TMI Tax Updates - e-Newsletter
October 25, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. WHETHER THE PROVISIONS OF PUBLIC PREMISES ACT, 1971 OVERRIDES THE ARBITRATION AND CONCILIATION ACT, 1996?

   By: DR.MARIAPPAN GOVINDARAJAN

2. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

3. Assessee can avail ITC only on tax paid on services for leasing/ renting/ hiring of motor vehicles for women’s safety

   By: Bimal jain

4. Geo Membrane is classifiable would fall under Chapter 59

   By: Bimal jain

News

1. Government e Marketplace (GeM) signs Memorandum of Understanding with the State of Sikkim for increasing adoption of GeM

Notifications

Customs

1. 70/2024 - dated 23-10-2024 - Cus (NT)

Retrospective Exemption from any amount is payable under customs duty on the import of “Rough diamonds (industrial or non-industrial)” for the specified period from 1.7.2017 to 1.2.2022

2. 69/2024 - dated 23-10-2024 - Cus (NT)

Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver

DGFT

3. 38/2024-25 - dated 23-10-2024 - FTP

Procedure for export of sesame seeds to the United States of America (USA)

GST - States

4. G.O.Ms.No. 104 - dated 10-10-2024 - Telangana SGST

Amendment in Notification G.O.Ms No. 121, Revenue (CT-II) Department, Dt: 30.06.2017

5. G.O.Ms.No. 87 - dated 24-8-2024 - Telangana SGST

Notifies special procedure by a registered person engaged in manufacturing of the certain goods

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/146 - dated 24-10-2024

Clarification with respect to advertisement code for Research Analysts (RAs)

DGFT

2. 27/2024-25 - dated 23-10-2024

Filing of Annual RODTEP Return (ARR)

Highlights / Catch Notes

GST

• High Court Remands CGST Act Exclusion Case for New Ruling; Emphasizes Functionality Test for Service Providers.

  Case-Laws - HC : The High Court examined the constitutional validity of exclusion (iii) to the Explanation to Section 17 of the CGST Act regarding the applicability to service providers. The authorities analyzed the matter from the perspective of definitions of 'plant' and machinery, relying on dictionaries, but did not focus on the functionality test. The Supreme Court held that a fact-finding inquiry is necessary in each case, applying the functionality test. As the Petitioner had yet to establish the requisite infrastructure when the Advance Ruling Authorities decided, the High Court remanded the matter to the AAR for a fresh ruling considering the Supreme Court's observations, given the limited scope of judicial review on factual matters unless perversity is demonstrated. The AAR and Appellate Authority's orders were set aside.
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• Parallel GST proceedings avoided: Central authority to proceed except for FY 2017-18 already covered by State.

  Case-Laws - HC : The High Court addressed the issue of parallel proceedings initiated by both State and Central GST Authorities against the petitioner for the same assessment years. For the Financial Year 2017-18, the State GST Authority had initiated actions first, while for the remaining years, the Central GST Authority took the initial steps. The Court directed the Central GST Authority to continue its investigation and proceedings, except for the Financial Year 2017-18, which had already been completed by the State GST Authority, thereby avoiding duplication of proceedings for the same assessment year. The petition was disposed of accordingly.
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• Court Dismisses ITC Claim on Construction Goods; Fact-Finding Required to Determine Eligibility as 'Plant'.

  Case-Laws - HC : The case pertains to the validity of input tax credit (ITC) availed on construction goods for a building leased to an educational institution. The Supreme Court held that each case involving malls or buildings must undergo a fact-finding inquiry to determine if it satisfies the functionality test of being a 'plant' u/s 17(5)(d). If the building qualifies as a plant, ITC can be allowed on goods and services used in setting up the immovable property. The petitioner was required to satisfy the adjudicating authority whether the building qualified as a plant to avail ITC but failed to submit necessary documents and instead approached the court. The final order was passed, which the petitioner did not challenge. The court dismissed the petition, allowing the petitioner to file an appeal and rely on the Supreme Court's decision in the Safari Retreats case.
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• State GST Demand Quashed for Lack of Jurisdiction; Petitioner Must Address Central GST Notice on Manpower Services 2017-2022.

  Case-Laws - HC : Challenge to the State GST authorities demanding input tax credit availed by the petitioner along with interest and penalty for IGST paid on manpower supply services received during 2017-2022. It holds that the impugned show cause notices issued by the State GST authorities are illegal, arbitrary, and without jurisdiction, as the Central GST authorities had already initiated proceedings against the petitioner for the same subject matter, barring the State authorities from initiating proceedings u/s 6(2)(b) of the KGST Act, 2017. Consequently, the show cause notices are quashed. However, regarding the challenge to the show cause notice issued by the Central GST authorities, the petitioner is directed to submit a reply with relevant documents, which the authorities must consider in accordance with law, considering provisions like Section 13(3)(C) and Section 128A of the CGST Act, 2017, and Circular No. 211/5/24-GST. The petition is partially allowed.
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• Penalty for Expired E-way Bill Reduced; No Tax Evasion Intent Found, Rs. 10,000 Fine Imposed Instead of Maximum Penalty.

  Case-Laws - HC : Levy of penalties u/ss 122 and 129 of CGST/SGST Acts - expiry of e-way bill - mens rea in penalty imposition. Technically, violation of law by petitioner in transporting goods without revalidating e-way bill. However, once plausible explanation provided by transporter/assessee and no attempt to evade tax found, proceedings should not culminate in maximum penalty u/s 129. Officer should have imposed penalty u/s 122(1)(xiv) only. Provisions of Section 129 do not authorize imposition of tax/penalty u/s 129(1)(a) or 129(1)(b) in cases of minor discrepancies; such penalty can be imposed only for violations leading to tax evasion, intent to evade tax, or repeated violations. In other cases, penalties u/ss 122 and 126 to be imposed. In present case, penalty of Rs. 10,000/- u/s 122(1)(xiv) can be imposed. On payment of penalty, bank guarantee to be released.
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• Taxpayer's GST demand order set aside due to consultant's non-communication, to be reconsidered after remitting 10% disputed tax.

  Case-Laws - HC : Breach of principles of natural justice occurred as the petitioner was unaware of proceedings due to non-communication by the consultant entrusted with GST compliances, resulting in an order confirming tax demand due to non-response. Considering the petitioner's inability to participate, an opportunity should be provided to contest the demand on merits. The order is set aside subject to verification of appropriation of Rs. 4,09,604.87 from the petitioner's bank account towards the demand. If not appropriated, the petitioner shall remit 10% of the disputed tax demand within two weeks. The petition is disposed of accordingly.
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• Tax Demand Order Overturned Due to Improper Notice Service; Petitioner Can Contest After Partial Payment.

  Case-Laws - HC : Breach of principles of natural justice occurred due to lack of proper service of show cause notice (SCN). The impugned order and preceding notices were uploaded on the GST portal but not communicated through other modes. There was a mismatch between the petitioner's GSTR 3B returns and auto-populated GSTR 2A. The High Court held that since the petitioner could not participate due to unawareness of proceedings, the interest of justice warrants providing an opportunity to contest the tax demand on merits after remitting 10% of the disputed tax demand within two weeks. The impugned order was set aside on this condition, and the petitioner was permitted to submit a reply to the SCN within the said period. The petition was disposed of accordingly.
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• GST Exemption Removed for Consultancy Services to Maharashtra Jeevan Pradhikaran Post-Jan 2022; 18% GST Applies.

  Case-Laws - AAR : Rate of tax applicable on services provided by the applicant to Maharashtra Jeevan Pradhikaran (MJP) as part of the Jal Jeevan Mission, a Government of India mission. The services are classified as "Technical Consultancy for Project Development and Management support services" under SAC code 998399, attracting 18% GST (9% CGST & 9% SGST), unless exempted. For services provided before 01.01.2022, the exemption under Entry No. 3 of Notification No. 12/2017-Central Tax (Rate) is applicable. However, for services provided on or after 01.01.2022, the exemption is not available due to the omission of "Government Authorities" from the notification entry. The applicant's argument that services are provided to Central and State Governments, thus eligible for exemption, is rejected as speculative. The issue of whether MJP's appointment amounts to delegation of sovereign functions under the Constitution is deemed outside the purview of Section 97(2) of the GST Act.
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Income Tax

• Bank officials erroneously ignored restraint orders, leading to FIR; lack of intent quashed criminal proceedings.

  Case-Laws - SC : Inadvertent error by bank officials ignoring restraint orders led to FIR against bank officials for offences under IPC provisions. Continuation of criminal proceedings questioned. Held: FIR did not show bank induced anyone fraudulently or dishonestly, lacking mens rea required for offences u/ss 420, 406, 409, 462 IPC. No entrustment of property misappropriated by bank. Sections 206, 217, 201 IPC requiring mens rea not applicable. No common intention or cooperation by bank in alleged offences, hence Sections 34, 37, 120B IPC inapplicable. Case falls under categories exempting quashing per Bhajan Lal case. Continuation would cause undue hardship. High Court order quashed.
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• High Court classifies rent income as business profits, not house property income, based on business objectives and operations.

  Case-Laws - HC : The High Court held that rent income derived from letting out properties by the assessee should be treated as 'Income from Profits and Gains of Business' and not 'Income from House Property'. The key considerations were: the assessee's main objective as per the Memorandum of Association was to earn income from letting out properties, making it the principal business activity; the nature of activity and operations, not merely ownership of properties, determines the head of income; the income was derived from the assessee's main business of letting out properties. The Court distinguished situations where property income is incidental to the main business. Following the Supreme Court's decision in Chennai Properties, the Court held that the Tribunal erred in treating the rent income as 'Income from House Property' instead of 'Income from Profits and Gains of Business'. Consequently, the appeals were allowed in favor of the assessee.
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• Employer's failure to deposit TDS can't lead to demands on employees.

  Case-Laws - HC : The High Court held that the Income Tax Department cannot demand TDS amounts from employees when such amounts have been deducted from their salaries by the employer but not deposited with the government. Section 205 of the Income Tax Act bars raising demand against assessees to the extent tax has been deducted from their income. The object is that when the obligation to deposit tax lies with the employer, the liability cannot be shifted to the employee who is the beneficiary of the payment. Issuing demand notices against the employees for the TDS amounts not deposited by the employer is impermissible and violates Section 205. The writ petition was allowed.
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• Reassessment Notice Issued to Deceased Individual Deemed Invalid; Legal Representatives Not Bound if Proceedings Not Pre-Death.

  Case-Laws - HC : Issuance of notice u/s 148 of the Income Tax Act to a deceased assessee is defective and cannot be continued against the legal representative, except in cases falling under clause (a) of sub-section (2) of Section 159 where proceedings were already initiated against the deceased before death. Mere informing the Assessing Officer about the assessee's death and requesting to drop proceedings does not constitute participation, and hence the defect cannot be cured u/s 292B. The legal representative's objection to the validity of notice from inception precludes applicability of the waiver principle. Issuing reassessment notice to a dead person is not a mere technical defect curable u/s 292B when the legal representative has consistently objected and not participated by filing returns.
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• Tax Tribunal Limits Assessment Delay Due to Valuation Report; Upholds Fair Tax Governance in Capital Gains Case.

  Case-Laws - AT : The Income Tax Appellate Tribunal (ITAT) held that when the valuation officer fails to submit the valuation report within a reasonable time, the assessing officer cannot extend the limitation period indefinitely for completing the assessment solely due to the absence of the valuation report. The revenue's interest cannot override considerations of probity and fairness in tax governance. If the assessing officer is allowed to modify the order after receiving the valuation report beyond the limitation period, it would reward the revenue with an enhanced limitation period and embolden unscrupulous tax officials to mistreat the assessee. Consequently, the ITAT deleted the addition made by the assessing officer, who had computed the capital gains by taking the value determined by the stamp authorities as the sale consideration instead of the value declared by the assessee. The assessee's appeal was allowed.
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• Can't levy late fee on delayed TDS returns before 01.06.2015 due to legal restrictions.

  Case-Laws - AT : The pre-amended Section 200A of the Income Tax Act did not permit processing of TDS statements for default in payment of late fee u/s 234E. Hence, late fee charged for belated filing of TDS quarterly returns could not be recovered through processing u/s 200A. As per Karnataka Grameen Bank case, the amendment allowing imposition of fee u/s 234E during processing u/s 200A came into effect from 01.06.2015 with prospective effect. Therefore, levy of late fee u/s 234E would be illegal for TDS statements pertaining to periods prior to 01.06.2015. Consequently, the demand raised with reference to Section 234E cannot be countenanced under the pre-amended provision of Section 200A and requires quashing.
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• Property purchase TDS only on payment, not stamp duty valuation. Penalty on late TDS filing cancelled for pre-amendment deal.

  Case-Laws - AT : Tax deduction at source (TDS) u/s 194IA is applicable on the payment made for purchase of immovable property, not on the stamp duty valuation. The provision mandating TDS on stamp duty value was introduced from April 1, 2022, after the assessee's transaction. Since the assessee was not liable to deduct TDS u/s 194IA at the time of transaction, the penalty u/s 234E for late filing of TDS return is cancelled. The appeal against the penalty is allowed, as the assessee was not obligated to deduct TDS on the transaction value.
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• Denial of tax exemption over excessive salary & rent payments overturned due to incorrect rent comparison.

  Case-Laws - AT : The case pertains to the denial of exemption u/s 11 due to excessive payments made on account of salary and rent to persons specified u/s 13(3). The Assessing Officer (AO) had disallowed the payments made to specified persons. However, upon examination, it was found that the rent paid by the assessee was lower than the prevailing market rates in the same area paid by unrelated parties. The AO had relied on an agreement for a different premise in the same locality, leading to an appreciation of wrong facts. Consequently, the Appellate Tribunal (ITAT) held that the impugned payments were not excessive or unreasonable, deciding the case in favor of the assessee.
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Customs

• Sulphur Black imports from China hit with anti-dumping duty for 5 years to protect domestic industry.

  Notifications : Anti-dumping duty imposed on imports of Sulphur Black originating in or exported from China PR for 5 years. Tariff items 3204 11 96, 3204 12 18, 3204 19 11, 3204 19 25, 3204 19 58, 3204 19 64, 3204 19 67, 3204 19 79 or 3204 90 00. Duty rates: $271/MT for Shandong Dyeriyarn Ecochem Co., Ltd., $389/MT for other Chinese producers/exporters, $389/MT for non-Chinese origin exported from China PR. Based on final DGTR findings of dumping, injury to domestic industry. Duty payable in Indian currency, rate as per notification under Customs Act.
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• Cellophane Film from China faces 5-year anti-dumping duty, except Shandong Henglian. Protects domestic industry from dumping injury.

  Notifications : Anti-dumping duty imposed on imports of Cellophane Transparent Film from China for 5 years. Nil duty for producer Shandong Henglian New Material, $1.34/kg for other producers. Applicable to goods under tariff codes 3920 71 11 or 4823 90 90, originating or exported from China. Aims to remove injury to domestic industry caused by dumping. Duty payable in Indian currency, rate determined by notification under Customs Act.
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• Tariffs Slapped on Chinese TPU Imports for Domestic Industry Protection.

  Notifications : Anti-dumping duty imposed on imports of Thermoplastic Polyurethane (TPU) from China for 5 years based on DGTR's final findings of dumping, injury to domestic industry. Duty rates specified for producers BASF Polyurethane Specialties China, Zhejiang Huafon TPU, Miracll Chemicals and residual category. Covers polyester, polyether based TPU, excludes polycaprolactone-based. Payable in Indian currency, exchange rate as notified by Ministry of Finance. Levied from notification date in Official Gazette.
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• Airlines must share passenger data 24 hrs before flight.

  Notifications : Every aircraft operator must transfer passenger name record information no later than twenty-four hours before scheduled departure time. The Passenger Name Record Information Regulations, 2022 have been amended to reflect this change, mandating the transfer of such information within the specified timeframe. The amendment has been issued by the Central Board of Indirect Taxes and Customs under the Customs Act, 1962, and shall come into force upon publication in the Official Gazette.
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• Rice exports liberalized; zero export duty on basmati, non-basmati & other varieties.

  Notifications : This notification seeks to amend the export duty on certain varieties of rice by substituting the existing duty rates with "nil" against S. No. 6A, 6B, and 6C in the table of Notification No. 27/2011-Customs, dated 1st March 2011, issued by the Ministry of Finance (Department of Revenue). The amendment comes into force with immediate effect, exercising powers under sub-section (1) of section 25 of the Customs Act, 1962, in the public interest.
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• License-exempt wireless devices get Equipment Type Approval via self-declaration on SARAL portal.

  Circulars : This instruction from the Central Board of Indirect Taxes and Customs (CBIC) pertains to the issuance of Equipment Type Approval (ETA) for license-exempt wireless equipment devices. Key points are: applicants can obtain ETA on a self-declaration basis by submitting applications with requisite documents and fees on the SARAL Sanchar portal; ETAs ensure compliance with RF regulations, but holders must obtain necessary clearances from DGFT before importing equipment; it is the responsibility of ETA holders to comply with all import regulations stipulated by DGFT; earlier instructions stand modified to this extent; difficulties may be brought to CBIC's notice. The OM from Department of Telecommunications enabling this process is also enclosed.
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• Retrospective duty exemption on rough diamond imports.

  Notifications : Retrospective exemption granted from payment of any customs duty on import of "Rough diamonds (industrial or non-industrial)" for the period 1.7.2017 to 1.2.2022. Notification amends previous notification allowing duty-free import of "Simply Sawn Diamonds" from 2.2.2022 subject to Kimberley Process Certification. Central Government satisfied with prevalent practice of non-levy of customs duty on such imports during specified period. Exercising powers u/s 28A of Customs Act, 1962, directs that no customs duty payable for imports during that period, notwithstanding any duty leviable under Customs Tariff Act, 1975 and notifications.
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• Customs Tariff Values Revised for Edible Oils, Gold, Silver; Brass Scrap, Areca Nuts Unchanged.

  Notifications : This notification from the Central Board of Indirect Taxes and Customs, issued u/s 14(2) of the Customs Act, 1962, revises the tariff values for certain imported goods. It substitutes new tables for edible oils like crude palm oil, RBD palm oil, palmolein, and soybean oil, maintaining the existing tariff values. The tariff values for brass scrap and areca nuts remain unchanged. For gold and silver imports, separate tariff values are prescribed based on form, purity levels, and import mode. The notification comes into effect on October 24, 2024, amending the previous Customs (N.T.) notification.
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• Importers Must Justify Identical FOB Values in Trade Documents; Court Upholds Regulation for Compliance Verification.

  Case-Laws - HC : This case involves a challenge to a public notice issued by customs authorities, specifically Clause 3(ii), which requires importers to provide an explanation for identical FOB (Free on Board) values mentioned in the FTA-COO (Free Trade Agreement Certificate of Origin) and the third-country invoice when submitting the self-assessed bill of entry. The court held that Clause 3(ii) does not infringe upon the importer's rights or entitlements under preferential trade agreements. The requirement to provide an explanation is only to enable the proper officer to assess and verify compliance with the relevant rules and regulations. The court clarified that this clause applies only in cases of identical FOB values and not in all cases. The petitioner cannot seek a direction to grant benefits under the Customs notification without providing the required explanation. Each transaction must be considered on its own merits based on the facts disclosed and compliance reported. The petition was dismissed, and the petitioner's entitlement to preferential trade agreement benefits must be determined in accordance with the applicable laws, notifications, and rules.
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• Petition Dismissed: No Writ Against Show-Cause Notice for MEK Export Without NOC; Must Respond to Customs Notice.

  Case-Laws - HC : Petitioner sought declaration that it is not required to obtain NOC from Narcotics Commissioner for exporting its product containing Methyl Ethyl Ketone (MEK). Issue was whether the product is covered under Schedule-B of the 2013 Order, which could lead to confiscation and penalty. Court held that Customs authorities issued show-cause notice, and Petitioner will have opportunity to comment on Commissioner's opinion during adjudication. Granting declaration before adjudication would be inappropriate. Petition was filed before show-cause notice, but this is irrelevant. Writ petitions should not be entertained routinely against show-cause notices unless there is absolute lack of jurisdiction. Petitioner should respond to notice and raise all grounds, with jurisdictional issues initially adjudicated by issuing authority. Litigation against show-cause notices should not be encouraged. Petition dismissed with liberty to reply to notice and face adjudication proceedings.
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• High Court Upholds CESTAT Ruling: Penalties Dropped Due to Lack of Cross-Examination Opportunity Under Customs Act.

  Case-Laws - HC : The High Court dismissed the appeals, holding that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) correctly set aside the order imposing penalties u/ss 114 and 114AA of the Customs Act, 1962. The Department failed to follow the procedure u/s 138B of the Act by denying the exporter's request to cross-examine the Chemical Examiner whose report formed the basis of the allegations. The CESTAT rightly found that the statements relied upon could not be used as relevant evidence without affording the exporter an opportunity for cross-examination, as mandated by Section 138B, unless exceptional circumstances existed, which were not present in this case. The High Court upheld the CESTAT's decision, as no substantial question of law arose.
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• Appellate Tribunal Supports Solar Panel Importer's Classification, Overturns Revenue Authority's Decision.

  Case-Laws - AT : Classification of imported Poly Crystalline Silicon (C-Si) and Solar Photovoltaic Modules (Solar Modules) under the Customs Tariff Act. The key points are: The burden of proving classification lies with the revenue authorities. The test report from IIT Kanpur, relied upon by the authorities, was inconclusive and could not determine if the solar modules had bypass diodes, a crucial factor for classification. The authorities failed to substantiate their stand of classifying the imported solar modules under CTH 8501, while the appellant provided evidence supporting classification under CTH 8541. The department cannot take a contradictory stand without evidence, especially when it goes against the CBIC's clarification, which is binding. The demand u/s 28 cannot be confirmed in the absence of finalized assessment. The Appellate Tribunal ruled that the Solar Panels imported by the appellant merit classification under CTH 8541, setting aside the impugned orders and allowing the appeal.
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• Gold trade defense overlooked, invoices' authenticity unexamined. Cryptic order lacking reasoning, facts ignored.

  Case-Laws - AT : Tribunal held Adjudicating Authority's order cryptic, failing to examine appellants' defense regarding legitimate procurement and supply of gold as business transaction. Authority did not evaluate evidence u/s 108, authenticity of duty-paid invoices, or assayer's disclaimer on foreign origin. Passing common order without appreciating individual facts and evidence amounts to non-application of mind, violating principles of natural justice. Matter remanded to Original Authority for fresh adjudication as impugned order lacked reasoning, not a speaking order. Appeal allowed by way of remand to Adjudicating Authority.
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• Customs Duty Exemption Reevaluated: Impact of Depreciation Clause on Imports Before and After 2017 Amendment.

  Case-Laws - AT : This case deals with the applicability of customs duty exemption under Notification No. 12/2012-Cus for imports made before and after its amendment by Notification No. 06/2017-Cus, and the applicability of depreciation provisions under Clause (e) of Condition 40A post-amendment. The key points are: Prior to the amendment, the exemption was available without any depreciation clause, as per the CLOUGH ENGINEERING LTD. case. After the amendment, duty became payable on leftover goods with prescribed depreciation rates. The confiscation demand and penalties were set aside, as the notification itself foresaw the possibility of leftovers and disposal. The case was remanded for fresh adjudication considering the depreciation provisions for post-amendment imports.
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• Duty refund denied for insufficient evidence of non-passing; Flawed orders set aside, assessee's case upheld.

  Case-Laws - AT : Refund claim governed by unjust enrichment principles under Customs Act, 1962. Documentary evidence insufficient to rebut statutory presumption of passing on duty incidence. Flaws in orders: Non-consideration of assessee's evidence, improper recovery direction without following due process, misapplication of Supreme Court decision on different context. Certificate attesting transfer to receivables sufficient to negate unjust enrichment. Original authority's order restored, appellate order set aside for lack of validity.
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DGFT

• Annual RoDTEP Return filing mandatory for exporters claiming over Rs. 1cr duty remission.

  Circulars : This public notice notifies the procedure for filing Annual RoDTEP Return (ARR) to assess taxes/duties incurred on inputs used in export production. Key points are: Exporters with RoDTEP claims exceeding Rs. 1 crore annually must file ARR by March 31 of next financial year. Non-filing will lead to denial of RoDTEP benefits after grace period. Delayed filing attracts composition fees. Records substantiating duty remission claims in ARR must be maintained for 5 years. ARR filings may be scrutinized to revise RoDTEP rates or recover excess claims. The format for submitting ARR data product-wise is provided, capturing details like taxes paid on inputs, transportation, electricity, fuel, stamp duty etc.
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• Streamlined export procedure for Indian sesame seeds to USA.

  Notifications : This notification outlines the procedure for exporting sesame seeds to the United States of America (USA). The key points are: India Oilseeds & Produce Export Promotion Council (IOPEPC) is designated as the competent authority to issue export certification. IOPEPC shall issue export certification within two working days upon receiving a 'Certificate of Analysis' from a NABL accredited laboratory. The detailed procedure is outlined in the document 'Procedure for Control of Contamination of Residues of Pesticides in Sesame Seeds for Export to United States of America (USA)'. The Export Policy conditions shall come into effect from 16th November 2024.
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IBC

• NCLAT Missteps in Settlement Approval, Sidesteps CIRP Withdrawal Rules, Supreme Court Overturns Decision.

  Case-Laws - SC : The NCLAT erred in invoking its inherent powers u/r 11 of the NCLAT Rules 2016 to approve a settlement between the second respondent and the Corporate Debtor, circumventing the prescribed procedure for withdrawal of CIRP u/s 12A and Regulation 30A. The inherent powers cannot override specific legal provisions exhaustively providing a procedure. The NCLAT failed to provide reasons for deviating from the withdrawal procedure or the urgency necessitating approval without following due process. Once CIRP commenced, it became a collective proceeding involving all creditors as stakeholders. The NCLAT inadequately addressed the appellant's objections regarding the ongoing ED investigation against the respondents and attempts by the Corporate Debtor to dissipate assets. Despite the appellant not being a party to the settlement, it has locus standi as an aggrieved person u/ss 61 and 62 of the IBC to challenge the NCLAT order before the Supreme Court. The impugned NCLAT judgment is set aside.
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• Insolvency Proceedings Upheld: Debt Acknowledged in Financials & Settlement Proposal; Appeal Dismissed as Time-Barred.

  Case-Laws - SC : Initiation of CIRP proceedings was challenged on the ground of limitation, which was rejected by the Adjudicating Authority and NCLAT based on the acknowledgement of debt in the financial statements and auditor's report of the Corporate Debtor for the year ending 31.03.2017. The entries in the balance sheets, along with Note 3.4 mentioning defaults in repayment of term loans, interest, and long-term borrowings, were considered clear acknowledgments of debt. The Corporate Debtor's One Time Settlement (OTS) proposal to UCO Bank, acknowledging prior debts owed, was also considered an acknowledgment of debt, relying on the Supreme Court's judgment in Lakshmirattan Cotton Mills Co. Ltd. case. The findings of the Adjudicating Authority and NCLAT were upheld as correct in law and fact, and the appeal was dismissed.
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• Claim Dismissed: Unsubmitted Claims Extinguished in Insolvency Resolution Process; Appeal Denied Without Costs.

  Case-Laws - HC : The appellant's claim for Rs. 9.21 crores, arising from the termination of an agreement due to non-renewal of a performance bank guarantee, was not considered by the Resolution Professional during the insolvency resolution process. Despite the claim being returned for re-submission, the appellant failed to take any action. The Resolution Plan was approved by the NCLT, extinguishing any remaining claims. Although the appellant's second claim was disbursed by the successful Resolution Applicant, the appellant did not object or challenge the Resolution Plan. The court held that once a Resolution Plan is approved, any remaining claims are deemed extinguished, as per the Supreme Court's ruling in Ghanashyam Mishra. The appellant's inaction resulted in the extinguishment of their claim, and the reliance on Greater Noida Industrial Development Authority was inapplicable, as the appellant did not challenge the Resolution Plan. The appeal was dismissed without any order on costs.
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• Tribunal Rules Escrowed Mine Closure Funds Belong to Debtor, Must Be Included in Insolvency Process as CIRP Cost.

  Case-Laws - AT : The Appellate Tribunal held that the Annual Mine Closure Cost (AMCC) deposited by the Corporate Debtor in an Escrow Account belongs to the Corporate Debtor and cannot be kept aside from the Corporate Insolvency Resolution Process (CIRP). The Escrow Agreement provided for the return of the entire AMCC amount to the Corporate Debtor after completing mine closure activities. Categorizing AMCC as a pre-CIRP due and allowing its recovery independently would contravene the moratorium u/s 14 of the Insolvency and Bankruptcy Code (IBC). AMCC should be considered a CIRP cost u/s 5(13) of the IBC for running the Corporate Debtor as a going concern. The Appellate Tribunal set aside the Adjudicating Authority's direction to keep AMCC aside, as it would give the Respondents an undue preference over other creditors, defeating the purpose of CIRP. The appeal was allowed, modifying the impugned order.
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SEBI

• SEBI Updates CAF for FPIs in IFSCs: Allows 100% NRI/OCI/RI Contributions, Requires Detailed Reporting for Transparency.

  Circulars : This circular from SEBI modifies the Common Application Form (CAF) for Foreign Portfolio Investors (FPIs) based in International Financial Services Centres (IFSCs) in India. It allows up to 100% aggregate contribution by NRIs, OCIs, and RIs in the corpus of such FPIs, subject to certain conditions. The key points are: 1) A new option is added in the CAF allowing FPIs to confirm that aggregate NRI/OCI/RI contributions exceed 50% of the corpus, while ensuring compliance with regulations. 2) FPIs must provide details of NRI/OCI/RI constituents, their ownership/economic interest, PAN copies or acceptable alternative documents. 3) For non-individual constituents controlled by NRIs/OCIs/RIs or where they hold 50%+ ownership/economic interest, similar details must be provided. 4) Where PAN is unavailable, specific documents like passport copies, OCI cards, government IDs must be submitted along with declarations. 5) The circular is applicable immediately, and depositories must update their CAF modules accordingly. 6) It aims to protect investors and promote securities market development under SEBI Act and FPI Regulations.
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VAT

• State fails to adjust tax refunds against prior dues without proper orders.

  Case-Laws - HC : The authorities under the Maharashtra Settlement of Arrears of Taxes Act, 2022 cannot exercise powers granted under the MVAT Act. The Settlement Act is a self-contained code and does not empower authorities to import provisions like Section 50 of the MVAT Act for determining the settlement amount. Adjusting refunds against dues of different years without an order u/s 50 of the MVAT Act is without jurisdiction. In the absence of such an order, invoking review powers u/s 15 of the Settlement Act is unjustified. The impugned review orders adjusting refunds against arrears are quashed, and the refund amount is directed to be credited back with interest within four weeks.
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Service Tax

• Revenue authorities bound by earlier orders on identical facts; refund claim to be re-adjudicated considering precedents.

  Case-Laws - AT : The CESTAT held that the revenue authorities cannot adopt an inconsistent stand in subsequent proceedings when the facts are identical, unless there is a change in law. The authorities failed to base their decision of rejecting the refund claim on any change in law or circumstance, and ignored the appellant's submission regarding earlier orders granting refunds for the same service. The Tribunal remanded the matter back to the Adjudicating Authority for de novo adjudication, considering the earlier orders granting refunds, the appellant's submissions, and the laws applicable at the relevant time, after providing a proper opportunity of hearing to the appellant.
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Case Laws:

• GST

• 2024 (10) TMI 1245
  Constitutional validity of exclusion (iii) to Explanation to section 17 of the CGST Act - ultra vires to the provisions of the CGST Act or not - applicability of exclusion (iii) to Explanation to section 17 of the CGST Act in case of service providers - HELD THAT:- The authorities under the Advance Ruling have primarily analysed the matter from the perspective of definitions of plant and machinery by relying upon various dictionaries. Though there are some references to the functions, it is not as if the matter has been examined by focusing on the functionality test. The Hon ble Supreme Court, in its judgment and order dated 3 October 2024 [ 2024 (10) TMI 286 - SUPREME COURT ], has held that in each such case, a fact-finding enquiry is contemplated. Such an enquiry is necessary, inter alia, because such matters will have to be decided by recourse to the functionality test. Possibly, when the Advance Ruling Authorities decided the matter, the Petitioner had yet to establish the requisite infrastructure - Respondents, is also justified in contending that the scope of judicial review in such matters is relatively minimal and, therefore, typically, determination of questions of fact not entered into unless a case of perversity is made out. However, that does not mean that a party should be deprived of an opportunity to place all relevant facts before the fact-finding authority given the circumstances arising from the Hon ble Supreme Court s judgment. The order made by the Authority for Advance Ruling and the order dated 7 December 2019 made by the Appellate Authority set aside - matter remanded to the AAR for a fresh ruling in the light of the observations made by the Hon ble Supreme Court.

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• 2024 (10) TMI 1244
  Violation of principles of natural justice - appeal preferred by the petitioner was dismissed without hearing - time limitation - HELD THAT:- A perusal of the order indicates that the appeal was dismissed as the document which were required to be filed were not filed and the appellant was not even present before the appellate authority. Considering the provisions contained in Section 107(8) read with relevant rules and there being no provision to dismiss the appeal for want of prosecution and following the judgment of this court in the case of M/S RAJDHANI ARMS CORPORATION, LUCKNOW THRU. PROPREITOR, SEEMA SARNA VERSUS COMMISSIONER OF COMMERCIAL TAX U.P., COMMERCIAL TAX BHAWAN, LUCKNOW [ 2024 (7) TMI 1391 - ALLAHABAD HIGH COURT] , the impugned order dated 20.01.2024 is set aside. The appellate authority is directed to pass a fresh order in accordance with law after giving an opportunity of hearing to the petitioner. To avoid any further delay, it is directed that the petitioner shall be present himself or through his authorized representative before the Tribunal on 06.11.2024 at 12:00 Noon. In case the petitioner does not present himself, the appellate authority would be at liberty to decide the appeal on merits in accordance with law. Petition disposed off.

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• 2024 (10) TMI 1243
  Parallel proceedings - both the State GST Authorities and Central GST Authorities are proceeding against the petitioner with regard to the same assessment years - HELD THAT:- It is clear from the factual matrix that Financial Year 2017-18, the actions were initiated by the respondent no.3 while for the remaining years the action was first initiated by the Central GST. In light of the same, the Central GST is directed to continue with its investigation with regard to the show cause notice given to them except for the Financial Year 2017-18, which has already been completed by the State GST. Petition disposed off.

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• 2024 (10) TMI 1242
  Validity of SCN - Input Tax Credit (ITC) availed on construction goods - construction of building for leasing out to M/s Shishukunj Knowledge Society for running school - HELD THAT:- The matter of CHIEF COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX ORS. VERSUS M/S SAFARI RETREATS PRIVATE LTD. ORS. [ 2024 (10) TMI 286 - SUPREME COURT] is relating to the construction of the mall. The Apex Court has held that each mall is different, therefore, in each case fact finding enquiry is contemplated. The High Court has not decided whether the mall in question will satisfy the functionality test of being a plant. The matter has been remanded back to decide, whether, on facts, the mall in question satisfies the functionality test so that it can be termed as a plant within the meaning of bracketed portion in Section 17 (5) (d). The same applies to warehouses or other buildings except hotels and cinema theatres. The Apex Court has held that if the building in which the premises are situated qualifies for the definition of plant, ITC can be allowed on goods and services used in setting up the immovable property, which is a plant. The petitioner was required to satisfy adjudicating authority, whether the building in question qualifies for the definition of plant in order to avail the ITC, but the petitioner instead of submitting all these necessary documents chosen not to appear before the authority and directly approached this Court. Now the final order has been passed, which has not been challenged in this petition. The petitioner is having remedy to file an appeal against the said order. The petitioner is free to file an appeal before the appellate authority, wherein the petitioner may file all the necessary documents and rely on the law laid down by the Apex Court in the case of M/s Safari Retreats Private Ltd. Petition dismissed.

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• 2024 (10) TMI 1241
  Demand upheld with penalty and interest being upheld - rejection of refund claim - HELD THAT:- Issue notice. List after four weeks.

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• 2024 (10) TMI 1240
  Challenge to SCN demanding input tax credit availed by the Petitioner along with interest and penalty - ITC in respect of the IGST paid on manpower supply services received by the Petitioner during the period 2017- 2022 - HELD THAT:- A perusal of the material on record and the submissions made by both sides will clearly indicate that prior to the State GST Authorities issuing the impugned Show Cause Notices at Annexures A, Al and A2 is concerned, the Central GST Authorities had already initiated proceedings as against the petitioner and consequently, in the light of Section 6(2)(b) of the KGST Act, 2017 which contemplates a complete bar / embargo on the State GST Authorities to initiate proceedings in a situation where the Central GST Authorities had already initiated proceedings as against the petitioner in respect of the same subject matter. The impugned Show Cause Notices at Annexures A, Al and A2 are clearly illegal, arbitrary and without jurisdiction or authority of law and contrary to the aforesaid statutory provisions and the same deserve to be quashed. The challenge to the impugned Show Cause Notice at Annexure-B can be disposed of by directing the petitioner to submit a suitable reply together with the relevant documents and by directing the concerned respondent Nos.1, 3 and 4, Central GST Authorities to consider the same and proceed further in accordance with law bearing in mind the observations made (Section 13(3)(C) of the CGST Act, 2017, Section 128A of the CGST Act, 2017, Circular No. 211/5/24- GST dated 26.06.2024 etc.). The impugned Show Cause Notices at Annexures A, A1 and A2 dated 05.08.2023, 05.08.2023 and 06.10.2023, respectively, are hereby quashed - The petition is allowed in part.

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• 2024 (10) TMI 1239
  Levy of penalties u/s 122 and 129 of the CGST/SGST Acts - Expiry of the e-way bill - mens rea in penalty imposition - HELD THAT:- In the facts of the present case, the e-way bill was generated at 10:00 P.M on 23.10.2021 for transporting goods over a distance of about 107 km and the e-way bill was therefore valid for a period of 24 hours, i.e., till 10:00 P.M on 24.10.2021. The third proviso to Sub-rule (10) of Rule 138 of the CGST/SGST Rules indicates that the petitioner had time till 06:00 AM on 25.10.2021 to extend the validity of the e-way bill. However, the petitioner had not done so and the vehicle was intercepted at 09:59 A.M on 25.10.2021. Technically, there is a violation of the law by the petitioner and the reason stated for transporting goods without revalidating the e-way bill (see paragraph 4 of the writ petition) may not be supported by any material. However, the question remains as to whether this should automatically lead to the initiation and conclusion of the proceedings under Section 129 of the CGST/SGST Acts resulting in the imposition of a huge amount as tax and penalty. The learned Government Pleader may be right in contending that there is justification for the initiation of proceedings under Section 129 of the CGST/SGST Acts in the facts of this case. However, once a plausible explanation is provided by the transporter/assessee, and it is found that there is no attempt to evade any tax, the question remains as to whether the proceedings must thereafter culminate in an order under Section 129 of the CGST/SGST Acts imposing the maximum penalty in terms of the provisions contained in Section 129 of the CGST/SGST Acts. While the initiation of the proceedings under Section 129 of the CGST/SGST Acts, in the facts of this case, cannot be found to be without jurisdiction, the fact remains that once the transporter/assessee had offered an explanation and had demonstrated that there was no attempt to evade tax and in the absence of any finding of an attempt to evade tax, the officer should have imposed a penalty as contemplated by the provisions of Section 122 (1) (xiv) of the CGST/SGST Acts only, without imposing penalty as contemplated by the provisions of Section 129 of the CGST/SGST Acts. Coming to the judgment of a Division Bench of this Court in Daily Express [ 2019 (3) TMI 596 - KERALA HIGH COURT] it has to be held that the decision follows the view taken by the same bench in Indus Towers Ltd [ 2018 (7) TMI 1181 - KERALA HIGH COURT] . It no doubt takes the view that in a case covered by Section 129 and in view of the non-obstante clause neither the general discipline in the imposition of penalties in Section 126 nor the provisions of Section 122 would bar the imposition of penalty under Section 129. It is declared that the provisions of Section 129 of the CGST/SGST Acts do not authorise the imposition of tax/penalty as contemplated by the provisions of Section 129 (1) (a) or Section 129 (1) (b) in cases where only minor discrepancies are noticed and such penalty can be imposed only for violations which may lead to evasion of tax or where the transport was with an intent to evade tax or in cases of repeated violations (even of a minor nature). In other cases, the authorities will impose penalties having due regard to the provisions of Sections 122 and 126 of the CGST/SGST Acts. In the facts of the present case, this Court is of the considered opinion that a penalty of Rs. 10,000/-, as contemplated by the provisions of Section 122 (1) (xiv) of the CGST/SGST Acts can be imposed. On payment of the penalty as directed above, the Ext.P7 bank guarantee produced by the petitioner shall be released to it. Petition disposed off.

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• 2024 (10) TMI 1238
  Dismissal of appeal as time barred - condonation of delay in filing appeal - HELD THAT:- The impugned order is set aside and the matter is remitted back to the Appellate Authority to decide the appeal afresh in accordance with law. The Appellate Authority shall decide the issue with regard to the date of filing of the appeal. If there is delay of less than thirty days, the Appellate Authority shall give an opportunity to petitioner for seeking condonation of delay. Petition disposed off by way of remand.

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• 2024 (10) TMI 1237
  Violation of principles of natural justice - SCN and other communications were uploaded in the view additional notices and orders tab in the GST portal and not communicated to the petitioner through any other mode - petitioner submits that the petitioner is in a position to explain each defect confirmed in the impugned order, if provided an opportunity - HELD THAT:- On examining the impugned order, it is evident that the tax proposals were confirmed because the petitioner did not file a written objection to the show cause notice or attend the personal hearing. In view of the assertion that such non participation was on account of not being aware of proceedings, the interest of justice warrants reconsideration subject to putting the petitioner on terms. The impugned order dated 28.12.2023 is set on condition that the petitioner remits 10% of the disputed tax demand, as agreed to, with in fifteen days from the date of receipt of a copy of this order. With in 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 1236
  Classification of lease as a supply of services or a sale of land under the Central Goods and Service Tax Act, 2017 - HELD THAT:- Issue Notice returnable on 3rd July, 2024. There shall be ad-interim relief.

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• 2024 (10) TMI 1235
  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 Odisha Goods and Services Tax Rules (OGST 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 disposed off.

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• 2024 (10) TMI 1234
  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 Odisha Goods and Services Tax Rules (OGST 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 disposed off.

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• 2024 (10) TMI 1233
  Violation of principles of natural justice - it is submitted that the impugned order is vitiated by non-consideration of material documents filed by the petitioner - HELD THAT:- The reply dated 24.01.2024 from the petitioner clearly indicates that six volumes of documents containing several material documents such as purchase orders, tax invoices, e-way bills, weighment slips, bank statements, etc. were submitted by the petitioner. Although the impugned order contains a discussion on the e-way bills, there is no discussion on the other documents submitted by the petitioner. No reason is contained in the impugned order for rejecting such documents or for concluding that such documents were fabricated. Therefore, the matter requires reconsideration. In order to protect revenue interest to an extent, it is necessary to put the petitioner on terms. On instructions, learned counsel for the petitioner agrees that the petitioner would remit 5% of the disputed tax demand, as a condition for remand. The impugned order dated 02.04.2024 is set aside on condition that the petitioner remits 5% of the disputed tax demand as agreed to with in two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit an additional reply within the said period - Petition disposed off.

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• 2024 (10) TMI 1232
  Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - inadvertent error while filing GSTR 3B returns - HELD THAT:- On examining the impugned order, it is evident that the tax proposal related to non payment of RCM. By taking into account the assertion that such tax proposal arose out of an inadvertent error as also the assertion that the petitioner could not participate in proceedings because the petitioner was unaware of such proceedings, the interest of justice warrants re-consideration by putting the petitioner on terms. The impugned order dated 26.12.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand with in two weeks from the date of receipt of a copy of this order. With in 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 1231
  Legality and validity of the impugned notice as well as impugned order of confiscation issued by the respondent authority under Section 130 of the Central Goods Service Tax Act, 2017 - detention of vehicle and the goods under Section 129 of the GST Act - HELD THAT:- Issue Notice, returnable on 31st July, 2024. To be heard with Special Civil Application No.8353 of 2022. By way of ad-interim relief, goods and conveyance which are detained by the respondent authority shall be released on the condition that The goods and conveyance shall be released on payment of Rs. 03,28,446/- by the petitioner and submission of bond of the value of Rs. 32,84,454/-.

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• 2024 (10) TMI 1230
  Condonation of delay in filing appeal - only ground on which the impugned order has been passed is that the appeal was filed beyond the time limit prescribed under Section 117 of the TNGST Act, 2017 - Cancellation of GST Registrations - returns not filed for a continuous period of 6 months - Section 29 of the TNGST Act, 2017 r/w Rule 22 of TNGST Rules - HELD THAT:- The issue involved in this Writ Petition is squarely covered by the decision of this Court rendered in TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. [ 2022 (2) TMI 933 - MADRAS HIGH COURT] where it was held that The petitioners are directed to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid. The impugned order passed by the second respondent, dated 15.02.2023, is set aside. The petitioner is directed to comply with the above requirements. Subject to the petitioner complying with the above requirements, the registration of the petitioner shall be restored - Petition allowed.

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• 2024 (10) TMI 1229
  Waiver of interest and penalty - Challenge to demand made by Annexure-P1 series which is dated 02.12.2021 - HELD THAT:- The petitioner admittedly did not file any appeal from the above order and now the same is time barred. The petitioner s contention is that as of now there is some waiver of interest and penalty insofar as the subject assessment year, as decided by the GST Council. If the same is applicable, the petitioner would have to first approach the Assessing Authority with the orders of the GST Council and it is not for the petitioner to seek the remedy under Article 226 peremptorily. The writ petition would stand rejected without any observations on the claim of waiver, which the petitioner would have to convince the Assessing Authority if the same is avoidable.

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• 2024 (10) TMI 1228
  Exemption from service tax - contention of the petitioner is that the petitioner engages only in government contracts which is exempted from the levy of service tax - HELD THAT:- The question of whether the various contracts entered into by the petitioner is covered under the exemption notification is a question both on facts and law which has to be agitated before the appellate authority. Petition dismissed.

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• 2024 (10) TMI 1227
  Legality and validity of the impugned notice issued by the respondent authority under Section 130 of the Goods Service Tax Act, 2017 - detention of vehicle and the goods under Section 129 of the GST Act - HELD THAT:- Issue Notice, returnable on 31st July, 2024. To be heard with Special Civil Application No.8353 of 2024. By way of ad-interim relief, goods and conveyance which are detained by the respondent authority shall be released on the condition that The goods and conveyance shall be released on payment of Rs. 13,68,438/- by the petitioner and submission of bond of the value of Rs. 38,01,216/-.

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• 2024 (10) TMI 1226
  Violation of principles justice - petitioner s reply was not taken into consideration while arriving at the tax liability - mismatch between the GSTR 3B returns and the auto populated GSTR 2A - HELD THAT:- On examining the impugned order, it is evident that the petitioner s reply was construed as vague and not trustworthy because the petitioner failed to submit documents to reconcile the mismatch. However, the assessing officer did not take into consideration the RCM adjustment referred to by the petitioner. Therefore, re-consideration is warranted in the interest of justice by putting the petitioner on terms. The impugned order dated 31.10.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand with in fifteen days from the date of receipt of a copy of this order. With in the said period, the petitioner is permitted to submit an additional reply along with relevant documents - petition disposed off.

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• 2024 (10) TMI 1225
  Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - HELD THAT:- On examining the impugned order, it is evident that the tax proposal was arrived at on best judgment basis because the petitioner did not respond to the notice or appear at the personal hearing. Since the petitioner was not heard before the order was issued and the petitioner asserts that he was unaware of proceedings, the interest of justice warrants reconsideration albeit by putting the petitioner on terms. The impugned order dated 15.12.2022 is set aside on condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. With in such period, the petitioner is permitted to reply to the notice - Petition disposed off.

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• 2024 (10) TMI 1224
  Time Limitation - Rejection of appeal on the ground that it was filed beyond the period of limitation - mismatch between the petitioner s GSTR 3B return and the GSTR 1 statement - HELD THAT:- On examining the order in original, it is evident that the tax proposal related to a mismatch between the petitioner s GSTR 3B return and the GSTR 1 statement. Such tax proposal was confirmed because the petitioner did not reply to the show cause notice or appear at the personal hearing. In the affidavit in support of this writ petition, the petitioner has stated that he is a small dealer in optical devices and was unable to monitor the portal especially in view of his son s kidney ailment. In these facts and circumstances, albeit by putting the petitioner on terms, it is just and appropriate that the petitioner be provided an opportunity to contest the tax demand on merits. Petition is disposed of without any order as to costs by setting aside the order in original dated 24.08.2023 and remanding the matter to the 2nd respondent for reconsideration. This is subject to the petitioner remitting an additional 5% of the disputed tax demand.

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• 2024 (10) TMI 1223
  Breach of principles of natural justice - GST compliances had been entrusted to a consultant and that such consultant did not inform the petitioner about proceedings culminating in the impugned order - mismatch between the petitioner s GSTR 3B returns and the auto populated GSTR 2A - H ELD THAT:- On examining the impugned order, it is evident that the tax proposal was confirmed because the petitioner did not reply to the show cause notice or attend the personal hearing. By taking note of the assertion that the petitioner could not participate in proceedings on account of not being aware of the same, the interest of justice warrants that an opportunity be provided to the petitioner to contest the tax demand on merits. The petitioner stated that a sum of Rs. 4,09,604.87/- was appropriated from the bank account and the bank statement has been placed on record to substantiate such contention. Subject to verification of this appropriation, revenue interest stands secured to that extent. The impugned order dated 12.12.2023 is set aside subject to verification that a sum of Rs. 4,09,604.87/- was appropriated from the petitioner s bank account towards the tax demand under the impugned order. If not, the petitioner shall remit 10% of the disputed tax demand with in two weeks from the date of receipt of a copy of this order - petition disposed off.

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• 2024 (10) TMI 1222
  Violation of principles of natural justice - sufficient opportunity was not provided to the petitioner to contest the tax proposal on merits - tax liability imposed in respect of the mismatch between the petitioner s GSTR 3B return and the auto populated GSTR - HELD THAT:- The petitioner s reply dated 11.12.2023 is on record. Apart from referring to circular No.183 and pointing out that GSTR 2A was notified by circular issued on 11.11.2019, no other documents were enclosed with such reply. The tax proposal was confirmed in such circumstances. Since learned counsel for the petitioner submits that the petitioner is in a position to establish that only eligible ITC was claimed, the interest of justice warrants that another opportunity be provided to the petitioner by putting the petitioner on terms. The impugned order dated 31.12.2023 is set aside on condition that the petitioner remits 15% 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 additional documents, if any - petition disposed off.

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• 2024 (10) TMI 1221
  Challenge to impugned orders passed under Section 73 of the TNGST Act, 2017 - non-service of SCN - case of the petitioner is that although intimation in DRC-01A and DRC 01 was issued, DRC-01 did not accompany any show cause notice - Violation of principles of natural justice - HELD THAT:- Having considered the submissions of the learned counsel for the petitioner and the learned counsel for the respondents, it is evident that the impugned orders have been passed in violation of principles of natural justice. Considering the same, the impugned orders are quashed and the same shall be treated as addendum to the notice in DRC-01. The petitioner shall file a reply to the same with in a period of 30 days from the date of receipt of a copy of this order. It is expected that the respondent will complete the proceeding with in a period of 3 months thereafter. Petition allowed.

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• 2024 (10) TMI 1220
  Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - alleged mismatch between the petitioner s GSTR 3B returns and the auto populated GSTR 2A - HELD THAT:- On examining the impugned order, it is evident that the tax proposal pertains to a mismatch between the petitioner s GSTR 3B returns and the auto populated GSTR 2A. Such tax proposal was confirmed because the petitioner did not respond to any of the notices. Since the petitioner asserts that she could not respond on account of not being aware of proceedings, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits albeit by putting the petitioner on terms. On instructions, learned counsel for the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand. He makes a request that the sum of Rs. 31,433/- paid by him may be adjusted and that he would make good the shortfall. The impugned order dated 05.10.2023 is set aside on condition that the petitioner remits, in the aggregate, 10% of the disputed tax demand after taking into consideration any remittance previously made in that regard. Such remittance shall be made with in two weeks from the date of receipt of a copy of this order - petition disposed off.

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• 2024 (10) TMI 1219
  Maintainability of appeal - requirement of pre-deposit - HELD THAT:- Being satisfied with the reasons stated and stated in the affidavit in support of the present case and also medical records enclosed along with this Writ Petition, this Court is inclined to exercise the discretion in favour of the petitioner to file an appeal within a period of 15 days from today as ordered subject to the petitioner depositing 25% of the disputed tax towards pre-deposit. In case along with aforesaid appeal and the said deposit, the petitioner approaches the first respondent, the appeal shall be entertained and disposed of on merits and in accordance with law without any reference to the limitation - Petition disposed off.

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• 2024 (10) TMI 1218
  Breach of principles of natural justice - service of SCN - impugned order and notices preceding such order were uploaded on the View Additional Notices and Orders tab on the GST portal and not communicated to the petitioner through any other mode - mismatch between the petitioner s GSTR 3B returns and the auto-populated GSTR 2A - HELD THAT:- On examining the impugned order, it is evident that each tax proposal dealt with therein was confirmed because the petitioner did not file a reply to the show cause notice. Since it is asserted that the petitioner could not participate in proceedings because of being unaware of proceedings, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits after putting the petitioner on terms. The impugned order dated 27.12.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. With in 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 1217
  Violation of principles of natural justice - materials placed on record by the petitioner were not duly considered - wrongful availment of ITC - HELD THAT:- On perusal of the impugned order, it is evident that the tax dues towards SGST and CGST were discharged by the petitioner. It also appears that 100% penalty was imposed under Section 74 without recording any reasons for invoking Section 74. In these circumstances, the matter requires re-consideration by putting the petitioner on terms. The impugned order dated 28.06.2023 is set aside on condition that the petitioner remits 10% of the cess demand under the impugned order with in two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a detailed reply to the show cause notice during the aforesaid period. Petition disposed off by way of remand.

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• 2024 (10) TMI 1216
  Jurisdiction - proper officer or not - whether the Joint Commissioner can be the appellate authority? - HELD THAT:- The issue whether the Joint Commissioner can be the appellate authority, is a question, which is pending consideration before this Court in a Writ Petition, which is fixed for 19.06.2024. However, in the present case, the summary order dated 13.05.2024, has been passed by the Deputy Commissioner, who is the proper officer, and against this order, an alternate remedy of filing an appeal is available. As per the GST Act, before the Appellate Authority, under sub-section (6) of section 107 of the GST Act, the appellant has to deposit 25% of the amount before the Appellate Authority. Under section 107 (6) of the GST Act, the order dated 17.05.2024, passed by the learned Single Judge, is being modified. The appellant will deposit 25% of the amount demanded from him by the proper officer vide order dated 13.05.2024, and thereafter, after depositing the said amount, the vehicle and the goods can be released. The appeal is disposed of.

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• 2024 (10) TMI 1215
  Breach of principles of natural justice - cancellation of petitioner s GST registration without proper opportunity to contest the tax demand - HELD THAT:- On examining the impugned order, it is evident that the tax proposal pertains to a comparison of the taxable supplies reported in the GSTR-3B returns of the petitioner and Form 26AS as well as the annual return. The impugned order records that the tax proposal is confirmed as the petitioner did not lodge objections. By taking into account the fact that the GST registration was cancelled and also the fact that the petitioner was not heard before the order was issued, it is just and appropriate to provide an opportunity to the petitioner to contest the tax demand on merits by putting the petitioner on terms. The impugned order dated 30.10.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to with in a period of two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.

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• 2024 (10) TMI 1214
  Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - mismatch between GSTR-3B and the auto-populated GSTR-2A - HELD THAT:- On examining the impugned order, it is clear that the confirmed tax proposal pertains to mismatch between the GSTR-3B returns and the auto-populated GSTR-2A. Such tax proposal was confirmed because the petitioner did not reply to the show cause notice. Therefore, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits, albeit by putting the petitioner on terms. The impugned order dated 07.07.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to with in two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is permitted to send a detailed reply to the show cause notice by enclosing all the relevant documents - Petition disposed off.

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• 2024 (10) TMI 1213
  Rate of tax - work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed invoiced before and after 01.01.2022 - work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India which is performed invoiced after 01.01.2022 but which is allotted before 01.01.2022 - service receiver within the meaning of Sec.2(93) of CGST/MGST Act in respect of amounts received as grants by MJP which are paid to the applicant on services provided before and after 01.01.2022 - appointment of MJP as an agency to implement water Supply schemes - legation of sovereign function enumerated in Sch. XI XII with in the frame work of Constitution of India so as to hold that MJP has performed the function entrusted under Article 248G 243W of the Constitution of India or not. What is the classification of the services supplied to Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, and its HSN/SAC Code and applicable entry in Notification No. 11/ 2017- Central Tax (Rate) dated 28 th June 2017? - HELD THAT:- The services supplied by the applicant are in nature of Technical Consultancy for Project Development and Management support services, and hence classifiable under SAC code -998399- Other professional, technical and business services n.e.c., under the head Business and Production Services covered at Sr No 21 (ii) in the Notification No 11/2017- Central Tax (Rate)- dated 28 th June 2017 and are taxable at rate of 18% (9% CGST SGST each), wherever exemption is not applicable. Wherever exemption is not applicable. Whether Services provided to MJP for the Constitutional function of State Central Governments, for which these Governments are liable to pay the consideration of contract, and as payment is made through PFMS, supplies are in fact made to the Central State Government? - HELD THAT:- The argument of the applicant that services provided to MJP for the Constitutional function of State Central Governments, for which these Governments are liable to pay the consideration of contract, and as payment is made through PFMS, supplies are in fact made to the Central State Government. Hence, even after deletion of the word Government Authorities with effect from 01-01-2022, from the notification entry number 3, the services provided by the applicant shall be eligible for benefit of exemption services provided by it to MJP, is not based on evidence, far-fetched and based on conjectures and surmises and very specious argument and hence rejected. Supply of services where Time of supply is on or before 31-12-2021 - HELD THAT:- Supply of services where Time of supply is on or before 31-12-2021. After Considering all the aforesaid facts, provisions of Law, issues and decision therein, there are no hesitation in holding the Technical Consultancy for Project Development and Management support services , provided by the applicant to the MJP for its Water supply schemes where time of supply is on or before 31-12-2021, are covered by the exemption entry at Sr No. 3 of the exemption notification No 12/2017-Central Tax (Rate), dated 28th June 2017. Supply of services where Time of supply is on or after 01-01-2022 - HELD THAT:- There are no hesitation in holding the Technical Consultancy for Project Development and Management support services , provided by the applicant to the MJP for its Water Supply schemes where time of supply is on or after 01-01-2022, are not covered by the entry at Sr No. 3 of the Notification No 12/2017-Central Tax (Rate), dated 28th June 2017. As the words or a Government Authority or a Government Entity , are omitted from the aforesaid Entry at Sr. No. 3. Whether appointment of MJP as an agency to implement water supply schemes amounts to delegation of sovereign function enumerated in Sch. XI XII within the framework of Constitution of India so as to hold that MJP has performed the function entrusted under Article 243G 243W of the Constitution of India? - HELD THAT:- Not answered, being out of purview of provisions of section 97 (2) of the GST ACT, 2017.

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• Income Tax

• 2024 (10) TMI 1246
  Rejection of application for grant of regular 80G as time barred - Need to file regular 80G registration within a period of six months therefrom provisional registration granted - HELD THAT:- As reading from para 7 of impugned order it as an undisputed fact that the appellant assessee was granted a provisional registration u/c (iv) of s/s (5) of section 80G of the Act by an order u/c (vi) of s/s (5) of section 80G of the Act by the CIT(E) on 16/02/2022. Therefore, there remains no reason to draw out appellant s case from claiming benefit of extended period for filing application for regular registration. The circular 08/2023 also clarified that the extended period upto 30/09/2023 shall apply even in cases, (i) where the application was rejected by the CIT(E) on or before issuance of this circular dated 24/05/2023 (ii) where due date for making/filing application has expired, on or before 30/09/2023. We find in similar facts circumstance in Shashvat Paediatric Care Foundation[ 2024 (3) TMI 1365 - ITAT PUNE] , Swachh Vapi Mission Trust [ 2024 (3) TMI 614 - ITAT SURAT] , TB Lulla Charitable Foundation[ 2024 (6) TMI 798 - ITAT PUNE] and Gujarat Hira Bourse[ 2024 (1) TMI 946 - ITAT SURAT] and Bhamashah Sundarlal Daga Charitable Trust [ 2023 (11) TMI 1210 - ITAT JODHPUR] Rejection of appellant s application on the ground of limitation in our considered view is without appreciating the facts in its entirety and devoid of subsisting circular (supra), hence deserves to be set-aside, ergo ordered accordingly. Non-compliance of notice seeking rectification of discrepancies and submission of copy of certificate granted u/s 12AB r.w.s. 12(1)(ac)(iii) of the Act - As we note that such notices were sent to email [email protected] belonging to a tax consultant who failed to intimate the same to the assessee for due compliance. Thus, the said non-compliance by the assessee was purely accidental undeliberate, which better can be complied only if the matter is restored back. In view hereof, without commenting on merits, we remand the matter back to the file of Ld. CIT(E) with a direction to treat appellant s application dt. 30/09/2023 as filed within the time limit prescribed u/c (iii) to first proviso to section 80G(5) of the Act r.w.c. 06/2023 (supra) and adjudicate the same on merits in accordance with law after according two effective opportunities.

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• 2024 (10) TMI 1212
  Inadvertent error on the part of the bank officials ignoring restraint orders - FIR registered for the offences punishable under the different provisions of the IPC on certain officials of the appellant-bank - continuation of the criminal proceedings against the appellant-bank - mens rea of the officials of the appellant-bank or failure to disclose the commission of any offence - restraint order was imposed in respect of Bank Lockers, Bank Accounts and Fixed Deposits - As submitted that access of the bank locker given is in violation of Section 132(2) of the IT Act would attract the offence under Section 409 read with Section 405 of the IPC HELD THAT:- In the present case, the FIR does not show that the appellant-bank had induced anyone since inception. For bringing out the offence under the ambit of Section 420 IPC, the FIR must disclose the following ingredients: (a) That the appellant-bank had induced anyone since inception; (b) That the said inducement was fraudulent or dishonest; and (c) That mens rea existed at the time of such inducement. The appellant-bank is a juristic person and as such, a question of mens rea does not arise. However, even reading the FIR and the complaint at their face value, there is nothing to show that the appellant-bank or its staff members had dishonestly induced someone deceived to deliver any property to any person, and that the mens rea existed at the time of such inducement. As such, the ingredients to attract the offence under Section 420 IPC would not be available. For bringing out the case under criminal breach of trust, it will have to be pointed out that a person, with whom entrustment of a property is made, has dishonestly misappropriated it, or converted it to his own use, or dishonestly used it, or disposed of that property. In the present case, there is not even an allegation of entrustment of the property which the appellant-bank has misappropriated or converted for its own use to the detriment of the respondent No.5. As such, the provisions of Section 406 and 409 IPC would also not be applicable. Since there was no entrustment of any property with the appellant-bank, the ingredients of Section 462 IPC are also not applicable. Likewise, since the offences under Section 206, 217 and 201 of the IPC requires mens rea, the ingredients of the said Sections also would not be available against the appellant-bank. FIR/complaint also does not show that the appellant-bank and its officers acted with any common intention or intentionally cooperated in the commission of any alleged offences. As such, the provisions of section 34, 37 and 120B of the IPC would also not be applicable. We find that the present case would squarely fall within categories (2) and (3) of the law laid down by this Court in the case of Bhajan Lal and others [ 1990 (11) TMI 386 - SUPREME COURT] The continuation of the criminal proceedings against the appellant-bank would cause undue hardship to the appellant-bank. The impugned judgment and order passed by the learned Single Bench of the High Court of Judicature at Patna is quashed and set aside.

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• 2024 (10) TMI 1211
  Maintainability of appeal in High Court - substantial question of law or not? - income tax officer disallowing expenses and determining income at a higher amount - as decided by HC [ 2024 (1) TMI 1336 - BOMBAY HIGH COURT] a reasoned order has been passed for allowing or disallowing the claim of the appellant. There is no question of substantial question of law when all the facts have been considered - HELD THAT:- Delay in refiling the special leave petition is condoned. No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is accordingly dismissed.

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• 2024 (10) TMI 1210
  TP Adjustment - comparable selection - M/s TCS E-Serve International Ltd., M/s TCS E-Serve Ltd. and M/s Infosys BPO Limited - inclusion of 3 comparables was essentially raised on the ground of the huge expenditure incurred by those entities in brand building and advertisement as also on account of the reputed brand value and profile of those entities which clearly resulted in higher profitability. HELD THAT:- We find that insofar as TCS E-Serve and Infosys BPO Limited are concerned, the Tribunal had in the appellant s own case pertaining to AY 2011-12 excluded those two entities from the list of comparables following the decision rendered by this Court in BC Management Services Pvt. Ltd. [ 2017 (12) TMI 255 - DELHI HIGH COURT] In AY 2011-12, TCS E-Serve International had been excluded from consideration by the TPO itself. The exclusion of the three comparables in question would clearly merit acceptance bearing in mind a subsequent decision rendered by this Court in PCIT v. Evalueserve Sez (Gurgaon) Pvt. Ltd [ 2018 (2) TMI 1750 - DELHI HIGH COURT] The appeal shall consequently stand allowed. The question as framed is answered in the affirmative and in favour of the appellant assessee.

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• 2024 (10) TMI 1209
  Correct head of income - rent income derived from properties - Income from house property or Income from Profits and Gains of Profession or Business - HELD THAT:- In the present case, it appears to be not in dispute that the only source of income for the assessee was the income derived from rent or amounts as received by the assessee from letting out its properties. The record indicates that the AO in the present case has not disputed the nature of the business of the assessee and more importantly, the income offered to tax in respect of all the relevant assessment years, (subject matter of different appeals) is derived from letting out various properties, and which is the business activity of the assessee, to earn such income, through its business, as seen from the main objectives, outlined in the memorandum of association. It is hence, not the case that the business of the assessee is of a nature that the income from house property is required to be treated as an incidental income not derived from its main business, when it is derived from its main business of letting out its properties. In our opinion, there is certainly a difference between the two situations, firstly where the main object of the assessee is to earn income from letting out properties, and secondly, where the assessee incidentally earns income apart from its main business i.e. from letting out its house properties, both these situations are totally distinct. Adverting to the law as laid down in Chennai Properties Investments Ltd. [ 2015 (5) TMI 46 - SUPREME COURT] it is clear that what must be borne in mind for the Court is to consider the main objective of the assessee as contained in the Memorandum of Association, and that the deciding factor, is not the ownership of land or leases but the nature of the activity of the assessee and the nature of the operations in relation to them. It is the main objective of the company which needs to be the focal point, to consider the business of the assessees in considering whether any income derived from such properties is the income from profits and gains of business or profession or the same would be required to be regarded as income from house property . In the present case, the income of the assessee is derived from letting out of the properties, which in fact, is the principal business of the assessee as seen from its main objectives of the assessee as contained in its memorandum of association, therefore, the assessee was correct in accounting such income under the head income from profits and gains of business , and not as income from house property . For such reasons, there was an apparent error of law in the Tribunal holding that the assessee s income is required to be treated as income from house property and not the income from profits and gains of business . The appeals need to succeed. Rent income derived by the assessee from lease of its properties was assessable as income from profits and gains of business. The questions of law as framed by this Court are answered in favour of the assessee and against the revenue.

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• 2024 (10) TMI 1208
  Non-deposit of the TDS amounts - according to the petitioners, such amounts were shown to have been deducted from the salary slips as issued to the petitioners - petitioners contend that it was not permissible for respondent No. 1 to issue such demand notices against the petitioners in view of clear provisions of Section 205 of the Income Tax Act, which bars any demand against the assessees - HELD THAT:- The mandate of Section 205 is absolutely clear that the assessee shall not be called upon to pay taxes himself to the extent to which tax has been deducted from the asessee s income. The object and purpose behind the provision is to the effect that when an obligation to deposit the tax as in the present case, is on the employer and if the employer has defaulted, the liability to pay such tax cannot be shifted so as to be foisted on the employee, who is in fact the beneficiary of the payment to be received from the employer and who would also become the beneficiary of the tax being deposited at source on his behalf. Such is the object of the provision. However, what the department has done is that without a warrant in law, the liability to pay such tax is being foisted on the petitioners, which is clearly in the teeth of Section 205 of the Income Tax Act. Thus, looked from any angle, it was not permissible for respondent No. 2 to raise any such demand against the petitioners. WP allowed.

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• 2024 (10) TMI 1207
  Disallowance u/s 14A - if no exempt income is earned by the Assessee - HELD THAT:- Clearly, there could be no disallowance of any expenditure u/s 14A of the Act if the assessee s income for the relevant assessment year did not include any income that was exempt from the limited tax. This issue is covered by the decision of this Court in Cheminvest Limited [ 2015 (9) TMI 238 - DELHI HIGH COURT ] as well as the recent decision in Alchemist Ltd. [ 2024 (8) TMI 1371 - DELHI HIGH COURT ] Concededly, the said explanation is applicable prospectively and thus, would be inapplicable to the assessment year in question (AY 2016-17). It is relevant to note that this Court had in Era Infrastucture (India) Ltd. [ 2022 (7) TMI 1093 - DELHI HIGH COURT ] held that the explanation would be applicable only prospectively and would have no retrospective operation. In the given facts of this case, where the assessee does not have any exempt income in the relevant assessment year, there is no allegation that any expenditure has been incurred on account of exempt income that would accrue or arise in future years. Thus, even if we accept which we do not that the explanation to Section 14A of the Act as introduced by the Finance Act, 2022 was applicable retrospectively, the same would have no application in the given facts. Decided in favour of assessee.

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• 2024 (10) TMI 1206
  Validity of reopening of assessment against dead assessee - notice issued on a dead person - Responsibility of legal representative - Assessee did not file return of income disclosing cash deposited in the bank account which had remained unexplained - HELD THAT:- Issue with regard to issuance of notice for reassessment u/s 148 of the Act on a dead person is no more res integra in view of the decision of Bhupendra Bhikhalal [ 2021 (3) TMI 892 - GUJARAT HIGH COURT] wherein notice issued u/s 153C of the Act against a dead person is held to be defective and consequently quashed and set aside. Continuing assessment proceedings after assessee death against legal representatives - Expression assessee includes every person who is deemed to be an assessee under any provision of the Act. Sub-section (3) of section 159 of the Act, postulates that the legal representative of the deceased shall, for the purposes of the Act, be deemed to be an assessee. Sub-section (2) of section 159 of the Act says that for the purpose of making an assessment (including an assessment, reassessment or re-computation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1). Thus, clause (a) of sub-section (2) of section 159 of the Act provides for the eventuality where a proceeding has already been initiated against the deceased before his death, in which case such proceeding shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased. In the present case, the proceeding under section 147 of the Act had not been initiated against the deceased before his death, and hence, clause (a) would not be applicable in the facts of this case. In the present case, the impugned notice under section 148 of the Act has been issued against the deceased assessee. In the opinion of this court, since this is not a case falling under clause (a) of subsection (2) of section 159 of the Act, the proceeding pursuant to the notice under section 148 of the Act issued to the dead person, cannot be continued against the legal representative. Revenue contended that issuance of the notice to the dead assessee is merely a technical defect which could be corrected u/s 292B - In the opinion of this court, here lies the distinction between those cases and the present case. In the relied upon cases, the legal representative, in response to the impugned notice, filed return of income and participated in the proceeding and then raised an objection to the validity of the proceeding and, therefore, the court held that this was a case of waiver and that a technical defect can be waived; whereas in this case, right from the inception the petitioner has objected to the validity of the notice and thereafter to the continuation of the proceeding and has at no point of time participated in the proceeding by filing the income tax return in response to the notice issued under section 148 of the Act. Had the petitioner responded to the notice by filing return of income, he could have been said to have participated in the proceedings, however, merely because the petitioner has informed the Assessing Officer about the death of the assessee and asked him to drop the proceedings, it cannot, by any stretch of imagination, be construed as the petitioner having participated in the proceedings. Assessee appeal allowed.

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• 2024 (10) TMI 1205
  Validity of reassessment proceedings post approval of resolution plan by NCLT - HELD THAT:- As pursuant to insolvency proceedings initiated under the Code, a resolution plan was approved by the Tribunal. It is also on record that the claims lodged by various parties were verified and admitted in the proceedings before NCLT. After consideration of the claims by all concerns the plan was approved. As relying on Ghanashyam Mishra [ 2021 (4) TMI 613 - SUPREME COURT ] in view of above clear provisions of law no person would be entitle to initiate or continue any proceedings in respect of any claim for any dues relating to the period prior to approval of resolution plan. In view of approval of resolution plan, all liabilities of all stakeholders including that of Government/ Statutory Authority shall stand extinguished after approval of the resolution plan. We therefore, deem it appropriate to quash and set aside the Assessment Order passed u/s 147 r.w.s. 144B of the Act as well as the demand notice issued for the Assessment Year 2013-14. The petition is accordingly allowed.

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• 2024 (10) TMI 1204
  Penalty u/s 271(1) - disallowance of long-term capital loss arise on account of slump sale as per slump sale agreement - HELD THAT:- As evident that the brought forward loss was not set off by the assessee. Thus, from the perusal of the evidence placed on record, it is evident that the very basis on which it was alleged that the entire transaction is an afterthought which is a trick to evade taxes and the long-term capital loss was added to the total income of the assessee is without any merits. Thus, we find that in the present case, the AO merely disagreed with the business transaction of the assessee whereby the proprietary concern was taken over by a company in which the assessee is a majority shareholder. Due to the long-term capital loss, which is the basis for the levy of the impugned penalty, there is no evasion of tax. We find that while examining the meaning of the term particulars in section 271(1)(c) as in CIT v/s Reliance Petroproducts (P) Ltd [ 2010 (3) TMI 80 - SUPREME COURT] held that mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. We are of the considered view that the levy of penalty under section 271(1)(c) of the Act in the facts of the present case is not justifiable, and accordingly the same is deleted. Appeal by the assessee is allowed.

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• 2024 (10) TMI 1203
  LTCG - exemption u/s. 54 towards investment in house property which was under construction and not completed - utilization of the capital gain in construction of a residential house - HELD THAT:- As relying on C. Gopalaswamy [ 2016 (6) TMI 643 - KARNATAKA HIGH COURT ] there is no infirmity in the decision of the CIT(A) in allowing the exemption u/s. 54 of the Act based on the amount utilised by the assessee towards construction of new house property where the construction is not complete. Appeal filed by the Revenue is dismissed.

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• 2024 (10) TMI 1202
  LTCG - Applicability of Section 50C - refence to the valuation officer - substitution of sale consideration with the stamp duty value - HELD THAT:- When the valuation officer is guilty of breach of the law by not submitting the valuation report within a reasonable time period thus for the breach of all such legal provisions, the lower authorities should not get some premium by enhancing the limitation period by leaving the assessment open with such condition for indefinite period. We are live to the issue that though the interest of revenue is vital, such interest cannot override considerations of probity and fairness in tax governance. A fair tax regime where no assessee is harassed is equally crucial. The reference was made to the valuation officer on 22.03.2021 and thereafter the assessment was completed on 18.04.2021 as by making reference of limitation for completing the assessment, the same cannot be extended now solely for want of the valuation report, at the same time, necessary steps should have been taken by the concerned officials to ensure that the report from the office of the valuation officer should reach to the office of the AO within a reasonable time period which both the lower authorities have miserably failed to do. If we allow the AO to modify the order after the receipt of the report from the valuation officer which otherwise is barred by limitations such action would not only reward the revenue with an enhanced limitation period but embolden unscrupulous tax officials to manipulate orders or otherwise mistreat the assessee. Therefore, we delete the addition made by AO who computed the amount of capital gains by taking Rs. 1,15,51,737/- being the value taken by stamp authorities as sale consideration as against Rs. 17,64,150/- as declared by the assessee - Appeal of assessee allowed.

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• 2024 (10) TMI 1201
  Estimation of income - Addition of Bogus Purchases - HELD THAT:- For the present year, it was incumbent on the part of Ld. AO to make necessary verification / enquiries from alleged bogus suppliers. AO could not proceed merely on the basis of findings of earlier years. The search has happened in the middle of the year and there are not adequate evidences to hold that the purchases made throughout the year are bogus purchases. Assessee is engaged in construction activity and would require purchase of raw material to carry out construction activities. In the light of all these facts and to plug the leakage of revenue, we estimate addition of 5% against alleged bogus purchases. Bogus sub-contractors expenses - Though the payment was made through banking channels, cash was received subsequently, Accounts Head, admitted that bogus expenses were booked to reduce the profit of the firm - HELD THAT:- For the present year, it was incumbent on the part of Ld. AO to make necessary verification / enquiries from alleged bogus sub-contractors. AO could not proceed merely on the basis of findings of earlier years. The search has happened in the middle of the year and there are not adequate evidences to hold that the expenditure as incurred throughout the year is bogus. Considering the nature of assessee s business, the assessee would require services of sub-contractors. In the light of all these facts and to plug the leakage of revenue, we estimate addition of 25% against this item. The same comes to Rs. 32,80,189/-. The impugned addition stands restricted to that extent. The corresponding grounds stands partly allowed. Addition of undisclosed interest income - alleged by Ld. AO that the assessee advanced undisclosed loans - HELD THAT:- We find that the quantum addition as made by Ld. AO for alleged loans in AY 2020-21 has been deleted by us in [ 2024 (10) TMI 1148 - ITAT CHENNAI] . This is consequential addition. Since the basis of the addition goes, the consequential addition would not have any legs to stand. Therefore, this addition stands deleted. The grounds raised by the assessee stand allowed.

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• 2024 (10) TMI 1200
  Validity of reopening assessment u/s 147 - no notice u/s 143(2) - HELD THAT:- Hon ble Delhi High Court in case of PCIT vs. Silver Line [ 2015 (11) TMI 809 - DELHI HIGH COURT] also held that merely because assessee participated in proceeding pursuance to notice under section 148, it would not obviate mandatory requirement of AO to issue a notice under section 143(2) before finalizing order of assessment. Further find Mukesh Mahavirprasad Singh [ 2021 (11) TMI 805 - ITAT SURAT] also held that issuance of notice under section 143(2) is a prerequisite of assuming jurisdiction under section 147/148 and section 292BB does not cure defect of non-issuance of notice u/s 143(2). Now again turning to the facts of case in hand qua issue under discussion, find that despite raising legal issue, the revenue has not placed on record any evidence/ material to show that notice under section 143(2) was ever issued by AO. The assessee has place sufficient material on record that despite raising specific request in ordinary as well as by virtue of invoking provisions of Right to Information Act, the AO failed to provide such information to the assessee that notice u/s 143(2) was issued by Assessing officer before passing assessment order. Appeal of the assessee is allowed.

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• 2024 (10) TMI 1199
  Late fee levied u/s 234E - delay filing statements of tax deduction at source u/s 200/206C r.w.s. 200A/206CB by the deductor/collector - HELD THAT:- The pre-amended section 200A of the Act as stood on 31.03.2013 i.e. F.Y. 2012-13 relevant to A.Y. 2013-14 in question, did not permit processing of TDS statement for default in payment of late fee u/s 234E - Hence, late fee charged for belated filing of TDS quarterly return could not be recovered by way of processing u/s 200A of the Act. As in Karnataka Grameen Bank [ 2023 (2) TMI 78 - ITAT BANGALORE] observed that amendment under section 200A providing imposition of fee if under section 234E could be computed at the time of processing of return and issue of intimation had come into effect only from 01.06.2015 and had only prospective effect and therefore, levy of late fee under section 234E would be illegal for statement of TDS in respect of period prior to 01.06.2015. Late fee for TDS quarterly statement under challenge in captioned appeals cannot be recovered by way of processing under section 200A - Therefore, the demand raised with reference to section 234E of the Act cannot be countenanced in terms of the pre-amended provision of S. 200A and hence, requires to be quashed.

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• 2024 (10) TMI 1198
  Disallowance u/s 80P(2)(a)(i) - interest received from Bank of Baroda (on FDR) - Assessee submitted that the assessee was carrying on business of providing credit facilities to its members and, therefore, it was eligible for deduction - also surplus funds were invested in FDRs with Bank of Baroda and, therefore, the interest received on such FDRs was part of business activity of the society and should have been allowed as deduction - HELD THAT:- The provision of Section 80P(2)(a)(i) of the Act stipulates that the income derived by a cooperative society engaged in carrying business of banking or providing credit facilities to its members shall be allowed as deduction. The assessee is not engaged in banking business. Further, the interest earned by the assessee on the FDRs made with Bank of Baroda cannot be held as income derived from providing credit facilities to its members. Therefore, the AO had rightly treated this interest income as ineligible for deduction u/s. 80P(2)(a)(i) of the Act. As in the case of State Bank of India [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] had categorically held that investing the surplus funds with State Bank of India was no part of business of providing credit to its members and that the character of the interest derived on FDRs with Banks was different from the income attributable to the business of the society of providing credit facilities to its members. No merit in the ground as taken by the assessee and interest derived by the assessee on FDR with Bank of Baroda was rightly disallowed u/s. 80P(2)(a)(i). Alternate claim of the assessee to allow pro-rata expenses on earning this interest - In the present case, the AO had already examined this contention of the assessee and given a categorical finding in the assessment order that the assessee was not eligible for proportionate interest expenditure as the assessee had not made any expenditure towards earning of this interest income from the above bank/institutions. In order to be eligible for any deduction in respect of earning of interest on FDRs, the assessee has to first establish that it had incurred certain expenditure for earning this income. No such evidence has been brought on record. Further, the assessee has also not controverted the findings as given by the AO. Under the circumstances, we do not find any merit in the claim of the assessee to allow proportionate expense. Disallowance u/s. 80P(2)(d) - AO held that the interest earned on the deposit with Cooperative Bank was not allowable as deduction - whether the investment made by the assessee, which is a cooperative society, with a cooperative bank, shall be considered as investment with other cooperative society in order to avail the deduction u/s 80P(2)(d) ? - HELD THAT:- It is clear from the amended order of Katlary Kariyana Merchant Sahkari Sarafi Mandali Ltd. [ 2022 (1) TMI 1309 - GUJARAT HIGH COURT] that the interest derived on FDRs with other cooperative banks will now be eligible for deduction u/s. 80P(2)(d) of the Act. In view of the amended order of the Jurisdictional High Court and also the fact that the cooperative banks are registered as cooperative societies, the disallowance of interest derived by the assessee from The Mehsana District Central Co-operative Bank Ltd. cannot be sustained. Therefore, the disallowance u/s. 80P(2)(d) of the Act is deleted. The ground taken by the assessee is allowed.

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• 2024 (10) TMI 1197
  Penalty u/s 234E - late filing of TDS Form 26QB - HELD THAT:-CIT(A) has given a finding that through the purchase consideration paid by the assessee was less than Rs. 50 Lakhs, the stamp duty valuation of the property was Rs. 1,41,46,475/-, which was more than 50 Lakhs and, therefore, the assessee could not have claimed exemption u/s.194IA(2). This observation of the CIT(A) is not found to be correct. The deduction of TDS u/s.194IA of the Act at the relevant point of time, when the transaction was made by the assessee, was required to be made on the amount of payment as made by the assessee. The provision for TDS u/s.194IA of the Act on the stamp duty value of the property was introduced w.e.f. 01.04.2022 i.e. after transaction was already completed by the assessee. It is found that the assessee was not liable to deduct any TDS u/s.194IA of the Act. And when the assessee was not liable to deduct the TDS under the provision of the Act, no penalty u/s.271E of the Act can be imposed for late filing of TDS return. Therefore, the penalty of as imposed u/s.234E of the Act is cancelled. Appeal of the assessee is allowed.

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• 2024 (10) TMI 1196
  Condonation of delay in filing appeal - Ex-parte dismissal of appeal by the first appellate authority - HELD THAT:- Assessee explaining the reasons of delay occurred in instituting the present appeal and reasons behind his non-compliance before first appellate authority capable of suggesting that such non-compliance was accidental undeliberate. After vouching the reasons behind such accidental undeliberate non-compliance, in the larger interest of justice we are of the view that the assessee for sufficient reasons prevented from representing himself before Ld. NFAC. Relying on judgement in St. Paul s Anglo Indian Education Society [ 2003 (2) TMI 41 - PATNA HIGH COURT] we are mindful to hold that the appellant assessee was deprived of reasonable opportunity and time to produce all relevant documents to substantiate his claims therefore any adjudication without such evidential documents would be violative of principle of natural justice and rendered itself irregular, thus deserving to be set-aside. In the event and in view of the aforestated discussion we deem it proper to accord one more opportunity to the assessee to place evidential material before the Ld. NFAC. Appeal allowed for statistical purposes.

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• 2024 (10) TMI 1195
  Ex-parte dismissal of appeal by Ld. NFAC - unexplained SBN deposited into bank account - assessee decided to settled the tax dispute through Vivad Se Vishwas Scheme - rejection of books and determination of income - as submitted due to confusion created by erstwhile tax consultant who advised to opt for VSVS in place of prosecuting pending appeal, the appellant could neither pressed evidential documents filed by her in support of grounds raised nor could communicate her choice to continue VSVS - HELD THAT:- The burden of proof that the SBN deposited into bank account do not represent the income was on the claimant assessee and failure to discharge such burden with convincing entrenched evidence may in view of decision in Shashi Garg Vs PCIT [ 2019 (7) TMI 410 - SC ORDER] entitles the Revenue to assess the same as unexplained income. However, we note that owning to bonafied confusion the appellant could cause no appearance on other hand disregarding the appellant s written submissions Ld. NFAC dismissed the appeal ex-parte. Having considered the facts of the case holistically, in the larger interest of justice, we deem it to grant one more opportunity to the assessee by remitting the file to the Ld. NFAC for de-novo adjudication decide the issue afresh.

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• 2024 (10) TMI 1194
  Denial of exemption u/s 11 - excessive payments on account of salary and rent to the persons specified u/s 13(3) - disallow the payments made to specified persons - HELD THAT:- As seen from the first chart that the rent paid by an unrelated party in the same area is Rs.7.83/- per sq. ft. whereas the same was Rs. 7.02/- per sq. ft., till 31/03/2016 and Rs. 2.75/- per sq. ft. as on 31/03/2017 by the assessee. Similarly, rent paid to Tara Meera Education Trust by unrelated party come to Rs. 176.47/- per sq. ft. per month and the rent paid by the assessee for the same premises is Rs.147.06/- per sq. ft. per month. While completing the assessment for AY 2018-19, the AO has referred to an agreement but the same was for a different premise in the same locality and not the premise for which the assessee has paid rent. Therefore, the AO proceeded on appreciation of wrong facts. Thus, we do not find the impugned payments to be excessive or unreasonable - Decided in favour of assessee.

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• Customs

• 2024 (10) TMI 1193
  Rejection of Regular bail - offences punishable under Section 8 (c) read with Sections 21 (c), 23 (c), 28 and 29 of the N.D.P.S. Act read with Section 135A of the Customs Act - HELD THAT:- On going through the orders of the pending trial thereby it reveals that the case is pending consideration of the application of discharge filed by accused No. 2. Looking to the period of incarceration of the petitioner, which is more than 5 years and the trial may take time to conclude, this petition is allowed and the petitioner is directed to be released on bail on furnishing the suitable bail bonds and sureties and on such other terms and conditions as may be deemed fit by the trial court. Petitioner to abide all the conditions as imposed and shall regularly attend the trial until exempted by the court. Violation, if any, may give a cause to take recourse as permissible and the trial court is at liberty to do the needful. The Special Leave Petition stands allowed.

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• 2024 (10) TMI 1192
  Challenge to the public notice dated 24 June 2024 including Clause 3 (ii) of the said notice - entitlement to clear the goods for home consumption after availing the benefit of Notification No. 46/2011 Customs dated 01.06.2011 in regard to the goods imported by the Petitioners - HELD THAT:- It is apparent that Clause 3 (ii) only requires the importer to furnish or include an explanation for the identical FOB values mentioned in the two documents, viz. FTA-COO and the third country invoice at the time of submission of the self-assessed bill of entry. This clause will apply only in case of identical FOB values and not in all other cases. Nothing in this clause militates against the 2009 Rules as was sought to be suggested. This explanation is called for only to enable the proper officer to assess and verify compliance with the 2009 Rules or other relevant rules applicable to the transaction in question. The requirement in Clause 3 (ii) does not infringe upon any rights of the Petitioner. Suppose the Petitioner fulfils the requirements of the 2009 Rules or other rules as may be applicable. In that case, there is no reason why the Petitioner will be denied the benefits under the preferential trade agreements - there are no illegality in Clause 3 (ii) of the public notice. No provision has been shown which would as an interdict or render ultra vires the explanations sought in terms of Clause 3 (ii) of the public notice dated 24 June 2024. The requirement in this clause does not affect the Petitioner s statutory entitlement. By challenging the public notice, the Petitioner cannot seek a direction to assess the bills of entries at Exhibits F , G and H by directly granting the Petitioner the benefit of the Customs notification dated 1 June 2011. The explanation that the Petitioner furnishes will indeed be considered - by filing a Petition to challenge the public notice itself, no omnibus relief as applied can be granted. Each transaction must be considered on its own merits given the facts disclosed, and the compliance reported. This petition cannot be entertained - the issue of the Petitioner s entitlement or otherwise to the benefits of the preferential trade agreements will have to be considered in accordance with the law, the relevant notifications, and the rules - petition dismissed.

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• 2024 (10) TMI 1191
  Seeking declaration that the Petitioner is not required to obtain NOC from the Narcotics Commissioner (Respondent No. 2) for exporting its product, namely ADCOTE 545S containing Methyl Ethyl Ketone (MEK) - Whether ADCOTE 545S, which contains Methyl Ethyl Ketone (MEK), is covered under Schedule-B of the 2013 Order. - confiscation - penalty. HELD THAT:- The Customs authorities issued the Show-cause notice. The Assistant Narcotics Commissioner s communication only conveys the Commissioner s opinion to the Deputy Commissioner of Customs. When adjudicating the show cause notice, the Petitioner will have full opportunity to comment upon such opinion or its correctness. However, insisting that this Court carry out this exercise while examining the validity of a show cause notice would not be appropriate. The circumstance that this Petition was instituted before the issue of show cause notice is entirely irrelevant. Based on the pleadings, it is doubtful whether the relief of declaration that no NOC from the Narcotics Commissioner was required, to be granted. In all probabilities, we would have relegated the Petitioner to respond to the eventual show cause notice that would have to be issued to the Petitioner. Now that a show cause notice has been issued, there is no case made out to deviate from the usual rule of exhaustion of alternate remedies. In Special Director and Another Vs. Mohd. Ghulam Ghouse and another [ 2004 (1) TMI 378 - SUPREME COURT] the Hon ble Supreme Court has held that unless the High Court is satisfied that the show-cause notice was totally non-est in the eye of the law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine. The writ petitioner should invariably be directed to respond to the show cause notice and take all the grounds that may now be highlighted in the writ petition. Whether the show cause notice was founded on any legal premises is a jurisdictional issue which the recipient of the notice can even urge, and such issues also can be initially adjudicated by the authority issuing the very notice, before the aggrieved party approaches the Court. In Mahanagar Telephone Nigam Ltd. Vs. Chairman Central Board, Direct Taxes and another [ 2004 (5) TMI 7 - SUPREME COURT] , the Hon ble Supreme Court held that it was settled law that the litigation against show cause notices should not be encouraged. The Court approved the decision of the High Powered Committee, which was eminently fair and aimed at preventing frivolous litigation. The Court held that the appellant s right was not affected. It was clarified that the appellant could move a court of law against an appealable order. By not maintaining discipline and abiding by the decision, the appellant had wasted the public money and time of the courts. This Petition is dismissed with the liberty to reply to the show cause notice and face the adjudication proceedings.

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• 2024 (10) TMI 1190
  Levy of penalties u/s 114 and 114AA of Customs Act, 1962 - failure to follow procedure u/s 138B of the Act - wrong interpretation of Section 138B of the Customs Act,1962 - denial of exporter s request to permit the cross examination of the Chemical Examiner - setting aside the order without any remand and opportunity to the Department to allow cross examination - no cogent and convincing reason mentioned by the Adjudicating Authority for denial of cross examination of CRCL officer. HELD THAT:- It is clear from the plain reading of the impugned order that the CESTAT had allowed the appeals on the sole ground that the statements, which formed the foundation of the order-in-original dated 23.11.2011 could not be used as relevant for proving the allegations against the respondents, in view of Section 138B of the Act. The exporter was given no opportunity to cross-examine any of the person whose statement was sought to be relied upon. The said persons were not examined by the Court and the Court had not expressed any opinion that the statements ought to be admitted, as contemplated under Section 138B (1) (b) of the Act. The question whether a person against whom a statement is relied upon ought to be given an opportunity to cross-examine the person who has made the statement was the subject matter for consideration by the Coordinate Bench of this Court in BASUDEV GARG, ARUN GUPTA, ANIL GOEL VERSUS COMMISSIONER OF CUSTOMS [ 2013 (5) TMI 350 - DELHI HIGH COURT] where it was held that The circumstances referred to in section 9D, as also in section 138B, included circumstances where the person who had given a statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay and expense which, under the circumstances of the case, the court considers unreasonable. It is clear that unless such circumstances exist, the noticee would have a right to cross-examine the persons whose statements are being relied upon even in quasi-judicial proceedings. Undisputedly, there are circumstances where statements can be relied upon notwithstanding that the persons against whom the said statements are relied upon have not been afforded any opportunity to cross-examine the persons, who have made the statements. However, undisputedly, the record does not indicate that any of such circumstances existed in the facts of the present case. It is also material to note that the report of the Chemical Examiner was merely a conclusion and did not contain any analysis on the basis of which the conclusion was drawn. Clearly, in such circumstances, the exporter ought to have been provided an opportunity to cross-examine the Chemical Examiner. Thus, no substantial question of law arises in the present appeals - appeal dismissed.

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• 2024 (10) TMI 1189
  Classification of imported goods - Poly Crystalline Silicon (C-Si), Solar Photovoltaic Modules (Solar Modules) - to be classified under CTH 85414011 or under CTH 8501 of the Customs Tariff Act? - burden to prove - HELD THAT:- The fact that the Solar Modules imported by the Appellant did contain bypass diodes has not been disputed by the Adjudicating Authority or before us during the hearing. It is settled law that burden to prove classification is on the revenue and the department has tried to discharge the same burden by placing reliance on the test report provided by IIT Kanpur Test Report. As per the said report it is certified that the sample of solar panel is equipped with simple elements (for example, diodes to control direction of the current) which can supply electric power directly to an external DC load. Further the said report clarifies that the supporting field test reports of the panel was to illustrate the typical V-I characteristics of the solar panel and the panel is not equipped with any type of convertor/regulator for trolling the generated power. In addition, there is no storage device integrated with the solar panel. This clearly shows that the test report is not conclusive and cannot be relied upon for determining classification in the present case in as much as the expert agency has admitted that the required test to find out if the solar modules had passing diodes is not possible at the laboratory. Further despite approaching Department of Electrical Engineering, IIT Kanpur the department was informed that the test could not be carried out due to non availability of samples. It can therefore be stated that the imported goods were not tested on vital parameters as clarified in circular issued by the board and accordingly the contention of the Appellant that the test report of IIT Kanpur cannot be taken as a conclusive document to determine whether the solar modules were capable of transferring power to external load merits acceptance. While the Department has failed to substantiate its stand of classifying imported solar modules under CTH 8501, the Appellant has submitted evidence in favour of classification under CTH 8541. In the present case having accepted the classification of similar goods, the department cannot be permitted to take a contra stand more so in absence of any evidence in support of the purported different stand. The said stand further appears to be contrary to the clarification issued by CBIC which was binding on the department. The demand under Section 28 cannot be confirmed in absence of finalisation of assessment, and are of the view that the same is settled in their favour in view of various decisions placed in compilation filed during the hearing. The Solar Panel imported by the Appellants merit classification under CTH 8541 and as a result the impugned orders in the captioned Appeals are set aside - appeal allowed.

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• 2024 (10) TMI 1188
  Confiscation - penalty - Interception of certain consignments in the Air Cargo Complex, Hyderabad which were being carried by the Courier companies - burden to prove - deatils not considered properly before passing impuned order - violation of principles of natural justice - HELD THAT:- The entire case is decided by the Adjudicating Authority in a very cryptic manner without going into detail as far as the defence taken by the appellant is concerned. One of the major point which appellants have been claiming is that the gold in question was procured from legitimate source as also supply of the gold was being made as a legitimate business transaction. This aspect has not been dealt with at all by the Adjudicating Authority and very cryptic remark has been made to dismiss the defence. The claim that it s a remelted gold and that duty paid invoice has been given to Courier company has also not been examined. When in a statement recorded under Section 108 of Customs Act 1962, someone gives evidences, it has to be carefully evaluated and it s authenticity or otherwise has to be examined. The Adjudicating Authority should have examined all the documents and submissions and then taking up the issue of authenticity with regard to the claim that the gold were procured from legitimate source following prescribed procedure before coming to the conclusion that the said gold was of foreign origin. It is also on record that when the assayer has made a disclaimer that he is not in a position to say whether gold is of foreign origin or otherwise, how Commissioner (Appeals) can say that he has certified the gold to be of foreign origin. A cryptic common and general order passed for all the persons, without appreciating factual matrix and evidence adduced by each of the appellants, would not be correct and may tantamount to nonapplication of mind. In the present case, the impugned order is clearly not a speaking order nor it appears to have followed the principles of nature justice in true spirit of the doctrine. The matter is required to be remanded back to the Original Adjudicating Authority - Appeal allowed by way of remand.

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• 2024 (10) TMI 1187
  Applicability of Customs Duty exemption under Notification No. 12/2012-Cus for imports made prior to and after the amendment by Notification No. 06/2017-Cus. - applicability of depreciation provisions under Clause (e) of Condition 40A post-amendment - HELD THAT:- Notification 12/2012 as it stood prior to 02 February, 2017 did not contain the Clause (e) in the Condition No. 40A. The law as it stood prior to 02 February, 2017 has been interpreted in various decisions - In the case of CLOUGH ENGINEERING LTD. VERSUS COMMISSIONER OF CUS. (IMPORT) , MUMBAI [ 2005 (10) TMI 173 - CESTAT, MUMBAI] it was held that he appellants are eligible to the benefit of Notification No. 21/2002 and hence confiscation duty demand and penalty are not sustainable, and accordingly set aside the same. The said decision was approved by the Hon ble Apex Court in the case of COMMISSIONER VERSUS CLOUGH ENGINEERING LTD. [ 2006 (8) TMI 597 - SC ORDER] . The aforementioned decisions were made in respect of Notification No. 21/2002-Cus which provided similar exemption as in case of 12/2012- Cus. The aforementioned decision is equally applicable to the facts of the case in respect of Notification No. 12/12- Customs as it stood prior to 02 February, 2017. In view of the above, the demand in respect of imports made vide Bill of Entry dated 24 January, 2017 is set aside. The facts in the instant case are that the appellant had imported certain goods, as certified by DGSC and had put most of the goods in use for the stated purpose. A part of the goods were leftovers. It is found that the facts in the instant case are significantly different from the facts in the case of M/S JAGSON INTERNATIONAL LTD., OIL NATURAL GAS CORPORATION LTD. VERSUS C.C. -JAMNAGAR (PREV.) [ 2018 (9) TMI 196 - CESTAT AHMEDABAD] where the importer had failed to fulfil the necessary conditions of place by ONGC. In view of the above, the reliance on the decision of Tribunal in the case of Jagson International ltd, in the impugned order is not correct. After introduction of Clause (e) in Condition 40A by Notification No. 06/2017 dated 02 February 2017, the duty became payable on the leftover goods imported for the petroleum operations or for coal bed methane operations. However, the said notification also prescribed the rate of depreciation at which the goods will be valued. It is seen that in the instant case does not involves any violation of Section 111 of the Customs Act and the notification itself foresees the possibility of leftovers and disposal thereof. In these circumstances, we do not find any reason for confiscation of goods or imposition of penalties on anyone. The impugned order is set aside and the matter is remanded to the original adjudicating authority for fresh decision - Appeal allowed by way of remand.

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• 2024 (10) TMI 1186
  Refund claim - principles of unjust enrichment - documentary evidence with the application did not suffice to overcome the presumption, under section 28D of Customs Act, 1962, of having passed on the incidence of the excess duty collected in the sale of goods manufactured by them - non-application of mind - HELD THAT:- There are three inherent flaws in the impugned order. While the refund sanctioning authority was satisfied that the certificate of chartered accountant sufficed for the purpose of determining that incidence of duty had not been passed on, the first appellate authority found the same certificate to be deficient for want of such treatment from the year of provisional assessment and has placed on record absence of any other evidence having been submitted for discharge of onus. Consequently, without affording opportunity to the assessee to make good the then revealed gaps, the impugned order has gone on to hold that the assessee had been unjustly enriched. Moreover, in directing recovery for credit in the Fund, the impugned order has not indicated the means to be adopted while section 28 of Customs Act, 1962 is the explicitly available facility for recovery of erroneously granted refund, it is moot if an appellate authority can step into the shoes of the proper officer contemplated therein or supplant the application of mind inherent in such jurisdiction. It is also moot if action under section 142 of Customs Act, 1962 initiated by anyone other than proper officer or authority designated therein is valid in law. The present dispute may, in effect, be restated to posit that the case of customs authorities is that imported goods have been used in the year of procurement for manufacture and conversion into sale value in the selfsame year. The impugned order has not disputed the provisioning as receivables in 2019-20 and has accepted the certificate of chartered accountant to that effect. The appeal of Commissioner of Customs did not dispute it either. The backbone for discard of the claim is the purported inadequacy of certificate for not attesting to concurrence of provisioning with the period of dispute and that, in the absence of scrutiny of sale invoice, kicks in the presumption of section 28D of Customs Act, 1962 on the back of the decision of the Hon ble Supreme Court in COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY ORS. [ 2018 (7) TMI 1826 - SUPREME COURT] . On the finding that sale invoice considered by the first appellate authority is not liable to be brought into existence at that stage of proceedings and the presumption in law intended for different context, that the decision on strict interpretation of exemption notification has been misconstrued in the impugned order and that certificate has merely to attest transfer to receivables as sufficing to cross the bar of unjust enrichment , the impugned order lacks validity. The order of the original authority stands restored along with setting aside the order of the first appellate authority.

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• Insolvency & Bankruptcy

• 2024 (10) TMI 1185
  Locus of the appellant before the Court - inherent powers under Rule 11 of the NCLAT Rules 2016 - adequate addressing of objections raised by the appellant or not - discretionary power under Rule 11 of the NCLAT Rules 2016. Whether the appellant, who is not a party to the settlement between the second respondent and the Corporate Debtor, has locus in the proceedings before this Court? - HELD THAT:- Section 62 of the IBC stipulates that any person who is aggrieved by the order of the NCLAT may file an appeal before the Supreme Court within the prescribed limitation period. Similar language is used in Section 61 of the IBC, which provides for appeals to NCLAT from orders of the NCLT.50 The use of the phrase any person aggrieved indicates that there is no rigid locus requirement to institute an appeal challenging an order of the NCLT, before the NCLAT or an order of the NCLAT, before this Court. Any person who is aggrieved by the order may institute an appeal, and nothing in the provision restricts the phrase to only the applicant creditor and the corporate debtor - The appellant who claims to be a Financial Creditor, has expressed reasonable apprehensions about the prejudice it would face if there were roundtripping of the funds, and the prioritization of the debts of the second respondent, an operational creditor. The appellant had moved an application before the NCLAT seeking impleadment as a respondent and the objections of the appellant were specifically recorded and addressed in the Impugned Judgement. Therefore, there is no doubt that the appellant falls within the ambit of the phrase any person aggrieved and has the locus standi to institute the present Civil Appeal before this Court. Whether the NCLAT erred in invoking its inherent powers under Rule 11 of the NCLAT Rules 2016 in the presence of a prescribed procedure for withdrawal of CIRP and settlement of claims between parties? - HELD THAT:- The inherent powers cannot be used to subvert legal provisions, which exhaustively provide for a procedure. To permit the NCLAT to circumvent this detailed procedure by invoking its inherent powers under Rule 11 would run contrary to the carefully crafted procedure for withdrawal. In the Impugned Judgement, the NCLAT does not provide any reasons for deviating from this procedure or the urgency to approve the settlement without following the procedure. The correct course of action by the NCLAT would have been to stay the constitution of the CoC and direct the parties to follow the course of action in Section 12A read with Regulation 30A of the CIRP Regulations 2016. This legal framework for such withdrawal was formulated after giving due consideration to the appropriate procedure for withdrawal and balancing it with the objectives of the IBC. Even if the procedural infirmity is kept aside, once the CIRP was admitted, the proceedings became collective, and all creditors of the Corporate Debtor became stakeholders. Without prejudice to the above, whether the NCLAT adequately addressed the objections raised by the appellant, while exercising its discretionary power under Rule 11 of the NCLAT Rules 2016? - HELD THAT:- The ongoing investigation by the Enforcement Directorate against the first respondent and the Corporate Debtor; and other attempts by the Corporate Debtor to dissipate assets, were not adequately addressed by the NCLAT. The impugned judgment of the NCLAT dated 2 August 2024 is set aside - appeal allowed.

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• 2024 (10) TMI 1184
  Initiation of CIRP proceedings - existence of debt - main objection to the initiation of CIRP proceedings on the ground of limitation was rejected by the Adjudicating Authority on the ground that there is an acknowledgement of debt in the financial statements as well as auditor s report of the Corporate Debtor for the year ending on 31.03.2017 - HELD THAT:- The Adjudicating Authority as well as the NCLAT have concurrently held that the entries in the balance sheets amount to clear acknowledgment of debt. The findings are agreed upon. Further, Note 3.4 appended to said balance sheet entry dated 31.03.2017 mentions that company has made certain defaults in the repayment of term loans and interest. It further mentions of a continuing default. The entry also mentions long-term borrowings. The conclusions of NCLT and NCLAT that there is acknowledgment of debt are unimpeachable. Adjudicating Authority and NCLAT have also considered the Corporate Debtor s proposal of One Time Settlement (OTS) to UCO Bank. The proposal made by letter dated 07.06.2016 acknowledges that there were prior debts owed to UCO Bank. To substantiate the argument that such OTS constituted acknowledgment of debt since it relates to present and subsisting liability and indicates existence of a jural relationship between the parties, UCO Bank relied on judgment of this Court in Lakshmirattan Cotton Mills Co. Ltd. and Messrs Behari Lal Ram Charan v. Aluminium Corporation of India Limited [ 1970 (10) TMI 81 - SUPREME COURT] . The findings arrived at by the Adjudicating Authority and NCLAT are correct in law and fact - there are no merit in the appeal - appeal dismissed.

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• 2024 (10) TMI 1183
  Extinguishment of claims upon approval of the Resolution Plan - amount arising out of termination of the Agreement due to non-renewal of the PBG - clean state principles - whether the respondent was liable for the alleged dues, thereby ascertaining its eligibility to participate in the coal mine auctions? - HELD THAT:- Once the claim was returned to the appellant to be re-filed, it did not take any action in pursuance thereto. Thus, there did not exist any claim to be processed by the Resolution Professional to be placed before the Committee of Creditors and thereafter, before the NCLT for approval of the Resolution Plan. Notwithstanding that, undeniably, the Resolution Plan was approved by the NCLT on 20th March, 2023 and the second claim of the appellant in respect of Rs. 9.21 crores was calculated and disbursed to it by the successful Resolution Applicant. Despite having notice of all the above events and facts, the appellant neither objected nor challenged the Resolution Plan at any time till date. Besides, it is trite that once the Resolution Plan is formally approved by the NCLT, any other remaining claims etc. would be deemed to have extinguished. This has been succinctly but authoritatively laid down by the Supreme Court in Ghanashyam Mishra [ 2021 (4) TMI 613 - SUPREME COURT ]. The appellant appears to have let the claim get extinguished without a protest or demur. Merely because the waiver was not allowed by the NCLT while approving the Resolution Plan would not, ipso facto, resurrect the right of claim. In the opinion of this Court, the right of the appellant to the claim is clearly extinguished post approval of Resolution Plan. To that extent, the reliance on Greater Noida Industrial Development Authority [ 2024 (2) TMI 681 - SUPREME COURT (LB) ] would not enure to the benefit of the appellant. In that case, the aggrieved person had infact challenged the Resolution Plan itself whereas, in the present case, the appellant let the claim get extinguished by its own apathy. In the case of Greater Noida Industrial Development Authority, the Supreme Court was considering a dispute similar to the one in the present case, except, in that case, the aggrieved person therein challenged the Resolution Plan itself and the Supreme Court held that the form in which the claim was submitted with the Resolution Professional is inconsequential so long as a proper claim is laid. It further held that what needed to be considered respecting such claim is, whether it deserved to form part of the Resolution Plan. In the present case, though the appellant did submit the claim at hand, yet did not re-submit the same after it was returned. There are no reason, much less any cogent reason to interfere with the impugned order passed by the learned Single Judge. Resultantly, the present appeal is dismissed without any order as to costs.

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• 2024 (10) TMI 1182
  Direction to withdraw the withdrawal letter of mine opening permission - direction to Appellant to keep aside the Annual Mine Closure Cost besides directing the Appellant personally liable for disposal of the mined coal in accordance with the terms of the Mine Agreement - HELD THAT:- On looking at the terms of the Escrow Agreement, it is clear that Clause 3 provides that the AMCC was to be placed in the Escrow Account to perform the mine closure obligations. Undisputedly, the same clause also provides that CCO is to be the exclusive beneficiary and that AMCC is to be verified by the CCO. It is equally significant to note that in the very succeeding clause i.e. Clause 4, the Escrow Agreement clearly provides that 80% of the amount deposited by the Corporate Debtor as AMCC would be returned to the Corporate Debtor every 5 years and the balance would be returned after completion of the final mine closure. Thus, when the Escrow Agreement itself provides that the entire amount is to be returned to the Corporate Debtor after completing mine closure activities, it cannot be persuaded by the argument canvassed by the Respondent No. 1 2 that AMCC was money held in trust and are more inclined to agree with the Appellant that this sum clearly belonged to the Corporate Debtor for discharge of mine closure obligations. The Corporate Debtor stood admitted into the rigours of CIRP on 12.08.2022 under the provisions of the IBC. Pursuant to the admission of the Corporate Debtor into CIRP, moratorium in terms of Section 14 of the IBC stood imposed against the Corporate Debtor. IBC places moratorium on all past dues of the Corporate Debtor. Once moratorium is declared in respect of any company, the institution of suits or continuation of pending suits or proceedings against such company including execution of any judgement, decree or any other order in any court of law, tribunal, arbitration panel or other authority is statutorily barred. Under the scheme of the IBC, each creditor is required to file its claim with the interim resolution professional/resolution professional as on the insolvency commencement date. So, for all pre-CIRP claims, there is a provision contemplated under IBC to file claims. These claims are then to be dealt in the resolution plan or during liquidation as the case may be. The recovery of unpaid AMCC as pre-CIRP dues independently of the other stakeholders of the Corporate Debtor is a step in direct contravention of the IBC as it is barred under Section 14 and therefore deserves to be set aside. In terms of the provisions of IBC as contained in Section5(13) of IBC it would therefore also be accurate and appropriate to categorise AMCC as CIRP cost in running the Corporate Debtor as a going concern. The Adjudicating Authority grossly erred in holding that the AMCC is not part of the estate of the Corporate Debtor and that the same needs to be kept aside - the reasoning offered by Adjudicating Authority to allow AMCC to be kept out of the CIRP process to enable its recovery dehors the scheme of IBC, cannot be agreed upon. If the AMCC is allowed to be kept outside the CIRP of the Corporate Debtor, it would tantamount to giving the Respondents a special status that is not recognised by law. Respondents cannot be paid in preference to other creditors as that would defeat the purpose of CIRP and would prejudice other secured financial creditors who are members of the CoC. The impugned order is modified by setting aside the directions of the Adjudicating Authority to consider the Annual Mine Closure Costs as money not belonging to the Corporate Debtor and to keep the same aside - appeal allowed.

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• 2024 (10) TMI 1181
  Rejection of application for time extension to implement resolution plan - Appellant is ready to deposit the balance amount of the Resolution Plan - HELD THAT:- The entire amount has been deposited in the account of the Corporate Debtor, Liquidator shall distribute the amount to the Creditors as per the Resolution Plan. Appellant shall make payment of Rs.10.5 Lakhs to the Liquidator towards the liquidation cost within two weeks from today by a Bank Draft or by RTGS. Liberty granted to the Liquidator to file an Application before the Adjudicating Authority with regard to entitlement of fee, if any, which may be decided in accordance with law. In view of the fact that Financial Creditors have expressed their willingness to accept the amount of the Resolution Plan, the time as prayed was required to be extended by the Adjudicating Authority - the Order of the Adjudicating Authority set aside - appeal allowed.

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• Service Tax

• 2024 (10) TMI 1180
  Refund of service tax - export of service in terms of Rule 6A of Service Tax Rules, 2012 r/w Rule 3 of Place of Provision of Service Rules, 2012 - services claimed to be advertising agency services, provided by the appellant from India through electronic media to their group companies/clients of its overseas group companies located outside India - principles of unjust enrichment - it is submitted that for the earlier years i.e. April, 2011 upto June, 2012 the department kept on sanctioning refunds to the appellant on the same set of documents by considering the service as Advertising Agency service without raising any doubt - HELD THAT:- After looking at the earlier orders of granting refund, it is deemed proper to firstly take up the issue about the inconsistency in the orders of Adjudicating Authority that too for the very same assessee. In our view, the issues have been dealt with by the lower authorities in a most casual way. Time and again it has been repeated through various judicial precedents that the revenue cannot be permitted to adopt an inconsistent stand in a subsequent assessment where the facts are identical unless there is change in law. None of the authorities below have considered it proper to even address the submission on behalf of the appellant regarding the earlier orders of the Adjudicating Authority granting refund for the same service. That becomes relevant when no appeals have been preferred by the revenue against the said order. The revenue cannot be permitted to adopt an inconsistent stand in subsequent proceedings when the facts are identical unless they show that the law has changed but nothing of that sort has been attempted. The authorities below have failed to base their decision of rejecting the refund claim on any change in law or circumstance, rather they ignored the said submission on behalf of the appellant - also, w.e.f. 1.7.2012 substantial changes by way of amendment have been affected in the Finance Act as well as in the Service Tax Rules and also various new Rules such as Place of Provision of Service Rules, 2012 etc. were brought into effect. It s deemed proper to remand the matter back to the Adjudicating Authority for denovo adjudication after taking into consideration their earlier orders of granting refunds to the appellant and also after taking into consideration all the submissions of the appellant and the laws applicable at the relevant time. The said authority must provide a proper opportunity of hearing to the appellant. Appeals filed by the appellant are allowed by way of remand to the Adjudicating Authority.

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• 2024 (10) TMI 1179
  Recovery of credit of tax paid availed on receipt of services under CENVAT Credit Rules, 2004, on the ground that either registration number was missing in the tax paying documents or that the number itself was incorrect - rule 9 of CENVAT Credit Rules, 2004 - HELD THAT:- As the inadequacy in the documents is deemed to a technical error and that there is no allegation record that the services had not been rendered or that tax had not been discharged, there is no reason to uphold the impugned order. The appeal is allowed.

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• Central Excise

• 2024 (10) TMI 1178
  100% EOU - interest on the delayed refund of pre-deposit - HELD THAT:- It is found that in this case, the appellant has made the pre-deposit in terms of the direction of the Tribunal vide Order dated 09.09.2014 on 11.11.2014, and the order of the Tribunal has gone in favour of the appellant. In these circumstances, by relying on the decision of the Tribunal in the case of Riba Textiles Ltd. [ 2020 (2) TMI 602 - CESTAT CHANDIGARH] , which decision has been affirmed by the Hon ble Punjab and Haryana High Court [ 2022 (3) TMI 693 - PUNJAB HARYANA HIGH COURT] , wherein the Hon ble High Court observed The appellant is entitled to claim the interest on delay refund from the date of deposit till its realization. Relying on the decision of the Hon ble High Court of Punjab and Haryana in the case of Riba Textiles Ltd. the appellant is entitled to claim interest of pre-deposit made on 11.11.2014 till its realization. Appeal disposed off.

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• 2024 (10) TMI 1177
  Inclusion of discounts offered to bulk purchasers in the transaction value - period from July 2008 to November 2011 and from December 2011 to January 2013 - HELD THAT:- The issue stands squarely covered by the decision of the Tribunal in MAHANAGAR GAS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI II [ 2024 (3) TMI 341 - CESTAT MUMBAI] . On a perusal of the said decision, it is found that the issue is identical and relates to the period from July 2008 to November 2011 and from December 2011 to January 2013. The said decision, having examined the contentions as well as decision of the Tribunal in MAHANAGAR GAS LIMITED VERSUS CCE, MUMBAI - V [ 2016 (9) TMI 782 - CESTAT MUMBAI] , held that money value of the facilities, treated as equivalent to trade discount , be added back to the transaction value. These fall under different provisions of the Rules supra and the lower authorities have not amplified the lack, and remedy, which was sought to be invoked. There are no merit in the impugned order which is set aside to allow the appeals.

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• CST, VAT & Sales Tax

• 2024 (10) TMI 1176
  Seeking to challenge review orders 15 of the Maharashtra Settlement of Arrears of Taxes, Interest, Penalties or Late Fees Act, 2022 (Settlement Act) - refund amount for financial year 2016-2017 is sought to be adjusted against the outstanding demand for the financial years 2013-2014, 2015-2016 and 2017-2018 - seeking to review settlement orders passed under Section 13 (1) of the Settlement Act. Whether the Respondents were justified in exercising the review powers under Section 15 of the Settlement Act to review the settlement orders passed under Section 13 (1) of the said Settlement Act and recalculating the amount of arrears which were initially accepted by the Respondents while passing the settlement orders? - HELD THAT:- On an analysis of the Settlement Act, it is found to be a self-contained code in itself, inasmuch as, it defines various terms for the purpose of the said Act. It provides for the designated authority for implementation of the said Act. It provides for eligibility for the settlement of the arrears, the amount which is to be considered for the settlement of the Act, the time within which the amount determined for settlement is required to be paid, the conditions to be satisfied for availing the settlement, order to be passed accepting or rejecting the settlement, power of rectification, review and appeal. Consequences of settlement order obtained by suppression and conclusiveness of the proceedings covered by settlement. Whether authorities under the Settlement Act can abdicate and exercise powers granted to authorities under the MVAT Act? - HELD THAT:- It is important to note that the Settlement Act nowhere provides or empowers the authorities under the said Act to import the provisions of the MVAT Act and more particularly provisions of Section 50 of the MVAT Act for determination of the requisite amount to be paid under the Settlement Act. Therefore, the action of the Respondents in passing the review order by importing the provisions of Section 50 of the MVAT Act is wholly without the authority of law and without jurisdiction. If the legislature wanted to empower the authorities under the Settlement Act with the powers conferred under the MVAT Act then nothing prevented them from providing the same under the Settlement Act. The legislature while enacting the Settlement Act in Section 2 (2) provided that the words and expressions used in the Settlement Act, but not defined in the said Act shall have the same meanings assigned to them under the Relevant Act. However, the legislature consciously and rightly so did not empower the authorities under the Settlement Act with the powers conferred under the MVAT Act and, therefore, any action of the authorities under the Settlement Act by encroaching upon the powers conferred under the MVAT Act would be without jurisdiction. Whether, on a reading of the Settlement Act, amount for considering for settlement is to be arrived at after adjusting refund of other years against the dues of the years for which application is made under the Settlement Act? - HELD THAT:- There is no provision under Settlement Act which provides for calculation of outstanding arrears of a particular year to be arrived at after adjustment of refund for another year moreso in a case where there is no such adjustment of the refund order on the date of application or on the date of settlement order under Section 13 of the Settlement Act. Therefore the impugned action of the Respondents to recalculate the outstanding arrears for the financial years 2013-2014, 2015-2016 and 2017-2018 after passing the settlement order by invoking provisions of Section 15 of the Settlement Act admittedly without there being an order Section 50 of the MVAT Act is certainly without jurisdiction. Whether in the absence of any order under Section 50 of the MVAT Act for adjustment of refund order, are the authorities under the Settlement Act justified in invoking review powers under Section 15 of the Settlement Act? - HELD THAT:- On conjoint reading of Section 50 and Rule 60, unless an assessee desires for adjustment of refund of one year against demand of another year, the Commissioner cannot, under Section 50 adjust the same on its own volition and even if he proposes to do so he has to do so by giving an opportunity of hearing - In the instant case, admittedly there is neither such desire expressed by the Petitioner nor we have been shown any order under Section 50 which is passed for adjusting the refund of Financial Year 2016-2017 against demand for the years 2013-2014, 2015-2016 and 2017-2018. Therefore, in absence of any order under Section 50 read with Rule 60 of the MVAT Rules, the impugned action of the Respondents to adjust refund by resorting to the provisions of the Settlement Act is wholly without jurisdiction. In the absence of any order under Section 50 of the MVAT Act by the authorities under the said Act, review orders passed by authorities under the Settlement Act conferring power upon itself powers under Section 50 of the MVAT Act is without jurisdiction and also there is no provision under the Settlement Act to adjust such refund for arriving at the amount to be considered for the settlement and, therefore, there cannot be any error in the settlement orders for the authorities to exercise review powers under Section 15 of the Settlement Act. The impugned review orders dated 17th July 2023 passed under Section 15 of the Settlement Act for the years 2013-2014, 2015-2016 and 2017-2018 are hereby quashed and set aside and consequently impugned communication dated 13th October 2023 is also quashed and set aside - Respondents are directed to refund sum of Rs. 2,72,08,381/- being refund for the financial year 2016-2017 alongwith interest as per the Act and the said refund should be credited to the Petitioner s account within four weeks from the date of uploading the present order. Petition disposed off.

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• 2024 (10) TMI 1175
  Violation of principles of natural justice - declination to grant waiver of pre-deposit to the appellant without assigning any reasons for such decision - declination to grant waiver of pre-deposit to the appellant even though the entire demand is based upon Section 61 of the VAT Act which is wholly irrelevant to the issue of determination of sale price - declination to grant waiver of pre-deposit to the appellant even though adjustment of tax liability is clearly permissible under Section 8 of the VAT Act - declination to grant waiver of pre-deposit to the appellant even though the appellant has a strong prima facie case squarely supported by decision of Hon ble Supreme Court in the case of Southern Motors [ 2017 (1) TMI 958 - SUPREME COURT ]. HELD THAT:- On perusal of the impugned order passed by the Tribunal dated 16.06.2022 as well as the order dated 18.11.2022 dismissing second appeals on the ground of non-payment of pre-deposit, it is opined that the Tribunal has admittedly not considered the prima facie case of the appellant while determining the amount of pre-deposit which ought to have been considered as per the decision of this Court in case of Kavya Marketing [ 2022 (4) TMI 1202 - GUJARAT HIGH COURT ]. The impugned order passed by the Tribunal is accordingly quashed and set aside. The appeals are therefore allowed by remanding the matter back to the Tribunal to consider the prima facie case of the appellant for deciding the quantum of pre-deposit, if required.

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