGST Act. It highlights that Rule 9(1)(e), not Rule 9(1)(bb), is applicable for RCM payments, and credit cannot be denied, citing the POLYGENTA TECHNOLOGIES LTD. case. Regarding transition of credit, it states that u/ss 142 and 140 of the CGST Act, the appellant was eligible for TRAN-1 credit, and the rejection citing non-declaration in Service Tax returns was hyper-technical. Section 142(8)(b) mandates refunding eligible credit in cash. The Adfert Technologies case upheld transitional credit as a vested right. Consequently, the impugned order rejecting the refund claim was set aside, and the appeal was allowed.
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• Transfer of business goodwill not an IPR service; service tax demand quashed, extended period & penalties set aside.

  Levy of service tax on intellectual property rights (IPR) services, particularly the transfer of goodwill. It clarifies that goodwill is distinct from trademarks and is not recognized as an intangible property under intellectual property laws in India. The case establishes that the transfer involved the goodwill of a business, not just a trademark, and hence the service tax demand based on treating it as an IPR service is set aside. It also addresses issues related to manpower recruitment or supply agency services, the extended period of limitation, and penalties. The tribunal held that the services provided were business support services, not manpower supply, the extended period was wrongly invoked as there was no suppression of facts, and penalties were not warranted as there was no deliberate defiance or disregard of obligations.
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Central Excise

• Excise duty dispute on goods classification: Arbitrability, NIT clause, and price recovery.

  The dispute pertained to the excise duty payable on certain goods, with the petitioner and the excise department adopting different classifications. The key issues were whether the disputes were arbitrable, whether the claims arose from a "change" in taxes under the NIT clause or revision in purchase orders, and the petitioner's entitlement to recover the price along with excise duty mentioned in invoices. The court held that the respondent had anticipated and notified the petitioner about the possibility of additional excise duty, and the evidence supported the conclusion that revenue authorities had recovered excise duty at 12.36% for the goods. The arbitrator's assessment of evidence and conclusions were reasonable. While the underlying legal argument was contested, the cited judgments elaborated on the analyzed argument but did not go to the root of the award. An award can only be interfered with if it contains errors going to the root of the matter, subject to disclosure of factual material and the parties' ability to challenge reliance on authorities within the statutory parameters. The court found no merit in the petition and dismissed it.
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• Retrospective unjust enrichment proviso inapplicable for pre-1999 provisional assessments finalization. Delay by authorities can't deny refund claim.

  Proviso to Rule 9B(5) of Central Excise Rules, 1944 regarding unjust enrichment not applicable retrospectively for finalization of provisional assessments prior to 1999. Entitlement to refund and finalization independent of Section 11B refund provisions. Delay in passing Assessment Order not attributable to assessee cannot defeat refund claim on unjust enrichment grounds u/r 9B(5) proviso. Tribunal order in consonance with law, no substantial question of law, appeal dismissed.
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• Gross violation of CBEC rules. Binding precedent of CESTAT orders over lower authorities. Revenue appeal sans grounds against Tribunal order.

  Gross violation of CBEC instructions and the precedential value of CESTAT decisions. The Revenue filed an appeal before the first Appellate Authority without specifying grounds or reasons for departing from the Tribunal's order followed by the Adjudicating Authority. Section 35R(4) is applicable only to the Commissioner (Appeals) and Appellate Tribunal, requiring them to consider circumstances under which an earlier order was accepted and not challenged. This section does not set aside the principle of judicial precedents and the binding nature of higher Appellate Authority orders. Authorities below the Tribunal are bound by its earlier orders. The impugned order set aside the original authority's order solely because the Tribunal's order was accepted due to monetary limits, without stating grounds contrary to the Tribunal's observations. The original authority kept demand notices awaiting the Tribunal's decision and adjudicated accordingly after it set aside the order. The impugned order lacked merits for differing from the available higher Appellate Authority order without specifying grounds, leading to the appeal being allowed.
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Articles

• LATEST CLARIFICATIONS ISSUED BY CBIC
• Assessee should respond to the SCN and take all grounds before the authority, and if aggrieved, should avail an alternate statutory remedy of appeal

Notifications

• GST - States

• S.R.O. No. 912/2024 - dated 9-10-2024 - Kerala SGST
  Amendment in Notification G.O. (P) No. 156/2018/TAXES dated 28th September, 2018

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• S.R.O. No. 911/2024 - dated 9-10-2024 - Kerala SGST
  Amendment in Notification No. 74/2017/TAXES dated 30th June, 2017

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• S.R.O. No. 910/2024 - dated 9-10-2024 - Kerala SGST
  Amendment in Notification No. G.O. (P) No. 73/2017/TAXES, dated 30th June, 2017

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• S R.O. No. 913/2024 - dated 9-10-2024 - Kerala SGST
  Amendment in Notification No. 59/2017/TAXES dated 30th June, 2017

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Circulars / Instructions / Orders

• Customs - Instruction No. 23/2024 - dated 21-10-2024
  Clarification on certain aspects of origin procedures under free trade agreements (FTAs)

News

• Repayment of ‘GOI FLOATING RATE BOND 2024’

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Case Laws:

• GST

• 2024 (10) TMI 1049
  Seeking release of Currency of Rs. 58.00 Lacs resumed/seized illegally by the Respondents - it was held that the release of currency is allowed - HELD THAT:- Issue notice on the application seeking condonation of delay as well as on the Special Leave Petition. There shall be stay of the impugned order in the meanwhile.

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• 2024 (10) TMI 1048
  Cancellation of GST registration of petitioner, obtained by fraud - time limitation - petitioner s application for revocation of cancellation of GST registration was dismissed having been preferred beyond the statutory time limit - no valid resaon in the SCN - Violation of principles of natural justice - HELD THAT:- It is pertinent to note that the only reason notified to the petitioner for revoking the registration in the notice served upon him was to the effect that he had obtained registration by practising fraud. It is totally bereft of any circumstance indicating as to the manner in which the alleged fraud was perpetrated. Considering the fact that fraud is a serious allegation which has to be proved to the hilt, respondent no. 4 - Joint Commissioner would have been more cautious in issuing the show cause notice by giving all the details and circumstances which were considered for drawing the inference about alleged fraud. It would have extended an opportunity to the petitioner to deal with each of the circumstances individually and even collectively. The order passed by respondent no. 4 - Joint Commissioner in the original proceeding and that of respondent no. 3 - Commissioner in the appeal are quashed and set aside. The matter is remitted back to respondent no. 4 - Joint Commissioner. Petition disposed off by way of remand.

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• 2024 (10) TMI 1047
  Writ petition under Article 226 of the Constitution of India - challenge to order passed by the respondent No.2 under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 - HELD THAT:- The factual matrix is such that the matter is squarely covered by a coordinate Bench judgment of this Court in Mahaveer Trading Company vs. Deputy Commissioner State Tax and another, [ 2024 (3) TMI 334 - ALLAHABAD HIGH COURT] where it was held that ' It has been passed in gross violation of fundamental principles of natural justice. The self imposed bar of alternative remedy cannot be applied in such facts. If applied, it would be of no real use. In fact, it would be counter productive to the interest of justice. Here, it may be noted, the appeal authority does not have the authority to remand the proceedings.' The impugned order dated March 4, 2024 is quashed and set-aside with a direction given to the officer concerned to grant the petitioner another opportunity of filing a fresh reply and thereafter fix a date of hearing and pass a reasoned order. The entire exercise should be completed within a period of two months from date. Petition disposed off.

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• 2024 (10) TMI 1046
  Competence of Appellate Authority to condone the delay in filing an appeal - condonation of delay beyond a period of one months after the expiry of three months period prescribed for filing appeal under Sub-section (1) of Section 107 of the Act of 2017 - exercise of extraordinary jurisdiction vested under Article 226 of the Constitution of India - HELD THAT:- This petition is disposed of by directing the petitioner to approach the Competent Authority for registration of his GST number within a period of seven days from today. The Competent Authority shall restore GST number of the petitioner immediately, subject to the completion of all requisite formalities. The petitioner shall file the returns and deposit the taxes and penalty along with interest within a period of seven days. In the event the needful is not done by the petitioner within stipulated period, this order shall cease to be in operation. Petition disposed off.

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• 2024 (10) TMI 1045
  Maintainability of petition - HELD THAT:- The order dated 3 July 2023 is set aside and the matter is restored before the Respondent No. 4. The Petitioner is granted two weeks time to file reply to the show cause notice dated 11 April 2023. After considering such reply and hearing the Petitioner, the show cause notice must be disposed of as expeditiously as possible, in any event, within eight weeks of receiving the reply. All contentions of all parties are left open. The Rule in this Petition is disposed of in the above terms.

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• 2024 (10) TMI 1044
  Maintainability of petition - availability of alternative remedy - Appeal held as premature on the erroneous ground that no appealable order has been passed by any adjudicating authority - HELD THAT:- Once the Division Bench of this Court has directed the petitioner to avail of alternative remedy as provided under Section 107 of the Act, the impugned order cannot be sustained in the eyes of law and therefore, the matter requires reconsideration by the appellate authority. The writ petition is partly allowed. The impugned order dated 29.2.2024 is set aside

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• 2024 (10) TMI 1043
  Dismissal of petition - withdrawal of appeal without exhausting alternate remedies - lack of knowledge of the order - HELD THAT:- All the defences cannot be readily accepted. If the petitioner was confident of such defences, it is difficult to understand why the appeal was withdrawn. Suppose the petitioner, for the reasons attributable to himself, fails to avail of alternate remedies provided by the Statute. In that case, such a petitioner cannot insist on invoking this Court's writ jurisdiction. Accordingly, this petition cannot be entertained. If the petitioner so chooses and, if so advised, applies for revocation of his withdrawal application and seeks restoration of the appeal, the Appellate Authority must dispose of such application in accordance with the law, considering that he is an individual and after considering the reasons for revocation - petition disposed off.

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• 2024 (10) TMI 1042
  Challenge to SCN - wrongful availment or short payment of tax - levy of GST on printing services - HELD THAT:- Upon perusal of the show cause notice, one factor immediately strikes is there is no specific allegation with regard to wrongful availment or short payment of tax by reason of fraud, or any wilful misstatement or suppression of facts to evade tax . It is to be further noted that advance ruling authorities in the State of Karnataka, West Bengal and Chhattisgarh have also held that the activity of printing of books by publishers wherein the content is provided by NCERT or any similar educational board would amount to supply of goods and the fact that royalty is paid by such publishers would amount to the publishers playing the role of copy right holder as well as printer. The only other ground of challenge from the side of the respondents is that this writ petition is not maintainable as the petitioner is challenging the show cause notice. Counsel appearing on behalf of the respondents submitted that the petitioner should reply to the show cause notice and proceed with the alternative remedy available with the petitioner. It is to be noted that the Supreme Court in a catena of judgements has stated that interference at the show cause notice stage and/or when an alternative remedy is available to the petitioner, specially in cases of fiscal statutes that are self contained in nature is to be avoided by the High Courts. The Supreme Court in the case of Union of India and another v. Gauhati Carban Limited [ 2012 (11) TMI 885 - SUPREME COURT] held that the power under Article 226 of the Constitution of India is an extraordinary power and should be exercised by the High Court only in those cases where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or where an order has been passed in total violation of the principles of natural justice causing prejudice to the petitioner. The petitioner has established a prima facie case in its favour and the balance of convenience and inconvenience lies in favour of the petitioner for obtaining an order of injunction. List this matter on December 17, 2024.

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• 2024 (10) TMI 1041
  Rejection of refund claim with interest - Interpretation of Section 50 of the CGST Act, 2017 - HELD THAT:- Considering the affidavit and the position reflected the impugned order dated 18 August 2021 is set aside and the respondents are directed to refund to the petitioner the amounts claimed i.e., Rs. 9,26,570/- within four weeks from today.

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• 2024 (10) TMI 1040
  Maintainability of appeal - appeal dismissed as being beyond limitation - opportunity of hearing not provided - violation of principles of natural justice - HELD THAT:- Considering the mandate of Section 75(4) of the GST Act as well as the following the judgment in PARTY TIME HOSPITALITY PROP. SMT. PUNITA GUPTA LKO. [ 2023 (9) TMI 48 - ALLAHABAD HIGH COURT ], which is squarely covered to the facts of the present case, the impugned orders dated 21.02.2022 (Annexure-2) and 14.03.2024 (Annexure-1) are quashed giving liberty to the State to file a fresh demand order in accordance with law after giving opportunity of hearing. The authority shall pass order indicating the date of hearing as well as the time and place of the hearing in specific term and shall proceed accordingly in accordance with law - the writ petition is disposed off.

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• 2024 (10) TMI 1039
  Violation of principles of natural justice - Rejection of Petitioner s refund claim without bothering to grant the Petitioner an opportunity of hearing or even considering the Petitioner s reply - HELD THAT:- In the show cause notice dated 29 December 2021, 15 days were granted to the Petitioner to submit a reply. Without any justification, this period was curtailed. In the curtailed period, the Petitioner did file a fairly detailed reply. That reply has not even been considered, and there is no justification for why no opportunity of hearing was granted to the Petitioner despite the Petitioner specifically requesting the same. All this is sufficient to hold that there was a failure of natural justice in making the order dated 7 January 2022. The appellate authority has not considered the challenge based on the failure of natural justice. Even the reasoning of the appellate authority does not align with the proposed reasons in the show cause notice. The Appellate Authority has addressed a point about which the Petitioner was never put to any notice in the show-cause notice served on the Petitioner. These are sufficient grounds to set aside the order dated 30 September 2022 made by the appellate authority. The Assistant Commissioner s order dated 7 January 2021 and the appellate authority s order dated 30 September 2022 are set aside - matter is now remanded to the Assistant Commissioner to decide the Petitioner s refund claim as expeditiously as possible - petition allowed by way of remand.

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• 2024 (10) TMI 1038
  Cancellation of GST registration of petitioner - non-service of SCN - violation of natural justice principles - HELD THAT:- It appears that a show cause notice was uploaded on the GST portal and subsequent to the same, the order impugned was passed under Section 73 of the Act. Once the registration has been cancelled, the petitioner is not obligated to check GST portal. The mode of service of any show cause notice has to be by way of alternative means to the petitioner. There has been violation of the principle of natural justice, and accordingly, the impugned order dated December 26, 2023 passed by the respondent No.2 is quashed and set aside. The department shall be at liberty to issue a proper notice to the petitioner and act in accordance with law. The writ petition is disposed of.

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• 2024 (10) TMI 1037
  Challenge to order passed by the respondent No.2 u/s 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 - violation of principles of natural justice - HELD THAT:- The factual matrix is such that the matter is squarely covered by a coordinate Bench judgment of this Court in Mahaveer Trading Company vs. Deputy Commissioner State Tax and another [ 2024 (3) TMI 334 - ALLAHABAD HIGH COURT ], where it was held that ' before any adverse order passed in an adjudication proceeding, personal hearing must be offered to the noticee. If the noticee chooses to waive that right, occasion may arise with the adjudicating authority, (in those facts), to proceed to deal with the case on merits, ex-parte. Also, another situation may exist where even after grant of such opportunity of personal hearing, the noticee fails to avail the same. Leaving such situations apart, we cannot allow a practice to arise or exist where opportunity of personal hearing may be denied to a person facing adjudication proceedings.' Upon a perusal of record, it appears that the factual matrix is very similar to one in Mahaveer Trading Company's case - there are no reason to take a different stand. The impugned order dated 26.8.2024 passed by Deputy Commissioner, Sector-13, State Tax, Chetganj, Varanasi, Uttar Pradesh (Respondent No.2) is quashed and set-aside with a direction given to the officer concerned to grant the petitioner another opportunity of filing a fresh reply and thereafter fix a date of hearing and pass a reasoned order - Petition allowed.

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• 2024 (10) TMI 1036
  Challenge to adjudication order - blocking the Petitioner's credit ledger - no personal hearing was granted - violation of principles of natural justice - HELD THAT:- There is hardly any discussion and in any event, there are no reasons to sustain the findings. As noted earlier, the Petitioner had filed a fairly detailed response to the show cause notice. Most of the contentions raised in the response have not been addressed or considered. Simply stating that the adjudicating officer finds that the demand or interest is recoverable does not amount to giving any reasons. Furnishing reasons is now accepted as one of the essential concomitants of the principles of natural justice and fair play. It is only based on reasons that the Appellate Authority can discern the basis for the decision that may be appealed against. An order bereft of reasons renders the right to appeal, which is a valuable right, nugatory. The impugned order contains no reasons but only conclusions. To say that I find that the tax, interest, or penalty is payable is merely an ipse dixit. The impugned order neither discusses the Petitioner s response nor gives any independent reasons supporting the conclusion or finding. The impugned order is unreasoned and non-speaking. Such orders cannot be sustained. The impugned order dated 03 July 2023 is set aside on the above short ground. The matter is remanded to the 4th Respondent for fresh adjudication following the law. The 4th Respondent must hear the Petitioner and pass a speaking order within six weeks from today - Petition allowed.

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• 2024 (10) TMI 1035
  Short payment of the GST - seeking a declaration that the petitioner is entitled to ITC and in the alternative for refund of Rs.3 Crore, which were paid under protest - HELD THAT:- When it is apparently a matter wherein the petitioner either was made to deposit or had deposited the money even before adjudication of its liability to pay the tax, such payment cannot be treated as a voluntary one; more so, when it was made on the very date when the petitioner s premises was visited by the revenue officials. The respondent CGST shall forthwith refund the amount of Rs. 3,00,00,000/- to the petitioner - If the amount is not refunded within two weeks, it shall carry simple interest @ 6% per annum - The writ petition is allowed partly.

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• 2024 (10) TMI 1034
  Provisional attachment of bank account maintained by it in exercise of powers conferred by Section 83 of the Central Goods and Services Tax Act, 2017 - wrongful availment of of Input Tax Credit - HELD THAT:- Bearing in mind the nature of allegations which stand levelled against the petitioner and stand reflected in the impugned order, the end of justice would merit the petitioner being accorded the liberty to move and seek lifting of the provisional attachment in terms of Rule 159. The writ petition is disposed off by permitting the writ petitioner to move in terms of Rule 159 within a period of one week from today. Any application for revocation of provisional attachment so made may be examined and disposed of in accordance with law and preferably within a period two weeks therefrom.

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• 2024 (10) TMI 1033
  Auction of property for recovery of taxes due from their vendor - petitioners contends that the property in question had been purchased, by way of registered deeds of sale and that the said property cannot be auctioned for recovery of the dues of the vendor - Sham transactions - HELD THAT:- Section 81 of the Act merely provides for declaration of certain transactions to be void transactions with certain safeguards embedded in the proviso. However, there is no machinery available for determination of the question as to whether the transactions in question are sham transactions falling within the ambit of Section 81 of the Act. Prima facie, this Court, subject to the contentions that may be raised by the learned counsel for the respondents, is of the opinion that the provisions of Section 81 of the Act cannot be pressed into service unless there is a finding as to the nature of the transactions in question by a competent authority, authorized under the Act or the Rules. There shall be stay of all further proceedings, in pursuance to the notice, dated 26.06.2024, attaching immovable properties belonging to the petitioners - Post on 23.10.2024.

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• 2024 (10) TMI 1032
  Denial of input tax credit on account of the provisions contained in Section 16(4) of the CGST/SGST Acts - constitutional validity of Section 16(4) of the CGST/SGST Acts - HELD THAT:- Taking into consideration the directions issued by this Court in M. Trade Links [ 2024 (6) TMI 288 - KERALA HIGH COURT] , this writ petition can be disposed of, setting aside Ext. P3 assessment order to the extent that it denied input tax credit on account of the provisions contained in Section 16(4) of the CGST/SGST Acts and directing that the claim of the petitioner be considered in terms of the directions issued by this Court in M. Trade Links and also taking note of the provision of Section 16(5) of the CGST/SGST Acts. Exts.P3 is set aside to the extent that it denies input tax credit on account of the provisions contained in Section 16(4) of the CGST/SGST Act and it is directed that benefit of the directions contained in the judgment in M.Trade Links shall also be extended to the petitioner - Petition disposed off.

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• 2024 (10) TMI 1031
  Challenge to Circular No. 212/6/2024-GST dated 26 June 2024 [Impugned Circular] issued by the Central Board of Indirect Taxes and Customs [CBIC] as well as the Show Cause Notice [SCN] dated 02 August 2024 - guarantee commission and the service tax liability raised in connection therewith - discounts and Section 15 (3) (b) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Insofar as the aspect of guarantee commission is concerned, the allegations noted which stand levelled in the impugned SCN and where the respondents view a failure on the part of the writ petitioner to discharge perceived GST liabilities considering commission income @ 0.75% of the corporate guarantee which may have been extended. Attention drawn to RBI Circular No. RBI/2021-22/121 dated 09 November 2021 in terms of which the Central Bank itself restrains parties from obtaining consideration by way of commission in respect of guarantees of the genre with which are concerned. While the respondents may continue with the proceedings forming part of the impugned SCN dated 02 August 2024, they shall desist from ruling on the issues pertaining to discounts and Section 15 (3) (b) as well as guarantee commission - Let the writ petition be called again on 09.01.2025.

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• 2024 (10) TMI 1030
  Challenge to SCN u/s 74(1) of the WBGST/CGST Act, 2017 - validity of circular related to GST exemption on annuity payments for road construction - invocation of Section 74 of the Act - HELD THAT:- Ordinarily, in relation to a challenge to the show cause notice, no interference is called for. However, taking note of the fact that a jurisdictional issue has been raised, the matter may require further consideration. However, since, the parties submit that time to respond to the show cause notice has already expired, at this stage it would be prudent to permit the petitioners to respond to the show cause notice. Accordingly, time to respond to the show cause notice is extended till 4th November 2024. List this matter under the same heading for further consideration on 12th November 2024.

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• 2024 (10) TMI 1029
  Challenge to Recovery notice - rejection of Input Tax Credit - HELD THAT:- A perusal of the material on record will indicate that the issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in the case of M/S. SADHANA ENVIRO ENGINEERING SERVICES VERSUS THE JOINT COMMISSIONER OF CENTRAL TAX; THE PRINCIPAL COMMISSIONER OF CENTRAL TAX BENGALURU; UNION OF INDIA; STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY, BANGALORE [ 2024 (9) TMI 1648 - KARNATAKA HIGH COURT] where it was held that ' The respondents are directed to unblock and release the credit balance of the petitioner in their ITC Ledger / Account, if not already released, immediately / forthwith upon receipt of a copy of this order without any delay.' Petition is hereby disposed of in terms of the judgment of this Court in the case of M/s. Sadhana Enviro Engineering Services vs. Joint Commissioner of Central Tax others - the impugned Order is set aside - petition allowed.

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• 2024 (10) TMI 1028
  Cancellation of petitioner's GST registration - non-filing of the GST return for a continuous period of six months - petitioner contends that now the petitioner is ready to make the payment towards GST return for a period of six months as well as the penalty, if any, imposed by the respondent-department - HELD THAT:- The matter is covered by the order passed in SUNIL SAH VERSUS UNION OF INDIA [ 2024 (9) TMI 904 - UTTARAKHAND HIGH COURT ], the present writ petition is also decided in terms of the said order. The petitioner shall be at liberty to move an application for revocation or cancellation of the order under Section 30 (2) of the CGST Act, 2017, within two weeks. With this application, the petitioner shall also furnish all the GST returns, which he fails to submit and he will also deposit the outstanding tax and dues of the goods and service tax with his application. If he makes such an application within stipulated period, the Competent Authority shall consider petitioner s application and pass appropriate order as per law, within four weeks thereafter. Petition is disposed off.

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• 2024 (10) TMI 1027
  Challenge to order passed under section 73 of the WBGST Act/CGST Act, 2017 - Single Bench was of the view that the appellants should exhaust the appellate remedy available under section 107 of the Act - HELD THAT:- Hon ble Supreme Court in M/s. Radhasoami Satsang, Saomi Bagh, Agra v. Commissioner of Income Tax [ 1991 (11) TMI 2 - SUPREME COURT] held that res judicata does not apply to income tax proceedings as each assessment year being a unit, what is decided is one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year - The facts of the present case clearly show that in respect of earlier assessment year i.e. 2017-2018, on identical set of facts, it is seen that the department has dropped the demand and the proceedings have attained the finality. Therefore, in order to maintain a consistent approach in the matter, this Court is of the view that one more opportunity can be granted to the appellants to go before the authority and establish their case that it is similar to that of the case for the assessment year 2017-2018 among other grounds that they may be entitled to canvass. The order passed in the writ petition is set aside. Consequently, the adjudication order passed under section 73 (9) of the Act dated April 8, 2024 is set aside and the matter is restored to the stage of show-cause notice dated December 5, 2023 - Appeal allowed.

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• 2024 (10) TMI 1026
  Cancellation of petitioner's GST registration - failure to conduct business from the declared place - HELD THAT:- In view of the consensus arrived at between both the parties that the matter is covered by the order passed by this Court in M/S KALYAN SINGH VERSUS VERSUS COMMISSIONER STATE GOODS AND SERVICES TAX COMMISSIONERATE AND ANOTHER. [ 2024 (8) TMI 1463 - UTTARAKHAND HIGH COURT] , present writ petition is also decided in terms of that order. Petitioner shall be at liberty to move an application, under Section 30 of the Central GST Act, for revocation of cancellation of his GST registration within three weeks. The petitioner is directed to furnish all the GST returns which he failed to submit and will also deposit the outstanding tax and dues of Goods and Service Act with his application. If such application is made by the petitioner within three weeks from today, the said application of the petitioner shall be considered by the Competent Authority which shall pass an appropriate order thereon as per law, with in four weeks thereafter. The writ petition is disposed of.

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• 2024 (10) TMI 1025
  Challenge to SCN issued under Section 73 of the Finance Act, 1994 - leviability of the Service Tax - scope of the word 'Service' - HELD THAT:- Exactly the points that has been raised by the learned counsel appearing for the Petitioner who have challenged against the Show Cause Notice since has been answered by the said decision of the Coordinate Bench of this Court THE PRINCIPAL COMMISSIONER, OFFICE OF THE PRINCIPAL COMMISSIONER OF CGST AND CENTRAL EXCISE, CHENNAI VERSUS M/S. WUNDERBAR FILMS PRIVATE LIMITED, REP. BY MR. S. VINOD KUMAR, DIRECTOR, CHENNAI [ 2024 (3) TMI 17 - MADRAS HIGH COURT] , by respectfully following the same, this Writ Petition is dismissed also on same terms i.e., open to the Writ Petitioner to reply to the Impugned Show Cause Notice wherein it is for the Writ Petitioner to take whatever grounds/objections against the Show Cause Notice and accordingly the issue can be adjudicated and decided by the Adjudicating Authority/Assessing Authority/Revenue at an earliest point of time preferably within a period of four (4) weeks from the date of filing of the reply/objections by the Writ Petitioner. Writ Petition stands disposed of.

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• 2024 (10) TMI 1024
  Challenge to order passed under Section 73 of the WBGST/CGST Act, 2017 - tax period from April 2018 to March 2019 - HELD THAT:- Taking note of the response filed by the petitioners on 3rd December, 2023 in respect of the scrutiny period July, 2017 to March, 2018, it is difficult to accept the contention of the petitioners that the petitioners consultant remained unreachable or was ill for reasons whereof, the petitioners were unaware with regard to the impugned show-cause notice dated 5th December, 2023. The petitioner no.1 is not a small business entity but a private limited company, having corporate entity. Thus, the petitioners cannot feign ignorance of the pre show-cause as well as the show-cause notice by contending that its consultant was unwell or remained unreachable. The petitioners having not responded to the pre-show-cause notice as well as the show-cause notice, there being no proper explanation for having not responded to the same and further taking note of the efficacious alternative remedy available to the petitioner in the form of an appeal under section 107 of the said Act, the petitioners are not entitled to invoke the extraordinary writ jurisdiction to this Court for adjudication of its case on merits on the basis of its stand taken for the first time before this Court. This writ petition thus, cannot succeed and is accordingly dismissed.

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• 2024 (10) TMI 1023
  Maintainability of petiiton - availability of alternative remedy - Penalty u/s 129(1)(a) of the Central Goods Services Tax Act, 2017 - seeking release of detained goods - HELD THAT:- This Court, in view of the aforesaid submission, is disposing of the instant writ petition, on the ground of availability of alternative remedy of appeal, granting liberty to the writ petitioner to prefer appeal, raising all points, before the appellate forum, if not already preferred. Petition disposed off.

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• 2024 (10) TMI 1022
  Challenge to demand-cum- show cause notice - non-payment of GST under Reverse Charge Mechanism - lack of jurisdiction - applicability of Section 15(2) of the CGST Act, 2017 - HELD THAT:- The challenge is to the demand-cum-show cause notice issued by the competent authority. The appropriate course of action for the petitioners is to submit a reply and contest the matter before the said authority. The demand- cum show cause notice dated 24.04.2024 having been issued by the competent authority cannot be challenged on the plea of lack of jurisdiction. As regards, the applicability of Section 15(2) of the CGST Act, 2017, all issues raised by the petitioners herein are left open to be adjudicated before the competent authority. Petition dismissed.

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• 2024 (10) TMI 1021
  Seeking withdrawal of petition - change in the policy, where by the penalty and interest on GST will be waived - HELD THAT:- In light of the memo filed, petition is dismissed.

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• 2024 (10) TMI 1020
  Seeking grant of bail - creating fake companies / firms and appointing Directors / Partners / Proprietors for fraudulently availing fake Input Tax Credit and further passing on the inadmissible Input Tax Credit - HELD THAT:- It appears that petitioner is in judicial custody since 09.04.2024, investigation has been completed and charge sheet has been submitted. Trial has yet to commence which shall consume considerable time. The relevant evidence of the case pertains to electronic evidence, which cannot be tampered by petitioner and other witnesses are official witnesses. Considering the nature of allegation against petitioner coupled with materials available on record and period of custody of the petitioner, the above-named petitioner is released on bail. Accordingly, the petitioner named above, is directed to be released on bail on furnishing bail bond of Rs. 1,00,000/- with two sureties of the like amount each to the satisfaction of learned Additional Chief Judicial Magistrate, Special Court, Economic Offences, Jamshedpur in connection with Complaint Case No. 1281 of 2024, subject to fulfilment of conditions imposed - bail application allowed.

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• 2024 (10) TMI 1019
  Rejection of appeal on the ground of being filed after expiry of limitation period as envisaged under Section 107 of the Central Goods and Services Tax Act, 2017 - Registration of the Petitioner has been cancelled for failure to furnish the returns for a continuous period of six months - HELD THAT:- The instant case is squarely covered by the judgment ABDUL SATAR VERSUS THE PRINCIPAL COMMISSIONER, CENTRAL GOODS AND SERVICE TAX CX, THE JOINT COMMISSIONER (APPEALS) , CGST CX (APPEALS) , THE SUPERINTENDENT, CGST CX, RANGE-1, RAMGARH DIVISION [ 2024 (3) TMI 780 - JHARKHAND HIGH COURT] where it was held that ' The provisions under sections 30, 45, 46, 47 etc. are intended at providing opportunity to the defaulter Firm so as the Firm continues its business. Therefore, a liberal approach is required to be taken in the matters like the present proceeding notwithstanding the period prescribed under section 30 of the GST Act having been lapsed' , hence, the same may be disposed of in terms of the said judgment. Petition disposed off.

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• 2024 (10) TMI 1018
  Prayer to consider and dispose of rectification application - time limitation prescribed under section 161 in Odisha Goods and Services Tax Act, 2017, followed or not - HELD THAT:- Rectification application dated 20 th August, 2023 of petitioner is to be dealt with and disposed of by 17th September, 2024. It is made clear, the department on issuing notice for participation of petitioner in the proceeding, will expect it to comply. Omission on part of petitioner should not impead the department to deal with the application. Mr. Sahoo prays for stay of the demand. Since rectification thereof is pending, it is only after disposal of the application that the demand will either be reiterated or made afresh. The writ petition is disposed of.

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• 2024 (10) TMI 1017
  Seeking release of amount charged towards GST for release of the bills for the work done - It is contended that the petitioner is not liable to pay the GST as per the contract - HELD THAT:- It appears that the dispute is alleged with regard to the payment of GST and as such Rs. 2,10,714/- GST amount has been released on the bills of the petitioner for the work prepared by him. As such if the petitioner contends that he is not liable to pay the amount and the same is disputed by the learned counsel for the respondent, this Court is not inclined to entertain such application but liberty is granted to the petitioner to approach the alternative forum namely Arbitral in the terms and conditions of the agreement itself. Petition disposed off.

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• 2024 (10) TMI 1016
  Levy of interest and penalty - wrongly availed and utilized Input Tax Credit (ITC) - Whether the petitioner can be called upon to make payment of interest upon the petitioner not complying with the notice issued in Form DRC- 01A as regards payment of interest, prior to issuance of the show cause under Section 73 of the said Act? HELD THAT:- Admittedly, in this case on the issuance of a notice in Form DRC -01A the petitioner had debited its credit ledger by indicating that by reasons of error committed during filling of GSTR 09 the petitioner had wrongly availed the ITC. It is the petitioner s case that the ITC, though wrongfully availed, was not utilized by him. According to the petitioner unless, the ITC is wrongfully availed and utilized, in terms of Section 50(3) of the said Act interest is not leviable - the said section had been amended by Finance Act of 2022 with retrospective effect from 1st July 2017. The petitioners had enough credit in its electronic credit ledger, a sum in excess of Rs.5,00,000/- which incidentally was the approximate ITC amount availed, for the relevant period. It is also noticed that in somewhat situation a Coordinate Bench of this Court in the case of M/S. LARSEN TOUBRO LIMITED VERSUS STATE OF WEST BENGAL ORS [ 2022 (12) TMI 1496 - CALCUTTA HIGH COURT] had concluded that unless a registered tax payer avails and utilized ITC, interest cannot be levied. In this case it is noticed that the petitioner had debited its electronic credit ledger to reverse the ITC availed. A perusal of Section 49(4) of the said Act would clarify that the amount available in the electronic credit ledger, may be used for making payment towards output tax under the Act. Thus, from the tenor of Sections 50(1) proviso, read with Section 49, read with Rule 86 and 87 of the said Rules, it would be apparent that payment of interest and penalty can only be made by debiting the electronic cash ledger and not from the electronic credit ledger. The payment made on 20th March 2021 in form GST DRC-03 is by debit of the electronic credit ledger - unless the ITC is both availed and utilized, interest cannot be levied on the registered tax payer. The order passed by the proper officer dated 8th April 2023 which has since, merged with the order passed by the appellate authority dated 13th May 2022 cannot be sustained, the same is accordingly set aside. Consequentially, the demand raised by the respondents on account of interest and penalty is also not sustainable and the same is accordingly quashed - Petition disposed off.

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• 2024 (10) TMI 1015
  Challenge to N/N. 9/2023 C.T. dated 31.03.2023 and N/N. 56/2023-C.T. dated 28.12.2023 issued under the provisions of Section 168A of the CGST Act extending the limitation - issuance of demand notice to the petitioner imposing taxes, penalty and interest - HELD THAT:- This writ petition be listed along with the bunch of connected writ petitions including WP(C)/3291/2024 - And till the next date fixed, let there be no coercive action be taken against the writ petitioner in terms of the impugned order passed by the respondent authority. Let the names of all respondent counsels be reflected in the Cause List by the Registry.

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• 2024 (10) TMI 1014
  Levy of GST on amount of Royalty - whether the Royalty is in the nature of tax or profit a prendre and thus, cannot be deemed to be a consideration or not - HELD THAT:- Having heard the learned counsel for the parties and having gone through the records, it is undisputed fact that against the order impugned, the appeal lies and, as such, instead of availing the alternative remedy available under the statute, the petitioner has approached this Court by filing this writ application, which cannot be sustained. Without expressing any opinion on the merits of this writ application, this writ application stands disposed of, by permitting the petitioner to pursue the remedy before the appropriate authority in accordance with law. Application disposed off.

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• 2024 (10) TMI 1013
  Quasing of SCN and summary of SCN - availment of Input Tax Credit against purchase made from non-existent tax payer - HELD THAT:- Having heard the learned counsel for the parties and without expressing any opinion on the merits of the case, since the order is an appealable one, this Court is not inclined to entertain this writ application and grant liberty to the petitioner to pursue the remedy in accordance with law before the appropriate Forum. Application disposed off.

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• 2024 (10) TMI 1012
  Levy of GST on amount of Royalty and District Mineral Fund Contribution paid by the petitioner to the State of Jharkhand - HELD THAT:- It is undisputed fact that against the order impugned, the appeal lies and, as such, instead of availing the alternative remedy available under the statute, the petitioner has approached this Court by filing this writ application, which cannot be sustained. Without expressing any opinion on the merits of this case, this writ application stands disposed of, by permitting the petitioner to pursue the remedy before the appropriate authority in accordance with law.

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• 2024 (10) TMI 1011
  Cancellation of registration of petitioner u/s 29(2)(a) of the UP GST Act - whether registration has been obtained by willful misstatement and suppression of fact? - HELD THAT:- Once on the basis of some material is to be used against the dealer, then it should be put to notice before using the same. But in the case in hand, the petitioner was never put to notice for material use adversely against it, which is in violation of the principle of natural justice and the authorities have not adhered to the same. Further, for cancellation of registration, section 29(2) (a) to (e) is provided, but on perusal of the said section, neither there is any violation of the said section, nor any finding has been recorded by any of the authorities for cancelling the registration of the petitioner as contemplated in section 29(2) of the UP GST Act. The registration of the petitioner could only be cancelled in accordance with the provisions as contemplated in section 29(2) of the UPGST Act and not otherwise. Therefore, the impugned order dated 07.08.2019 passed by the Additional Commissioner, Grade - 2 (Appeal), V, Commercial Tax, Ghaziabad as well as the order dated 30.06.2018 passed by the respondent no. 3 under section 29(2)(a) of the UP GST Act are hereby quashed. Petition allowed.

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• 2024 (10) TMI 1010
  Condonation of delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due - HELD THAT:- The delay in petitioner s invoking the proviso to Rule 23 of the Central Goods and Services Tax Rules (CGST Rules) is condoned and it is directed that subject to the petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the petitioner s application for revocation will be considered in accordance with law. Petition dipsosed off.

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• 2024 (10) TMI 1009
  Challenge to assessment order - failure to notice the notices that preceded the impugned order - initiation of recovery proceedings - HELD THAT:- The interest of the petitioner and the revenue can be balanced, subject to the petitioner depositing 10% of the disputed tax from its Electronic Cash Register within a period of 30 days from the date of receipt of a copy of this order. The petitioner shall file a composite reply with the respondent with in a period of 30 days from the date of receipt of a copy of this order together with the said deposit. Petition disposed off.

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• 2024 (10) TMI 1008
  Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - HELD THAT:- On perusal of the impugned order, it appears that the tax proposal was confirmed because the petitioner did not reply to the show cause notice. The petitioner asserts that such non-participation was on account of not being aware of proceedings. In these facts and circumstances, the interest of justice warrants reconsideration by putting the petitioner on terms. The impugned order dated 16.03.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand within three weeks from the date of receipt of a copy of this order. Within the said period, the petitioner is permitted to submit a reply to the show cause notice - Petition disposed off.

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• 2024 (10) TMI 1007
  Challenge to order in original - petitioner's replies were not duly taken into consideration - inadvertent error was committed by reflecting net ITC - violation of principles of natural justice - HELD THAT:- On examining the petitioner's GSTR 3B returns for the month of October and November 2017-18, it appears prima facie that an inadvertent error was committed and that such error was rectified, albeit irregularly. As against the confirmed tax proposal of Rs. 6,15,502/-, a sum of Rs. 4,47,300/- was recovered from the petitioner's bank account. The facts and circumstances clearly warrant reconsideration. The impugned order dated 29.12.2023 is set aside and the matter is remanded for reconsideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of a copy of this order - petition disposed off.

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• 2024 (10) TMI 1006
  Seeking setting aside of order - attachment of bank account in terms of Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The authorities have no objection if the petitioner s account is de-freezed in terms of sub-section (2) of Section 83. The bank is not required to get instructions from the authorities because Section 83(2) is very clear. Petition disposed off.

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• 2024 (10) TMI 1005
  Refund of Input Tax Credit (ITC) accrued to the petitioner under the Value Added Tax (VAT) regime - Transition to GST regime - petitioner s contention based on Section 143(8)(b) is that when an assessment is carried out and a refund is ordered then necessarily, the same shall be refunded to the assesee as per clause (8)(b) of Section 142 - HELD THAT:- Sub-section (a) of Section 18 is the enabling provision, which benefit is reflected in the Transitional Provisions under Section 140, permitting a business registered under the VAT provisions; in which regime too there existed ITC, to carry forward that credit to be availed as set off under the GST regime for the inputs held in stock; whether it be in the semi-finished or finished form, as on the date the business becomes liable to pay tax under the GST regime. Sub-section (2) prohibits any credit to be availed after the expiry of one year from the date of issue of tax invoice relating to such supply. As far as the transitional claims are concerned there is a further limitation prescribed as on 27.12.2017 and then of course, as per the Hon ble Supreme Court s directions there was a window of two months provided. Unless the claim is made in Form GSTR TRAN-1 within the time initially provided or that provided later, to get over the teething problems, there can be no claim raised even for credit of input tax and its set off and never of a refund in cash. There are no reason to interfere with the order rejecting the claim for refund, which refund in any event is not applicable, and the petitioner can only claim ITC as set-off against the output tax. Petition dismissed.

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• 2024 (10) TMI 1004
  Challenge to order passed against a deceased person - Section 93 of the CGST/SGST Act - HELD THAT:- Since Ext.P3 seems to be issued against a deceased person, the said order is a nullity. It may be true that the provisions of Section 93 of the CGST/SGST Acts permit the continuance of proceedings against the legal heirs of a deceased person, in a case where the business has been discontinued. However, the said provision does not authorize the continuance and culmination of proceedings against a deceased person. Therefore, Ext.P3 order is a nullity as rightly contended by the learned counsel appearing for the petitioner. This writ petition is allowed and Ext.P3 is quashed. The respondent is permitted to continue with the proceedings against the legal heirs of late Santhamma T.

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• Income Tax

• 2024 (10) TMI 1003
  Disallowance u/s 14A if no exempt income earned - TP adjustment on account of AMP expenditure - HC [ 2022 (11) TMI 384 - DELHI HIGH COURT] decided assessee appeal in favour - delay filling SLP - HELD THAT:- There is a delay of 586 days in filing the Special Leave Petition which has not been satisfactorily explained. The Special leave Petition is accordingly dismissed on the ground of limitation. However, the question of law is kept open to be adjudicated in an appropriate case.

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• 2024 (10) TMI 1002
  Exemption u/s 10(23G) - whether long-term capital gains exempt under section 10(23G) are available? - application of retroactive laws - whether prospective Legislation or declaratory Legislation and, thus, has to be construed as retroactive? - HELD THAT:- In the present case assessee seeking under the newly amended provision which was later incorporated in the section 10(23G) initially it was part of the section. The exemption relates to power generation under the long term capital gains, which include infrastructure facilities. In the said circumstances, if Assesment Officer exempted the assessee and no provision was altered. Hence, this is also not applicable to present case. In the present case, appellant raised the objection with regard to exemption, stating that the provision itself was not exist for those previous years, so, the question of allowing exemption under sec. 10(23G) prior to 1.4.1997 does not arise. The contention of the appellant counsel is incorrect. Subsequently after amendment the Central Board of direct Taxes have clarified by way of press release that the exemptions available under the provisions of secretion 10 (23G) ,prior to its amendment by the Act, will continue to govern the investments made prior to 1.6.1998. When doubts arise about whether long-term capital gains exempt u/s 10(23G) are available, the CBDT has clarified the issue through a press release, resolving the matter. Therefore, the question of exemption under section 10(23G) is no longer a concern, as correctly observed by the Income Tax Appellate Tribunal. An infrastructure facility is created by purchasing shares, but this will not be considered income. It is solely for the creation of infrastructure facilities. Once the shares are purchased on February 4, 1996, they are classified as a creation of an infrastructure facility, not as income. In the present case, as per Explanation 2, prior to its amendment, the capital expenditure for purchasing shares falls under the category of infrastructure facilities and shall not be included in total income. This is because merely purchasing shares does not contribute to the income of the respondent/assessee. Since it does not count as income, no amount needs to be paid in taxes. We firmly believe that the question of law framed by the Court while admitting the appeal should be decided in the negative. Therefore, the appeal is dismissed, thereby confirming the impugned order of the Tribunal.

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• 2024 (10) TMI 1001
  Validity of reopening notice issued u/s 148 against non-existent entity/amalgamating company - HELD THAT:- In the present case, despite the fact that the AO was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment [ 2017 (12) TMI 754 - SC ORDER ] Thus there was neither a legal basis nor jurisdiction with Respondent No. 1 to issue the impugned notice u/s 148A (b) and pass an order thereon and further to issue the impugned notice u/s 148 to a non-existing entity- Uber India Research and Development Private Limited . Such notices at the threshold were illegal, invalid and non-est. Decided in favour of assessee.

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• 2024 (10) TMI 1000
  Rectification u/s 154 - Cash deposits being unexplained to be taxed at 60% u/s 115BBE - CIT(A) erred in not appreciating that invocation of S.115BBE after the assessment order is framed is beyond the scope of Section 154 and therefore he ought to have held it illegal and without jurisdiction - assessee submitted that the Ld. CIT(A) failed to consider that the appeal against the original assessment order passed u/s.143(3) is pending as on today with the E-filing HELD THAT:- Without disposing of the main appeal, Ld. CIT(A) disposed of the present appeal arising out of the rectification order, so the impugned order is liable to be set aside to the file of Ld. NFAC to decide along with the pending appeal. Appeal filed by the Assessee is allowed for statistical purpose.

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• 2024 (10) TMI 999
  Bogus purchases u/s 69C - transaction with Shri Ganpati Enterprises, a non-existing concern - HELD THAT:- Since assessee is dealing with scrap material it has to deal with unorganized sector and in that process, one of the suppliers who is a scrap vendor obtained certain bills from Shri Ganpati Enterprises. In the investigation in the case of Manoj Kumar who was controlling several entities which were not in existence and it is found that Shri Ganpati Enterprises is one of such enterprises through whom Manoj Kumar has issued bills to other parties. As per the facts on record, scrap vendors have received bogus bills from Mr. Manoj Kumar and submitted the same to the assessee. It is not clear whether these bills were obtained by the assessee or supplied by such scrap supplier who belongs to unorganized sector. It is also relevant to notice that assessee has purchased scraps from several parties to the extent of Rs. 24.23 crores and Assessing Officer has found discrepancy only in the case of Rs. 4,92,806/-. This is absolutely very negligent compared to total material purchased by the assessee i.e. it is only 0.2% of the total purchases. Thus we are inclined to treat the above purchases questionable but cannot be treated as non-genuine. In the result, we allow the grounds raised by the assessee.

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• 2024 (10) TMI 998
  Correct head of income - addition of 50% of agricultural income as income from other sources - HELD THAT:- AO cannot step into the shoes of an assessee , or question or even sermons to his beleaguered assessee s on the conduct of the business. This is more particularly so, when there is nothing in the enacted laws, that requires an assessee to conform to a particular set of business practices. Merely on the basis of some estimation assumption of the AO, reducing the agricultural income will not automatically commute into any income under head income from other sources without any specific material being brought on record to show that agricultural Income were inflated in order to escape the assessment under head Income from Other sources . In our opinion, the AO has merely acted on the basis of surmises and conjectures in adopting the estimation of 50% of Net agricultural income as income from other sources without any basis without carrying out any further verification. The suspicion however strong cannot take the place of proof. In this case, none of the authorities below have brought any substantial material on record to demonstrate that assessee has not earned Income through agricultural sources but from income from other sources . Our view also supports from the fact that AO in the assessee s own case for the AY 2018-19 as well as for AY 2020-21 accepted the source as agricultural income by passing the assessment order u/s 143(3) accepting the returned Income and no adverse inference was drawn by the ld. AO in both these years. Therefore, we set aside the order of the CIT(A) by allowing the appeal of the assessee.

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• 2024 (10) TMI 997
  Reopening of assessment - assessment after 4 years from the end of the assessment year - Deduction u/s 80IB(11A) - activities of the assessee would constitute the manufacturing and not processing eligible for deduction - HELD THAT:- Once the AO has not alleged what information or material fact necessary for the assessment was not disclosed by the assessee then the reopening of the assessment for these assessment years falls in the category of change of opinion. Even otherwise this issue is a debatable issue whether the processing activity of the assessee would be in the ambit of eligible business as contemplated in the provisions of Section 80IB(11A) or not. Therefore, the question of failure on the part of the assessee to disclose fully and truly all the material facts necessary for assessment does not arise. Thus, in view of the undisputed fact that the assessment for Assessment Years 2012-13 and 2013-14 were completed u/s 143(3) of the Act and notice u/s 148 were issued after the expiry of 4 years from the end of the respective assessment years then the reopening of the reassessment is hit by the proviso to Section 147 as there is nothing brought on record by the AO to show that the income assessable to tax has escaped assessment due to the reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Thus, the said mandatory condition in the case of the assessee has not been fulfilled. Accordingly the reopening of the assessment for Assessment Years 2012-13 and 2013-14 is quashed being invalid. Deduction u/s 80IB - whether this process of making potato based chips and snacks falls within the expression processing as provided in Sub Section 11A of Section 80IB of the Act or not? - The Hon ble Madras High Court in case of M/s Chamadhi Trades V/s Commercial Tax Officer [ 2018 (5) TMI 461 - MADRAS HIGH COURT ] as held that the products (chips) sold by the assessee are to be classified as processed vegetable and not to come under the residuary entry for the purpose of commercial tax. Once the chips is classified as processed vegetable for the purpose of commercial tax then it cannot be given a different classification for the purpose of Income Tax so far as the processing of vegetable is concerned. Similarly the Hon ble Uttarakhand High Court in case of M/s Shriya Enterprises [ 2011 (10) TMI 564 - UTTARAKHAND HIGH COURT ] has held that the potato chips is nothing but a preserved vegetable and in other words the potato chips is also a vegetable product. The contention of the revenue that the product is not a processed vegetable but is a snack item and in fact the manufacturing process and end product is a new item has not been accepted. Thus, the CIT(A) has allowed the claim of the assessee by following various decisions including the judgment of Hon ble Supreme Court, High Courts as well as this Tribunal. No contrary decision has been brought to our notice by the revenue except a decision of Vora-Food Specialities (P) Ltd v/s Income Tax Officer [ 1995 (3) TMI 126 - ITAT BOMBAY ] wherein the issue of allowability of investment allowance u/s 32A of the Act was decided in favour of the assessee and nothing adverse can be drawn from the said decision. Accordingly in the facts and circumstances of the case as discussed above we do not find any error or illegality in the order of the CIT(A) on this issue. The appeal of the revenue stand dismissed.

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• 2024 (10) TMI 996
  Validity of reassessment proceedings u/s 148 - reasons to believe - borrowed satisfaction of ADIT - addition u/s 68 of the Act to the income of the assessee in respect of loan raised - HELD THAT:- The case of the assessee finds support from the decisions of SFIL Stock Broking Ltd. [ 2010 (4) TMI 102 - DELHI HIGH COURT ] and in the case of Meenakshi Overseas Pvt. Ltd. [ 2017 (5) TMI 1428 - DELHI HIGH COURT ] wherein it was held that the AO has to apply his mind to the information and independently arrived at a belief that income had escaped assessment otherwise the reopening of assessment cannot be sustained. The Hon'ble Delhi High Court has held that where the reasons to believe contain not the reasons but the conclusions of the AO one after the other and there was no independent application of mind by the AO to the tangible material which forms the basis of the reasons to believe that income has escaped assessment. Conclusions of the AO are at best a reproduction of the conclusion in the investigation report. Indeed it is a borrowed satisfaction. In our opinion, the reasons have to be read as were recorded by the AO and no substitution or addition or deletion are allowed at a later stage for the reasons that the AO by reopening the assessment is unsettling the already settled assessment of the assessee. In our opinion the AO is supposed to exercise utmost care and caution in the matter of exercising the jurisdiction us u/s 147. As we find that the AO has re-opened the assessment absolutely without application of mind and without making any further enquiries on the information received from the investigation wing. In our view the reopening has been made just on borrowed satisfaction of ADIT which cannot be a basis of re-opening of assessment u/s 147 of the Act. Therefore, we quash the re-opening of assessment u/s 147 of the as well as the assessment framed pursuant thereto. Decided in favour of assessee.

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• 2024 (10) TMI 995
  Addition u/s 68 - denial of claim of exemption u/s 10(38) - Bogus share transactions - HELD THAT:- We do not find any merits in the reason of the AO as well as the CIT (A) where the above addition is confirmed by them as the AO has not established that the assessee was involved in price rigging and further the AO did not find fault with any of the documents furnished by the assessee. We noticed earlier that the AO has assessed the Sale consideration of shares as unexplained cash credit u/s 68 of the Act. As pertinent to note that the purchase of shares made in an earlier year has been accepted by the revenue. The sale of shares has taken place in the online platform of the Stock exchange and the sale consideration has been received through the stock broker in banking channels. Hence, in the facts of the case, the sale consideration cannot be considered to be unexplained cash credit in terms of sec. 68 of the Act. Since we have held that the sale transactions of shares cannot be doubted with, the addition made by the AO with regard to estimated commission expenses is also liable to be deleted. Thus, orders of lower authorities are reversed. AO is directed to delete the addition u/s 68 of the act and allow assessee exemption u/s 10(38). Violation of principles of natural justice - As we completely agree with the finding of the ld. CIT (A) to the extent of the opportunity of cross examination not given to the assessee does not violate principles of natural justice because those statements were not sued for making the addition and issue is squarely covered against the assessee by the decision of Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT ], this issue is not dealt with in Chirag Tej Prakash Dangi [ 2024 (2) TMI 1413 - ITAT MUMBAI ] so separate finding is given by us. Accordingly appeal of assessee is partly allowed.

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• 2024 (10) TMI 994
  LTCG - Exemption u/s 54F - Denial of exemption as nothing on record brought by the assessee to establish his intention to purchase one single unit - interpretation of a residential house in section 54/54F - two units are distantly situated or closely connected HELD THAT:- The claim of the assessee in the present fact is that assessee purchased two flats to be used as a single dwelling unit which is discernible from the plan reapproved by MHADA vide letter dated 24/11/2020. Admittedly, there is a change in the legal position with effect from 01/04/2015, wherein the assessee can claim exemption u/s 54F only on acquisition of one residential house. In the present facts of the case, the revised plan dated 24/11/2020 clearly establish that the two flats though independently purchased by the assessee adjacent to each other was converted to be used as a single unit. As decided in case of CIT vs Suresh Rao [ 2014 (1) TMI 1585 - KARNATAKA HIGH COURT ] considered similar situation wherein the significance of the expression held used by the legislature was analysed and explained in a great length. In the case of CIT vs Raman Kumar Suri [ 2012 (12) TMI 421 - BOMBAY HIGH COURT ] observed that, when two flats were joined together before the assessee became the owner of the two flats and certification from the society also establishes that the flats were joined together and were considered as one residential house, AO had to accept these facts and cannot disallow the claim merely because the flats were purchased by two separate agreements. So long as the house is used by the assessee as one single unit, though by conversion, in our view, the exemption cannot be denied to the assessee u/s 54F of the Act. There is nothing on record brought by the revenue other than arguing that, the assessee originally entered into two independent agreements for purchase of the flat. The impediment with the assessee at that stage was because, the builder originally got the plan approved as two separate units, plan was subsequently revised, in order to suit the requirement of the assessee to use it as one single unit. The revised plan very categorically identifies one kitchen and other necessary structures, to be used as a single dwelling unit. The revised plan furnished by the assessee has not been opposed by the revenue with any contrary evidence. Thus the conditions relevant for claiming deduction u/s 54F is fully satisfied in the present facts of the case. At this juncture we refer to the Special Bench decision of this Tribunal in case of ITO vs. Ms.Shushila M. Jhaveri [ 2007 (4) TMI 289 - ITAT BOMBAY-I ] exemption under section 54 was held to be allowable only in case of purchase of a single house as focused their discussion on the word a and held that exemption under section 54/54F would be available in respect of one house only. But where two houses joint together constitutes a single unit for residence, then exemption u/s 54 would be available to such joint residential house. Hon ble Special Bench, also noted that, where two units are distantly situated, then it could not constitute to be a residential house and, therefore, exemption u/s 54 will be available only to one residential house at the option of the assessee. Thus, no reason to dismiss the claim of the assessee based on surmises and conjectures of the authorities below. We direct the Ld.AO to grant complete deduction under section 54F as claimed by the assessee. Assessee appeal allowed.

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• 2024 (10) TMI 993
  Unexplained cash credit u/s 68 - addition of cash advance received from customers - invoking provisions of section 115BBE for taxing the addition made - scope of preponderance of probabilities - HELD THAT:- The bench noted that out of the 93 parties AO choose the 58 parties and served the notices. Out of the notices so issued 69 % notices were duly served upon the address and the details submitted by the assessee. Therefore, the contentions of the revenue that the assessee fails in proving the identity of the parties has no merits because out of the selection the assessee details were correct to the extent of 69%. Even out of the notices so issued confirmation were filed and the parities have expressed their willingness to confirm the said facts in persons and ld. AO did not went to verify the reals facts by issuing the summons. He merely relied upon the the reply of two parties who negated having been given any advance to the assessee and the ld. AO made that as basis to reject the whole amount as unexplained money. Here the preponderance of probabilities as held by the apex court in the case of Durga Prasad More [ 1971 (8) TMI 17 - SUPREME COURT] come to the rescue of the assessee. The books of accounts were duly audited, purchase and sales are duly supported by invoices. There is no iota of doubt on the records so produced by the assessee. Merely the assessee has taken the advances for purchase of gold by those parties and that too on the eve of demonetization, cannot be doubted when the assessee has provided all the details related to the advances so received and the same were verified on majority cases. Thus, source for the sales is already considered and assessed as such as income and the profit from that has already been considered and not objected by placing any contrary evidence. The assessee shifted the burden casted upon him to the revenue to establish that the amount that the assessee has received is the unaccounted income of the assessee. Nothing contrary to the records were proved in even though all the details were placed on record by the assessee regarding the receipt of the advances, sales, and purchases from the said source of money. The assessment has been completed in the case of the assessee u/s. 143(3) of the Act without rejecting the book results. Therefore, once the sales is accepted the source of making that sales again cannot be added as unexplained receipt in the hands of the assessee as per provision of section 68 of the Act. See Smt. Harshila Chordia v. ITO [ 2006 (11) TMI 117 - RAJASTHAN HIGH COURT] as found as a fact that the assessee was receiving money from the customers in hands against the payment on delivery of the vehicles on receipt from the dealer the question of such amount standing in the books of account of the assessee would not attract section 68 because the cash deposits becomes self-explanatory and such amounts were received by the assessee from the customers against which the delivery of the vehicle was made to the customers. the assessee made sales out of the money so received as advances cannot be considered as unexplained money u/s. 68 of the Act. Assessee has placed on record all the details related to the sales and that of the advances received by the assessee. The assessee has furnished all those details which the ld. AO has also verified by issuance of notice u/s. 133(6) of the Act, majority of the notices were served and they have confirmed the transactions. Thus, the contention raised by the assessee cannot be rejected without placing anything contrary on record. If the assessee supports the contention based on the evidence, department cannot act unreasonably and reject that explanation to hold that it was unexplained income. The fact that there was receipt of money as an advance from the customer is even verified by issuance of notice u/s. 133(6) of the Act is itself prima facie evidence support the contention of the assessee. Not only that the parties who have replied the notices have also shown willing to support the contention if required in person. Thus, once all this evidence placed on record merely based on surmises and conjecture that the assessee has taken the advance before the receipt of the stock where the identity and sales made by the assessee is not disputed cannot be added in the hand of the assessee as unexplained money. Decided in favour of assessee.

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• 2024 (10) TMI 992
  Validity of reassessment proceedings post insolvency proceedings concluded - IBC overriding effects over other laws - HELD THAT:- As per section 238 of the Insolvency and Bankruptcy Code, 2016, the provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Thus, the IBC has overriding effects over other laws and hence the appellate proceedings pending in this Tribunal cannot continue and are liable to be dismissed on account of being infructuous and in violation of the provisions of the IBC after approval of the Resolution Plan by the NCLT, more so when the plan has not been disputed by the Revenue in any court of law and has attained finality. Similar finding has been given in several judicial pronouncements in this regard. As held in the case of Maruti Koatsu Cylinders Ltd. [ 2024 (8) TMI 185 - GUJARAT HIGH COURT ] that when the NCLT has approved the application filed under section 13(6) of IBC, 2016 and resolution plan submitted by the applicant was approved, the AO would not have any jurisdiction to reopen the assessment with regard to the assessment year 2019-20. Thus in view of the legal provisions under the IBC, 2016, since the resolution Plan has been approved by the Adjudicating Authority, all proceedings pending in respect of the Corporate Debtor (CD), i.e. the assessee are barred thereafter and cannot be allowed to continue. Only the claims made as per the plan can be recovered. As regards the refund, if any arising on account of a favourable order is concerned, the Successful Resolution Applicant, i.e. Tega Industries Limited is entitled to pursue all actionable claims in favour of the assessee/CD after the approval of the plan. Hence, the appeal filed by the assessee cannot continue and is dismissed on account of being infructuous.

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• 2024 (10) TMI 991
  Revision u/s 263 - Shares held as penny stock - as per CIT GCM Securities Ltd. is a penny stock and the AO failed to conduct relevant enquiry and passed the assessment order, which is found to be erroneous insofar as prejudicial to the interest of Revenue - HELD THAT:- When we examine the evidences brought on record by the Assessing Officer, the first question that arises is whether these evidences satisfy the test of preponderance of human probability. The Supreme Court has held in the case of SEBI Vs. Rakhi Trading (P) Ltd. [ 2018 (2) TMI 580 - SUPREME COURT] that abnormal difference between the prices at which the trades were executed without corresponding effect on the price of the underlying security, shows that the option in which the party traded was not in demand in the market and that it was unusual that the trades were transacted with such huge profits when there was no change in the underlying prices - such trade transactions were obviously only aimed at carrying out manipulative objective. Following this principle laid down supra, there was nothing wrong in the Revenue s doubt about the genuineness of the transaction, considering the volatile fluctuation in share price of GCM Securities Ltd. It is difficult to get direct information or evidence in respect of manipulative activities of price rigging and accommodation entry which happens with prior meeting of minds between the beneficiary and the stock broker. As held in the case of Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT] that a holistic approach is required to be made and the test of preponderance of probabilities have to be applied and while doing so, we cannot lose sight of the fact that the shares of very little-known companies with in-significant business had a steep rise in the share prices within the period of little over a year. The thrust of the assessee s argument is that the sale consideration was received by cheque on which STT was paid and, therefore, the LTCG earned was genuine cannot be accepted in view of multiple adverse evidences collected by the Revenue and the assessee cannot be treated as a passive beneficiary of the transactions. We are of the considered opinion that the transactions entered into by the assessee are not properly verified by the A.O. while passing the assessment order, as no worthwhile enquiries were made rather superficial enquiries were made, as were warranted keeping in view facts and circumstances of the case. The assessee has relied upon few case laws which are found to be different on facts. Since Ld. PCIT invoking explanation 2 to Section 263 of the Act, has set aside the issue back to the file of AO to pass fresh assessment order after allowing adequate opportunities of being heard to the assessee, no infirmity in the directions given by Ld. PCIT since the A.O. has not made any worthwhile enquiry about the GCM Securities Ltd. shares. Decided against assessee.

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• Customs

• 2024 (10) TMI 990
  Suspension of the warehousing operation of the Respondent - alleged breach of conditions for operating a public bonded warehouse - imposition of redemption fine and penalty. Whether the Hon'ble CESTAT correct in law in setting aside Order in Original solely on the ground that permissions were issued by Customs Department for unloading/storing of goods and/or such activities were done under the supervision of Customs Department without looking into factual aspects and conditions of each such permissions/supervisions of activities of the Respondent? - HELD THAT:- The record bears out, and the Tribunal, in its detailed order, has held that there was no breach of any of the conditions of the licence. This is purely a finding of fact, and such finding is supported by the material on record. Accordingly, not even a ground alleging perversity or otherwise to assail this finding of fact was even proposed in this Appeal. The CESTAT has not only taken due note of the circumstances in which the goods are discharged through a high-pressure pipeline from the vessel directly into the tanks but has taken cognisance of the permissions granted by the Customs Authorities from time to time. The allegation that such permissions have been misinterpreted or misconstrued is without basis - On a conjoint reading of the applications made by the Respondent and the permissions granted thereon, there is no case of breach of the licence s conditions made out by the Appellant. The first substantial question of law, does not arise and, in any event, if the same arises, will have to be held against the Appellant and favouring the Respondent. Whether in the facts and circumstances of the case, the Hon'ble CESTAT was correct in law in overlooking the procedures outlined in JNCH Public Notice No. 155/2016 and the Board's Circular No. 08/2021 regarding advance discharge permission and the mandatory filing of Bills of Entry before the vessel's arrival? - HELD THAT:- Such a question was not even raised before the CESTAT. Therefore, it is incorrect to state that the procedure outlined in the JNCH Notice and Board s Circular regarding advance discharge permission or the mandatory filing of Bills of Entry before the vessel's arrival was overlooked by the CESTAT. A substantial question of law has to arise from the proceedings. Such a question does not arise. In any event, whether the procedures were complied with or not also involves a factual element. Without any precise particulars, such a question cannot be entertained at this stage. As noted earlier, an Appeal under Section 130 of the Customs Act can be entertained only if it involves a substantial question of law. Whether in the facts and circumstances of the case, the Hon'ble CESTAT was correct in law in setting aside the imposition of penalties under Sections 117 and 112 (b) (ii) of the Customs Act, 1962 for violations including non-reporting of time-expired bonds, storage of non-bonded goods in bonded tanks, and lack of audit trail facilities? - HELD THAT:- Once it is held that there was no breach of any of the terms and conditions of the licence and that the goods themselves were not liable for confiscation, there was no question of imposing any fines or penalties - In any event, the Tribunal has recorded the findings that there were no breaches, and consequently, there was no case of inferring any improper importation or confiscation of goods. In such circumstances, it is not necessary to go into the question of whether a redemption fine could be imposed even if the goods were not available. Thus, no substantial question of law arises in this Appeal, and accordingly, this Appeal is liable to be dismissed. This Appeal is accordingly dismissed.

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• 2024 (10) TMI 989
  Exemption under Serial No. 432 of the Notification No. 12/2012-CUS dated 17.03.2012 - Classification of imported LED/LCD TV panels - to be classifed under Customs Tariff Item [CTI] 8529 90 90 or not - demand of differential duty under section 28(4) of the Customs Act, 1962 with interest and penalty. Whether the appellant was entitled to claim exemption under the Exemption Notification and in this connection, the Principal Commissioner examined whether the goods imported by the appellant were complete LCD TV panels or LED TV panels and found as a fact that as the benefit of the Exemption Notification is only available for complete LCD and LED TV panels, the goods imported by the appellant being not complete TV panels but open cell with the T-con Board, the benefit of the Exemption Notification would not be available? HELD THAT:- It is clear from the aforesaid judgment of the Supreme Court in SHRI RAMA MACHINERY CORPORATION (P) LTD. VERSUS COLLECTOR OF CUSTOMS [ 1991 (11) TMI 55 - SUPREME COURT] that though Rama Machinery Corporation had claimed one classification before the adjudicating authority but had claimed an alternative classification before the Tribunal. This was not permitted by the Tribunal. This view of the Tribunal was not accepted by the Supreme Court and it was held the Tribunal should have permitted the appellant to raise this alternative classification. Thus, it is not possible to accept the contention advanced by the learned special counsel for the department that the application should be rejected. The appellant is permitted to raise the alternative classification of the goods under CTI 9013 80 10 by adding a ground - The application is, accordingly, allowed.

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• 2024 (10) TMI 988
  Export of frozen Sheep Meat in contravention to the ITC(HS) - Prohibited goods or not - recovery of duty drawback with interest and penalty - HELD THAT:- It is settled principle that certificates issued in any proceedings would be valid until the same is declared to be void by the Competent Authority in this regard. Customs officers are not designated authority to determine and give a finding that the certificate is fraudulent, this is exactly what the Commissioner observed in the impugned order. There are no merits in this appeal as not even a single instance have brought on record whereby the exported goods were returned back from the designated country importing that for the reason that it was sub-standard or not upto the mark. There are no merits in the appeal - appeal dismissed.

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• 2024 (10) TMI 987
  Classification of imported goods - SVPS Chillers - to be classified under CTH 84198940 or not - benefit of notification dated 17.03.2012 - HELD THAT:- The provisions for confiscation of improperly importation of the goods are contained in Section 111 ibid. The goods which do not correspond in respect of the value or in any other particulars are liable for confiscation under Clause (m) of Section 111 ibid - In the present case, the appellants had filed the Bill of Entry on the basis of the import documents such as commercial invoice, packing list etc. They have also claimed the correct classification of the imported goods. Claiming of wrong exemption notification is not a condition precedent for invocation of clause (m) in Section 111 ibid, for confiscation of the goods. This Tribunal, in an identical matter, in the case of M/S. SIRTHAI SUPERWARE INDIA LTD. VERSUS COMMR. OF CUSTOMS, NHAVA SHEVA-III [ 2019 (10) TMI 460 - CESTAT MUMBAI] has set aside confiscation of goods and also imposition of penalty under Section 112(a) ibid, holding ' From plain reading of the said clauses of Section 111, we do not find that these sub clauses, are applicable to cases where the classification of claim of exemption is found to be erroneous. The fact that the goods correspond to declaration in respect of the description and value is sufficient to take the imported goods away from the application of these two clauses. Hence the order holding goods liable for confiscation and imposition of penalty under Section 112(a) cannot be sustained.' Further, this Tribunal in the case of JK. INDUSTRIES LTD. VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI [ 1996 (6) TMI 200 - CEGAT, NEW DELHI] has also held that claim for exemption is not a declaration for the purpose of Section 111(m) ibid and hence, confiscation of goods and imposition of penalty are liable to be set aside. In view of the fact that the appellant herein had not contravened clauses (m) and (o) of Section 111 ibid at the time of importation of goods, the confiscation of goods, imposition of redemption fine and penalty by the authorities below are not in conformity with the statutory provisions. Therefore, there are no merits in the impugned order, insofar as it has upheld the confirmation of the adjudged demands on the appellants - appeal allowed.

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• 2024 (10) TMI 986
  Retrospective effect of Notification dated 26.12.2013 issued subsequent to the date of import of the goods - effect of amendment in the Notification dated 26.12.2013 - phrase 113 Kameng Hydro Electrical Power Project, Arunachal Pradesh- 600 MW (North Eastern Electric Power Corporation Ltd.) (NEEPCO) was inserted - HELD THAT:- The department has appreciated the fact that the appellant s power project was duly approved by the Joint Secretary in the Ministry of Power, Government of India and the benefit of duty exemption provided under the Notification dated 17.03.2012 is available. Since, the Notification dated 17.03.2012 was amended vide Notification dated 26.12.2013, the same should be considered as curative in nature inasmuch as the specific power project in the North East belonging to NEEPCO was inserted for providing the duty exemption contained therein. Since, the date of effect of the notification dated 26.12.2013 was not specifically provided, it has to be construed that to cure the defect of non-incorporation of the particular power project, which was subsequently done vide notification dated 26.12.2013 should be considered as retrospective in operation and the goods imported by the appellants for installation in the approved power project should be available for the benefit of exemption provided therein. The Hon ble Supreme Court in the case of WPIL. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT, UP. [ 2005 (2) TMI 137 - SUPREME COURT] has clarified that clarificatory notification merely clarifies the position and makes explicit what was implicit and in such case, the notification should be considered as retrospective in operation. Further, in the case of M/S. RALSON (INDIA) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [ 2015 (4) TMI 74 - SUPREME COURT] , the Hon ble Supreme Court have held that when the Government rectifies an inadvertent error by way of issuance of the notification, then the same should be treated as corrective/clarificatory and will have retrospective effect. Thus, the benefit provided under Notification dated 26.12.2013 should be available to them and accordingly, the application filed by the appellants for re-assessment of B/E should be considered by the department by extending the benefit provided under Notification dated 26.12.2013 - the impugned order is set aside - appeal allowed.

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• Corporate Laws

• 2024 (10) TMI 985
  Unilateral change of appointed date from 1.4.2019 to 1.4.2020, by Ld. NCLT, while admitting the scheme of arrangement between the parties - HELD THAT:- A bare perusal of the impugned order would show the said order is passed by the Ld. NCLT relying upon the General Circular No.9 of 2019 dated 21st August, 2019 as above, more particularly its Clause (c) of para 6. However, the Learned NCLT failed to notice the application for the scheme of merger was filed on 1st December, 2019 and in terms of the said para 6(c) of the Circular (Supra), the appointed date was fixed at 01.04.2019, which was within a year of filing of the Scheme. Hence, even as per sub-para (c) of para 6 there was no need to change the Appointed Date. Even otherwise, as per the said sub-para, if the Appointed Date was ante dated beyond a year from the date of filing, which in the present case it is not, then also only justification would have to be obtained from the applicants that it is not against public interest. Admittedly the petition was filed in December 2019 but owing to the outbreak of Covid pandemic there has been a delay beyond anybody s control in the sanction of the scheme, but despite that the Appointed Date should have been kept as 01.04.2019. A bare perusal of judgements in Accelyst Solutions Pvt Ltd Vs Freecharge Payment Technologies Pvt Ltd [ 2021 (3) TMI 1009 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI ] and Shree Balaji Cinevision (India) Pvt Ltd [ 2009 (9) TMI 920 - GUJARAT HIGH COURT ] would show while sanctioning the scheme of arrangement if the Court comes to a conclusion that the provisions of statute have been complied with; and that there is no violation of any provision of law, or the proposed scheme of compromise or arrangement is not unquestionable, unconscionable or contrary to public policy, then the NCLT has no further jurisdiction to sit in appeal over the commercial wisdom of the class of person who with their eyes open have given their approval, even if, the Court is of the view that better scheme could have been framed. It is also agreed that the alterations in the Appointed Date would affect the calculation and would have a serious financial implication. Hence if the parameters for sanctioning the scheme are complete, then the Tribunal would only be left with supervisory jurisdiction. The Appointed Date should remain as 01.04.2019 instead of 01.04.2020 - Appeal allowed.

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• Insolvency & Bankruptcy

• 2024 (10) TMI 984
  Recovery of Tax - Applicability of Section 31 of the IBC - Seeking a declaration that the demand notice and the communication issued to it by Gram Panchayat, Gowari, through its Secretary, Tahsil Rajura, District Chandrapur, be quashed and set aside - demand pertain to the dues for the period prior to 2019 i.e. the period prior to the petitioner's acquisition of the assets of the corporate debtor under the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The liquidation process moved ahead and the petitioner acquired the assets, in due process and now the respondent want to stake its claim for recovery of the amount of tax outstanding and payable to it by the corporate debtor but once the petitioner has acquired the assets of the corporate debtor, the claims, if any, which were not raised, stand extinguished and the respondent cannot now seek to recover those claims from the petitioner, who acquired the assets of the corporate debtor through auction process under the IBC. Perusal of the scheme under the IBC and in particular Section 31, clearly prescribe that the resolution plan shall be binding on the Central Government, State Government or any local authority to whom a debt in respect of payment of dues arise under any law for the time being in force and the retrospective applicability of 2019 amendment to Section 31 is upheld by the Apex Court in the case of Ghanshyam Mishra Sons Pvt Ltd vs. Edelweiss Asset Reconstruction Company Ltd [ 2021 (4) TMI 613 - SUPREME COURT] . The Apex Court has categorically held that the amendment is clarificatory and declaratory in nature and it would apply retrospectively even in relation to pending proceedings and to the dues owed prior to the amendment. One of the dominant object of the IBC is to see to it that an attempt is made to revive the corporate debtor and make it a running concern and since it contemplate that the resolution applicant has to prepare a resolution plan on the basis of the information, memorandum and which is expected to provide for the payment of insolvency resolution process costs, implementation and supervision resolution plan, once such a plan is approved, it shall bind to one and all. The demand notice dated 31.12.2023 (Annexure-M) and communication dated 12.01.2024 (Annexure-N) issued by respondent to the petitioner is bad in law, arbitrary and violative of Article 14 of the Constitution of India in so far as demand for dues pertaining to the period prior to 2019 i.e. period prior to the petitioner s acquisition of the assets of corporate debtor under the Insolvency and Bankruptcy Code, 2016 - the petitioner is not liable to pay any outstanding tax dues to the respondent pertaining to the period prior to the petitioner s acquisition of the assets of corporate debtor under the Insolvency and Bankruptcy Code, 2016. Petition disposed off.

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• 2024 (10) TMI 983
  Condonation of 18 days delay in filing the appeal - Appellant submits that the delay is not 18 days since he is entitled for the benefit of the time when he received the free of cost copy from the NCLT - HELD THAT:- Present is the case where it is not the case of the appellant that he even applied for certified copy of the order. He is relying only on the free of cost copy of the order which stated to be received on 23.07.2024. The Judgment of Hon ble Supreme Court which has relied by appellant itself indicate that the litigant who does not apply for the certified copy cannot then fall back and claim that he was awaiting the grant of the free copy to obviate the bar of limitation - Judgment of the Hon ble Supreme Court in V Nagarajan vs. SKS Ispat and Power Ltd. Ors.[ 2021 (10) TMI 941 - SUPREME COURT (LB) ] has laid down that limitation for filing the appeal commences from the date of order is pronounced and litigant has to be vigilant in applying the certified copy of the order. The mere fact that the appellant received free of cost copy on 23.07.2024 cannot arrest the running of the limitation which began on the date when the Judgment was pronounced. The judgment which has been relied by the appellant in STATE BANK OF INDIA VERSUS INDIA POWER CORPORATION LIMITED [ 2024 (10) TMI 883 - SUPREME COURT] where the delay was within the condonable period. In the present case the delay being of 18 days is beyond our jurisdiction as per Section 61(2) proviso. The delay condonation petition is dismissed.

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• Service Tax

• 2024 (10) TMI 982
  Exemption from payment of service tax or taxable under the category of Commercial Training or Coaching services - training extended by the appellant to unemployed youth of Scheduled Caste and Scheduled Tribe and Minority communities sponsored by Bruhat Bangalore Mahanagar Palike (BBMP) - sovereign function or not - invocation of Extended period of limitation - HELD THAT:- The issue on merit is considered by the Hon ble High Court in VASUNDHARA A.G.K.,N.H. MURALIDHAR, AND AMBA PRASAD N.H. VERSUS THE BRUHATH BANGALORE MAHANAGARA PALIKE [ 2024 (1) TMI 8 - KARNATAKA HIGH COURT] and is well settled that appellant is liable to pay service tax. Extended period of limitation - HELD THAT:- There is no suppression of any material facts with an intention to evade payment of service tax. It is an admitted fact that the training extended by the appellant to unemployed youth of Scheduled Caste and Scheduled Tribe and Minority communities, and it is sponsored by BBMP. Further, it is found that no service tax amount was included, while fixing the consideration for such training. As held by the Hon ble Supreme Court in the matter of ANAND NISHIKAWA CO. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT [ 2005 (9) TMI 331 - SUPREME COURT] , mere non-payment of Service Tax cannot be considered as suppression of fact to invoke the extended period of limitation. The appeal is partially allowed by setting aside the demand with interest for the extended period. Further, Penalties under section 76 and 78 of the Finance Act, 1994 imposed by adjudication authority are also set aside. The matter is remanded to the Adjudication Authority for computing the demand for normal period.

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• 2024 (10) TMI 981
  Refund claim - rejection on the ground that the amount paid under RCM is not admissible Rule 9(1)(bb) of CENVAT Credit Rules 2004 and was hence not eligible to be transited as input tax credit in the GST regime as stated in section 142(8)(a) of CGST Act - HELD THAT:- It is seen from the Rule that since tax is paid under RCM, the relevant provision is Rule 9(1)(e) ibid and not Rule 9(1)(bb), as evoked in the OIO and the impugned order and hence credit cannot be denied. In POLYGENTA TECHNOLOGIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NASIK-I [ 2018 (2) TMI 804 - CESTAT, MUMBAI] a similar matter was examined by CESTAT Mumbai where it was held that 'It is apparent that the appellant is not service provider and therefore Rule 9(i)(bb) would not be applicable to them. The appellant is paying service tax on reverse chare basis in terms of Rule 2(1)(d) of Service Tax Rules, 1994 and therefore credit can be availed in terms of Rule 9(i)(e) of Cenvat Credit Rules. Since Rule 9(i)(bb) is not applicable to the appellant, the credit cannot be denied.' Transition of credit - HELD THAT:- The transition provisions contained under section 142 of CGST Act 2017 allows refund of any amount of CENVAT credit, duty, tax or interest paid under the existing law. As per section 140 of the GST Act, 2017, the appellant was eligible to transfer the amount as TRAN-1 credit. Further the amount was paid on 18/12/2017 and the last date for availment as TRAN-1 credit was on 27/12/2017, the appellant had applied within time. No fraud etc. was alleged, by issuing a SCN, hence the error of non-payment of tax was inadvertent in nature. The rejection of the claim on 21/02/2023 citing non-declaration of the amount in Service Tax returns was hyper technical as the tax was paid after being pointed out by Audit, by which time the CGST law had come into force on 01/07/2017. Section 142(8)(b) also makes it clear that where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law - once the credit is found eligible, it is to be refunded in cash. In such a situation the appellant is eligible for refund as per section 142 of CGST Act 2017. In the case of Adfert Technologies Pvt. Ltd. Vs UOI and Others [ 2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT] , it has been held that transitional credit being a vested right, it cannot be taken away on procedural or technical grounds. The impugned order rejecting the refund claim is not proper. The same is hence set aside - Appeal allowed.

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• 2024 (10) TMI 980
  Levy of service tax - Intellectual Property Right Services - income received from the transfer of goodwill - Whether goodwill is covered in the definition of IPR Service as per the Finance Act and that is this same as trademark as has been held by Original Authority? - Manpower Recruitment or Supply Agency Service - extended period of limitation - penalty - HELD THAT:- The donor, a legal practitioner has institutionalized the Goodwill of his profession/business associated with the name of his business with all associated rights including intellectual property rights in favour of his family members. The words Goodwill in name used in addition to other rights are patently clear to show that Goodwill in name and Goodwill in Business were intended to be two different things though both are intangible in nature. Name is the brand/trade mark, the intellectual property whereas Business is the reputation. As brought to notice that the Goodwill Valuation Report also reveals that the valuation was of the goodwill of Remfry Sagar as a going concern and it was not the value of a trade mark, Remfry Sagar - the valuation took into account is the long standing of the Firm, the professional manner in which the Firm was run and handled its clients and the probability of their returning to the Firm. It is clear that valuation was for an intangible property but being different from the Intellectual Property( Trade Mark). The perusal of the documents makes it patently clear that the appellant company has not simply lent the name Remfry Sagar to the partnership firm of the legal practitioners/Consultants but it also maintained complete hold on the conduct of business to ensure the Goodwill therein associated with name Remfry Sagar . It stands established that Dr. Vidya Sagar being 76 years age without any Lawyer as his legal heir, in the first place separated the Goodwill of 173 years old practice and profession from his proprietorship Firm and institutionalized the same by way of gift. The said Goodwill of the practice and profession including all rights, which was valued at 45,00,00,000.00 as on 31.3.2001, was gifted to the Appellant, while the other assets of the proprietorship Firm were sold to the Appellant by way of a separate arrangements. A few of the legal practitioner working in the proprietorship Firm of Dr. Vidya Sagar were brought in as partners in the Law Firm which was formed to carry on the Continued Practice of Dr. Vidya Sagar without break, while other legal practitioners were absorbed as consultants in the Law Firm. Non-technical staff of the proprietorship Firm of Dr. Vidya Sagar was absorbed by the Appellant. Contemporaneously, the said institutionalized Goodwill in the practice and profession of attorneys-at-law was licensed by the owners/donors to the Law Firm by way of the License Agreement to carry on the continued practice. On application of principle of ejusdem generis , it is held that the only interpretation which can be arrived from the words any other similar intangible property is that other intangible properties which come under the Cinematographic Act,1952 ,The Biological Diversity Act,2002 , The Seeds Act,1966 , Protection of Plants Varieties and Farmers Rights Act,2001 , The Geographical Indications of Goods(R P) Act,1999 , The Information Technology Act,2000, etc. which are recognised under Intellectual Property Law in India. As already held above that Goodwill is not recognised under any law, same cannot be held as similar intangible property as trademarks, designs patents. The License Agreement read with the partnership deed of the Law Firm, fundamentally requires the continuity of 173 years old practice of Dr. Vidya Sagar wherein the control and benefits lie with the Appellant Company (legal heirs of Dr. Vidya Sagar). Only a 'Goodwill' licensor would be in position to control and reap benefits to this extent as 'Goodwill' is directly related to business or profession, which may or may not have a 'Trademark'. Hence we hold that the Goodwill transferred by appellant Company is the Goodwill of Business which is an intangible property but it has wrongly been held as Intellectual Property (Trade Mark). Service Tax demand based on said presumption is therefore liable to be set aside. Manpower Recruitment or Supply Agency Service - HELD THAT:- BSS are essentially the services which are provided by the service provider to service recipient in the form of specific support. The essence of 'business support service' is to outsource a specified work to another person in lieu of compensation. On the contrary, 'manpower recruitment or supply agency' service is limited to supply of manpower that too by Manpower Supply Agency to another - in the instant case, the Appellant is completely responsible to the Law Firm for all bad quality of work delivered using Appellant's employees and Appellant's equipment. Top of that appellant is not a Man Power Supply Agency. Hence the order under challenge has wrongly confirmed the demand of Service Tax under Manpower supply service. Invocation of extended period of limitation - HELD THAT:- There is no denial to the fact that the appellant was regularly paying tax vis- -vis the taxable activity of providing business support service and was filing the regular returns. Even Nil returns were being filed vis- -vis the license fee and other income received. This acknowledgement is sufficient to hold that there is no act of suppression, as alleged, has been committed by the appellant - extended period has wrongly been invoked while issuing the SCN. Hence it is held to be barred by findings. Penalty - HELD THAT:- In the case of Hindustan Steel Ltd. vs. State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] it is held that Penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law and was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation - in the present case, the party are not liable for any penal action and so the penal proceedings initiated in the SCN merits to be dropped. The impugned order is set aside - appeal allowed.

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• Central Excise

• 2024 (10) TMI 979
  Challenge to arbitral award - excise duty payable on the goods in question - difference in classification of the goods by the petitioner, and the classification adopted by the Excise Department - Whether the disputes between the parties were arbitrable? - claims were on account of a change in taxes, within the meaning of Clause III.12.2 of the NIT, or whether the same constituted a revision in the POs? - entitlement to recover the price alongwith excise duty at the rate mentioned in the invoices raised by it - HELD THAT:- The respondent had anticipated the controversy, and kept the petitioner notified of the possibility of additional excise duty becoming payable on the goods. The evidence on record, including the certificate dated 30.09.2015, was sufficient to support the conclusion that the revenue authorities had, in fact, recovered excise duty at the rate of 12.36%, in respect of the goods in question. Even de hors the question of correctness of the classification adopted, this, in itself, would have been sufficient to allow the respondent s claim on this account. There are no reason to interfere with the manner in which the learned arbitrator has dealt with the documentary evidence placed before him. The assessment of evidence, and weight to be attached thereto, are ordinarily matters within the domain of the arbitral tribunal, which in the present case, has come to entirely reasonable and justifiable conclusions. In the present case, the underlying legal argument was admittedly raised and contested during the course of hearing. The judgments cited in the impugned award, elaborate and elucidate upon the argument being analyzed in the award, but do not per se go to the root of the award. An award is liable to be interfered with, only if it contains errors which go to the root of the matter - Two caveats may, however, be placed. The first is that factual material must be disclosed to all parties, and the second is that it would remain open to the parties to assail the arbitral tribunal s reliance upon the authorities and the conclusions derived therefrom, within the parameters provided in Section 34 of the Act. There are no merit in the present petition, which is hereby dismissed.

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• 2024 (10) TMI 978
  Admissibility of interest on Sundry Debtors as a deduction in finalization of Provisional assessments under Rule 9B of the Central Excise Rules, 1944 for the period prior to 1996 - violation of principles of unjust enrichment - HELD THAT:- In the instant case, it is not in dispute between the parties that the relevant period is between 01.04.1989 to 31.03.1998. The Provisional Assessment Order was passed on 12.03.1999. The said order became subject matter of challenge in appeal and then before the CESTAT. Upon remand by CESTAT by its order, dated 04.11.1999, the Order-In-Original (Assessment Order) could be passed only on 31.03.2004. In this backdrop, it is to be seen whether proviso to Rule 9B (5) of the Rules, 1944 can be pressed into service and refund can be declined by applying the concept of unjust enrichment . In view of the settled position of law, it is clear that the entitlement to refund and finalization of the provisional assessment under Rule 9B of the Central Excise Rules, 1944 is independent from the provisions of refund under Section 11B of the Central Excise Act, 1944 - The procedure regarding unjust enrichment of finalization of provisional assessment will be applicable to the provisional assessment made after 1999 and not before that date as the proviso to Rule 9B in the form of sub-rule (5) did not have a retrospective effect. The doctrine of unjust enrichment therefore would not be attracted to the refunds pertaining to the finalization of the provisional assessment for the period prior to 1999 and sub-rule (5) to Rule 9B of the Central Excise Rules, 1944 will not operate retrospectively. When delay in deciding the Assessment Order is not attributable to the assessee, the time consumed in passing the Assessment Order will not defeat the claim for refund on the ground of unjust enrichment flowing from proviso to sub rule (5) of Rule 9B of the Rules 1944. The impugned order of Tribunal is in consonance with law and no case is made out for interference. In view of settled legal position, no substantial question subsists and therefore, the appeal is dismissed.

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• 2024 (10) TMI 977
  Calculation of duty on amortization cost of dies - non inclusion of amortization cost of dies used for manufacture of cylinder head and Break Shoe - suppression of facts or not - extended period of limitation - H ELD THAT:- The entire demand was raised in the show cause notice on the basis of two invoices, the copy of which has also been produced on record; both invoices bearing nos. 20650 dated 31.03.2009 of M/s Sunbeam Auto Ltd. and Invoice No. 11434 dated 02.11.2009 of M/s M M Machines Craft Pvt. Ltd; and the perusal of both the invoices shows that the appellant got the die of cylinder heads only and not the die of brake shoe as alleged by the Department. Extended period of limitation - HELD THAT:- The appellant was subjected to regular audit in the year 2010 also and no such objection was ever raised by the Revenue. It is also found that the Revenue has not been able to bring on record any fact which shows that the appellant has suppressed the material facts to justify the invocation of extended period to confirm the demand. It is also found that the appellant has conceded the demand for the normal period on account of cylinder heads only which he is liable to pay. The appellant is liable to pay the duty on account of cylinder heads only and that to for the normal period for the year 2009-10 only and the demand of duty on brake shoe by invoking the extended period of limitation is not sustainable and therefore, the same is set aside and the duty liability for the normal period along with interest is confirmed and for quantification of the same, the case is remanded back to the Original Authority to determine the same. Appeal allowed by way of remand.

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• 2024 (10) TMI 976
  Non-payment of duty - Classification of goods - Minute Maid Nimbu Fresh - to be classified under the tariff item 22029020 as Fruit pulp or fruit juice based drink or under tariff item 22029020 as Lemonade. ? - HELD THAT:- The issue in the present appeal is no more res integra and is squarely covered by the decision of the Larger Bench of the Tribunal in the case of Brindavan Beverages Pvt. Ltd. Others vs. CCE ST, Hapur [ 2019 (10) TMI 762 - CESTAT ALLAHABAD (LB)] whereby it was held that the product MMNF is classifiable under Tariffs Sub-heading 22029020 as fruit pulp or fruit juice-based drink . There are no infirmity in the impugned order and accordingly the same is sustained - the appeal filed by the Revenue is dismissed.

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• 2024 (10) TMI 975
  Gross violation of the CBEC instructions - precedent value of CESTAT decisions - Revenue filed the appeal before the first Appellate Authority without specifying any grounds or reasons why the order of the Tribunal had been wrongly followed by the Adjudicating Authority - HELD THAT:- From perusal of the section specifically 35 R (4) it is evident that this Section, is applicable only for the Commissioner (Appeals) and Appellate Tribunal, and it provides that these authority shall while hearing any appeal shall have regard to circumstances under which the earlier order has been accepted and not challenged before the higher appellate forum by the Department. Above Section is in no way setting aside the well known principle of judicial precedents and the binding nature of the order of the higher Appellate Authority it only provides that when an order has been accepted on monetary limits there should be examination of the issue and order passed either by distinguishing the order or else by following the order - All the authorities below Tribunal would be bound by the earlier order of Tribunal. In the impugned order no ground has been stated from the revenue appeal filed before the said authority which ran contrary to the observation made by the Tribunal in the earlier order dated 15.05.2017. In such a situation impugned order setting aside the order of original authority just for the reason that earlier order of Tribunal was accepted on the monetary grounds cannot be justified. Impugned order even do not record that order of Tribunal was held not acceptable by the reviewing authority to be not acceptable on merits but accepted the same in view of the Board Instruction prescribing the monetary limit for filing the appeal to higher forum. From the order of the original authority it is evident that the demand notices were kept in the call book awaiting the decision of the Tribunal against the order confirming the demand made by the Show Cause Notice mentioned at Sl. No. 1. After the decision of the Tribunal setting aside the said order they have been taken out from the call book and adjudicated as per the order of the Tribunal. There are no merits in the impugned order without specifying any grounds for differing with the available order of the higher Appellate Authority - appeal allowed.

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• Indian Laws

• 2024 (10) TMI 974
  Setting aside of auction sale - grant of adequate compensation to the appellant - submission of the learned counsel appearing for the appellant is that solatium at 5 per cent of the amount deposited by the appellant granted to the appellant is inadequate - HELD THAT:- The High Court set aside the auction sale not based on the provisions of the said Rules or on the ground that the auction was illegal. The High Court set aside the auction on equitable considerations, as the entire amount due and payable to the 4th respondent bank, including interest, was deposited by the 1st and 2nd respondents with the High Court within three months from filing the Writ Petition. There is no doubt that the appellant must be compensated as he was deprived of using the amount of Rs.81,20,000/- from 21st July 2019 till the date of actual refund due to no fault on his part. As stated earlier, the amount was transferred by the 3rd respondent to the 4th respondent on 13th October 2022. The appellant was entitled to receive interest on the said amount of Rs.81,20,000/- at the rate of 6 per cent per annum from the date of deposit of the said amount till the date of refund. It is an admitted position that the 3rd respondent conducted the auction of the property claimed by the 1st and 2nd respondents at the instance of the 4th respondent. Admittedly, the 4th respondent bank has not challenged the impugned orders and has thus accepted the finding that the appellant must be compensated. Therefore, the 4th respondent bank will be liable to pay interest to the appellant. The fact that the amount was lying deposited with the 3rd respondent is irrelevant as the auction was at the instance of the 4th respondent. The impugned judgments dated 5th September 2022 and 17th March 2022 are hereby modified by setting aside direction to pay an amount equivalent to 5 per cent of Rs.81,20,000/- to the appellant - the 4th respondent is directed to pay simple interest at the rate of 6 per cent per annum on the sum of Rs. 81,20,000/- to the appellant from 21st July 2019 till the date of the actual refund of the amount of Rs. 81,20,000/- to the appellant - appeal allowed in part.

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• 2024 (10) TMI 973
  Levy of of tax/fee/royalty on advertisement(s) - demand made without any legislative sanction and is, thus, violative of Article 265 of the Constitution of India, 1950 - whether the demand is by way of a tax/levy or simply in the nature of royalty for permission for advertising through hoardings within the limits of the Corporation? HELD THAT:- In the present case, it cannot be lost sight of, as also elucidated in INDSIL HYDRO POWER AND MANGANESE LIMITED VERSUS STATE OF KERALA AND ORS. [ 2021 (9) TMI 1561 - SUPREME COURT] , especially in Paragraph 56 thereof, after considering a host of precedents, that the imposition of royalty cannot be equated with imposition of tax/levy. Even otherwise, the law is no longer res integra that conduct of the parties and acquiescence would preclude a party from turning around and assailing a decision acquiesced to, except where there is an inherent lack of jurisdiction, or the exercise of authority is perverse or malafide, in law or in fact. In the instant factual setting, the advertising companies/respective Respondents No.1 had agreed in the year 2005 to pay a royalty of Re.1 per square foot to the Corporation for putting up hoardings/advertisements. There are no hesitation to hold that such revision of rate was within the power of the Corporation. However, at this very stage, it is equally unhesitant to hold that the Resolution to charge enhanced royalty in exercise of purported power under Section 4318 of the Act was misplaced as royalty is not tax. It has been authoritatively clarified by this Court that royalty and tax are not one and same. As such, the Corporation s power to charge royalty cannot be interfered with on the ground that the same is not available, either in the Act or in the Regulations concerned, as there is no question of the said royalty being a tax. Section 431 of the Act, therefore, would not come into the picture where royalty, that too by way of and under an agreement/understanding is concerned. In order to balance equities, the Court would indicate that the enhanced rate of Rs.10 per square foot would be payable by the respective Respondents No.1/advertising companies and other similarlysituated persons in terms of the Resolution of the Corporation from the date the same was made public/communicated to the concerned parties, whichever is later, with simple interest at the rate of 6% per annum. The Corporation is directed to furnish computation of amounts due to the parties concerned within 4 weeks. Payments be made within 16 weeks thereafter by the parties concerned, failing which they shall carry interest @ 10% per annum and be recoverable as arrears under the Bihar and Orissa Public Demands Recovery Act, 1914. Needless to state, amount(s), if any, paid over and above Re.1 per square foot, for the period in question, shall be adjusted towards the final liability to be determined by the Corporation vis-a-vis the respective Respondents No.1 herein and all other similarly-situated persons. Appeal disposed off.

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• 2024 (10) TMI 972
  Dishonour of cheque - security cheque or not - Presumption of innocence - challenge to acquittal of accused - HELD THAT:- The learned First Appellate Court acquitted the accused solely on the ground that the repeated presentation of the cheque and issuance of notice are not permissible. This finding of the learned First Appellate Court cannot be accepted. It was laid down by the Hon ble Supreme Court in MSR Leathers [ 2012 (10) TMI 232 - SUPREME COURT ] that there is nothing in the N.I.Act to prevent the repeated presentation of the cheque or issuance of successive notices. It was observed ' the prosecution based upon second or successive dishonour of the cheque is also permissible so long as the same satisfies the requirements stipulated in the proviso to Section 138 of the Negotiable Instruments Act. The reference is answered accordingly.' Therefore, the learned First Appellate Court erred in acquitting the accused on the ground that the cheque was presented repeatedly and the notices were issued twice. Hence, the judgment passed by the learned First Appellate Court is not sustainable. Since, the learned First Appellate Court has not touched the other grounds challenging the judgment and order passed by the learned Trial Court, therefore, the matter is required to be remitted to the learned First Appellate Court for its afresh disposal as per the law. This is also necessary because the scope of appeal against the conviction is wider than the scope of appeal against the acquittal and it is not permissible for this Court to simply affirm the judgment of the learned Trial Court when the accused had no opportunity to get the finding on the points raised by him before learned First Appellate Court. The present appeal is allowed and the judgment passed by the learned Sessions Judge, Hamirpur, is ordered to be set aside. The matter is remitted to the Court of learned Sessions Judge, Hamirpur, for its afresh disposal as per law.

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• 2024 (10) TMI 971
  Seeking to set aside impugned order - petition does make out a genuine case of hardship - HELD THAT:- It is found strange, that a letter by Petitioner's Chartered Accountant was not accepted by the office. It is not clear why it was not accepted. The impugned order is set aside - matter remanded for denovo consideration to Respondent No.2 - petition disposed off.

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