Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 26, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
GST
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GST registration cancelled retrospectively without reasons, violating natural justice principles.
Retrospective cancellation of GST registration without assigning reasons violates principles of natural justice. The impugned order lacked reasoning for cancelling registration retrospectively from a particular date, having cascading effect on input tax credit. Mere allegation of non-existence was insufficient, as petitioner substantiated temporary suspension due to ill health. Abject failure to conduct enquiry or provide reasons for retrospective cancellation renders the order unsustainable. Authorities directed to restore petitioner's GST registration after setting aside the impugned show cause notices and cancellation orders.
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Petition dismissed for alternate remedy; no hearing due to petitioner's failure to update address.
The petition was declined on grounds of maintainability due to availability of an alternate efficacious remedy of appeal against the impugned order. The contention regarding failure of principles of natural justice due to lack of opportunity of hearing was rejected, as intimations were sent to the petitioner's registered address, and the petitioner failed to notify the change of address. It was held that it was a case of "no adequate notice" rather than "no notice," and in such cases, the party must establish prejudice. Consequently, the petitioner was relegated to avail the alternate remedy of appeal, and the petition was disposed of.
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Arbitrary cancellation of registration without reasons & hearing flouts natural justice & equality.
Cancellation of registration by adjudicating authority without assigning reasons and without application of mind violates principles of natural justice and Article 14 of Constitution. Providing reasons is essence of judicial proceedings. Delay beyond permissible period cannot be condoned. Matter remanded to adjudicating authority to pass reasoned order after granting opportunity of hearing to petitioner by allowing filing of reply to show cause notice within four weeks.
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GST authorities cancelled registration retrospectively without proper reasoning. Court intervened, citing lack of substantive grounds.
Cancellation of GST registration with retrospective effect challenged. Court held that authorities failed to provide substantive reasons for rejecting application and issuing show cause notice/cancellation order, merely stating "reply unsatisfactory" and "others" without reasoning. Petition allowed, directing cancellation of petitioner's GST registration from specified date due to lack of proper reasoning by authorities.
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Overseas service provider wrongly classified as intermediary; entitled to refund of unutilized Input Tax Credit (ITC).
The court held that the petitioner was not an intermediary but directly engaged in providing services to an entity outside India. The respondents erroneously classified the petitioner as an intermediary without any material evidence or tripartite agreement. The petitioner's consistent stand was supplying services on a principal-to-principal basis. Merely providing services to a holding company or charging a mark-up over costs does not render the petitioner an intermediary. Consequently, the impugned orders classifying the petitioner as an intermediary were unsustainable and set aside, allowing the refund of unutilized Input Tax Credit (ITC).
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GST registration cancellation quashed for lack of reasons, retrospective effect revoked.
Retrospective cancellation of GST registration was challenged due to lack of adequate reasons provided for cancellation and violation of principles of natural justice. The High Court, relying on Riddhi Siddhi Enterprises case, held that authorities failed to assign even rudimentary reasons for retroactive cancellation, rendering the order unsustainable. Additionally, the original show cause notice did not indicate intention for retrospective cancellation. Consequently, the impugned order was quashed to the extent of retrospective effect from 12 November 2019. The cancellation was allowed prospectively from 09 September 2022, the date of show cause notice issuance, upholding principles of natural justice.
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Dismissal of late appeal against GST registration cancellation due to unexplained delay beyond limitation period.
The petition was dismissed due to the appeal being filed beyond the limitation period without a proper explanation for the delay. The High Court held that it cannot condone the delay under extraordinary jurisdiction when the petitioners failed to provide valid grounds. The Supreme Court precedent in Singh Enterprises case affirmed that there is no power to condone delay after the expiry of the 30-day period. Consequently, no interference was warranted in the impugned orders canceling the GST registration.
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Maintainability of petition regarding GST Appellate Tribunal; Assistant Commissioner as proper officer & adjudicating authority.
The High Court dealt with the maintainability of a petition concerning the non-constitution of an Appellate Tribunal and the jurisdiction and authority of the Assistant Commissioner as a "proper officer" and "adjudicating authority" under the Uttarakhand Goods and Service Tax Act, 2017. The court held that since the Assistant Commissioner was assigned functions as a proper officer u/s 5(1) and 5(3) read with Section 2(91) of the Act, and as an adjudicating authority u/s 2(4) (excluding the Commissioner), the Assistant Commissioner had the authority to pass an order for cancellation of GST registration. Consequently, an appeal would lie before the Commissioner against an order passed by the Assistant Commissioner, being a proper officer and adjudicating authority under the Act. The court allowed the review application in part, modifying its earlier judgment to hold that an appeal lies before the Commissioner against orders passed by the Assistant Commissioner.
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Mining lease deed registration fee & stamp duty - GST audit ongoing, advance ruling inadmissible.
The applicant's advance ruling application seeking nil rate of GST on stamp duty and registration fees paid for registering a mining lease deed is inadmissible. The matter is already under audit proceedings initiated by the Audit Commissionerate demanding GST payment. As per Section 98(2) of the CGST Act, an advance ruling cannot be sought on issues already pending in audit. The Madras High Court judgment in ABT Limited case upheld that during GST audit u/s 65, if tax non-payment or wrong ITC utilization is found, action u/ss 73 or 74 can be initiated u/s 65(7). Since the audit is a valid proceeding covered u/s 98(2), the applicant's appeal against the advance ruling is liable to be rejected.
Income Tax
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No double taxation of already taxed syndicate profits in member's hands.
The assessee was a member of syndicates (association of persons or body of individuals) and had received share of profits from them. The tax authorities sought to tax the assessee's share of profits from the syndicates in the assessee's hands, but the ITAT deleted the addition. The High Court upheld the ITAT's decision, holding that when an assessee is a member of an AOP/BOI and the income earned from such AOP/BOI has been offered to tax, then the share received by the assessee from such AOP/BOI after payment of due taxes cannot be taxed again in the assessee's hands, as per Section 86(a) proviso read with Section 67A. The court agreed with the ITAT that the income was rightly assessed in the hands of the syndicates, and a direct assessment of the same income in the assessee's hands was not justified. The court found no substantial question of law arising from the ITAT's order.
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Income from arbitral award rightly assessed in subsequent year after favorable court order.
The case pertains to the treatment of income received from an arbitral award in the assessment year. The AO passed an assessment order u/s 143(3) after the case was selected for scrutiny through CASS. The ITAT recorded that the AO issued a statutory notice u/s 142(1) with a specific query about the Nardana Claim-1 & Nardana Claim-2, and the assessee filed a cogent reply. The AO's approach in accepting the assessee's explanation regarding the recognition of liability for Nardana Claim-1 & Nardana Claim-2 as income in the AY 2018-19 was found sustainable. The amount was paid to the assessee in AY 2018-19 after furnishing a 100% bank guarantee on 100% margin, and it was rightly shown as a liability in the balance sheet. The income was shown in the next assessment year, i.e., 2019-20, after the Dhule Court's order in favor of the assessee. The ITAT did not find fault in the assessee's approach, considering the law laid down in the Hindustan Housing & Land Development Trust Limited case, where it was held that as long as there remains a dispute/litigation, the income cannot be said to have 'accrued' or '.
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Tax assessing authority rejecting established transfer pricing method without justification creates cash flow uncertainty for businesses.
The High Court held that a change in the approach of assessing tax, without any statutory change, leads to uncertainty in cash flow and fund flow, which are crucial for commercial enterprises. Unless there are cogent reasons to discard the Transfer Pricing (TP) method adopted in earlier assessment years, the Transfer Pricing Officer (TPO) should consistently follow the method used for determining the Arm's Length Price (ALP) in prior years. The TPO erred in rejecting the Transactional Net Margin Method (TNMM) without sufficient justification, despite it being consistently used in the past six assessment years. The court concurred with the Tribunal's view that the Dispute Resolution Panel (DRP) erred in finding that the TPO provided justification for rejecting TNMM. The TPO's decision to adopt the residual "any other method" u/r 10B(1)(f) was unjustified, as recourse to this method is available only if none of the other methods are considered appropriate. However, the TPO provided no reasons for rejecting TNMM and did not discuss the applicability of other methods. The court found it difficult to accept that a business model involving marketing support on a commission basis is unique or warrants rejecting TNMM. The comparables used by the TPO, such as a non-compete arrangement.
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Tax authorities can directly issue reopening notices post-search; faceless assessment to eliminate interface.
The High Court held that the Jurisdictional Assessing Officer (JAO) has valid jurisdiction to issue a notice u/s 148 for reopening of assessment, even in cases of search and seizure u/s 132. The faceless assessment scheme u/s 151A mandates recording satisfaction by the JAO before issuing such notice, but does not preclude the JAO from issuing the notice directly. The Court observed that the scheme aims to eliminate interface between tax authorities and assessees to the extent technologically feasible. The petitioner's challenge to the notice on grounds of lack of jurisdiction was rejected. The Court noted that satisfaction notes were provided, and subsequent proceedings like notice u/s 142(1) were issued by the Verification Unit of the Faceless Assessment Centre. The petitioners were advised to pursue remedies before the competent authority and seek virtual hearings if required, ensuring strict compliance with the law.
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High Court waives interest for delayed tax filing due to seized documents, upholds other penalties.
The Income Tax Settlement Commission passed an order charging interest u/ss 234A, 234B, and 234C of the Income Tax Act. The petitioners challenged the order's maintainability before the High Court. The court held that the writ petition was maintainable, following the Supreme Court's decisions in Jyotendrasinhji v. S.I. Tripathi and R.B. Shreeram Durga Prasad. Regarding Section 234A interest, the court examined the provisions and noted that while interest is automatic for defaults, courts have waived it in circumstances beyond the assessee's control. The Settlement Commission reduced the interest by 50%, citing the petitioners' inability to file returns due to seized papers. However, the court found no reasons for the 50% reduction and waived the entire Section 234A interest. For Sections 234B and 234C interest, the court upheld the levy, following the Gulraj Engineering case. It rejected the petitioners' arguments for waiver based on seized cash and the circular, relying on the Shelly Mehta case. Consequently, the writ petition was partially allowed, waiving Section 234A interest but upholding Sections 234B and 234C interest.
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Company penalized for not providing satisfactory details on source of undisclosed income during tax raid.
Section 271AAA(2) of the Income Tax Act mandates that for avoiding penalty, the assessee company must not only disclose undisclosed income during a statement recorded u/s 132(4) but also specify and substantiate the manner in which that income was derived. The High Court held that the assessee/appellant failed to meet these requirements, leading to the dismissal of the appeal against the levy of penalty u/s 271AAA.
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Tax dept's transfer pricing order quashed for manual signature post limitation date.
The High Court quashed the Transfer Pricing Order (TPO) and consequent draft assessment order, holding them illegal and arbitrary. The TPO order was not digitally signed on the last date of limitation, i.e., 31.07.2021, or subsequently on 02.08.2021, despite confirmation from the respondent. It was physically/manually signed only on 12.08.2021 and furnished to the petitioner on 13.08.2021, well beyond the limitation period. The TPO order was also uploaded on the ITBA portal on 16.08.2021, after the limitation period. The mere generation of a DIN number did not cure the defects and omissions in the TPO order, which was barred by limitation. The Court held that digital/physical/manual signature on the TPO order is an essential and mandatory requirement, failing which it would be invalid and non-est in the eyes of law.
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Revenue authorities' attempt to deny educational institution's tax exemption overruled by tribunal.
The assessee, a university, claimed exemption u/s 10(23C)(iiiab) for the relevant assessment year, which was accepted by the Assessing Officer (AO) after considering the applicable laws and facts. The AO included interest income on government grants in calculating the government financing, which exceeded 50% of the total income, meeting the substantial financing threshold. The Commissioner of Income Tax (Appeals) [CIT(E)] invoked Section 263, revising the AO's order as prejudicial to revenue, by excluding interest income and applying Rule 2BBB retrospectively. The Appellate Tribunal held that the AO correctly allowed the exemption based on the prevailing legal framework, judicial precedents, and facts. The exclusion of interest income and retrospective application of Rule 2BBB by the CIT(E) were incorrect. The AO's order was neither erroneous nor prejudicial to revenue. Accordingly, the CIT(E)'s order invoking Section 263 was quashed, and the assessee's appeal was allowed, upholding the principle of consistency and the AO's decision to grant exemption u/s 10(23C)(iiiab).
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Contractor rightfully claims deduction u/s 80IA in return filed after Section 153A notice.
The assessee, a works contractor, filed a return in compliance with Section 153A notice and claimed deduction u/s 80IA, which was not claimed in the original return filed u/s 139(1). The CIT(A) concluded that the assessee rightfully claimed the deduction u/s 80IA in the return filed pursuant to Section 153A notice. The ITAT, relying on judicial precedents like Kirit Dahyabhai Patel, held that the return filed u/s 153A is construed as a return filed u/s 139, and the assessee can make or modify claims before assessment completion. The CIT(A) rightly observed that the Revenue failed to negate the assessee's claim as a developer carrying out water works for the Bihar government. Considering the facts and judicial precedents, the ITAT found no infirmity in the CIT(A)'s decision allowing the Section 80IA deduction, ruling in favor of the assessee.
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Cash deposit during demonetization period questioned. Unexplained cash credit addition upheld (partly) due to lack of evidence.
Cash deposit during demonetization period treated as unexplained cash credit. Assessee's claim of introducing cash as capital in proprietary concern not accepted due to lack of evidence regarding availability of substantial cash. AO's view upheld that assessee's cash withdrawals from bank accounts indicate absence of substantial personal cash holdings. Assessee's cash in hand on date of deposit reduced by alleged capital introduction amount. Remaining cash in hand treated as source for deposit, with balance addition treated as unexplained cash credit. Appeal partly allowed.
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Undisclosed offshore bank account & interest income probed, assessee's self-incrimination claim rejected.
Addition made u/s 153A on account of undisclosed foreign bank account and interest income thereon - assessee confronted with client profiles from HSBC Bank showing unique code assigned for operation of foreign bank account - Revenue possessed overwhelming material indicating assessee held foreign bank account which assessee refused to confirm by not providing consent waiver form citing self-incrimination plea rejected as not maintainable - adverse inference drawn from assessee's conduct and undertaking - addition of imputed interest income not sustainable as bank account closed before relevant period. Addition on unexplained investment in jewelry - part addition deleted for jewelry received as wedding gifts with supporting evidence, balance addition confirmed for lack of proper details regarding jewelry claimed as received on children's birthdays.
Customs
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Bail Denied for Huge Drug Haul Despite Procedural Lapses; Trial Expedited.
Bail application dismissed in a case involving seizure of commercial quantity of contraband item (1.873 kg Methaqualone) under NDPS Act. Court held that alleged planting of drugs is an issue to be decided post-trial. Delay in filing Section 52A application can be contended during trial, but mere delay would not vitiate evidence. Defective notice u/s 50 NDPS Act not relevant as provisions apply only to personal search, not search of baggage. Applicant failed to overcome rigors of Section 37 NDPS Act for grant of bail despite delay in trial and prolonged incarceration, considering the large quantity of contraband seized. Trial court directed to expedite proceedings.
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Customs Broker Complied with Regulations, Represented IEC Holders Legally.
The case pertains to an alleged violation of Customs Broker Licensing Regulations (CBLR) 2018, specifically Regulations 10(d), 10(n), and 11 of CBLR 2013, by a Customs Broker. The key points are: The Customs Broker met the IEC holders in person, obtained the required documents under KYC guidelines, and the IEC holders acknowledged the representative's authority. The Regulations do not prohibit such consensual arrangements between IEC holders and the representative. The representative submitted export documents on behalf of the importing firms, and payments were made to the disclosed accounts. The CESTAT concluded that the importers possessed the requisite documents, the appellant did not gain any undue benefit from the arrangement, and the CESTAT order was based on sound reasoning and application of legal principles. Consequently, the High Court dismissed the appeal.
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Exporter's refund claim rejected for non-compliance with procedural conditions.
The appellant claimed refund of Service Tax based on actuals and documents as per Notification 41/2012, but the claim was rejected for non-compliance with procedures/conditions in Notification 52/2011. The appellant was neither registered with Central Excise nor had registered service tax code and bank account with Customs, and did not make a declaration in the Shipping Bill. These conditions are essential for granting exemption to prevent misuse. While the Government does not burden exporters with taxes, those seeking notification benefits must comply strictly. The Supreme Court has ruled that to claim notification benefit, strict compliance with its terms is necessary, and words cannot be stretched or added. The lower authority's view rejecting the claim is reasonable, legal and proper, hence the appeal is dismissed.
Indian Laws
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Drug case bail granted on lack of public witnesses, trial delay.
Applicant sought regular bail in case involving recovery of commercial quantity of contraband under NDPS Act. Court considered factors like prima facie case, nature of accusation, likelihood of offence repetition, severity of punishment, absconding risk, witness threat. Case based on chance recovery, peculiar absence of public witnesses despite crowded place. Charges framed but no witnesses examined yet. Applicant in custody since long, trial unlikely to complete soon. Apex Court granted bail in similar cases due to undue trial delay despite stringent NDPS Act bail provisions. Prolonged incarceration impinges on Article 21 rights. Court found prima facie case for bail due to absence of independent witnesses, trial delay. Bail granted on conditions of furnishing bonds, sureties to trial court's satisfaction.
VAT
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SIM cards not 'goods' for octroi: Court ruling exempts telecom services from local taxes.
SIM cards issued by Bharti Mobile Limited and distributed in Punjab were questioned whether they can be treated as "goods" for levy of octroi by Municipal Councils. The court held that SIM cards cannot be independently termed as "goods" for octroi purposes, based on Supreme Court judgments in BSNL and Idea Mobile cases, which found SIM cards are never sold as goods independent from services provided. Consequently, notifications levying octroi on SIM cards were set aside, and the writ petition was allowed.
Service Tax
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Software development services not classified as online data access.
The appellant's activity does not constitute Online Information and Data Based Access or Retrieval Services (OIDAR) as it involves developing software/websites or providing consultancy on the internet, which requires significant human intervention. The appellant's services do not involve merely accessing or retrieving online data, which is a prerequisite for OIDAR services as per the circular. The demand for service tax was based on a wrong presumption that the appellant's activity qualified as OIDAR. Rule 6(A) of the Service Tax Rules was also incorrectly invoked. Consequently, the Appellate Tribunal allowed the appeal and denied the confirmation of the service tax demand.
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Resolving Taxable Value for Goods Transport Agency (GTA) Services on Reverse Charge Basis.
Determination of the taxable value for payment of service tax on reverse charge basis by the service recipient in respect of Goods Transport Agency (GTA) Services. The key points are: The value of taxable service is the consideration received by the service recipient towards the provision of service, as defined u/s 67 of the Finance Act, 1994. The value is not based on the invoice value but the gross amount paid by the service recipient to the service provider. The appellant determined the taxable value as the actual amount paid after adjusting rewards and penalties, which is correct as per Section 67. Rule 6(1)(x) cannot override Section 67 and is not applicable in this case. The Supreme Court in Intercontinental Consultants case held that the value of taxable service shall be the gross amount charged by the service provider. Therefore, the impugned order enhancing the taxable value is incorrect, and the appeal is allowed.
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Port Weighbridge Activity: Not a Taxable Business Support Service.
The weighment activity carried out by the respondent appellant within the Navlakhi Port is not classifiable under the taxable category of Business Support Service as defined u/s 65(104c) of the Finance Act, 1994 read with Section 65(105)(zzzg). The weighbridge activity is an independent activity and cannot be classified as Business Support Service as the respondent is not supporting anyone's business. The demand raised in the Show Cause Notice does not survive as the category of demand itself is incorrect. The respondent has undertaken a statutory obligation by operating the weighbridge at the port. Such statutory obligations for smooth port operations cannot be taxed, as held in various judgments. The case of Food Corporation of India supports this view, where it was held that the weighment activity is not liable to service tax as it is not related to promotion, marketing, or sale of goods. Therefore, no interference is required in the impugned order of the lower authority, and the Revenue's appeal is dismissed.
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Cash Refund Eligibility under GST Act - A Concession, Not a Right.
Section 142(3) of the CGST Act 2017 is a provision for entertaining and allowing refund of credit, but the refund's eligibility and admissibility under existing law is the determining factor. The case of M/s NACL Industries Ltd. held that refund was not permissible in certain situations where it was otherwise not eligible under existing law. The Larger Bench decision of M/s Bosch Electrical Drive India Pvt Ltd. dealt with the maintainability of such appeals before CESTAT, not the admissibility of refund u/s 142(3). The order of M/s Jagannath Polymers Pvt Ltd. allowed the appeal without addressing various orders on the interpretation of Section 142(3). Courts and Tribunals have held that credit is not a substantive right but a concession. The Commissioner (Appeals) order dismissing the appeal had no infirmity.
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Directors' remuneration not liable for service tax under reverse charge mechanism.
Remuneration (salary, allowances, commission on company profits) paid to directors of a company is not liable to service tax under reverse charge mechanism. The Income Tax Act, 1961 deals with salary paid to employees, and TDS was deducted u/s 192 and Form 16 issued. CESTAT in Allied Blenders and Distillers Pvt Ltd and Supreme Treves Private Limited cases held that such remuneration paid to directors is not liable to service tax based on identical facts. Considering the ratio of these judgments, the demand for service tax on directors' remuneration is unsustainable, and the appeal is allowed, setting aside the impugned orders.
Central Excise
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SVLDRS: Failure to pay under Sabka Vishwas scheme within deadline leads to dismissal of petition.
The petitioner failed to deposit the required amount under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, despite receiving Form SVLDRS-3 from the respondent after considering Form SVLDRS-1 filed by the petitioner. The court held that the petitioner's reasons for non-payment were inconsequential, as the scheme's terms and conditions mandated payment within 30 days of issuing Form SVLDRS-3. Relying on the Supreme Court's decision in M/s. Yashi Constructions, the court ruled that modifying the scheme by extending the payment date is impermissible. The Bombay High Court's decision in Shri Arjun Amarjeet Rampal's case, involving a technical glitch, was distinguished as inapplicable. Consequently, the petition was dismissed for the petitioner's failure to comply with the scheme's terms and conditions.
Articles
Notifications
Central Excise-
26/2024 - dated
24-10-2024
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CE
Amendment in Fourth Schedule of the Central Excise Act, 1944
GST - States-
S.O. 454 - dated
9-10-2024
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Bihar SGST
Amendment in Notification No. S.O. 238, dated 13th September, 2018
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S.O. 453 - dated
9-10-2024
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Bihar SGST
Amendment in notification No. S.O. 99, dated 29th June, 2017
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9/2024–State Tax (Rate) - dated
9-10-2024
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Bihar SGST
Amendment in Notification No. 13/2017-State Tax (Rate), dated the 29th June, 2017
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7/2024–State Tax (Rate) - dated
9-10-2024
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Bihar SGST
Amendment in Notification No. 11/2017-State Tax (Rate), dated the 29th June, 2017
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6/2024–State Tax (Rate) - dated
9-10-2024
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Bihar SGST
Amendment in Notification No. 4/2017-State Tax (Rate), dated the 29th June, 2017
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5/2024–State Tax (Rate) - dated
9-10-2024
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Bihar SGST
Amendment in Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017
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S.O. 452 - dated
3-10-2024
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Bihar SGST
Amendment in Notification No. S.O. 147, Dated 7th September, 2017
Indian Laws-
S.O. 4658(E) - dated
24-10-2024
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Indian Law
Amendment in Notification No. S.O. 1443(E) Dated 18-4-2016
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2024 (10) TMI 1327
Grant of anticipatory bail - sum and substance of the prosecution case is that the appellant being the director in connivance with the others is involved in forging the documents for the purpose of getting statutory benefits with respect to customs duty and GST liability - HELD THAT:- By taking into consideration the fact that earlier a complaint was registered at the instance of another director, of the company in which the present appellant is also a director and the present proceeding being initiated in pursuance to the statement given to one of the employees during the investigation conducted thereunder, coupled with the fact that the appellant is a lady, we are inclined to set aside the impugned order and grant anticipatory bail to the appellant. Needless to state that the appellant shall cooperate with the investigation. The impugned order stands set aside and the appellant is granted anticipatory bail, subject to the terms and conditions that may be imposed by the Trial Court as it deems fit for the aforesaid purpose - Appeal allowed.
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2024 (10) TMI 1326
Blocking of Input Tax Credit (ITC) - Rule 86A of the U.P. GST Rules - satisfaction as required has not been indicated in the order impugned - HELD THAT:- Considering the fact that the application made by the petitioner on 18.09.2024, seeking unblocking of the ITC made by order dated 13.09.2024 continues to remain pending with the respondents, it would be in fitness of things that the respondents are directed to decide the pending application in accordance with law within a period of three weeks from the date of this order. Before deciding the said application, the petitioner would be provided appropriate opportunity of being heard. The petitioner would be free to raise all the issues as raised in the present writ petition. Petition disposed off.
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2024 (10) TMI 1325
Blocking of Input Tax Credit (ITC) - sub-rule (1) under rule 86A in Odisha Goods and Services Tax Rules, 2017 - HELD THAT:- Rule 86A provides for blocking of available input credit. Section 74 deals with determination of tax, inter alia, on wrongfully availing ITC. Thus there is an essential difference between section 74 operating in a field where ITC has already been availed of and rule 86A, operating where there is available ITC. In the circumstances, requirement under section 74 for issuance of show cause notice cannot be implied as mandate of pre-condition for blocking under rule 86A. The proper officer has exercised discretion in intimating petitioner that ITC has wrongly been availed by him and therefore there will be determination and recovery of tax. Regarding the assessment made under section 62, we appreciate that petitioner, in disputing the allegation of wrongfully availing ITC and suffering blocking of his available ITC, may have been prevented from filing return. As such, we direct that petitioner will have 30 days to file return commencing from date of communication of decision taken on his representation for unblocking his ITC. Petition disposed off.
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2024 (10) TMI 1324
Cancellation of GST registration of petitioner with retrospective effect - non genuine tax-payers - petitioner was found non-existent - impugned order does not indicate any reason for cancelling the petitioner s GST registration much less from retrospective effect - violation of principles of natural justice - HELD THAT:- The impugned order is bereft of any reason. It neither specifies the reasons for cancelling the GST registration nor gives any clue as to why it was cancelled w.e.f 02.09.2017. The retrospective cancellation of GST registration has a cascading effect inasmuch as the concerned authorities would also deny the input tax credit to other tax payers who might have received supplies from the petitioner herein. Dealing with an identical issue in the case of Riddhi Siddhi Enterprises vs. Commissioner of Goods and Services Tax (CGST), South Delhi Anr. [ 2024 (10) TMI 278 - DELHI HIGH COURT ], where it was held that 'It is also necessary to observe that the mere existence of such a power would not in itself be sufficient to sustain its invocation. What we seek to emphasise is that the power to cancel retrospectively can neither be robotic nor routinely applied unless circumstances so warrant. When tested on the aforesaid precepts it becomes ex facie evident that the impugned order of cancellation cannot be sustained.' It is foiund that there has been an abject failure on the part of the concerned authorities to assign even rudimentary reasons for retrospective cancellation. Since the only allegation against the petitioner was that it was non-existent, which was sufficiently addressed by the petitioner in his reply by claiming that the tax payer had to go to Rajasthan due to ill health of his father, and at the relevant time when visit was scheduled by the Department, the tax payer was travelling to Rajasthan and owing to this, the business place of the tax payer was closed and it was presumed that the tax payer is non-existent. The temporary suspension of business activity on account of ill health would not warrant cancellation of taxpayer s GST registration. The impugned order dated 27.08.2024 is completely silent with regard to even any enquiry having been conducted on the aforesaid aspect. Both the impugned SCNs dated 06.02.2024 and 07.08.2024 as also the impugned orders dated 25.05.2024 and 27.08.2024 are set aside. Respondents are directed to restore the petitioner s GST registration - Petition disposed off.
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2024 (10) TMI 1323
Challenge to penalty order passed in form GST MOV- 09 dated 21.09.2024 passed by respondent No. 2 under the provisions of CGST/IGST Act and Rules - clarification dated 31.12.2018 issued by the Central Board of Taxes and Customs GST Policy Wing - HELD THAT:- The impugned demand of penalty order dated 21.09.2024, Annexure-1, passed by respondent No. 2 is set aside. The matter is remanded back to the competent authority to pass a fresh order in terms of the observations made hereinbefore within a period of two weeks from the date of receipt of copy of this order. The writ petition is allowed. by way of remand.
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2024 (10) TMI 1322
Denial of ITC - marking wrong place of supply in annual return as 'other territory' instead of 'Kerala' - HELD THAT:- Having considered the judgments of the Madras High court in DEEPA TRADERS VERSUS PRINCIPAL CHIEF COMMISSIONER OF GST CENTRAL EXCISE CHENNAI, TAMIL NADU, SUPERINTENDENT OF GST, CENTRAL EXCISE, COIMBATORE GOODS AND SERVICES TAX NETWORK (GSTN) , NEW DELHI [ 2023 (3) TMI 628 - MADRAS HIGH COURT] and M/S. AKSHAYA BUILDING SOLUTION, REPRESENTED BY ITS PARTNER, MR. K. SENTHILKUMAR VERSUS THE ASSISTANT COMMISSIONER OF CGST CENTRAL EXCISE, COIMBATORE IV DIVISION, COIMBATORE [ 2023 (12) TMI 511 - MADRAS HIGH COURT] and also taking into consideration of the fact that the alleged mistake was in the year immediately after the introduction of GST, the petitioner can be granted relief as was done by the Madras High Court in the judgment referred to above - In Deepa Traders the Madras High Court held ' In the absence of an enabling mechanism, I am of the view that assessees should not be prejudiced from availing credit that they are otherwise legitimately entitled to. The error committed by the petitioner is an inadvertent human error and the petitioner should be in a position to rectify the same, particularly in the absence of an effective, enabling mechanism under statute.' This writ petition is allowed by setting aside Ext.P3 order in original and consequential recovery notices namely Exts.P4 and P7 and directing the competent among the respondents to permit the petitioner to resubmit the annual return for the year 2017-18 in GSTR 9 by correcting the mistakes allegedly committed by the petitioner - Petition allowed.
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2024 (10) TMI 1321
Maintainability of petition - availability of alternate efficacious remedy of appeal to the Commissioner (Appeals) - no opportunity of hearing - failure of principles of natural justice - HELD THAT:- The complaint about no opportunity of hearing, at least prima facie, cannot be accepted. At least three intimations were sent to the Petitioner s registered address. The Petitioner had not intimated the Respondents about the changed address. In this case, we notice that the show cause notice and the Order-in-Original were served at the Petitioner s registered address, i.e., Shed No. 1, Gat No. 344, Ground Floor, Konde Bandhu, Near Old Post Office, Moshi, Pimpri-Chinchwad, Pune 411501. Further, even the Petitioner wrote to Respondent No. 3 seeking documents on a letterhead containing the same address. Even the address in the cause title of this petition is the same. Therefore, the contention about a change of address cannot be at least, prima-facie, accepted. This is prima facie, not a case of no notice , but at the highest, this is a case of no adequate notice . In later cases, the party complaining about inadequate notice must establish some prejudice. This petition is declined to be entertained - the Petitioner are relegated to avail of the alternate remedy of appeal against the impugned order - petition disposed off.
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2024 (10) TMI 1320
Maintainability of petition - availability of alternative remedy of appeal - transition of credit - HELD THAT:- There is no reason why the Petitioner should not be relegated to the remedy of an appeal. Therefore, if the Petitioner files an appeal within four weeks from today, the Appellate Authority should consider such appeal on merits without going into the issue of limitation. This petition was pending since 23 June 2023 and Petitioner was bona fide prosecuting it before this Court. The Appellate Authority should take into consideration the effect the Finance (No. 2) Act of 2024 while deciding the appeal. Petition disposed off.
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2024 (10) TMI 1319
Dismissal of appeal - incompetent and incomplete appeal for want of deposition of the requisite fee - HELD THAT:- The stand taken by the State is appreciated and the present writ petition is disposed off with directions to the Appellate Authority to hear the appeal preferred by the petitioner on merits, subject to the petitioner depositing the remaining amount of Rs. 10,000/- within a period of one week from today. On account of the non-payment of the requisite fee, an appeal cannot be dismissed as not maintainable, and in fact, before the Appellate Authority takes up any appeal, the appellant should be informed of any deficiency and be given a chance to deposit and remove the deficiency, if any - Petition allowed.
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2024 (10) TMI 1318
Refund claim - no opportunity of being heard - non-compliance with the provisions of Rule 92 (3) of the Central Goods and Services Tax (CGST) Rules, 2017 - violation of principles of natural justice - HELD THAT:- The Respondents have filed an affidavit that a hearing was given to the representative of the Petitioner. However, the same has not been made good. In any event, Rule 92 (3) contemplates issue of a notice to the applicant to show cause as to why refund should not be ordered and upon considering the reply of the applicant, an order has to be made. The proviso also states that no application for refund shall be rejected without giving the applicant an opportunity of being heard. The impugned orders set aside to the extent they deny the Petitioner a refund. The Respondents will now have to comply with the requirements of Rule 92 (3) and decide the matter afresh as expeditiously as possible. By setting aside the impugned orders to the extent they deny the refund, the matter restored before the concerned Respondent for disposal of the refund application in accordance with law and by complying with the requirements Rule 92 (3) of the CGST Rules, 2017 - petition disposed off.
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2024 (10) TMI 1317
Cancellation of registration of the petitioner - rejection on the ground of laches in filing the appeal - no reasons assigned for cancellation - non-application of mind - violation of principles of natural justice - HELD THAT:- The record shows that no reason whatsoever has been assigned for cancellation of registration of the petitioner, however, the reason is the heartbeat and soul of any judicial or administrative order. In the impugned order, no reason has been assigned which shows that same has been passed without any application of mind, which does not satisfy the test of Article 14 of Constitution of India. This Court in the case of M/s Namo Narayan Singh Vs. State of U.P. and Others [ 2023 (10) TMI 482 - ALLAHABAD HIGH COURT] has held that providing of reasons in order is of essence in judicial proceedings. The Hon ble Apex Court in the case of Hongo India (P) Ltd. [ 2009 (3) TMI 31 - SUPREME COURT] and the Karnataka High Court in the case of Director of Mines and Geology [ 2011 (9) TMI 700 - KARNATAKA HIGH COURT] has held that delay i.e. beyond the period, cannot be condoned. In the case in hand, the cancellation of registration order has been passed without application of mind as no reason has been assigned in the impugned order dated 08.08.2023. However, the Division Bench of this Court has categorically held that if no reason has been given for cancelling the registration, doctrine of merger will not apply and therefore, the judgment relied upon by the counsel for the respondents in the case at hand, are of no aid to them. The matter is remanded to the adjudicating authority and the adjudicating authority after submission of reply to the show cause notice by the petitioner within four weeks from today as it is directed to the petitioner to file it, shall proceed de novo to pass a reasoned and speaking order after granting due opportunity of hearing to the petitioner - Petition allowed by way of remand.
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2024 (10) TMI 1316
Levy of penalty order passed in form GST MOV- 09 dated 21.08.2024 - Submissions have been made that penalty has been imposed u/s 129(1)(b) of the Act whereas in terms of the clarification dated 31.12.2018 issued by the Central Board of Taxes and Customs GST Policy Wing, the penalty in the present case could have been levied under Section 129(1)(a) of the Act to which, the petitioner is not disputing - HELD THAT:- The respondents does not dispute the fact that the issue as raised is covered by the clarification dated 31.12.2018 as well as the judgment in the case of M/S MARGO BRUSH INDIA AND OTHERS VERSUS STATE OF U.P. AND ANOTHER [ 2023 (1) TMI 1237 - ALLAHABAD HIGH COURT] . The impugned demand of penalty order dated 21.08.2024, Annexure-1, passed by respondent No. 2 is set aside. The writ petition is allowed. The matter is remanded back to the competent authority to pass a fresh order in terms of the observations made hereinbefore within a period of two weeks from the date of receipt of copy of this order - Petition allowed by way of remand.
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2024 (10) TMI 1315
Attachmnet of bank account of the petitioner - no relation whatsoever with the entities named in the order - HELD THAT:- In view of the fact situation, wherein the objections filed by the petitioner are pending consideration before the competent authority, it is deemed appropriate to direct the Authority to decide the pending representation/objections of the petitioner in Form GST DRC-22A (Annexure-4), after affording opportunity of hearing to the petitioner, within a period of four weeks from the date a copy of this order is placed by the petitioner with the said Authority. The petition stands disposed of.
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2024 (10) TMI 1314
Maintainability of petition - availability of alternative remedy - Jurisdiction to issue SCN - discretion of the court to entertain a writ petition under Article 226 of the Constitution of India - HELD THAT:- Prior to the passing of the impugned order dated 28.06.2024, a show cause notice dated 13.04.2023 was issued to the Petitioner, to which, the Petitioner submitted its reply and it is only thereafter that the impugned order dated 28.06.2024 has been passed. The issue relating to the show cause notice being without jurisdiction is said to have been raised by the Petitioner while submitting his reply before the Joint Commissioner, who has passed the impugned order dated 28.06.2024. Once the Petitioner submitted to this show cause notice dated 13.04.2023 by filing its reply, though raising an objection that the show cause notice was without jurisdiction, in our considered opinion, the appropriate remedy available to the Petitioner is to invoke the provisions of Section 107 of the CGST Act for challenging the impugned order dated 28.06.2024. It is well established that the remedy under Article 226 of the Constitution of India is discretionary, hence, ordinarily such a discretion should not be exercised by this Court, in case there is any other statutory and efficacious remedy available to the person invoking writ jurisdiction of this Court - The discretion in such a situation may be exercised by this Court under Article 226 of the Constitution of India in case there are violations of principles of natural justice or the decision under challenge has not been taken by the competent authority. It is not the case of the Petitioner that the impugned order dated 28.06.2024 could not have been passed by the Joint Commissioner. Petition dismissed.
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2024 (10) TMI 1313
Framing of an appropriate direction commanding the respondents to release the refunds - HELD THAT:- The sole ground on which the refund is sought to be contested is the opinion of the Deputy Commissioner that the Order-in-Appeal is not legally tenable - Since the order of 18 October 2022 has admittedly attained finality, the stand as taken cannot possibly be sustained. The claim of the petitioner for grant of refund is clearly merited. It would consequently be entitled to refund along with statutory interest. The instant writ petition is allowed - the respondents are directed to attend to the refund claim as made by the writ petitioner forthwith along with statutory interest as payable.
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2024 (10) TMI 1312
Suspension of registration of the petitioner - It is alleged that despite a response having been duly submitted on more than one occasion to the aforesaid notice, the respondents have failed to dispose of and conclude those proceedings - HELD THAT:- It is noted that the petitioner had admittedly and as far back as on 24 April 2023 as well as 22 November 2023 submitted its response to the impugned SCN. This was followed by a reminder which was submitted on 31 May 2024. Despite the above, the petitioner alleges that the respondents have failed to conclude the proceedings. Bearing in mind the statutory obligation which stands placed in terms of Rule 22, it is opined that the continued suspension of the registration of the petitioner is clearly unjustified. The writ petition is disposed off by directing the respondents to examine the replies dated 24 April 2023 and 22 November 2023 already submitted by the writ petitioner and dispose of the SCN proceedings within a period of three weeks from today.
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2024 (10) TMI 1311
Violation of principles of natural justice - opportunity of hearing not provided - jurisdiction to entertain the condone delay application - HELD THAT:- In the case on hand, the petitioner, being unaware of the impugned order, has failed to file their appeal within the prescribed time limit. However, the reasons assigned by the petitioner for non-filing of appeal within the prescribed time appears to be genuine. Therefore, being satisfied with the reasons assigned by the petitioner and also considering the submission made by the petitioner, this Court is inclined to condone the delay in filing the appeal by the petitioner. The rejection order dated 09.07.2024 is set aside and the delay of 54 days in filing the appeal before the Appellate Authority is hereby condoned - Appellate Authority is directed to take the appeal on record and pass appropriate orders on merits and in accordance with law, after providing sufficient opportunity to the petitioner, as expeditiously as possible. Petition disposed off.
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2024 (10) TMI 1310
Cancellation of registration of petitioner - Non compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed - no proper reasons given in the SCN - Violation of principles of natural justice - HELD THAT:- Neither the SCN nor the final order assign or record any reasons in support of the ultimate conclusion which has come to be drawn and recorded, namely, that the petitioner had violated the provisions of the Goods and Services Tax Act, 2017 or the Goods and Services Tax Rules, 2017 framed thereunder. The SCN is gloriously silent with respect to the provisions of the GST Act which are alleged to have been violated or infringed. The aforesaid position remained unaltered in the final order which too fails to provide any clue with respect to the provision of the statute which may have been violated or infringed. The impugned SCN dated 16 June 2023 and the impugned order of cancellation of registration dated 04 June 2023 is hereby quashed - Petition allowed.
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2024 (10) TMI 1309
Cancellation of GST registration of petitioner with retrospective effect - closure of business - HELD THAT:- The order rejecting the application for cancellation of registration, the SCN as well as the final order, have failed to assign or record any substantive reasons in support of the ultimate conclusion. It has instead proceeded to reject the application for cancellation on the solitary ground that the reply of the taxpayer has not been found satisfactory and had simultaneously issued a SCN and a final order of cancellation of registration merely stating as follows:- others . In the absence of any reasoning adduced in the order rejecting the application for cancellation of registration, the SCN or the final order of cancellation of registration, the instant writ petition is allowed and the respondent is directed to cancel the GST registration of the petitioner with effect from 06 August 2024. Petition disposed off.
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2024 (10) TMI 1308
Classification of services rendered - intermediary services or not - refund of unutilized Input Tax Credit (ITC) - HELD THAT:- An intermediary would be one who arranges or facilitates the supply of goods or services between two or more persons. The sample agreement which has been placed on our record clearly belies the view that was taken by the respondents in this regard. As is manifest from a reading of that agreement, the ITS was envisaged to be provided by the writ petitioner itself to the entity situate outside India. The petitioner was clearly not one which was facilitating the supply between two or more persons. It was itself directly engaged in the provision of supply. In view of the above, the foundational basis of the impugned orders itself is rendered unsustainable. The impugned orders do not rest on any material or evidence which could have been even remotely read as being suggestive of the petitioner being an intermediary as explained. The consistent stand of the petitioner had been that it was supplying service on a principal to principal basis. The respondents do not rest their decision on a finding that there was a tripartite agreement for the supply of services. Merely because the service was being provided to the holding company, the petitioner would not have been disentitled to a mark-up. In any case, it would clearly not be liable to be classified as an intermediary merely because such a mark-up had been obtained over and above the costs incurred. The impugned Order is set aside - petition allowed.
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2024 (10) TMI 1307
Retrospective cancellation of GST registration - adequate reasons provided for cancellation or not - violation of principles of natural justice - HELD THAT:- The decision rendered recently in Riddhi Siddhi Enterprises vs. Commissioner of Goods and Services Tax (CGST), South Delhi Anr. [ 2024 (10) TMI 278 - DELHI HIGH COURT] is perused, where, while construing the provisions of Section 29 (2) and the power of the respondent to cancel with retrospective effect, it is held ' in light of an abject failure on the part of the authority to assign even rudimentary reasons for a retroactive cancellation, we find ourselves unable to sustain the order impugned.' It is additionally found that even the original show cause notice had not placed the respondent on notice of an intention to cancel the registration with retrospective effect. The impugned order of 27 September 2022 is quashed to the extent that it purports to take effect from 12 November 2019. The cancellation shall consequently come into effect from 09 September 2022 i.e. the date when the show cause notice had been issued - petition allowed.
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2024 (10) TMI 1306
Permission to file an affidavit in the Court for the purpose of removing the defect - cancellation of GST Registration of petitioner - HELD THAT:- In view of the consensus between the parties, the matter is covered by the order passed in WPMS No. 2285 of 2024 [ 2024 (9) TMI 904 - UTTARAKHAND HIGH COURT] , the present writ petition is also decided in terms of the said order. The petitioner shall be at liberty to move an application for revocation or cancellation of the order under Section 30(2) of the CGST Act, 2017, within two weeks. With this application, the petitioner shall also furnish all the GST returns, which he fails to submit and he will also deposit the outstanding tax and dues of the goods and service tax with his application. If he makes such an application within stipulated period, the Competent Authority shall consider petitioner s application and pass appropriate order as per law, within four weeks thereafter. Petition disposed off.
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2024 (10) TMI 1305
Initiation of parallel proceedings despite the issuance of a comprehensive notice by the Directorate General of GST Intelligence - HELD THAT:- The respondents are restrained from taking further steps pursuant to the impugned SCN dated 24 May 2024 pertaining to the tax period of April 2019 to March 2020. Petition disposed off.
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2024 (10) TMI 1304
Cancellation of GST registration - appeal was preferred beyond the period of limitation - condonation of delay without there being any proper explanation - HELD THAT:- It is not in dispute that after service of the impugned order dated 19.1.2023, the appeal should have been preferred within limitation, but the appeal has been preferred beyond the limitation. Admittedly, the impugned order dated 19.1.2023 was received by the petitioner - Further, before this Court also, petitioners have failed to give any good ground for condonation of delay, therefore, this Court, under extra ordinary jurisdiction, cannot interfere with the impugned orders. The Apex Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT ], has specifically held ' Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days' period.' Thus, no interference is called for in the impugned orders - petition dismissed.
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2024 (10) TMI 1303
Violation of principles of natural justice - failure to appear for personal hearing - discrepancies in returns filed for financial year 2018-2019 - HELD THAT:- According to the petitioner, the petitioner was not aware of the issuance of the reminder notice issued through the GST Portal and the original of the said notice was not furnished to them. In such circumstances, this Court is of the view that the impugned orders came to be passed without affording any opportunity of personal hearing to the petitioner to establish its case, thereby violating the principles of natural justice and that it is just and necessary to provide an opportunity to the petitioner to establish their case on merits and in accordance with law. The orders impugned herein are set aside and the matter is remanded to the first respondent for fresh consideration subject to the payment of Rs. 5,000/- to the credit of Cancer Institute (Regional Cancer Centre), Adyar, Chennai 600 020 for delay in approaching this Court, within a period of one week 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 1302
Cancellation of GST registration of petitioner with retrospective effect - attachment of petitioner no. 1 s premises - lack of opportunity for the petitioner to respond and be heard before the cancellation - violation of principles of natural justice - HELD THAT:- It is seen that the impugned SCN does not propose the cancellation of petitioner no. 1 s GST registration with retrospective effect from 01.07.2017. Plainly, if it is the respondents contention that petitioner no. 1 s principal place of business has been attached by the secured lenders under the SARFAESI Act, on 14.03.2023, the same cannot lead to the conclusion that petitioner no. 1 did not carry on its business from the said premises since inception. It is also relevant to note that although the impugned SCN called upon the petitioner to appear for personal hearing before the proper officer, however, no date or time was fixed for personal hearing. Thus, in effect, the petitioners were also not afforded an opportunity of being heard. The impugned order is set aside as it has been passed in violation of the principles of natural justice. Clearly, petitioner no. 1 had no opportunity to respond as to why its registration be not cancelled from a retrospective date - petition disposed off.
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2024 (10) TMI 1301
Excess claim for input tax credit (ITC) - availment of ITC in respect of supplies from the suppliers, whose GST registration was cancelled retrospectively - HELD THAT:- The petitioner was issued a reminder notice dated 04.12.2023 issued by respondent no. 1. Thereafter, the petitioner had filed another reply dated 15.12.2023, which was on similar lines as earlier reply dated 21.10.2023. The impugned order is ex facie unreasoned and has not considered any of the submissions made by the petitioner. The adjudicating authority has rejected the reply submitted by the petitioner with the observations that it is found to be vague and miserably fails to counter the demands mentioned in DRC-01 . Additionally, the proper officer noted that no invoices, certificates, or proof of payment had been attached in support of his claim for excess ITC. The petitioner s contention that it had not claimed any excess ITC and the difference was only on account of a technical glitch, was not addressed. Since the impugned order is unreasoned, it is considered apposite to set aside the same on the aforesaid ground. It is so directed. The matter is remanded to the adjudicating authority for considering afresh after affording the petitioner a reasonable opportunity to be heard - petition disposed off by way of remand.
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2024 (10) TMI 1300
Challenge to assessment order - disallowance of Input Tax Credit - disallowed only on the ground that the claims have been lodged beyond the period prescribed under Section 16(4) of the GST Acts - HELD THAT:- The impugned order passed by the respondent dated 24.04.2024 is set aside. The learned assessing adjudicating authority/respondent would re-do the assessment by taking into account the amendment referred supra. The petitioner may submit their objection by way of reply, within a period of three weeks from the date of receipt of a copy of this order along with the amendment and other details. This Writ Petition is disposed of.
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2024 (10) TMI 1299
Freezing of Bank Accounts u/s 83 (1) of the Central Goods and Services Tax Act, 2017 - whether period of one year has not lapsed since the issuance of fresh orders? - HELD THAT:- A plain reading of the petitions in these cases indicate that the petitioners have not taken any effective steps in ascertaining the reasons as to why the bank accounts have been frozen. It is considered apposite to direct the respondents to send copies of the respective orders passed under Section 83(1) of the CGST Act/DGST Act for freezing the bank accounts of the petitioners. Petition disposed off.
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2024 (10) TMI 1298
Non-reversal of Input Tax Credit (ITC) in respect of exempted supplies - impugned order does not indicate the reasons - violation of principles of natural justice - HELD THAT:- It is apparent that the impugned order is unreasoned inasmuch as it does not consider the explanation as provided by the petitioner. The impugned order is set aside and the matter is remanded to the Adjudicating Authority for considering afresh - Petition allowed by way of remand.
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2024 (10) TMI 1297
Seeking grant of anticipatory bail - offence under Section 132(1)(b) and 132(1)(c) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- On going through the material placed on record but without meaning to make any comment on the merits of the case, this Court is of the considered opinion that the present petition deserves to be allowed keeping in view the fact that the investigation has been completed, a complaint has been filed and the trial has commenced and the petitioner, whose arrest has been stayed on 16.12.2020, has not misused the same. The petitioner is granted concession of anticipatory in the aforesaid complaint, subject to furnishing personal/surety bonds to the satisfaction of the trial Court and further subject to the compliance of conditions envisaged under Section 438(2) of Cr.P.C. Petition allowed.
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2024 (10) TMI 1296
Maintainability of petition - non-constitution of Appellate Tribunal - Jurisdiction and authority of the Assistant Commissioner as a proper officer and adjudicating authority. - cancellation of registration of GST of petiitoner - HELD THAT:- Since by order dated 30.06.2017, the Assistant Commissioner of State Tax, State Goods and Services Tax Officer has been assigned the functions of proper officer under the Uttarakhand Goods and Service Tax Act, 2017 by invoking powers conferred under sub Section (1), sub Section (3) of Section 5 read with clause (91) of Section 2 of the Uttarakhand Goods and Service Act, 2007 (Act No. 06 of 2017) and the Rules framed thereunder, which has not been challenged by the writ petitioner in the writ petition, whereby the Assistant Commissioner, who passed the order of cancellation of GST registration, is admittedly is an adjudicating authority as per Section 2(4) of the Act, which excludes the Commissioner and is also a proper officer in terms of Section 29(1) of the Act and hence the Appeal will lie against an order passed by such officer, i.e. Assistant Commissioner to the Commissioner. Since after the remand order, the writ petition was disposed of by the learned Single Judge on 18.08.2022, which has not been assailed and for a limited purposes the review application has been preferred whether an Appeal will lie before the Commissioner against an order passed by the Assistant Commissioner, therefore, the Review Application is being allowed, in part. The judgment and order passed by this Court on dated 20.06.2022 is reviewed and modified by holding that since the Commissioner has assigned the functions under the Act to the Assistant Commissioner and due to this assignment, the Assistant Commissioner being an officer under the Act is a proper officer in terms of Section 2(91) and also an adjudicating authority in terms of Section 2(4) of the Act and hence the Appeal will lie against the order passed by the Assistant Commissioner, before the Commissioner.
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2024 (10) TMI 1295
Violation of principles of natural justice - petitioner was unaware of proceedings culminating in the impugned order because GST compliances were entrusted to an auditor, who failed to notice the show cause notice and order on the GST portal - HELD THAT:- On examining the impugned order, it is clear that the tax proposal was confirmed because the tax payer did not file objections to the tax proposal. In view of the assertion that the tax payer could not participate in proceedings on account of being unaware of such proceedings, the interest of justice warrants that the petitioner be provided an opportunity by putting the petitioner on terms. The impugned order dated 17.04.2024 is set aside on condition that the petitioner remits 10% of the disputed tax demand with in a period of 15 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 1294
Order impugned against a dead person - this petition is filed by the legal heirs of the late M.K.Girish - HELD THAT:- The petitioners have placed on record the death certificate of Mr. M.K.Girish. Such death certificate specifies the date of death as 25.02.2021. The legal heirship certificate is also on record and the legal heirs are the siblings of the late M.K.Girish and the petitioners here in. In these circumstances, the impugned order cannot be sustained. The impugned order dated 29.04.2024 is set aside by leaving it open to the respondent to initiate appropriate legal proceedings against the legal heirs of the late M.K.Girish - petition disposed off.
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2024 (10) TMI 1293
Violation of principles of natural justice - Failure to consider petitioner's reply to SCN - non-application of mind - singular contention is that the exercise of issuance of show-cause notice should not be an empty formality - HELD THAT:- In furtherance of show-cause notice, the petitioner filed reply which has not been considered. This exercise of issuance of notice and obtaining a reply, in our opinion, is not an empty public relation exercise. Instead, it is the codification of principles of natural justice in the statute and the said principle mandates that said reply be obtained before passing any adverse order and there must be an application of mind by considering the reply of the petitioner. In the instant case, in a hasty manner, without application of mind, the impugned order has been passed. Without expressing any opinion on merits of the case, the impugned order dated 09.05.2024 is set aside by reserving liberty to the respondents to consider the reply of petitioner and pass a fresh order - Petition disposed off.
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2024 (10) TMI 1292
Non-service of SCN - order not communicated to the petitioner through any mode, including by uploading the same on the GST portal - violation of principles of natural justice - assessment period July 2017 to December 2017 - HELD THAT:- Pursuant to the order dated 09.01.2019, by notice dated 26.11.2020, the petitioner was called upon to remit the tax dues in relation to the order dated 09.01.2019. In spite of receiving the notice, the petitioner did not take any steps to obtain a copy of such order within a reasonable time. Instead, after receipt of the garnishee order, the petitioner addressed a communication to the first respondent on 15.05.2024 requesting for a certified copy of the impugned order and filed this writ petition upon receipt thereof. Although a period of limitation is not prescribed for the initiation of proceedings under Article 226 of the Constitution of India, it is needless to say that the petitioner is required to approach the Court within a reasonable time. By taking into account the fact that the order is dated 09.01.2019 and the petitioner has filed this writ petition on 24.05.2024, the petitioner is not entitled to discretionary relief. Petition dismissed.
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2024 (10) TMI 1291
Admissibility of Advance Ruling application - Levy of GST on stamp duty registration fee paid for the purpose of a registering lease deed with registering authority - Applicability of Nil rate of tax under Sl. No. 47 of the exemption notification 12/2017-CT dtd. 28.06.2017 to stamp duty registration fee paid by the Applicant for registering their mining lease deed - stamp duty and registration fee should be treated as consideration for mining lease service, when those are actually paid for receiving service of the Government for registration of a conveyance/ lease deed - HELD THAT:- In the instant case, the Applicant i.e. M/s. Geeta Rani Mohanty, Barbil, appears to have fallen under the above proviso to Section 98 (2) of the CGST Act, 2017. The Applicant opted for appeal to advance ruling at such a stage when the subject matter is already pending in the audit proceedings initiated by the Audit Commissionerate, Bhubaneswar under Section 65 of the CGST Act, 2017. Further, it is seen that DRC-01 dated 10.04.2024 has already been issued to the Applicant by the Additional Commissioner, Audit Commissionerate, Bhubaneswar demanding Rs. 6,27,74,106/- (Rupees Six Crores Twenty Seven Lakhs Seventy Four Thousand One Hundred and Six only) u/s 73 of the CGST Act, 2017. Reliance placed upon the judgement passed by the Hon ble Madras High Court in the case of M/S. ABT LIMITED, REPRESENTED BY ITS COMPANY SECRETARY, MR. S. ELAVAZHAGAN VERSUS THE ADDITIONAL COMMISSIONER OF GST CENTRAL EXCISE, O/O. THE COMMISSIONER OF GST CENTRAL EXCISE (AUDIT) , COIMBATORE [ 2024 (2) TMI 130 - MADRAS HIGH COURT] wherein, the Hon ble Court held that during the conduct of GST Audit under Section 65 of the CGST Act, 2017, if it indicates that tax was not paid or short paid or that Input Tax Credit (ITC) was wrongly availed or utilized, the proper officer may initiate the action under Section 73 or 74 of the CGST Act under Section 65 (7) of the CGST Act. The Audit is a valid proceeding under CGST Act, 2017 and it is also covered under sub section (2) of section 98 of the Act. Accordingly, the appeal filed by the appellant against advance ruling passed on the impugned issue is liable to be rejected.
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Income Tax
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2024 (10) TMI 1290
Penalty imposed u/s 271G - default of the notice requiring the petitioner/assessee to produce the relevant documents u/s 92D(3) - Whether TPO did not possess the requisite jurisdiction to initiate penalty proceedings and its imposition subsequently on 16.01.2015? - as decided by HC [ 2018 (10) TMI 298 - DELHI HIGH COURT] since event of default occurred in March, 2014 i.e. well prior to the date of coming into force the amendment (i.e. 01.10.2014), the impugned order was wholly without jurisdiction. HELD THAT:- This petition is covered by a decision of this Court in the case of Virkey Chacko [1993 (8) TMI 1 - Supreme Court ] held that the event of default defines the jurisdiction of the concerned authority, who may proceed to initiate the penalty proceedings.When the Income-tax Officer reached the satisfaction that the assessee had concealed his income and made the assessment order on March 27, 1972, the amended provisions of section 274 (2) were in operation and they entitled the Income-tax Officer to impose penalty in cases where the amount of income in respect of which particulars had been concealed were, as here, less than Rs. 25,000. Hence, the Special Leave Petition is dismissed.
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2024 (10) TMI 1289
Disallowance in respect of future expenses claimed as deduction - Delay filling SLP - Issue involved in this appeal is holding the questions of law in Assessee s favour HELD THAT:- There is absolutely no reason to condone the delay of 289 days in filing the petition. Hence, the application for condonation of delay is dismissed. Accordingly, the Special Leave Petition also stands dismissed. Pending application, if any, also stands disposed of.
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2024 (10) TMI 1288
Addition in the hands of syndicate v/s assessee - appellant's share of profit derived by various syndicates maintaining that share of profit is taxable in the hands of syndicate or in the hands of the assessee - ITAT deleted addition - Whether, such syndicate did not have any PAN and that they were not filing statutory tax returns, fully establishing mens rea on the part of the assessee and taxing share of profits of such colourable devices (syndicates) in the hands of the assessee in all practicality is in the spirit of the 'Doctrine of lifting of corporate veil' in larger public interest? HELD THAT:- As per the findings given by the CIT (A) and reproduced by the ITAT which remained uncontroverted by the Revenue, even in respect of some of the syndicates, separate assessments have already been framed by the various AO u/s. 144/153C r.w.s. 153A of the Act and while making assessments in the hands of such syndicates, the amount of undisclosed income earned by these syndicates, have already been determined. It is also pertinent to mention that it is a well settled legal position that as per clause (a) of proviso to section 86 of the Act r.w.s 67A of the Act, if the assessee is a member in AOP/BOI and income earned from such AOP/BOI have been offered to tax, then, the share received by the assessee from such AOP/BOI after payment of due taxes cannot be taxed again in the hands of the recipient assessee. CIT (A) as well as the ITAT referred to the legal position rendered in the case of ITO vs. Ch. Achatalya [ 1995 (12) TMI 1 - SUPREME COURT] and took the view that the income derived by various syndicates in which the assessee was found one of the members, was required to be assessed in the hands of such syndicates only and a direct assessment in the hands of the assessee could not have been made in respect of such income derived by the syndicates. Thus, as per the scheme of the Act, the issue is covered in favour of the assessee as per clause (a) of the first proviso to section 86 r.w.s. 67A of the Act. We are totally in agreement with the conclusion reached by both the lower appellate authority i.e. CIT (A) as well as the ITAT holding that, the assessee was a member of an association of persons or body individuals, share of members of such association of persons or body individuals were determinate and known. Such association of persons or body individuals were chargeable to tax on their total at the maximum marginal rate or any higher rate. In such a factual position and circumstances, the share of profit/income received by the assessee from association of persons or body individuals/syndicates fall under the clause (a) of the first proviso to section 86 r.w.s 67A of the Act and, thus, the AO was not justified in making the addition in the hands of the assessee on account of his share in profits of syndicates and on account of his share of inadmissible expenses incurred by the syndicates. Therefore, we are in agreement that, CIT (A) was right in deleting the addition in the hands of the assessee and, consequently, the sole ground of the Revenue being devoid of merits is not sustainable. Thus, when tested on the anvil of the afore-noted legal principles, we are of the opinion that in these appeals no substantial question of law arises from the order of the Tribunal. This Court refrains from entertaining these appeals as there is no perversity in the order passed by the ITAT since the ITAT has dealt with all the grounds raised by the appellant in the order impugned and has passed a well reasoned and speaking order taking into consideration all the material available on record. Tribunal being a final fact finding authority, in the absence of demonstrated perversity in its finding, interference with the concurrent findings of the CIT (A) as well as the ITAT therewith by this Court is not warranted. No hesitation in holding that no question of law, more so a substantial one, arises from the order of the Tribunal requiring consideration of this court. There is no merit in these appeals as the Tribunal has not committed any error in deleting the additions which was made by the AO as the same cannot be said to be erroneous and prejudicial to the interest of revenue. Thus, present set of cases does not involve any substantial question of law so as to meet the provisions of Section 260-A of the Act for admitting these appeals.
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2024 (10) TMI 1287
Revision u/s 263 - case was selected for scrutiny through CASS, and AO passed an order of assessment u/s 143(3) - income recognition - Treatment of income received from an arbitral award in the assessment year - HELD THAT:- ITAT has recorded the finding that the statutory notice was issued u/s 142(1) of the Income Tax Act by the AO with a specific query about the Nardana Claim - 1 Nardana Claim - 2. In response to the said notice, the assessee filed a cogent reply. AO's approach in accepting the explanation furnished by the assessee to him was not found unsustainable view as the liability of Nardana Claim - I Nardana Claim - 2 could have been recognized as income in the AY 2018 -19. The amount was paid to the assessee in the Assessment Year - 2018 - 19 after furnishing 100% bank guarantee on 100% margin, therefore, same was rightly shown as liability in the balance-sheet. It is not a case that the assessee has concealed the income of receipt by way of award. After the order passed by the Dhule Court in favour of the assessee on 15.10.2018, the income was shown in the next assessment year i.e. 2019 - 20. ITAT did not find any fault in the approach of assessee, in view of the law laid down in the case of Hindustan Housing Land Development Trust Limited [ 1986 (7) TMI 10 - SUPREME COURT] in which as held that as long as there remains a dispute / litigation, the income cannot be said to have 'accrued' or 'arisen' to the assessee. Approach of the assessee as well as the view taken by the AO is his favour cannot be termed as erroneous-cum-prejudicial to the interest of revenue. No substantial question of law.
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2024 (10) TMI 1286
Ex-parte order of assessment by Income tax Department concluding a recovery amount - HELD THAT:- As submitted the order in original passed by the AO is already under challenge u/s 264 in a revision petition, which is still pending and the order impugned in the present writ petition is appealable by filing an appeal under Section 253 of the Act, 1961 before the Appellate Tribunal. The petitioner has wrongly chosen the Forum of the writ petition for challenging the said order. He may very well maintain an appeal before the Appellate Tribunal. Petitioner admitted this legal position. Accordingly, the writ petition is dismissed in-limine. However, the petitioner is given a liberty to file an appeal before the Appellate Tribunal against the order dated 23.08.2023.
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2024 (10) TMI 1285
Validity of assessment proceedings initiated u/s 147 - as per CIT(A) no income had been brought to tax on the grounds set out in the notice issued u/s 148 - HELD THAT:- Undisputedly, the controversy involved in the present case whether any addition can be made by the AO pursuant to initiation of re-assessment proceedings, notwithstanding that no addition is made on the grounds on the basis of which the assessment was reopened is covered by an earlier decision of this Court in Ranbaxy Laboratories Ltd. [ 2011 (6) TMI 4 - DELHI HIGH COURT] . The said issue was also considered by this Court in the recent decision of ATS Infrastructure [ 2024 (7) TMI 1441 - DELHI HIGH COURT] - It is not disputed that the questions of law, as projected, are covered in favour of the assessee.
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2024 (10) TMI 1284
Condonation of delay of 860 days in re-filing the present appeal - HELD THAT:- A bare perusal of the application indicates that the only ground for delay in re-filing is that there were a large number of appeals, which were filed between the period March, 2020 to March, 2022. And, the said appeals could not have been pursued on account of outbreak of the COVID-19 pandemic. It is clear that there is an inordinate delay of 880 days in re-filing the appeal. We do not find that there are sufficient grounds to justify such an inordinate delay. The application is, accordingly, dismissed. Assessment u/s 153A - addition u/s 68 treating certain balances, as available in the books of accounts, as unexplained - CIT (A) allowed assessee appeal and the addition made by the AO was deleted on the ground that since no incriminating material was found during the search conducted, the re-assessment could not be sustained as relied on the earlier decision of Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT ] also confirmed by ITAT HELD THAT:- Concededly, the said issue is covered by the earlier decision of this Court in Commissioner of Income Tax v. Kabul Chawla (supra) which has been recently cited with approval by the Supreme Court in Principal Commissioner of Income Tax, Central-3 v. Abhisar Buildwell Pvt. Ltd [ 2023 (4) TMI 1056 - SUPREME COURT] stating since no incriminating material was found during the search conducted, the re-assessment could not be sustained. Decided in favour of assessee.
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2024 (10) TMI 1283
TP Adjustment - MAM determination - TNMM v/s Berry ratio - decision of the TPO to reject the TNMM with Berry ratio (GP/VAE gross profit/value added expenses) as the most appropriate method for determining the ALP - HELD THAT:- A change in the approach of assessment of tax, absent any statutory change, leads to uncertainty as to the cash flow/fund flow, which are the lifelines of commercial enterprises. Thus, unless there are cogent reasons to discard the method for transfer pricing adopted in the earlier assessment years, the TPO was required to follow the method consistently adopted for determining the ALP in prior years. We find no infirmity with the decision of the Tribunal in faulting the TPO for discarding the TNMM for determining the ALP as consistently followed in the past six assessment years (AYs 2009-10 to 2014-15), without sufficient reason. We concur with the Tribunal s view that the DRP had erred in finding that the TPO had provided justification for rejection of the TNMM. Thus, the Tribunal has rightly concluded that the TPO s decision to reject TNMM as the most appropriate method was without reasons. TPO s decision to adopt the residual method any other method under Rule 10B (1) (f) of the Rules - Undeniably, Rule 10AB of the Rules does permit determination of the ALP by simulating the price that would have been charged in similar uncontrolled transactions under similar circumstances having regard to all relevant facts. However, the recourse to this method would be available only if none of the other methods are considered as the most appropriate method. However, as noted above, the TPO had provided no reasons for rejecting TNMM, which had been used in earlier years. The TPO had also not discussed the applicability of any other methods. Tribunal had referred to the Guidelines issued by the Institute of Chartered Accountants of India (hereafter the Guidelines) in regard to use of Other method under Rule 10AB of the Rules. Guidelines rightly observe that the Rule 10AB of the Rules does not describe any methodology but provides flexibility to determine the price in complex transactions where third party comparable prices/transactions may not exist. The said method would be most appropriate in cases where the other methods are found to be inapposite on account of difficulties in obtaining comparable data on account of uniqueness of the transactions, which are to be benchmarked. It is difficult to accept that a business model that entails providing marketing support on commission basis is not unique or one that would warrant rejecting the TNMM. Objection to the comparables used by the TPO for determining the ALP - A Non-Compete Arrangement is clearly not similar to the transaction of purchase of hardware, which is the international transaction to be benchmarked. It is also noticed that the transaction at Serial no.3 is in relation to educational services, which admittedly is not similar to the international transactions being benchmarked. In the circumstances, this Court had called upon Revenue to explain the similarity between the transactions used as comparables and those that were to be benchmarked. However, the counsel fairly stated that he could not. Assessee had selected a set of four comparable transactions and used the TNMM with OP/VAE (Operating Profit / Value Added Expenses) as well as Berry ratio (gross profit / value added expenses) as PLI s. The computation of the assessee s PLI is significantly higher than the mean PLI of the comparable entities. In addition, the assessee had also furnished benchmarking studies of other entities engaged in trading by deleting the value of stocks and working capital to corroborate that the international transactions were at ALP. No substantial question of law arises in the present appeal.
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2024 (10) TMI 1282
Reopening of assessment u/s 147 - non compliance with the faceless assessment scheme u/s 151A - mandation of recording of satisfaction by the Jurisdictional Assessing Officer - Valid Jurisdiction of the Jurisdictional Assessing Officer (JAO) in issuing the notice - HELD THAT:- By reading all the relevant provisions of the Income Tax Act' 1961 as also the notification dated 29.03.2022 issued by the Central Government framing scheme for E-Assessment of Income Escaping Assessment under sub-sections (1) and (2) of Section 151A of the Act' 1961, we reach at an irresistible conclusion that the challenge to the notice under Section 148 dated 22.03.2024 for A.Y. 2021-2022 on the sole premise that the said notice could have been issued only through automated allocation in faceless manner and not by Jurisdictional Assessing Officer (JAO), cannot be sustained. The submission of petitioner that the Jurisdictional Assessing Officer (JAO) was not competent to issue the impugned notice u/s 148 in a case of Search and Seizure u/s 132are not convincing. \Section 151A contemplates framing of the scheme by the Central Government by notification in the official Gazette, even for the purpose of issuance of notice under Section 148 in the case of re-assessment or sanction for issue of such notice under Section 151, with the aim to impart greater efficiency, transparency and accountability by eliminating the interface between the income tax authority and the assessee or any other person to the extent technologically feasible. The challenge to the impugned notice on the ground of lack of jurisdiction of the Jurisdictional Assessing Authority is, accordingly, turned down. Two Satisfaction Notes have been supplied to the petitioner in the compilation submitted on behalf of the revenue. It was also placed before us by revenue that after issuance of the impugned notice u/s 148 the instant case has proceeded to the stage of issuance of the notice under Section 142 (1). The said notice is also part of the record and has been issued by the Verification Unit of the Faceless Assessment Centre. We, therefore, find it fit and proper to dispose of the present petitions with the observation that the petitioners may pursue his remedy matters before the Competent Authority and may ask for virtual hearing, if the need be, to participate in the proceedings, which have to be brought to their logical end, strictly in accordance with law.
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2024 (10) TMI 1281
Order passed by the Income Tax Settlement Commission to charge the interest @ 50% u/s 234A and interest u/s 234B and interest u/s 234C - Maintainability of writ petition against the order of the Income Tax Settlement - HELD THAT:- The petitioners had filed the applications for settlement of their income-tax and wealth tax u/s 245-C of the Act, and after considering all the aspects, the Settlement Commission passed the orders. It also granted immunity for the prosecution and at the same time, it reduced the interest chargeable under Section 234A by 50%, while interests in terms of Section 234B and C of the Act were directed to be charged from all the five applicants. However, interest u/s 220 (2) was waived. The question regarding maintainability of the present writ petition against the order of the Income Tax Settlement Commission is no more res integra, in view of the law as settled in the case of Jyotendrasinhji v. S.I. Tripathi and others[ 1993 (4) TMI 1 - SUPREME COURT] wherein Hon ble the Supreme Court while following its earlier judgement rendered in the case of R.B. Shreeram Durga Prasad and Fatechand Nursing Das [ 1989 (1) TMI 4 - SUPREME COURT] thus objection raised by learned counsel for the respondents regarding non-maintainability of the present writ petition, is rejected. Whether the discretion exercised by the Settlement Commission of reducing the interest by 50% in terms of the interest chargeable u/s 234A? - We would have to examine the provisions of Section 234A of the Act for the purpose, which provides for charging of interest for defaults in furnishing return of income, interest for defaults in payment of advance tax and for interest for deferment of the advance tax, respectively. The provisions of imposing the interest is automatic, and if there is a default, interest is liable to be paid. However, by the various judgments passed Courts have taken a view that in circumstances which are beyond the control of the assessee in filing of the return in time, the interest can be waived. In the present case, the Income Tax Settlement Commission accepted the version of the petitioners that the returns for the Assessment Year 1989-90 could not been filed in time, and were delayed on account of the fact that the seized papers were not available with them, and were lying with the Department. The Settlement Commission has also noticed that the letters and requests were made by the applicants/petitioners to the Department and looking into the said circumstances, interest had been reduced. We find that while exercising the discretion by the Settlement Commission, no reasons have been assigned as to why the interest has been reduced by 50% only, and as to why the complete interest has not been waived off for the assessment year 1989-90.We, accordingly, accept the present writ petition, and waive the interest charged, in terms of Section 234-A of the Act. Interest chargeable under Section 234B and 234C - Keeping in view that the advance tax was required to be paid, wherein there has been a default, in terms of the judgment passed in the case of Gulraj Engineering Construction Co [ 1995 (3) TMI 428 - INCOME TAX SETTLEMENT COMMISSION] we do not propose to waive the interest under Section 234B and 234C of the Act. We are also not impressed by the arguments raised by learned counsel for the petitioners in terms of the circular on waiver of interest (Annexure P-6) that the interest under Section 234B and 234C should be waived, as depositing of advance tax has nothing to do with the seizure of the books of accounts or during the course of proceedings for search, or seizure of cash. As decided in Shelly Mehta [ 2024 (9) TMI 220 - PUNJAB AND HARYANA HIGH COURT] this Court has taken a view that the cash seized during the seizure cannot be a ground for waiver of advance tax or payment of tax for the subsequent year. In view thereto, we do not accept the contentions made by counsel for the petitioners and the present writ petition is allowed in part.
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2024 (10) TMI 1280
Validity of Faceless assessment of income escaping assessment - Challenge to notice u/s 148 as non-compliance with Section 151A - notices issued by JAO instead of FAO - HELD THAT:- As decided in Jasjit Singh Vs. Union of India and Others [ 2024 (8) TMI 228 - PUNJAB AND HARYANA HIGH COURT] notice u/s 148 after introduction of Finance Act, 2021, cannot be issued by Jurisdictional Assessing Officer. The object of introduction of faceless assessment would be defeated if show cause notice u/s 148 is issued by Jurisdictional AO. Decided in favour of assessee.
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2024 (10) TMI 1279
Levy of penalty u/s 271AAA - requirement of substantiating the manner in which undisclosed was derived by the Assessee Company - HELD THAT:- As we read Section 271AAA(2) of the Act, it becomes manifest that an escape from the imposition of a penalty is dependent not only on a disclosure of income having been made in the course of a statement recorded u/s 132(4) of the Act but the assessee also standing obligated to specify the manner in which that income had been derived and thereafter substantiate the said disclosures. As we read the order of the ITAT it is manifest that the assessee/appellant failed to meet the aforesaid requirements. We consequently find no merit in the instant appeal. Appeal dismissed.
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2024 (10) TMI 1278
Reopening of assessment u/s 147/148A - inability and omission on the part of the petitioner to submit reply / response along with documents to the Section 148A(b) notice - HELD THAT:- Petitioner has not submitted reply / response along with documents to Section 148A(b) notice. In view of the specific assertion on the part of the petitioner that if one more opportunity is granted, petitioner would submit reply along with documents, deem it just and appropriate to set aside the impugned order passed u/s 148A(d) and subsequent notice / orders, etc., and remit the matter back to respondent No.1 for reconsideration afresh from the stage of submitting of reply by the petitioner to Section 148A(b) notice and to proceed further in accordance with law.
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2024 (10) TMI 1277
Appeal challenging the determination of the ALP - substantial question of law - whether High Court is precluded from considering the determination of the ALP determined by the Tribunal, in exercise of powers u/s 260A ? - HELD THAT:- We agree with Respondent/assessee that in the case at hand while passing the order dated 14th January 2019, this Court has not refused to scrutinise the Tribunal s findings on the ALP. This Court has considered the matter on merits and came to the conclusion that no substantial questions of law arise. We are also informed by respondent that the judgment in Principal Commissioner of Income Tax-2, Pune v. PTC Software (I) (P.) Ltd. [ 2018 (4) TMI 1002 - BOMBAY HIGH COURT] on which the Court had relied upon, has attained finality. In the case of PTC Software (Supra), the appeal that was filed by Revenue, was withdrawn.
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2024 (10) TMI 1276
Validity of TP order due to lack of digital and physical signatures within the prescribed period - HELD THAT:- TPO order was not digitally signed on 31.07.2021 or subsequently even on 02.08.2021 when the respondent addressed an email to the petitioner and that the same was subsequently physically / manually signed on 12.08.2021 and furnished to the petitioner along with an email on 13.08.2021 is clearly borne out from the material on record. In other words, despite recognising, confirming and affirming that the TPO order was not signed either physically or digitally on 31.07.2021, the 1st respondent signed the same physically only subsequent on 12.08.2021 and it is this manually / physically signed copy that was uploaded on the ITBA portal on 16.08.2021, thereby leading to the sole inference that as on the last date of limitation i.e., 31.07.2021, a legally valid TPO order had not been passed by the 1st respondent and as such, the impugned order deserves to be quashed. TPO order was not passed on the last date of limitation i.e., 31.07.2021 as contended by the respondents - TPO order, even if passed, had not been digitally or physically / manually signed by 1st respondent on the last date i.e., 31.07.2021, thereby rendering the same illegal, invalid and barred by limitation - TPO order had not been uploaded on the ITBA portal on 31.07.2021, the last date of limitation. 2nd respondent addressed an email on 02.08.2021 to the 1st respondent confirming that the TPO order had not been digitally signed and asked him to take necessary action, thereby also indicating that the TPO order had not been physically / manually signed even as on 02.08.2021. Petitioner received an email on 02.08.2021 enclosing a copy of the TPO order which was neither signed digitally nor manually / physically as on that day, thereby rendering the same invalid, illegal and barred by limitation. The petitioner received an email on 13.08.2021 enclosing a copy of the TPO order which was physically / manually signed only on 12.08.2021, much beyond the last date of limitation i.e., 31.07.2021. The undisputed fact that the 2nd respondent noticed that the TPO order was digitally unsigned on 31.07.2021 as evident from the email addressed by him to the 1st respondent on 02.08.2021 is sufficient to come to the conclusion that digital / physical / manual signature of the TPO on the order is an essential and mandatory requirement, failing which, the TPO order would be rendered invalid, illegal, and non-est in the eye of law. The physically / manually signed TPO order was also uploaded in the ITBA portal only on 16.08.2021, much beyond the last date of limitation i.e., 31.07.2021. The mere generation of DIN number in the TPO order is not sufficient to cure the various inherent defects, lacunae, omissions and deficiencies in the TPO order which was barred by limitation warranting interference by this Court in the present petition. The impugned TP Order at Annexure-C said to have been passed on 31.07.2021 and the consequent draft assessment order at Annexure-M dated 29.09.2021 are illegal and arbitrary and deserves to be quashed. WP allowed.
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2024 (10) TMI 1275
Revision u/s 263 - revising the assessment order passed by AO u/s 147 r.w.s. 144B accepting the assessee's claim for exemption u/s 10(23C)(iiiab) - HELD THAT:- The assessee provided detailed calculations showing that when interest income on government grants is included, the government financing exceeds 50% of the total income, thereby meeting the threshold for substantial financing. AO did not apply Rule 2BBB retrospectively, as the rule was introduced only from AY 2015-16. There was no legal requirement during AY 2014-15 to adhere to the 50% threshold outlined in Rule 2BBB. Moreover, the assessee relied on judicial precedents, such as Institute of Liver and Biliary Sciences and Indian Institute of Management, which support the inclusion of interest income in the calculation of Government financing. AO s decision to allow the exemption based on the prevailing legal framework and facts of the case cannot be termed as erroneous. For an order to be prejudicial to the interests of revenue, it must result in a loss to the revenue. In this case, the AO properly accepted the assessee s exemption claim after considering the applicable laws and facts. The assessee s income was primarily derived from government grants and regulated fees, and the AO correctly determined that the university was substantially financed by the Government. CIT(E) s conclusion that the AO s order was prejudicial to revenue is based on the incorrect exclusion of interest income and an erroneous application of Rule 2BBB for AY 2014-15. As such, the order passed by the AO did not cause any loss to the Revenue. We find that the order passed by the AO was neither erroneous nor prejudicial to the interests of revenue. AO s decision to allow the assessee s exemption under Section 10(23C)(iiiab) of the Act was based on a correct appreciation of the facts and applicable law, and the principle of consistency must be upheld. CIT(E) erred in excluding interest income from the government grants and in attempting to apply Rule 2BBB retrospectively. Accordingly CIT(E) s order invoking Section 263 of the Act is quashed - Appeal of the assessee is allowed.
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2024 (10) TMI 1274
Validity of reopening assessment - invalid sanction obtained u/s 151 (ii) and not u/s 151(i) - HELD THAT:- We have perused the copy of the order of the Hon ble jurisdictional High Court of Bombay in the case of the assessee [ 2024 (5) TMI 1479 - BOMBAY HIGH COURT] wherein the assessment has been quashed because of invalid sanction obtained u/s 151 (ii) and not u/s 151(i). Therefore, no reason to interfere in the decision of the ld.CIT(A). Accordingly, all the grounds of the Revenue are dismissed.
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2024 (10) TMI 1273
Denial of deduction u/s 80IA - assessee is a works contractor and not developer - return filed in compliance to notice u/s 153A and not claimed the deduction in its regular return filed u/s 139 (1) - CIT(A) concluded that assessee has made a rightful claim u/s 80IA of the Act in the return filed in compliance to notice u/s 153A HELD THAT:- As various judgments referred mainly in case of Kirit Dahyabhai Patel [ 2015 (1) TMI 201 - GUJARAT HIGH COURT] where it has been held that the return filed u/s 153A of the Act will be construed to be return filed u/s 139 of the Act. We also observe that CIT (A) rightly taking note of the judicial precedents that the appellant can make or modify the claim at any time before the completion of the assessment. CIT (A) has also rightly observed that apart from the fact that the assessee failed to make claim of deduction u/s 80IA of the Act in its regular / original return filed u/s 139(1) of the Act, the Revenue authorities/ ld. DR failed to bring on record any concrete evidence which could negate the rightful claim made by the assessee u/s 80IA of the Act which is duly supported by the documents demonstrating that the assessee is a developer and has carried out the business of designing, constructing, testing, commissioning, operating and maintenance of water works for Bihar Rajya Jal Parisad (unit of state Government of Bihar) therefore, under the given facts and circumstances of the case the settled judicial precedents, we fail to find any infirmity in the finding of the ld. CIT (A) allowing the claim of deduction u/s 80IA - Decided in favour of assessee.
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2024 (10) TMI 1272
Deduction claimed u/s 80P(2)(a)(i) - interest income earned out of surplus fund invested with a Co-operative Banks in the form of fixed deposits - HELD THAT:- As respectfully following the decision of The Ismailia Urban Co operative Society [ 2024 (6) TMI 1404 - ITAT NAGPUR] we set aside the impugned order passed by the learned CIT(A) and hold that the assessee is eligible to claim deduction u/s 80P(2)(a)(i) of the Act. Thus, grounds no.1 and 2 are allowed.
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2024 (10) TMI 1271
Addition u/s 68 - cash deposit during demonetization period as unexplained cash credit assessee s claim of having introduced cash in form of capital with his proprietary concern - HELD THAT:-Although the assessee in his statement recorded u/s. 131 had claimed to have introduced cash amounting to Rs. 21.70 lacs by way of capital addition (out of personal funds available with him) in his proprietary concern, but I am afraid that the same in absence of any material which would irrefutably evidence availability of the aforesaid substantial amount of cash with him to source the capital introduction on the respective dates, cannot be summarily accepted. AO s conviction that now when the assessee during the pre-demonetization period was already having substantial amount of cash available with him, i.e. sourced out of opening CIH and cash withdrawn from bank accounts of the proprietary concern therefore, it was beyond comprehension and against the principle of preponderance of human probabilities that he would be in possession of substantial amount of cash-in-hand (in his personal account) carries substance. If the assessee during the pre-demonetization period was in possession of substantial amount of cash in hand (personal account), then neither there would have been any need for him to have made heavy cash withdrawals from the bank accounts of his proprietary concern nor made cash withdrawals from his bank accounts for incurring business expenses. Accordingly, the assessee s claim of having introduced cash in form of capital in his proprietary concern, viz. M/s. CP Coal Company in absence of any supporting material, and being beyond human probabilities cannot be accepted. Based on my aforesaid observations, the cash in hand available with the assessee in the books of account of his proprietary concern, i.e. on the date on which he had made a cash deposit of Rs. 33 lacs in Allahabad Bank stand reduced by an amount of Rs. 21.70 lacs, i.e. the capital (in cash) allegedly claimed to have been introduced by him during the period 13.10.2016 to 02.11.2016 out of cash in hand (from personal account). As the cash book of the assessee reveals availability of the CIH as on 22.11.2016 of Rs. 33,14,870.58, therefore, after reducing the same by an amount of Rs. 21.70 lacs (supra) the balance remains at Rs. 11,44,870.58. Thus cash in hand available with the assessee to source the cash deposit of Rs. 33 lacs on 22.11.2016 is explained only to the extent of Rs. 11,44,870.58 - Appeal of the assessee is partly allowed
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2024 (10) TMI 1270
Excess exemption claimed u/s.54EC - AO restricting the exemption u/s.50EC of the Act to Rs.50 Lakhs only - DR said limit of Rs.50 Lakhs in the investment of bonds as stipulated u/s.54EC of the Act was cumulative investment in respect of each transaction of transfer of long term capital asset and that the law doesn t envisage differential treatment on the basis of date of transfer HELD THAT:- The decision in the case of M/s. Areva T D India Limited [ 2008 (9) TMI 510 - MADRAS HIGH COURT] was considered in the subsequent decision in the case of Coromandel Industries Ltd. [ 2014 (12) TMI 852 - MADRAS HIGH COURT] and the Hon ble High Court had held that exemption of Rs.50 Lakhs each claimed in two financial years, within six months period from the date of transfer of capital asset, was eligible for exemption u/s 54EC Co-ordinate Bench of this Tribunal in the case of Shri Atushbhai B. Amin [ 2017 (3) TMI 890 - ITAT AHMEDABAD] held that the investment of Rs.1 Crore claimed in two financial years was allowable as deduction. CIT(A) was not correct in holding that the assessee was eligible for deduction of Rs.50 Lakhs only u/s. 54EC of the Act. As the assessee had fulfilled all the necessary conditions as stipulated in Section 54EC of the Act at the relevant point of time, he was eligible for deduction of Rs. 1 Crore as claimed u/s.54EC of the Act. Accordingly, the addition of Rs.50 Lakhs on account of excess exemption u/s.54EC of the Act is deleted. Appeal of the assessee is allowed.
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2024 (10) TMI 1269
Deduction u/s 80P(2) - interest received on investment held by the assessee with other co-operative societies and bank - HELD THAT:- The chief determinant factor entitling a claim of deduction u/s 80P(2)(d) in the hands of assessee society is that, interest income should have been earned by it from an investment made with any other cooperative society registered under the provisions of law, irrespective of its nomenclature. Thus, in substance, the Hon'ble High Court of AP TS [ 2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] held that interest income derived on investment with banks is earned / derived from by a co-operative society in the course of its regular business of accepting deposit providing credit facilities to its members hence eligible for deduction u/s 80P(2)(a) of the Act. Revenue could place no contrary decision of Hon'ble Jurisdictional High Court. Therefore, without multiplying judicial precedents on the aforestated issue in view of the ratio laid down in Smt. Godavari devi Saraf [ 1977 (9) TMI 24 - BOMBAY HIGH COURT] we adjudicate the issue in favour of assessee following the decision of Vavveru Co-operative Rural Bank Ltd. [ 2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] by holding that, the interest income earned by the appellant from its investment held with co-operative other banks qualifies for deductions u/s 80P(2)(a)(i) of the Act since arisen in the course of regular business - Decided in favour of assessee.
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2024 (10) TMI 1268
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:- 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 Ld. CIT(E). 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. In addition to above, in reply to a specific query, the appellant spelt out the reasons beyond delayed filing of application, which in our considered view also formed sufficient reasonable ground to condone the delay. We find in similar facts circumstance, the co-ordinate benches allowed benefit of extended time period in Rotary Club of Akurdi Charitable Trust [ 2024 (10) TMI 1246 - ITAT PUNE] , Shashvat Paediatric Care Foundation [ 2024 (3) TMI 1365 - ITAT PUNE] , Sarathi Youth Foundation [ 2024 (6) TMI 798 - ITAT PUNE] , Birmani Charitable Foundation [ 2024 (4) TMI 89 - 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 Ors [ 2024 (1) TMI 946 - ITAT SURAT] , Bhamashah Sundarlal Daga Charitable Trust [ 2023 (11) TMI 1210 - ITAT JODHPUR] . Thus, we hold the application of the appellant was filed well within the extended time limit and in consequence we set-aside the impugned order of rejection for remand with a direction to treat appellant s application dt. 22/08/2023 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.
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2024 (10) TMI 1267
Assessment u/s 153A - addition on account of undisclosed foreign asset in the form of foreign bank account and interest income earned on the deposits in the said undisclosed foreign bank account - incriminating material found in search or not? - HELD THAT:- We observe that the AO, in the first round of proceedings, confronted the assessee information/documents in the form of client profiles of HSBC Bank also showing unique code assigned to the assessee for operation of the bank account maintained with HSBC Bank. The profile of the assessee was found to be linked to 5 client profiles. Thus, evidently, the Revenue was in possession of definite material claimed to be obtained under DTAA/DTAC with foreign countries which seeks to indicate holding of foreign bank account by the assessee with HSBC Bank, Switzerland. The particulars available with the Revenue were thus overwhelming and specific in nature. With a view to verify the credibility and precision of such information on purported foreign bank account, a reference was sent to competent authorities in Switzerland and other countries by the Indian Revenue Authorities. The confirmatory verification report in respect of the foreign bank accounts allegedly maintained by the assessee could not however be obtained by the Revenue Authorities owing to the conditional handicap namely Consent Waiver Form which is required to be necessarily signed by the account holder. The Swiss authorities would, otherwise, in the absence of consent from the account holder would not officially part with the information of the customer to authorities of other sovereign state. The Revenue is in possession of cogent material which indicated the details of bank account maintained in the name of the assessee including the date of opening of bank account (06.10.1998) and date of closure (25.01.2006). The authenticated copy of such bank account could be obtained only with the consent and concurrence of the assessee, i.e., bank account holder, owing to limitations fastened by the stated policy, protocols and regulations of Swiss Govt. The question of self incrimination by signing the consent waiver form would arise only in the case of a finding of any offence committed. Where the assessee has not maintained any bank account, the existence of offence would not arise. Besides, a person who is called upon to assist the deptt. in the course of enquiry and investigation of facts is not an accused per se. Hence self incrimination plea is a damp squib. This view is supported by the judgment rendered in the case of Ramesh Chandra Mehta vs. State of West Bengal [ 1968 (10) TMI 50 - SUPREME COURT] Therefore, in the context of income tax proceedings, providing consent waiver form on non existent bank account, in our view , would not tantamount to testamentary compulsion violative of Article 20(3) of the Constitution. We thus see no substance in justification advanced for refusal to provide consent waiver form. Hon ble Bombay High Court in the case of Soignee R Kothari vs. DCIT [ 2016 (12) TMI 59 - BOMBAY HIGH COURT] in identical facts, observed that the conduct of the assessee is not forthcoming and opposed to normal human conduct. The Hon ble Court declined to turn a blind eye to the fact of refusal to sign consent waiver form to support absence of any undisclosed foreign bank account. The remedy sought by way of Writ challenging reopening action was thus not entertained. Notwithstanding, an undertaking of voluntary nature by the assessee addressed to DDIT (Inv.) post search filed by the assessee is entitled to due weight. Such undertaking, in the light of specific bank particulars of overseas bank confronted to the assessee, is a good evidence to draw adverse inference even if not conclusive. Decided against assessee. Addition of imputed interest income attributable to amount deposited with HSBC Geneva Switzerland - As purported bank account maintained by the assessee in HSBC bank is shown to be closed on 25.01.2006 and thus where the deposit itself is not available with the bank, the question of notional interest on deposits in the subsequent financial years is incomprehensible. The imputed interest @ 4% in the deposits kept with HSBC bank as a secondary adjustment cannot be countenanced on such facts. The grievance of the Revenue on account of imputed interest on deposits with HSBC bank in the respective appeals captioned above thus stands dismissed. Additions on account of notional interest attributable to undisclosed bank account in HSBC Bank is not permissible owing to closure of the bank account itself. Unexplained investment in jewellery found during the search - For gifts received on wedding, name and address of the persons, relationship and the description of item of jewellery is mentioned along with the corresponding serial number of the valuation report prepared during search matching the respective jewellery item. The total value of jewellery received on the occasion of the wedding comes to Rs. 25,36,118/-. The appellant has also filed hand written Aashirvad Patras in substantiation of the above. In view of the same, there is enough evidence and material in support of the appellant's contention that the said jewellery items were received on its wedding. AO in case he disbelieved the version of the appellant could have conducted inquiries from the persons gifting jewellery items for which names and addresses are available in the details filed by the appellant. AO failed examine the issues and disprove the contention of the appellant. In view of the same, addition to the extent of Rs. 25,36,118/-, out of total addition of Rs. 29,02,002/- is directed to be deleted. As regards the balance amount it is seen from the above table that the same is claimed to have been received as small jewellery items on the occasion of children's birthdays from friends and relatives. However, the names and addresses of friends and relatives have not been furnished. Even the description of certain items of jewellery reveals that expensive items such as 1 pair of Kara, aggregating Rs. 1,60,000/- has been received on birthday which is highly unlikely even for a person of the status of the appellant. Thus, addition is hereby confirmed due to lack of proper details and substantiating documents filed by the appellant.
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Customs
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2024 (10) TMI 1266
Delay in processing this bill of entry - expiry of shelf-life of some goods - HELD THAT:- At this stage, it is not required to either discuss such difficulties or redress them. The Respondents have ample statutory powers to deal with this type of situation. However, the only concern is that the Respondents, by citing various difficulties, cannot simply refuse to process the Bill of Entry in accordance with the law. It is not for this Court, at least at this stage, to direct the Respondents to exercise their statutory powers in a particular manner. However, in a situation where nothing is being done to process the Bill of Entry, surely, this Court will have to step in. The Respondents are directed to process the Petitioner s Bill of Entry No. 8048557 dated 28 September 2023 (Exhibit-A) as expeditiously as possible and, in any event, within four weeks from today - petition disposed off.
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2024 (10) TMI 1265
Seeking grant of bail - planting of drugs - seizure of commercial quantity of contraband item - violation of Sections 8/23, NDPS Act - Delay in filing Section 52A Application under NDPS Act - defective notice - Delay in trial and prolonged proceedings - HELD THAT:- In the present case, the seizure was done on 12 December 2021 when the applicant was apprehended at Terminal 3, Indira Gandhi International Airport, New Delhi. On interrogation, she denied carrying any contraband, however, a search of her baggage revealed about 1.873 kg Methaqualone valued at approximately Rupees 93.67 lacs. It is pertinent to note that the threshold for commercial quantity of Methaqualone is 500 grams. Alleged Planting of Drugs - HELD THAT:- This is an issue which will be decided post-trial, after all evidence has been led, and whether there is a colour change, is it a natural occurrence, specific to he chemical involved or whether the colour change denotes a defect/tampering in seizure or storage of the contraband. At this stage of bail, this issue cannot give any benefit of reasonable doubt to the applicant-accused. Delay in Filing Section 52A Application - HELD THAT:- In the present case, the application under Section 52A, NDPS Act was preferred 12 days after the seizure of the contraband from the applicant. The applicant may, in accordance with applicable law, contend prejudice caused on account of this delay, during trial. The judgement of a coordinate Bench in Sovraj v. State [ 2024 (7) TMI 1538 - DELHI HIGH COURT] , on similar lines, had observed ' As long as the prosecution is able to justify the delay on its end, mere delay would not vitiate the evidence. To hold otherwise would lead to an odd situation where even a few hours post the threshold of 72 hours would nullify the evidence. The Court has to be cognizant of the ground realities where situations may arise where the sample was not sent to FSL on time or the application under Section 52A of the NDPS Act could not be preferred on time.' Although in Sovraj, this Court had enlarged the accused on bail, same was done inter alia on the issue of absence of independent witnesses and lack of photography or videography of the recovery. Same do not form basis of applicant s contentions herein and thus, application of law in this case will have to be done in the facts and circumstances of this case. In the present matter, at this stage, this Court is of the opinion that the applicant has failed to overcome the threshold as prescribed by Section 37, NDPS Act. Defective notice - HELD THAT:- It is noted that provision of Section 50, NDPS Act needs to be complied with only in cases of personal search and not of the person searched. In this regard reference is made to the decision of the Supreme Court in Ranjan Kumar Chadha v. State of Himachal Pradesh [ 2023 (10) TMI 866 - SUPREME COURT] . Objections as regards defective notice under Section 50, NDPS Act or Section 102, Customs Act may not be finally relevant since nothing was revealed in a personal search of the accused. Provisions of Section 50, NDPS Act need to be complied with only in cases of personal search and not where it is of the bag of the person being searched. A proforma typed notice may ideally have both the options i.e. first that the person requires the personal search to be done before a Gazetted Officer/Magistrate; and second that the person to be searched has no objection to being searched by an officer present (lady officer in case the person to be searched is female). Delay in Trial/Prolonged Incarceration - HELD THAT:- In this case, the petitioner has undergone almost 3 years of custody and the trial is progressing. An attempt may be made by the Trial Court to expedite the trial. In the event, that the trial does not proceed ahead expeditiously, needless to state that the applicant will have the right to approach the Court at a subsequent stage. Taking into consideration four times the commercial quantity of contraband seized from the instance of the applicant, there being no prejudicial infirmity in the process adopted by the respondent, rigours of Section 37, NDPS Act, and progressing trial, this Court is unable to reach a prima facie conclusion that applicant is not guilty of the offences and is unlikely to commit the same if enlarged on bail. The threshold of Section 37, NDPS Act not having been crossed, the application for bail cannot be granted. Bail application stands dismissed.
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2024 (10) TMI 1264
Violation of CBLR, 2018 by Customs Broker - violation of Regulations l0(d) and 10 (n) of CBLR, 2018 and/or Regulation 11 of CBLR, 2013 - failure to appreciate the statements on record as a whole - HELD THAT:- CESTAT found that CB had met the IEC holders in person and they handed over the documents as are required under KYC guidelines and they themselves acknowledged Sandeep Jain to be their representative. CESTAT rightly observed that the Regulations nowhere bar such kind of consensual arrangement between the IEC holders and Sandeep Jain. CESTAT has also noted that on behalf of the importing firms, Sandeep Jain had handed over the export documents and the payments also used to go to the respective accounts as disclosed by Sandeep Jain/IEC holders. CESTAT concluded that all the importers were having requisite documents and they were in existence and appellant had not reaped any benefit out of the arrangement between the importers and Sandeep Jain. The order passed by the CESTAT is based on sound reasoning and due application of principles of law - Appeal dismissed.
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2024 (10) TMI 1263
Refund claim under N/N. 41/2012-ST dated 29.6.2012 - rejection for non-compliance of procedures / conditions stipulated in Notification No. 52/2011-ST dated 30.12.2011 - appellant has stated that they had claimed a refund of Service Tax based on actuals and upon production of connected documents as per paragraph 3 of Notification 41/2012 dated 29.06.12 by filing a refund application before their range / division Excise Officials. HELD THAT:- It is seen that the appellant is neither registered with the Central Excise Department nor has he registered his service tax code number and bank account number with the customs. He has also not made a declaration in the Shipping Bill while presenting the same to the proper officer of customs. Hence no verification could possibly have been done by the department. The said conditions are the essence or substance of the notification granting exemption. It helps the department in ensuring that the exemption is granted to an eligible exporter who fulfills its conditions and the facility is not abused. Hence these procedural violations would cause serious prejudice to revenue if refund is to be granted. While it is true that Government does not seek to burden the exporter with taxes, those who want to get the benefit of a notification benefit extended to them shall have to satisfy the provisions of the notification, so that no misuse of the same is made. The issue stated in the impugned order for rejection of the claim are not flimsy or mere technicalities. The Hon ble Supreme Court in Commissioner of Central Excise, Chandigarh I Vs Mahaan Dairies [ 2004 (2) TMI 73 - SUPREME COURT] , stated that, It is settled law that in order to claim benefit of a Notification a party must strictly comply with the terms of the Notification. If on wordings of the Notification the benefit is not available then by stretching the words of the Notification or by adding words to the Notification benefit cannot be conferred. The he lower authority has taken a view which is reasonable, legal and proper - appeal dismissed.
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Service Tax
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2024 (10) TMI 1262
Interpretation of Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019 regarding adjustment of CENVAT credit and cash payments for service tax - short payment of service tax - zero pre-deposit - HELD THAT:- Considering pursuant to the SCN petitioner had applied under the scheme and in view of aforesaid facts, we direct that the personal hearing will be for purpose of the Department/Designated Committee to conclude on petitioner s assertion that 50% or more of the demand was paid and it is entitled to relief against the balance, under the scheme. The Department/Designated Committee will do well to pass a reasoned order such that points urged by petitioner in the writ petition and as may be urged before it regarding the scheme applying to it, are dealt with without leaving any ambiguity. In event the Department/Designated Committee concludes that petitioner is not entitled to relief under the scheme, it will then issue fresh notice for personal hearing on the demand. This direction is made in view of clause (c) in aforesaid circular dated 27th August, 2019 and absence of anything on record or submission made that exercise of reconciliation was undertaken in respect of the particulars of the cash payments. The writ petition is disposed of.
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2024 (10) TMI 1261
Time limitation - suppression of facts or not - Failure to pay appropriate Service Tax, in spite of collecting service charges / Service Tax from the clients - failure to file S.T.-3 Returns properly - HELD THAT:- From the documents submitted by the appellant, it is observed that the Service Tax liabilities for each financial year has been included in schedule 11 under the head of current liabilities of the respective Balance sheets during the years 2009-10 and 2010-11 and for the rest of the impugned period i.e., for 2011-12 to 2013-14, the liabilities were reflected in note 7 under the head statutory liabilities. Further, the amount withheld as retention money has been reflected in note g under the head Security deposits EMD of the Balance sheets for the respective periods. The unpaid bill amounts were reflected in the sub-head Sundry debtors/Trade receivables of the head current assets of the respective Balance sheets of the impugned period. Thus, the appellant has not suppressed any information from the department. It is observed that the entire Show Cause Notice has been issued on the basis of the documents submitted by the Appellant. The gross value of taxable services provided during the material period viz. 2009-10 to 2013-14 has been taken from the Bill statement furnished by the Appellant, which tallies with the figures reflected under the account head Income from Operation in their balance sheet - the calculation of Service Tax liability has been done the basis of the Profit Loss Account and balance sheet figures reflected in their account. Thus, the Appellant has not suppressed any information from the Department. When the demand of Service Tax has been raised from the details available in the Books of Account of the Appellant, the extended period cannot be invoked to demand Service Tax. There is no suppression with intent to evade payment of tax established in this case. Accordingly, the demand of Service Tax confirmed by invoking the extended period of limitation is not sustainable and hence, the same is set aside. The matter remanded to the adjudicating authority for the purpose of calculation of the demand, if any, for the normal period of limitation i.e., 18 months, from October 2012 to March 2014 - appeal disposed off by way of remand.
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2024 (10) TMI 1260
Levy of service tax - Whether the activity rendered by the appellant amounts to rendering Online Information and Data Based Access or Retrivial Services (OIDAR) services? - HELD THAT:- As per circular no. 11/1/2001-TRO-dated 09.07.2001, annexure IV thereof, it has been clarified that the online data base access/retrival is firstly available through Internet Service Providers (ISP). Secondly it includes data base services, provision of information on websites, provision of online data retrieval services from data bases and other information to all or to limited number of users and provision of online information by content provider. The services as quoted above do not require any of these two elements. The activity rendered by appellant is not merely of accessing or retrieving online data. It is rather a service of developing softwares/websites or consultancy on internet which require too much of human intervention - the appellant s activity is wrongly hold as OIDAR. The confirmation of demand is held to be based on wrong presumption (as elaborated above) is denied to be called as OIDAR. Rule 6(A) of Service Tax Rules is also held to have been wrongly invoked - the appeal is hereby allowed.
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2024 (10) TMI 1259
Valuation - Recovery of Short paid service tax with interest and penalty - determination of the taxable value for payment of service tax on reverse charge basis by the service recipient in respect of GTA Services - what shall be the value of the services received? - HELD THAT:- The value of taxable service for the purpose of determination service tax payable, is the consideration received by the service recipient towards the provision of service. The word consideration has not been defined with reference to the invoice value but is defined in a inclusive manner by referring to the money value of the gross amount in any form paid by the service recipient to service provider for provision of service. Appellant takes the value of taxable service as equivalent to the actual amount paid to the service recipient after adjusting for the rewards and penalties, a fact not in dispute. There are nothing in section 67 as per which the manner of determination of the taxable value can be questioned. As the value of taxable service has been determined on the basis of Section 67 of the Finance Act, 1994 there are no merits in enhancement of the value of the taxable service in manner as suggested by the impugned order. It is the submission of the appellant that where so ever any additional incentive was paid to the service provider the same was added while determining the value of taxable service. However in case of penalties deducted from the invoice value the taxable value is determined on the basis of the gross amount paid towards the provision of service. We do not find that Rule 6 (1) (x) provides for enhancement of the value of the taxable service in such cases. Said Rule will have no applicability to the present case. In any case Rule 6 (1) (x) cannot be read to be over-riding the provisions of Section 67 of the Finance Act, 1994. In case of Intercontinental Consultants and Technocrats Pvt. Ltd. [ 2018 (3) TMI 357 - SUPREME COURT] Hon ble Supreme Court observed ' High Court was right in interpreting Sections 66 and 67 to say that in the valuation of taxable service, the value of taxable service shall be the gross amount charged by the service provider for such service and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service.' There are no merits in the impugned order - Appeal allowed.
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2024 (10) TMI 1258
Levy of service tax - weighment activity carried out within the Navlakhi Port - classifiable under the taxable category of Business Support Service as defined under Section 65(104c) of Finance Act, 1994 read with Section 65(105)(zzzg) of the Finance Act, 1994 or not - HELD THAT:- It is found that the weighbridge activity is an independent activity of the respondent appellant. The weighbridge, therefore, under any circumstances, this activity cannot be classified as Business Support Service as the Respondent is not doing any activity to support in anyone s business. Therefore, firstly, the category of the demand itself is incorrect and on that ground itself the demand raised in the Show Cause Notice does not survive. Consequently, the learned Commissioner (Appeals) has dropped the demand on the ground that the appellant have undertaken the statutory obligation by the activity of weighbridge at the Navlakhi Port. Thus, for the operation of the port, there are some statutory obligation to be performed for smooth operation of the port and such statutory obligations are assigned to different person as in the present case is weighbridge statutory obligation has been assigned to the respondent. Therefore, being a statutory obligation, the same cannot be taxed as held in various judgments cited by the learned counsel for the respondent. Reliance placed in the case of Food Corporation of India [ 2023 (8) TMI 538 - CESTAT CHANDIGARH ] where it was held that ' The Business Auxiliary Service means any service in relation to promotion or marketing or sale of goods produced or provided by or belonging to clients. As respondents are not concerned with the sale or marketing of the goods, therefore, cannot be said to be provider of incidental or auxiliary service to any activity such as promotion or marketing or sale of goods produced. In these circumstances, we find no infirmity in the impugned orders. The appeals are dismissed.' From the above judgment not only on the point of statutory obligation but also on the specific activity of weighment, it was held that the said activity is not liable to service tax. Thus, no interference is required in the impugned order - the impugned order is upheld - Revenue s appeal is dismissed.
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2024 (10) TMI 1257
Refund in cash - non-acceptance of the documents submitted, for the claim as not sufficient - reverse charge mechanism - HELD THAT:- Section 142(3) is only a provision which provides for entertaining and allowing refund of credit and in case any refund payable, then the same can be refunded in cash. However, whether the refund as such is otherwise eligible and admissible under the existing law would be the determining factor. On going through the judgments cited specially the case of M/s NACL Industries Ltd., [ 2024 (9) TMI 507 - CESTAT HYDERABAD] , which has dealt with the same issue and held that refund was not permissible in certain situation where it was otherwise not eligible under existing law. It is found that in the Larger Bench decision of M/s Bosch Electrical Drive India Pvt Ltd. [ 2023 (12) TMI 1145 - CESTAT CHENNAI-LB] , the issue referred to was not regarding the admissibility of refund under Section 142(3) in the given facts, rather it was with regard to maintainability of such appeal before CESTAT and which was decided by the Larger Bench by holding that such appeals are maintainable. This is not the issue in the present appeal as it has already admitted and is not being contested by the Revenue and therefore it does not help the grounds taken by the appellant. The order of Single Member Bench in M/s Jagannath Polymers Pvt Ltd. [ 2021 (12) TMI 736 - CESTAT NEW DELHI] , has allowed appeal in a given factual matrix without addressing the various order of Hon ble High Courts and Tribunals on the interpretation of Section 142(3) of CGST Act 2017. In so far as the issue of credit being substantive right and therefore refund is required to be allowed in view of provisions under Section 174 of CGST, the issue is also no longer res integra and various Court s and Tribunals have held the credit is not a substantive right rather it is in the nature if concession. There are no infirmity in the order passed by the Commissioner (Appeals) - appeal dismissed.
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Central Excise
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2024 (10) TMI 1256
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Petitioner failed to deposit the required amount under the scheme - HELD THAT:- Admittedly, the petitioner did not deposit the amount of Rs. 89,77,393.50 as per Form SVLDRS-3 issued by the respondent No. 2 after considering the Form SVLDRS-1 filed by the petitioner. The ground on which the petitioner had not deposited the money to avail the benefit under the scheme is of no consequence inasmuch as the facts remains that the petitioner had not abided by the terms and conditions of the scheme which stipulate that the petitioner was supposed to make the payment within 30 days from the issuance of the Form SVLDRS-3. The Hon ble Apex Court in the case of M/s. Yashi Constructions [ 2022 (3) TMI 110 - SC ORDER] has held that ' It is a settled proposition of law that a person, who wants to avail the benefit of a particular Scheme has to abide by the terms and conditions of the Scheme scrupulously. If the time is extended not provided under the Scheme, it will tantamount to modifying the Scheme which is the the prerogative of the Government.' Thus, the petitioner can not get the benefit of Form SVLDRS-3 and permitting the petitioner to pay the amount as per the Form SVLDRS-3 would amount to modify the scheme by extending the date of payment which is not permissible. Reliance placed by the petitioner on the decision of Bombay High Court in the case of Shri Arjun Amarjeet Rampal [ 2023 (5) TMI 13 - BOMBAY HIGH COURT] is also of no help to the petitioner as in the facts of the said case the petitioner could not deposit the amount due to some technical glitch - the decision in the case of Shri Arjun Amarjeet Rampal would not be applicable in the facts of the case when the petitioner has failed to deposit any amount as per the Form SVLDRS-3. The present petition fails and is accordingly dismissed.
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2024 (10) TMI 1255
Denial of input service credit - ineligible capital services - maintaining medical centre (Ambulance room) - membership of Tamil Nadu Electricity Consumer Association - what constitutes services used directly or indirectly in relation to manufacture of final products ? - period April 2011 to March 2013 - HELD THAT:- The words 'directly or indirectly in or in relation to manufacture' used in the definition of input service, should be given a very wide meaning, subject only to the restrictions placed by the CCR 2004. Credit of service tax of duty paid towards mandatory services availed by the appellant under various Acts or which are mandatory for manufacture of goods, would hence continue to be eligible for being taken as credit, as without availing the said services, the goods cannot be manufactured, without facing penal action or other disruptions. So they are integrally connected with the ultimate production of goods/ chemicals manufactured in their factory. Moreover, services availed are not used primarily for private use or consumption of any employee and the duty paid forms a part of the final price of the product on which tax is paid. In the KAKINADA SEAPORTS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX AND CUSTOMS VISAKHAPATNAM-II [ 2015 (11) TMI 51 - CESTAT BANGALORE ], the Division Bench examined the eligibility of taking cenvat credit on health care with ambulance facility, during the period 01/07/2012 to 31/03/2013. It was held ' provision of healthcare within the port area where accident can take place cannot be said to be having no nexus to the port service, therefore, the credit of Rs. 83,430/- is admissible.' Although it is not a universal rule to be followed in all situations, judicial comity or judicial propriety requires that the interpretation of law made by another Bench should be followed. Moreover, the issues involve a very low tax effect and relate to an Act / Rules that has already been eclipsed with the introduction of GST. Not much would be gained by protracting litigation. The impugned order is set aside - appeal allowed.
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2024 (10) TMI 1254
Refund of un-utilised cenvat credit on closure of units - denial of refund in the absence of express statutory mandate or provisions of law - time limitation - HELD THAT:- The principle of law was settled by the Tribunal, which was affirmed by the High Court of Karnataka and the Apex Court in Slovak India Trading Co. Pvt. Ltd. [ 2006 (7) TMI 9 - KARNATAKA HIGH COURT] that since there is no manufacture in the light of closure of the company, Rule 5 is not available for the purpose of rejection as has been rightly ruled by the Tribunal and, therefore, the refund has been rightly ordered in the light of the closure of the factory and the assessee having come out of the Modvat Scheme. The appellant is, therefore, entitled to the refund as claimed by him. In the impugned order, the Commissioner (Appeals) has also observed that the claim for refund filed by the appellant on 5.6.2018 is time barred under Section 11B of the Act, which provides that an application for refund of such duty shall be made before the expiry of one year from the relevant date. The Explanation annexed to Section 11B defines the relevant date for the purpose of reckoning the time period within which the refund claim is to be filed. Considering the facts of the present case, it is found that on closure of the unit at Delhi in March, 2016, the appellant vide its letter dated 30.05.2016 had requested the Department to transfer the accumulated cenvat credit to its unit at Gurgaon and thereafter, all the correspondences between the appellant and the Department had been at the Gurgaon address of the appellant. While the said request for transferring the credit amount was pending with the Department, the Central Excise Act, 1994 was repealed w.e.f. July, 2017 and as a result, the amount of cenvat credit accumulated could not be transferred to GST. In the circumstances, the appellant had no other alternative but to seek the refund of the cenvat credit amount of Rs.17,24,470/- and accordingly, the refund application was filed on 5.6.2018 - In the facts of the present case, the refund application cannot be rejected as being time barred. The impugned order deserves to be set aside and hence, the appeal is allowed.
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2024 (10) TMI 1253
Valuation of Excise Duty - inclusion of excess freight collected by the appellant as compared to the actual freight paid to the transporter in the assessable value of the excisable goods for the purpose of charging excise duty - HELD THAT:- This issue is no longer res-integra particularly in the appellant s own case this tribunal has held that in such case the freight is not includible in the assessable value. This Tribunal in KASHYAP SWEETNERS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VAPI AND JITENDRA PANDEY VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VAPI [ 2023 (7) TMI 1111 - CESTAT AHMEDABAD] where it was held that ' excess freight collected by the appellant from the customers shall not be included in the transaction value for charging excise duty.' The demand in the present appeals is not sustainable - Hence, impugned orders are set aside, appeals are allowed.
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2024 (10) TMI 1252
Exemption N/N. 12/2012-CE dated 17.03.2012 - procedure for goods cleared under Served from India Scheme not followed - whether Appellant wrongly availed exemption from duty for goods cleared under a specific notification? - HELD THAT:- It is found that the appellant has claimed the exemption notification no. 12/2012-CE dated 17.03.2012 which does not contain any condition except the submission of PAC which is not in dispute, therefore, the appellant is clearly entitled for the Notification No.12/2012-CE dated 17.03.2012 (Sr. no. 336). This was clearly presented before the learned Commissioner (Appeals) also but the Learned Commissioner (Appeals) has not given any finding or comment on the submission made by the appellant in this regard. This issue has been considered by this Tribunal in the appellant s own case vide Final Order No. 11181-11183/2024 dated 07.06.2024 [ 2024 (6) TMI 300 - CESTAT AHMEDABAD] where it was held that ' Once the genuineness of the invoices has been verified and found to be justify the quantum of claim of the appellant as verified by the Jurisdictional assistant Commissioner, the non-submission of undertaking by the appellant is merely procedural and the appellant should not be denied the substantial benefit merely for procedural lapse.' In view of the above decision in the appellant s own case, the learned Commissioner (Appeals) order without considering the entitlement of exemption N/N. 12/2012-CE is not legal and proper. Hence, the impugned order is set aside and the appeals are allowed. Other appeal for personal penalty on Shri Tarun Santra which is consequential to the demand of duty on the company. Since the duty demand against company is not sustainable, consequential penalty will also not sustain. Both the appeals are allowed.
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2024 (10) TMI 1251
Process amounting to manufacture - inspection, rectification of defects, complete functional testing, quality control etc. - discharge of duty on the transaction value as per Rule 16(2) of the Central Excise Rules, 2002 - HELD THAT:- This Tribunal in the appellant s own case M/S. MRO-TEK LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BANGALORE I [ 2024 (4) TMI 30 - CESTAT BANGALORE] analysing the processes undertaken by them on the imported Modems which are similar to that one now applied to the indigenous goods, held ' the activities carried by the appellant in the premises at 29B/3 on imported Modems would result into manufacture within the meaning of Section 2(f)(iii) of Central Excise Act, 1944. Consequently, the appellant are required to discharge duty on the imported Modems for the aforesaid activities in their trading premises, which amounts to manufacture.' Therefore, there is no doubt that the processes carried out by the appellant are resulting into manufacture; hence, the duty is required to be discharged on the transaction value of the Modems as per Rule 16(2) of the Central Excise Rules, 2002. The impugned order is set aside - the appeals are allowed
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2024 (10) TMI 1250
Demand of Differential duty - determination of assessable value - goods manufactured on job work basis by the appellant which were cleared to the principal manufacturer who consumes it captively - determination on the basis of principle laid down in the case of Ujjagar Prints or Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - HELD THAT:- The issue is no more res integra in view of the ratio laid down by the coordinate Bench of this Tribunal in the case of COSMOS CONDUCTORS PVT LTD VERSUS COMMISSIONER OF C.E., BANGALORE-II AND RAMACHANDRA M.G., MANAGER M/S COSMOS CONDUCTORS PVT LTD VERSUS COMMISSIONER OF C.E., BANGALORE-II [ 2023 (11) TMI 214 - CESTAT BANGALORE] and upheld by the Hon ble Supreme Court in the case of COMMNR. OF CENTRAL EXCISE, PUNE VERSUS M/S. MAHINDRA UGINE STEEL CO. LTD. [ 2015 (4) TMI 351 - SUPREME COURT] . This Tribunal in Cosmo Conductors Pvt. Ltd. s case observed that 'Even though the aforesaid judgement was delivered prior to insertion of Rule 10A, however, there is no change in the wordings of Rule 8 after 01.03.2007, and the facts of the present case do not fall either under sub-rule (i) or sub-rule (ii) of Rule 10A of Central Excise Valuation Rules, 2000.' There are no merit in the impugned order in applying Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Consequently, assessable value of the job-worked goods be determined following the principle laid down in UJAGAR PRINTS ETC. ETC. VERSUS UNION OF INDIA OTHERS [ 1989 (1) TMI 124 - SUPREME COURT] when the principal manufacturer (raw material supplier) uses it captively even after insertion of Rule 10A to the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 w.e.f. 01.04.2007. The impugned orders are set aside and the appeals are allowed.
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2024 (10) TMI 1249
Reversal/Recovery of CENVAT Credit - inputs written off - Rule 3(5B) of the Cenvat Credit Rules, 2004 - HELD THAT:- The issue is no more res integra and considered by this Tribunal in the case of M/S. HEWLETT PACKARD INDIA SALES PVT. LTD. VERSUS THE COMMISSIONER OF SERVICE TAX, LTU, BENGALURU [ 2024 (8) TMI 718 - CESTAT BANGALORE] . This Tribunal after referring to the judgments in the case of M/S. ERICSSON INDIA PVT. LTD. VERSUS CCE, JAIPUR [ 2019 (3) TMI 776 - CESTAT NEW DELHI] and M/S. GKN DRIVELINE (INDIA) LTD. VERSUS CCE, DELHI-III [ 2023 (9) TMI 1131 - CESTAT CHANDIGARH] , held ' erroneous availment of cenvat credit under Rule 3(5) of the Cenvat Credit Rules, 2004 could be recoverable only after insertion of the recovery provision to the said Rule by insertion of an Explanation through amending Notification No.3/2013-CE(NT) dated 01.03.2013 as amended only w.e.f. 01.03.2013.' Following the above precedent and since period of recovery pertains to 2006-07 to 2008-09, the impugned order is set aside - Appeal allowed.
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CST, VAT & Sales Tax
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2024 (10) TMI 1248
Benefit of the concessional rate of tax under Section 8 (a) (ii) of the Kerala Value Added Tax Act (KVAT Act), 2003 - import of any goods into the State or Country 'for incorporation in the works contract' - goods imported were not incorporated in the works contract for the year 2015-16 and the goods were returned to the supplier. HELD THAT:- While it may be a fact that in the absence of any material to suggest the actual return of the imported goods, the revenue may have been justified in presuming that the goods imported were in fact for incorporation in the works contract, and in such a situation would have been justified in insisting on the assessee discharging the tax liability @ of 7% on the contract value in accordance with Section 8 (a) (i) of the KVAT Act, we find that when the Appellate Tribunal was satisfied on facts regarding proof of return of the imported goods without incorporation of the same in the works contracts undertaken by the assessee for the assessment year in question, the assessee cannot be denied the benefit of the concessional rate of tax of 4% in terms of Section 8 (a) (ii) of the KVAT Act. The pre-condition for attracting the higher rate of tax under Section 8 (a) (i) cannot be seen as attracted on the facts of the instant case where the assessee did not hold a CST registration during the assessment year in question, and further, had returned the imported goods to the supplier without incorporating any part of it in the works contracts undertaken during the said year. There are no reason to interfere with the impugned order of the Appellate Tribunal - OT. Revision petitions are thus dismissed by answering the questions of law raised against the revenue and in favour of the assessee.
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2024 (10) TMI 1247
Levy of Octroi by the various Municipal Councils - SIM Cards issued by the Bharti Mobile Limited and distributed in the State of Punjab, being sold in their municipal limits - whether SIM Card can be treated as goods ? - HELD THAT:- The said question is no more res intergra, keeping in view the judgments passed by the Hon ble Supreme Court in BSNL Vs. Union of India [ 2006 (3) TMI 1 - SUPREME COURT ] and Idea Mobile Communication Ltd. Vs. Commr. of C. Ex. Cus., Cochin [ 2011 (8) TMI 3 - SUPREME COURT ] wherein the Hon ble Apex Court while examining the imposition of sales tax on the usage of SIM, held that sales tax can be imposed. The question of SIM card be goods was left to be further examined. However, in Idea Mobile s case , the Hon ble Apex Court has found that the SIM Cards to be never sold as goods independent from services provided. In view thereto, independently the SIM Cards cannot be termed as goods for the purpose of Octroi. There are no hesitation to hold that the SIM Cards which have been distributed in various Municipal Councils for the relevant period were not leviable to Octroi. Accordingly, the present writ petition is allowed and the notifications dated 26.07.2001(Annexure P-6), 08.08.2001 (Annexure P-7) and 30.10.2002 (Annexure P-8) are hereby set aside. Petition allowed.
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