TMI Tax Updates - e-Newsletter
October 3, 2023

Case Laws in this Newsletter:

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

Articles

• Process to Increase Authorized Share Capital
• GLOBAL MINIMUM TAX SERIES – PART 22 ,Global Minimum Tax in India: An Analysis
• BELATED Return - Income Tax Return filing after due date

Notifications

Central Excise

• 33/2023 - dated 29-9-2023 - CE
  Exemption to the excisable goods - Prescribe rates of SAED for exports of petrol and diesel - Seeks to amend Notification No. 04/2022-Central Excise, dated the 30th June, 2022

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• 32/2023 - dated 29-9-2023 - CE
  SAED on production of Petroleum Crude and export of Aviation Turbine Fuel - entries substituted - Seeks to amend Notification No. 18/2022-Central Excise, dated the 19th July, 2022

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Customs

• 57/2023 - dated 29-9-2023 - Cus
  Export duty exemption provided on exports of Bangalore Rose Onion - Seeks to amend notification No. 55/2022-Customs dated 31.10.2022.

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GST

• 51/2023 - dated 29-9-2023 - CGST
  Amendments (Third Amendment, 2023) to the CGST Rules, 2017 in supersession of Notification No. 45/2023 dated 06.09.2023

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• 50/2023 - dated 29-9-2023 - CGST
  Exemption from payment of tax on advances received in case of supply of goods - exclude specified actionable claims - Notification No. 66/2017-Central Tax dated 15.11.2017 as amended.

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• 49/2023 - dated 29-9-2023 - CGST
  Supply of online money gaming, supply of online gaming other than online money gaming and supply of actionable claims in casinos under section 15(5) of CGST Act notified - effective date 1st day of October, 2023

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• 48/2023 - dated 29-9-2023 - CGST
  Effective date for Provisions of the Central Goods and Services Tax (Amendment) Act, 2023 - 1st day of October, 2023

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• 11/2023 - dated 29-9-2023 - CGST Rate
  CGST Rate Schedule u/s 9(1) - Specified actionable claim - Seeks to amend Notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017

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• 04/2023 - dated 29-9-2023 - IGST
  Designated officers to grant GST registration in case of supply of online monay gaming for overseas supplier

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• 03/2023 - dated 29-9-2023 - IGST
  Payment of IGST on import of Supply of online money gaming as the goods - proviso to section 5(1) of IGST Act shall not apply (as CVD under Customs Act), but on which integrated tax shall be levied u/s 5(1) itself w.e.f 1st day of October, 2023.

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• 02/2023 - dated 29-9-2023 - IGST
  Provisions of the Integrated Goods and Services Tax (Amendment) Act, 2023 notified

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• 14/2023 - dated 29-9-2023 - IGST Rate
  IGST Rate Schedule u/s 5(1) - Specified actionable claim[chapter inserted] - Seeks to amend Notification No. 1/2017-Integrated Tax (Rate), dated the 28th June, 2017

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• 11/2023 - dated 29-9-2023 - UTGST Rate
  UTGST Rate Schedule u/s 7(1) notifying rates of UTGST @ 2.5%, 6%, 9%, 14%, 1.5% and 0.125% on Supply of Goods - Specified actionable claim [entries inserted] - Seeks to amend Notification No 01/2017- Union territory Tax (Rate) dated 28.06.2017.

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GST - States

• G.O. Ms. No. 13 - dated 4-8-2023 - Puducherry SGST
  Amendment in Notification G.O. Ms. No. 3, dated 19th May, 2023

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• G.O. Ms. No. 12 - dated 4-8-2023 - Puducherry SGST
  Amendment in Notification G.O. Ms. No. 2, dated 3rd January, 2018

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Income Tax

• 85/2023 - dated 29-9-2023 - IT
  Exemption from specified income U/s 10(46) – Notifies ‘National Farmers Welfare Program Implementation Society’

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• 84/2023 - dated 29-9-2023 - IT
  Exemption from specified income U/s 10(46) – Notifies ‘Punjab Nurses Registration Council’

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• 83/2023 - dated 29-9-2023 - IT
  Rule 21AHA inserted under exercise of option under sub-section (5) of section 115BAE - Income-tax (Twenty-Third Amendment) Rules, 2023.

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Highlights / Catch Notes

GST

• Rejection of benefit of Input Tax Credit (ITC) - ex parte order in appeal - petitioner assails the impugned order primarily on the ground that the same has been passed in violation of the principles of natural justice - Matter restored back subject to the condition of deposit of 20% of demand of tax in dispute - HC
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• Refund of amount recovered directly from the petitioner's bank account - petitioner appears to have discharged the tax liability by paying the amount and filing the return in GSTR-3B - The amount recovered directly from the petitioner's bank account on 05.05.2023 shall be refunded to the petitioner or adjusted subject to the final out come of the proceedings. - HC
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• Doctrine of promissory estoppel - incentive scheme - pre and post GST era - Definitely, the objective of the Industrial Policy was to promote Industrial Growth and it is in that background provisions were incorporated for reimbursement of 75% of SGST. However, impugned Notification dated 7th March, 2019, in effect nullifies, annuls or makes illusionary benefit under I.P. 2016 by introducing a fresh/new ‘End User condition within the State’ having an effect of destroying the acquired and/or vested right of the Petitioner. - Amendments so made quashed - HC
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• Validity of assessment order - appealable order or not - petitioner’s contention is that both the assessment orders are ex parte and the orders themselves were brought to the notice of the petitioner only when notice of attachment was issued to the bank - The petitioner by his own failure has not availed the appellate remedy - Petition dismissed - HC
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Income Tax

• TDS u/s 194I - additional premium paid by the assessee - whether the additional premium paid by the assessee to MMRDA is in the nature of rent within the meaning of section 194-I ? - AO directed to re-adjudicate the matter in view of the CBDT circular - AT
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• Revision u/s 263 - Non deduction of TDS u/s 194I - Assessee also shown evidence of payment of rent to different four persons @ Rs. 96,000/- per annum only. Such payment of rent to four different persons are clearly disenable in the bank account of assessee. Thus, the threshold limit of attracting the provisions of Section 194I of the Act is not applicable on the payment of rent by assessee - Revision order quashed - AT
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• Expenditure claimed under the head marketing staff commission and site development expenses - self made vouchers - CIT(A) has held that since the self made vouchers are not completely verifiable and since the assessee has not proved beyond doubt that the said expenditure is genuine, he directed the AO to restrict the disallowance to 5% - order of CIT(A) confirmed - AT
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• Reopening of assessment - Re-opening is on the basis of gross incorrect facts that the assessment had been completed u/s 143(1) of the Act of 1961 and was hence no assessment u/s 2(40) of the Act of 1961 when infact the assessment had been completed u/s 143(3) - re-opening was thus merely an outcome of change of opinion of the AO - HC
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• Additions for non deduction of TDS u/s 194C r.w.s. 40(a)(ia) - The freight inward charges were part and parcel of the purchase of the goods. It is settled law that the provisions of the TDS cannot be attracted on the transaction of purchase and sale of the goods. - No TDS liability on inward freight charges which were part of purchase of materials - AT
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• Penalty u/s 271(1)(c) - Merely because exemption on merit was not granted by the Authority, which will not attract penalty provisions. The assessee in the penalty appeal has produced all the relevant documents by way of additional documents, but the same were not accepted by the Ld. CIT(A) - No penalty - AT
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• Penalty order u/s. 271(1)(c) - expenditure claimed u/s. 57 - Nexus with “income from other sources” - mere filing written submission for 5 pages without any material evidences cannot yield good result to the assessee. We do not find proper assistance from the assessee by simply filing a written submission without any material evidences - Additions confirmed - AT
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• Revision u/s 263 - lack of verification and application of mind by AO - AO could not download the unit-wise balance sheets due to technical error - A mere observation that no proper details have been obtained, cannot be sufficient to come to a conclusion that the AO did not make proper and adequate inquiries which he ought to have made in the given facts and circumstances of this case. - Revision order quashed - AT
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• Reopening of assessment u/s 147 - AO had sufficient material to form a prima facie belief that the assessee had made cash payments for purchase of aforesaid properties, thereby leading to escapement of income. - CIT(Appeals) rightly held that issuance of notice u/s 147 as valid in the instant set of facts - Further, admission of additional evidences by the CIT(A) also in line with rule 46A. - AT
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Customs

• Validity of summons issued in the course of investigation - DRI is a proper officer to issue SCN or not - COFEPOSA - The power to arrest stands conferred upon the respondents to be utilised in aid of the enquiry or investigation which may be ongoing. The respondents upon forming the requisite opinion of the presence of a party being required in the course of investigation or inquiry are duly empowered by the statute to summon persons who may then be asked to participate in the inquiry that is pending. - Petition dismissed - HC
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• Classification of imported goods - coloured rubber granules - import policy restrictions - The relevant import policy for goods of chapter heading 4003 are ‘Free’ and there are no restrictions on import. Thus, the impugned order proposing absolute confiscation of imported goods classifying the imported goods under tariff item 4004 0000 is not legally sustainable. - AT
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• Revocation of Customs Broker License - forfeiture of security deposit - The inquiry report, as concurred with by the licencing authority, is bereft of any foundation that could lead to a conclusion that obligations in regulation 10 of Customs Broker Licencing Regulations, 2018 had been breached by the appellant - AT
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• Suspension of license of the Custom Broker (CB) - Revenue has not been able to lead any evidence that the said exporter was not existent at the time of export, and the CB had connived in any fraud to defraud the Government exchequer. It has also been brought on record that one of the GSTINs was still in existence at the time of suspension of the appellant’s license. - Commissioner has not recorded any reason for the cause of immediate suspension - Order set aside - AT
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Indian Laws

• Dishonour of Cheque - vicarious liability of the non-executive director - This Court is convinced that the complaint does not satisfy the requirements u/s.141 of the Negotiable Instruments Act and the petitioners, being non-executive directors, cannot be roped in as accused persons without there being a specific plea as to how and in what manner they were in charge and responsible for the conduct of the business of the company. - HC
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IBC

• Approval of Resolution Plan - Non Consideration of GST liability as First Charge - the ‘demand’ was not ‘ascertained’ and not crystalised and placed before the 1st Respondent / Resolution Professional for consideration of the ‘Committee of Creditors’. Suffice it, for this ‘Tribunal’, to pertinently point out that the Appellant / Petitioner, is prohibited, based on the ‘Principle of Res judicata’, and ‘by its conduct, is estopped’ from agitating the likewise, grounds for determination before the ‘Adjudicating Authority’ / ‘Tribunal’. - AT
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• CIRP - Extension of time in the CIRP has to be applied by the Resolution Professional who is the official conducting the CIRP and further when CoC has instructed the Resolution Professional to seek extension of 60 days, the application could not have been rejected only on the ground that Govind Prasad Todi and Siddhartha Todi who were granted liberty, who have not filed the application. - AT
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Service Tax

• CENVAT Credit - input service - Deposit Insurance Service provided by Deposit Insurance and Credit Guarantee Corporation - nexus of such service with the actual performance of the banking service provided by the respondents/assessees - The services provided by the assessee are not falling within the negative list. Therefore, there is relatability on a hostile consideration of business in banking between the services availed and services rendered. - CESTAT rightly allowed the benefit of CENVAT credit - HC
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Central Excise

• Method of Valuation - Related party transaction - There is no allegation or evidence that JSPL and JPL are connected to the appellant in any of the other three ways. There is no allegation that the appellant is either the holding or the subsidiary company of either JSPL or JPL. The only allegation is that they are associated companies and hence they are interconnected undertakings. - Demand made by applying the valuation rule 11, set aside - AT
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• Recovery of excess refund sanctioned to the assessee in the initial month where the Cenvat credit was not fully utilized - The refund claim of the appellants for the subsequent period, could not be rejected on the ground that the appellant has taken excess refund for the period prior to 22.12.2002 - AT
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VAT

• Validity of preassessment notices - Period of limitation as CST Rules - This Court is of the view that whether the notices are barred by limitation or not can be adjudicated by the authority issuing the notice and it is open to the petitioner to submit its objection to the proposal including the plea of limitation. - HC
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Case Laws:

• GST

• 2023 (9) TMI 1358
  Validity of summary report - goods transported without valid documents - excess ITC claimed - HELD THAT:- In light of what is stated in the affidavit, wherein it is stated by the deponent that he may be permitted to withdraw the order at page 20, the summary report dated 21.02.2019 is hereby quashed and set aside with the aforesaid liberty. The petition is partly allowed.

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• 2023 (9) TMI 1357
  Rejection of benefit of Input Tax Credit (ITC) - petitioner assails the impugned order primarily on the ground that the same has been passed in violation of the principles of natural justice - an inadvertent error of one of the suppliers in not mentioning the GSTIN number of the petitioner in the invoice - Mismatch of credit in Form GSTR-3B and the same was not reflected in FORM GSTR-2A. - HELD THAT:- Notice of personal hearing of the appeal was issued several times, but petition failed to appeal before the appellate authorities - Being left with no option, the respondent no.2 [Commissioner (Appeals)] proceeded to dispose of the appeal ex parte on the basis of the available records. One of the facets of the principle of natural justice is the concept of audi alteram partem or the rule of fair hearing. There can be no precise definition or strait-jacket formula which is to be followed in all cases. Notice of hearing is regarded as the minimum obligatory condition in such cases. The underlying principle which is to be followed in such cases is one of fairness. The petitioner had been given notice of personal hearing and repeated opportunities i.e. on 11 August, 2022, 1 September, 2022, 19 October, 2022 and 9 November, 2022 respectively. However, the petitioner chose not to appear leaving the respondent no.2 with no other option but to pass an ex parte order. The reconciliation process which the respondent no.2 has failed to do on the grounds of documentary evidence not being available is prima facie not tenable. Any mismatch ought to have been attempted to be ascertained from the records of the respondent authorities and their online portal. Moreover, the respondent authorities have not even adverted to the Circular dated 27 December, 2022 which inter alia clarify the approach to be followed by the Department in cases where the supplier had wrongly reported the said supply as B2C instead of B2B in FORM GSTR-1 due to which the relevant supply was not get reflected. Similarly, the declaration of the wrong GSTIN of the recipient in the FORM GSTR-1 ought to have been dealt with in terms of the said Circular. There is also absence of reasons in the impugned order in rejecting the contentions raised by the appellant. The impugned order is unsustainable and set aside - appellant is directed to deposit twenty (20) per cent of the tax in dispute in addition to the amount paid under sub-section (6) of section 107 of the Act. Upon such payment being made within 7 days from the date of passing of this order - Matter restored back for fresh adjudication.

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• 2023 (9) TMI 1356
  Refund of amount recovered directly from the petitioner's bank account - HELD THAT:- Considering the fact that the petitioner appears to have discharged the tax liability by paying the amount and filing the return in GSTR - 3B for the period March 2020 on 11.11.2020. Court is inclined to set aside the impugned order and remit the case back to the respondents to pass a fresh order on merits and in accordance with law, within a period of thirty (30) days from the date of receipt of a copy of this order. The amount recovered directly from the petitioner's bank account on 05.05.2023 shall be refunded to the petitioner or adjusted subject to the final out come of the proceedings. Meanwhile, the petitioner may file a fresh representation with the respondents, within a period of one week from the date of receipt of a copy of this order. Petition disposed off.

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• 2023 (9) TMI 1355
  Doctrine of promissory estoppel - incentive scheme - pre and post GST era - Notification issued under Clause 10.7 of I.P. 2016 by the Department of Industries - the notification gives effect to the provisions of the Policy can lay down additional conditions and/or restrictions for availment of benefit of Incentive which has not been stipulated under the Policy or not - HELD THAT:- The Department of Industries, Government of Jharkhand, in exercise of the power under Clause 10.7 of I.P. 2016, wherein power has been given for laying down operational guidelines, has imposed additional condition curtailing the benefit of reimbursement of State GST on End User restriction by providing, inter alia, that if any ITC is claimed by recipient of the goods sold by an eligible industry, the eligible industry would not be entitled for reimbursement of SGST as promised in the Industrial Policy, 2016. In view of the Explanation inserted vide Notification dated 7th March, 2019, benefit of reimbursement of SGST would not be available to the petitioner at any cost. Petitioner has specifically pleaded that the Explanation inserted would make the entire benefit under the policy as nugatory and/or illusionary and, in fact, the benefit stipulated in I.P. 2016 has actually been made illusionary and nugatory for the petitioner, as the High Powered Committee which earlier sanctioned incentive to the petitioner, kept in abeyance its decision vide its subsequent decision dated 06.02.2023. In view of the facts mentioned hereinabove, the issue is answered in affirmative and it is declared that amendment carried out vide Notification dated 7th March, 2019, wherein Explanation has been inserted to Clause 7.5(aa) of I.P. 2016, is clearly without jurisdiction, without sanction of law and is also ultra vires I.P. 2016. Whether even if it is presumed that Notification dated 7th March, 2019 has been issued by the State of Jharkhand in exercise of power under Clause 10.10 of I.P. 2016 curtailing the benefit of Incentive of reimbursement of SGST, the same is contrary to the principles of Promissory Estoppel and whether the same can be sustained in absence of any supervening public interest being pleaded and/or established by the State of Jharkhand for curtailing the benefits as promised under I.P. 2016? - HELD THAT:- A bare perusal of the Industrial Policy would reveal that broad objective of the Policy was to convert the State of Jharkhand into a favoured destination for investors and to promote sustainable Industrial Growth in the State. The Policy specifically enumerates that State of Jharkhand has accorded top priority to industrial growth as a means to mitigate poverty and unemployment. I.P. 2016 aims to establish State of the art infrastructure, promote manufacturing, enhance inclusivity poster innovation and create employment opportunities across sectors. It is with this bona fide objective I.P. 2016 has been promulgated. Hon ble Apex Court, in its decision rendered in the case of Brahmaputra Metallics Ltd. [ 2020 (12) TMI 1241 - SUPREME COURT] , dealt with Industrial Policy, 2012 notified by the State Government on 16th June, 2012. In the earlier Policy of 2012, certain benefits towards exemption from payment of 50% of Electricity Duty for a period of five years for self-consumption of captive use was stipulated vide Clause 32.10 of I.P. 2012. Despite such unambiguous promise being extended by the State of Jharkhand, in a similar fashion by issuing Operational Guidelines and/or Notification, said benefit was sought to be curtailed to eligible Industrial Units. Definitely, the objective of the Industrial Policy was to promote Industrial Growth and it is in that background provisions were incorporated for reimbursement of 75% of SGST. However, impugned Notification dated 7th March, 2019, in effect nullifies, annuls or makes illusionary benefit under I.P. 2016 by introducing a fresh/new End User condition within the State having an effect of destroying the acquired and/or vested right of the Petitioner. It is the case of the petitioner that although the petitioner, for expanded Unit, has maintained separate books of account, but while considering the claim of incentive of the petitioner by the High Powered Committee on 6th January, 2022, reimbursement of SGST paid was not calculated on the basis of the expanded unit, but was calculated taking into consideration the entire unit i.e., the original and expanded unit of the Petitioner, which resulted into reduction of the claim of subsidy of the petitioner - The Respondent-State of Jharkhand is directed to calculate the incentive towards reimbursement of SGST paid to the petitioner keeping in view the expanded unit of the petitioner only, as the petitioner is maintaining separate books of account and, consequently, to sanction and disburse the amount claimed by the Petitioner. The amendment carried out vide Notification dated 7th March, 2019 is not sustainable and, accordingly, the decision of the High Powered Committee dated 17.02.2023 and the letter dated 30.12.2022 issued by Additional Commissioner, Commercial Taxes Department is quashed and the Respondents are directed to release the amount towards reimbursement of SGST subsidy to the Petitioner under I.P. 2016 for the period 2017-18 to 2022-23 within a period of three months from the date of receipt/production of the copy of this order. Application allowed.

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• 2023 (9) TMI 1354
  Input Tax Credit - credit availed beyond the limitation prescribed under Section 16(4) read with Section 39 read with Rule 61(5) of the Central Goods and Services Tax (CGST) Rules, 2017 - validity of amendment to Rule 61(5) of the CGST Rules vide Notification No.49/2019 - Central Tax (CT) dated 09.10.2019 - HELD THAT:- As the petitioner has an alternate remedy and challenged the impugned order on the strength of the challenge to the amendment to Rule 61(5) of the CGST Rule vide Notification No.49/2019 - Central Tax (CT) dated 09.10.2019 in W.P.No.26908 of 2023, this Court is inclined to admit these two writ petitions. The petitioner shall however pay 10% of the disputed tax that has been confirmed vide impugned order dated 25.07.2023 within a period of four weeks from today. Subject to such compliance, there shall be an interim stay of all further proceedings. List these cases on 10.10.2023. The respondents to file their counter, if any by then.

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• 2023 (9) TMI 1353
  Cancellation of registration granted in favour of the appellant - mismatch of address in the trade license and that of the address given in the partnership deed - response to SCN not filed - HELD THAT:- The appellant did not file its response to the show-cause notice. Therefore, the authority cannot be faulted for proceeding ex parte. Nevertheless, while doing so, the authority ought to have informed the appellant and fixed the date for personal hearing after which he could have taken action. This being a mandate under Rule 24(3) of the said Rules, the same cannot be bypassed. The matter should be relegated back to the authority namely, the Commercial Tax Officer having jurisdiction to enable the appellant to file its response to the allegation in the show-cause notice and the authority shall afford an opportunity of personal hearing to the authorised representative of the appellant and thereafter proceed to decide the matter on merits and in accordance with law. The writ petition are allowed to the extent by setting aside the order of cancellation of the provisional registration dated 30th January, 2018 and the matter stands remanded to the Commercial Tax Officer having jurisdiction.

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• 2023 (9) TMI 1352
  Validity of assessment order - appealable order or not - petitioner s contention is that both the assessment orders are ex parte and the orders themselves were brought to the notice of the petitioner only when notice of attachment was issued to the bank in which the petitioner maintains an account - violation of principles of natural justice - HELD THAT:- The Hon ble Supreme Court in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2022 (1) TMI 385 - SC ORDER] due to the pandemic situation, limitation was saved between 15.03.2020 till 28.02.2022. It was also directed that an appeal could be filed within ninety days from 01.03.2022. Hence, an appeal could have been filed on or before 29.05.2022, which provision was not availed by the petitioner herein. The Hon ble Supreme Court also declared that if a longer period than 90 days is provided in a Statute, then that longer period will apply. In the BGST Act, u/s 107(4) there is a provision for condonation of delay, if the appeal is filed delayed, within one month of expiry of limitation. Even if that be deemed to be appealable then the appeal ought to have been filed by 28.06.2022. Here, the petitioner has not filed an appeal. Having not availed the statutory remedies available, the petitioner cannot seek to approach this Court under Article 226 of the Constitution of India to challenge an assessment order especially with respect to the computation of the turn over and the determination of the taxable turnover and the tax payable, as arrived at by the Assessing Officer. In the BGST Act, an appellate remedy is provided under Section 107, which has to be availed within a period of three months or with a delay within a further period of one month - It is trite law that when there is a specific period for delay condonation provided, there cannot be any extension of the said period by the Appellate Authority or by this Court under Article 226 of the Constitution. The petitioner by his own failure has not availed the appellate remedy and in that circumstance, there can be no invocation of the extraordinary jurisdiction under Article 226 of the Constitution of India - It is found that there is no jurisdictional error, violation of principles of natural justice or abuse of process of Court averred or argued by the petitioner in the above writ petition. Petition dismissed.

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• Income Tax

• 2023 (9) TMI 1351
  Revision u/s 263 - disallowance of claim of deduction u/s 80IA - tribunal granted relief to assessee - as per HC Tribunal correctly noted the factual contend with regard to the purchases which were undertaken assessee as also the terms and conditions of the agreement entered into by the assessee with the concerned highways department and having been factually satisfied that the deduction claimed by the assessee is admissible, had granted relief - also for the previous assessment years Tribunal had granted relief for assessee and in the absence of any distinguished feature in the nature of contract the Rule of Consistency has to be applied - HELD THAT:- Though there is delay of 219 days in filing this special leave petition, we nevertheless heard learned ASG on the merits of the matter. We do not find any infirmity in the impugned order. The special leave petition is, hence, dismissed, while condoning the delay in filing the special leave petition.

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• 2023 (9) TMI 1350
  Correct head of income - gain on sale of property - business income or capital gain/income from house property - whether the property constructed is a commercial or a residential premises? - HELD THAT:- From the stand-point of the company, it is immaterial whether, therefore, a part of the property is sold at a profit, as it does a flat at Kakkanad for Rs. 65 lakh on 20.10.2014, purchased on 06.09.2011 for Rs. 45 lakh, after effecting improvement thereto costing Rs. 16.33 lakh, yielding it thus a gain of Rs. 3.67 lakh, or sell it s building, a godown, let since FY 1997-98, on 13.07.2011, i.e., during the previous year relevant to AY 2012-2013, for the reason that it had become old, necessitating repairs and improvement which may presumably not yield it commensurate return. In each case, the sum realized, as indeed the rent received over the years, is, after meeting expenses, ploughed back in the business, purchasing and constructing landed property for being, similarly, either sold at a profit or leasing it. Where it found the land purchased (purchased for Rs. 78.80 lakhs on 02.05.2012), which was out of the sale proceeds of the godown sold during FY 2011-2012, could not be subject to commercial construction, i.e., its intended user, the same was immediately disposed of on 19.05.2014, i.e., for a business reason, even if at a meager profit of Rs. 1.20 lacs. The same could be held as a capital asset inasmuch as its location would only be appropriate, awaiting again in value over time, but was sold at near par once it was found that it did not serve a business purpose. The assessee is thus undertaking the business of real estate development, of which leasing, as is sale, an integral and a regular part. Thus setting aside the impugned order, uphold the assessment as framed, assessing the capital gains and income from house property as business income. Revenue s appeals are allowed.

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• 2023 (9) TMI 1349
  Validity of assessment - issuance of the notice u/s 143(2) as beyond the time limitation - HELD THAT:- As the return of income filed by the assessee belatedly u/s 139(4) on 07/02/2018 and notice u/s 143(2) of the Act was issued on 15/10/2018 by the A.O. The issuance of the notice u/s 143(2) is beyond the limitation as per proviso to section 143(2) of the Act i.e., within six months from end of the Financial Year in which return is furnished. Admittedly, the last date by which scrutiny notice u/s 143(2) of the Act could have been issue for a return filed on 07/02/2018 was 30/09/2018. Thus, in our opinion as per proviso to Section 143(2) of the Act, the notice issued u/s 143(2) of the act dated 15/10/2018 by the AO is time barred. As decided in Hotel Blue Moon [ 2010 (2) TMI 1 - SUPREME COURT] and Chetan Gupta [ 2015 (9) TMI 756 - DELHI HIGH COURT] held that failure to adhere to the time limit as prescribed under proviso to Section 143(2) of the Act results non-est of the assessment order. Thus, by following the above ratio of the Hon ble Supreme Court and jurisdictional High Court (supra), we find no error or infirmity in the order of the CIT(A) in deleting the addition. CIT(A) has committed no error in allowing appeal of the assessee in holding that notice issued u/s 143(2) of the Act was time barred - Decided against revenue.

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• 2023 (9) TMI 1348
  TDS u/s 194I - additional premium paid by the assessee - whether the additional premium paid by the assessee to MMRDA is in the nature of rent within the meaning of section 194-I ? - Assessee in default - HELD THAT:- The lump sum lease premium or one-time upfront lease charges, which are not adjustable against periodic rent, paid or payable for acquisition of long-term leasehold rights over land or any of the property were considered to be not in the nature of rent within the meaning of section 194-I of the Act. We find that in the present case, it is undisputed that the assessee agreed to pay a lease premium for the 80 years lease as per the agreement to lease dated 04/07/2000 entered into with MMRDA. For the grant of extension of time for construction of the building, the assessee was liable to pay an additional premium. Since the aforesaid Circular has been issued by CBDT after the orders passed u/s 201(1) and 201(1A) in the present appeals and the conditions laid down in the Circular have not been examined in any of the cases before us, therefore we deem it appropriate to remand this issue of deduction of tax u/s 194-I on the additional premium paid by the assessee to the file of AO for de novo adjudication in light of the CBDT Circular No. 35/2016 dated 13/10/2016. Accordingly, the order passed by the CIT(A) for the assessment years 2008-09, 2010-11, and 2011-12 to this extent is set aside. As a result, the appeals by the Revenue for the assessment years 2008-09, 2010-11, and 2011-12 are allowed for statistical purposes. Deduction of tax at source u/s 194-A on the interest paid by the assessee on delayed payment of additional premium - As in the exercise of the power conferred by the aforesaid provision, the Central Government vide Notification No. S.O.3489 dated 22/10/1970, inter-alia, notified any corporation established by a Central, State, or Provincial Act for the purpose of section 194A(3)(iii)(f) - Since MMRDA has been established under the Mumbai Metropolitan Region Development Authority Act, 1974, therefore we are of the considered view that the payment made to MMRDA will fall under the exclusion provided under sub-section (3) of section 194-A of the Act. Thus, the assessee cannot be held to be assessee in default for non-deduction of tax on the payment of interest on delayed payment of additional premium. Accordingly, the demand raised by the AO u/s 201(1) for non-deduction of tax under section 194A of the Act and interest levied u/s 201(1A) of the Act for the assessment year 2008-09 is deleted. As a result, the appeal by the assessee for the assessment year 2008-09 is allowed.

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• 2023 (9) TMI 1347
  Revision u/s 263 - Non deduction of TDS u/s 194I - Threshold limit for deduction of TDS - assessee paid rent to four different persons - HELD THAT:- We find that there is no reference of the issue of claim rental expenses in the assessment order, identified by the ld. Pr.CIT. CIT identified the issue with regard to applicability of TDS Proviso on the rental expenses incurred by assessee which were more than Rs. 1.80 lacs per annum. The assessee in his reply before ld Pr CIT has clearly submitted that he had paid the rent to four different persons, therefore, the regress of section 194I or 40a(ia) is not applicable. The assessee also filed copy of the rent agreement executed by four different persons. We find that the ld Pr CIT has not given his finding on the reply of the assessee. Before us, assessee filed copy of rent agreement showing the tenancy of assessee with four different landlords/owners. Assessee also shown evidence of payment of rent to different four persons @ Rs. 96,000/- per annum only. Such payment of rent to four different persons are clearly disenable in the bank account of assessee. Thus, the threshold limit of attracting the provisions of Section 194I of the Act is not applicable on the payment of rent by assessee, thus, in our considered view, the order of the Assessing Officer is not prejudicial to the interest of revenue. Appeal of assessee is allowed.

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• 2023 (9) TMI 1346
  Expenditure claimed under the head marketing staff commission and site development expenses - balance amount of 5% of the addition restricted by the Ld.CIT(A) - HELD THAT:- As find from the order of the CIT(A) that the assessee has not produced any verifiable documents before the Ld.CIT(A) also. CIT(A) has therefore held that since the self made vouchers are not completely verifiable and since the assessee has not proved beyond doubt that the said expenditure is genuine, he directed the AO to restrict the disallowance to 5% - assessee failed to provide any genuine vouchers before me. In the absence of cogent evidences produced either before the revenue authorities or before me, find that no intereference is therefore required on this ground. Hence, sustain the order of the Ld.CIT(A) on this ground. Disallowance of cash payments u/s 40A(3) - HELD THAT:- AR did not bring any material or confirmation from the vendors to substantiate that there is any business expediency for making payments in cash for purchase of the lands. Further, observe that the payments have been made by way of banking channels and also by cash and hence, the argument of the Ld.AR that the vendors are agriculturists and therefore, the amount is exempted under Rule 6DD of the IT Rules is not sustainable. As find from the order of the CIT(A) that the payments were not made on bank holidays to the vendors. No material was also placed before me, substantiating the business expediency of the vendors for the payment made by cash for purchase of lands. we inclined to confirm the order of the CIT(A) on this ground. Powers of the Joint Commissioner (Appeals) or Commissioner (Appeals) u/s 251(1A) - HELD THAT:- CIT(A) has rightly, after considering the materials on record and by exercising powers vested in him u/s 251(1)(a) of the Act, enhanced the assessment. Therefore, find no infirmity in the order of the Ld.CIT(A) and the ground raised by the assessee is dismissed

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• 2023 (9) TMI 1345
  Recovery proceedings - Assessment order has not yet been taken up for hearing though three years have passed - garnishee notices have been issued by respondent No.2 to the banker of the petitioner. HELD THAT:- As appeal filed by the petitioner is required to be heard expeditiously. In this connection, we may refer to Sub-Section (6A) of Section 250 of the Act which says that in every appeal, the Commissioner (Appeals), where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him under Sub-Section (1) of Section 246A of the Act. Though the aforesaid provision pertains to appeal filed under Section 246A of the Act, nonetheless the objective behind the aforesaid provision is to hear appeal as early as possible. That being the position, we direct respondent No.1 to take on board the appeal filed by the petitioner on 23.02.2020 against the assessment order dated 14.11.2019 for the assessment year 2017-18 and dispose of the same within a period of three (03) months from the date of receipt of a copy of this order.

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• 2023 (9) TMI 1344
  Reopening of assessment - re-assess the income/loss of the petitioner Co-operative Bank - cash deposits made during the period of de-monetization - re-opening of the completed assessment on the basis of information on the Insight Portal - HELD THAT:- We find in the facts of the present case that on the basis of the information supplied by the petitioner pursuant to the questionnaire issued under Section 142(1) of the Act of 1961 vide notices dated 30.08.2019 and 18.12.2019, re-opening of the completed assessment only on the basis of information on the Insight Portal would amount to seeking to re-open such assessment due to change of opinion. Assessing Officer in absence of any independent verification of the information available on the Insight Portal has proceeded to re-open the completed assessment without indicating the basis for having a reason to believe that the information in the hands of the petitioner had escaped assessment. Re-opening is on the basis of gross incorrect facts that the assessment had been completed under Section 143(1) of the Act of 1961 and was hence no assessment under Section 2(40) of the Act of 1961 when infact the assessment had been completed under Section 143(3) - re-opening was thus merely an outcome of change of opinion of the AO - The notice issued on 31.03.2021 under Section 148 of the Act of 1961 is thus liable to be quashed. It is accordingly quashed having been issued in absence of statutory jurisdiction in that regard. Consequentially, steps taken pursuant to the said notice issued u/s 148 would not survive. Decided in favour of assessee.

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• 2023 (9) TMI 1343
  Revision u/s 263 - claim deduction u/s 10AA - Tribunal held that it was not the case of PCIT that AO failed to make any additions/disallowance as he conducted enough inquiries to examine the debit and credit in the bank statement and he also examined the eligibility to claim deductions u/s 10AA of the Act and that is why he disallowed the deduction under section 10AA - HELD THAT:- Having considered the order of the Tribunal in light of the findings of the Principal CIT, we find that the Assessing Officer had conducted sufficient inquiry and examined the eligibility to claim deduction under section 10AA of the Act. It was not a case of no inquiry or lack of inquiry . When an opinion is formed as a result of the inquiries, which was in the exclusive domain of the Assessing Officer, it is not open for the revisional authority to arrive at conclusions merely on the basis of a subjective exercise. Thus as perused the order of the Tribunal, no substantial questions of law arise.

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• 2023 (9) TMI 1342
  Late fee as payable in terms of u/s 234E - HELD THAT:- The issue is squarely covered by the decision of the Karnataka High Court in Sri.Fatheraj Singhvi and others Vs. Union of India and others [ 2016 (9) TMI 964 - KARNATAKA HIGH COURT] and in Rajesh Kourani Vs. Union of India and others[ 2017 (7) TMI 458 - GUJARAT HIGH COURT] and in M/s.Viswabharathi Textiles Private Limited [ 2011 (10) TMI 620 - ITAT CHENNAI] The issue as to whether the petitioner is liable to pay late fee u/s 234E of the IT Act can be decided by the respondents independently by disposing of the petitioner's various representations last of which is dated 07.02.2023. We direct the respondents to dispose the petitioner's aforesaid representation within a period of six weeks from the date of receipt of a copy of this order.

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• 2023 (9) TMI 1341
  Additions for non deduction of TDS u/s 194C r.w.s. 40(a)(ia) - non-deduction of inward freight expenses - HELD THAT:- We note that the contention of the assessee that the inward freight charges were part of purchase of materials was nowhere doubted by the authorities below. Besides the above, we have also perused copies of the invoices placed in the paper book and note that the party (supplier of the materials) has given the break-up of the gross sale bill raised to the assessee which is inter-alia comprising of purchase cost as well as transportation charges. From the invoice, it becomes crystal clear that the freight inward charges were part and parcel of the purchase of the goods. It is settled law that the provisions of the TDS cannot be attracted on the transaction of purchase and sale of the goods. Thus, in the absence of any contract between the assessee and the transporter, we hold that the assessee was not under the obligation to deduct TDS of inward freight expenses incurred under the provisions of section 194C - Accordingly, the question of making the disallowance under the provisions of section 40(a)(ia) is not warranted. Hence, we set aside the order of ld. CIT(A) and direct the Assessing Officer to delete the addition made by him. Thus, the grounds of appeal of assessee are allowed.

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• 2023 (9) TMI 1340
  Penalty u/s 271(1)(c) - denial of claim of exemption u/s. 54B - NFAC condoned the delay of 391 days in filing the appeal, but rejected the claim of additional documents stating that the assessee has not explained why the additional documents were not filed before the Assessing Officer. HELD THAT:- It is well settled principle of law that merely because exemption on merit was not granted by the Authority, which will not attract penalty provisions. The assessee in the penalty appeal has produced all the relevant documents by way of additional documents, but the same were not accepted by the Ld. CIT(A). As decided in INTAS PHARMA LTD. [ 2021 (12) TMI 205 - GUJARAT HIGH COURT] merely because claim on merit was not granted, penalty could not be levied - Also see RELIANCE PETROPRODUCTS PVT. LTD. [ 2010 (3) TMI 80 - SUPREME COURT] - Decided in favour of assessee.

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• 2023 (9) TMI 1339
  Condition of delay - Delay of 168 days - HELD THAT:- As per Form no. 35, the date of service of order is stated to 7.1.2019. Therefore, the assessee ought to have filed appeal within thirty days from 7.1.2019. Hence, there was a delay of 168 days as computed by the learned CIT(A). It is well settled law that the appeal should not be dismissed purely on the ground of limitation. While adjudicating the issue of limitation the appellate authority should also examine whether there is a strong merit in the case of the appellant. Contention of the assessee that the AO has wrongly made addition on account of non-furnishing of Form 28 and making cash payments exceeding rupees twenty thousand - The contention of the assessee is that the AO had wrongly invoked the provisions of Section 40A(3) as in cash payment was exceeding rupees twenty thousand to a single individual. The learned CIT(A) without examining this issue dismissed the appeal purely on the ground of limitation. However, CIT(A) ought to have examined the correctness of contention of the assessee that the impugned additions have been wrongly made. Therefore, hereby condone the delay in filing the appeal before the CIT(A) and restore the issue to the file of the learned CIT(A) to pass a speaking order on the issue related to the impugned addition. Assessee s appeal stands allowed for statistical purposes only.

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• 2023 (9) TMI 1338
  Penalty order u/s. 271(1)(c) - expenditure claimed u/s. 57 - Assessee has shown gross income from other sources and claimed the expenses/deduction against the above income - AO during the assessment proceedings required the assessee to justify the expenses/deduction u/s 57 against the income earned from other sources - HELD THAT:- As seen from the Penalty order, the A.O. proceeded with the Penalty proceedings after the disposal of appeal by CIT(A) who has confirmed the disallowance - AO issued a show cause notice dated 08-01-2018 and served on the assessee by RPAD to explain its case on 29-01-2018. Even for this Penalty proceedings, the assessee has not responded thereby the AO imposed a minimum penalty u/s 271(1)(c) - Even before the Ld. CIT(A), the assessee has mentioned about the pendency of the appeal before the ITAT and not explained the expenditure claimed u/s. 57 - CIT(A) also confirmed the levy of penalty u/s. 271(1)(c) of the Act. As it can be seen from the assessment proceeding as well as penalty proceeding, the assessee failed to substantiate its claim of expenditure made u/s. 57 to earn the income from other sources . In the absence of the same, even before the Lower Authorities as well as before this Tribunal mere filing written submission for 5 pages without any material evidences cannot yield good result to the assessee. We do not find proper assistance from the assessee by simply filing a written submission without any material evidences before us as well as before Ld. CIT(A). It is not the case of the Revenue that made the addition without hearing the assessee, whereas five opportunities were given to the assessee to explain its case which were never responded by the assessee and nor filed any details or evidences in respect of the expenses claimed u/s. 57 of the Act. Therefore, we have no hesitation in confirming the order passed by the Lower Authorities. Thus the grounds of appeal raised by the assessee is hereby rejected.

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• 2023 (9) TMI 1337
  TP Adjustment - comparable selection - assessee s functional profile as, being, a company engaged in the retail trade of frozen fish and other seafood products both in the domestic as well as overseas markets and not carrying out any processing activity. The final product of the assessee is not ready to cook and eat but needs to be processed by its customers till it reaches that stage - HELD THAT:- Tolar Ocean Products Pvt. Ltd company is engaged in diverse activities and also in processing of marine products. It has outside processing as well. As against that, the assessee is only in retail trade of fish and sea products. Since the assessee is not in processing of any marine products, we hold that the ld. CIT(A) was justified in excluding this company from the list of comparables. Forstar Frozen Foods Private Limited is engaged in the business of manufacturing and export of fish and fish products which has ready to eat different packaged products using individually quick frozen technology. This company has also installed the breeding line instruments producing ready to eat value added seafood in Unit No.2. These facts indicate that this company was rightly excluded by the ld. CIT(A) from the list of comparables. We, therefore, countenance the same. Nekkanti Sea Foods Ltd - this company is in the business of processing and exporting. It has got state of art processing plants in four locations by integrating functions of deep-sea trawling and processing seafood. These facts indicate that it is substantially different from the assessee, which is engaged only in trading of fish and seafood products. We, therefore, approve the view point of the ld. CIT(A) on this score. Asvini Fisheries Private Limited is in the business of processing and export of shrimps. It has a processing facility at Bhimavaram, Andhra Pradesh and Tuticorin, Tamilnadu. It has a huge fixed asset base of Rs. 62.94 crore. As against it, the assessee is only in trading of fish and seafood products without having any manufacturing facility. We, therefore, approve the action of the ld. CIT(A) in excluding this company from the list of comparables. Apex Frozen Foods is engaged in processing and export of ready to eat aquaculture products with large shelf life. It has its own intangibles, under which the ready products are sold to direct consumers. Further, it is engaged in shrimp farming activity and hatchery in addition to the business of export of frozen shrimps. In our view, this company was rightly excluded by the ld. CIT(A). Shree Datt Aquaculture Farms Pvt. Ltd. is engaged in not only fish processing but also other business segments like food processing, tobacco products and further no segmental data is available. Such a contention raised before the TPO remained uncontroverted. The ld. CIT(A) further observed that this company is engaged in the business of manufacture, marine farming and sale of marine products. Obviously, the assessee is not into any manufacture or marine farming. In our view, the ld. CIT(A) rightly excluded it from the list of comparables. Uniroyal Marine Exports Ltd is engaged in diverse activities of manufacturing shrimps and squids. As the assessee is not into manufacture of shrimps and only in their marketing, we hold that the ld. CIT(A) was right in excluding it from the list of comparables. Gadre Marine Exports Pvt. Ltd. is a manufacturer and exporter of frozen seafood and manufactures a wide range of products including marinated, ready to cook fish and cut-n-clean raw fish. This company has factories across four locations of west coast of India. Its main business is manufacture and sale of Surimi value added products and fish meal. This company has operational wind mill at its facility at Sadawaghapur, Patan, Satara. These points eminently show its incomparability with the assessee company. Computation of ALP under dataset - CIT(A) in upholding the assessee s contention of using the current year data and taking the mean margin of the comparables for benchmarking the specified domestic transaction - HELD THAT:- The first and the second provisos of section 92C(2) read with rule 10B(4) and (5) dealt with the computation of the ALP with reference to the arithmetical mean of the PLI of the comparables computed by considering, usually, the figures for the current year only. Simultaneous with making the first and second provisos inoperative through the third proviso to section 92C(2), rule 10CA has been inserted by the 16th amendment rules. Sub-rule (1) of rule 10CA provides that the ALP of the international or SDTs `shall be computed in accordance with the provisions of this rule . This shows that where there are more than one comparable, then the ALP for the relevant years, including the year under consideration 2016-17, should be governed by rule 10CA. The assessee benchmarked the SDT with three comparables. The TPO expanded the list of comparables to twelve. The ld. CIT(A) reduced it to four, which we have countenanced above. As the surviving comparables are four, which is less than six, the case gets covered under sub-rule (7) of 10CA. Going with this sub-rule, the ALP shall be the arithmetical mean of the PLI of the comparables computed by considering the weighted values of current plus two preceding years, which will be further subjected to the benefit enshrined in the proviso. In our considered opinion, the ld. CIT(A) was not justified in taking recourse to rules 10B(4) and 10B(5), when the ALP was required to be mandatorily computed as per rule 10CA. The direction of the ld. CIT(A) that the assessee adopted a correct approach by using the current year data and taking the mean margin of the comparables, is fallacious and needs modification. It is therefore, held that, firstly, the ALP should be determined w.r.t. rule 10CA and not rule 10B and secondly, sub-rule (7) of rule 10CA will apply mandating the determination of the ALP by considering the arithmetical mean of the PLI of the four comparables computed by taking weighted average of the figures of the current plus two preceding years. We set aside the impugned order and remit the matter to the file of the AO/TPO with a direction to recompute the ALP of the SDT of `Purchase of Frozen fish and sea food' in the hue of the discussion made above

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• 2023 (9) TMI 1336
  Principle of mutuality - interest income earned by the assessee on the deposits with the bank - assessee-club claimed before the AO that it is a mutual organisation comprising of its members and the surplus income earned from mutual transactions is not taxable as per the principle of mutuality - AO noted that the doctrine of mutuality did not apply on the interest income on FDRs and security deposits as the same are income earned from third party - HELD THAT:- The issue is squarely covered in the case of Secundrabad Club etc [ 2023 (8) TMI 925 - SUPREME COURT] has categorically held that the principle of mutuality does not exempt from tax interest income earned by clubs from FDs in banks, irrespective of whether the banks are corporate members of the club or not. There is no infirmity in the orders of the lower authorities. There is no merit in the appeals of the assessee and the same are accordingly dismissed.

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• 2023 (9) TMI 1335
  Revision u/s 263 - lack of verification and application of mind by AO - Aas per CIT AO has allowed the deduction claimed u/s 80IA of the Act despite the fact that the assessee did not furnish all the supporting documents required as laid down in Rule 18BBB of the income Tax Rules for claiming deduction - Whether the assessee has submitted unit-wise Balance Sheets or not? - HELD THAT:- In response to notice under section 142(1) of the Act, the assessee has submitted unit-wise reply and detailed explanation before the Assessing Officer and the assessee also submitted further reply before the Assessing Officer. We note that Assessing Officer has issued further notice under section 142(1) of the Act, wherein the Assessing Officer asked the assessee to submit the details and documents of windmill unit-wise. In response to notice issued by the Assessing Officer, the assessee submitted its detailed reply along with documents and evidences. Therefore, we note that detailed reply and explanation were submitted before the Assessing Officer. We note that Assessing Officer could not download the unit-wise balance sheets due to technical error, therefore ld. Counsel submitted that there is no mistake on the part of the assessee in submitting the unit-wise balance sheets. From the judgment of the Hon'ble Gujarat High Court in the case of PCT vs. M/s. Shreeji Prints Pvt. Ltd. [ 2020 (2) TMI 1021 - GUJARAT HIGH COURT] it is vivid that the revisional powers cannot be exercised for directing a fuller inquiry to merely find out if the earlier view taken is erroneous particularly when a view was already taken after inquiry. A mere observation that no proper details have been obtained, cannot be sufficient to come to a conclusion that the AO did not make proper and adequate inquiries which he ought to have made in the given facts and circumstances of this case. None of the reasons set out by the PCIT for invoking the jurisdiction u/s 263 of the Act are sustainable. The impugned order of the PCIT has to be quashed for the reason that order of the AO sought to be revised in the impugned order was neither erroneous nor prejudicial to the interest of the revenue for the reason of any lack of inquiry that the Assessing Officer ought to have made in the given facts and circumstances of the case. We accordingly quash the order u/s. 263 of the Act, and allow the appeal of the assessee.

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• 2023 (9) TMI 1334
  Reopening of assessment u/s 147 - Addition made in respect of unexplained investment towards purchase of agricultural land - HELD THAT:- AO observed that since the assessee had purchased part of such land from one of the parties to the aforesaid MOU, the AO was of the view that since the aforesaid MOU mentioned the price of properties at a much higher value, the AO had reason to believe that substantial cash consideration was given by the assessee for the purchase of the aforesaid land and therefore, income had escaped assessment. It was on the basis of the aforesaid facts, that the Assessing Officer initiated proceedings u/s 147 of the Act. In our view, the AO has given detailed reasonings on the basis of which he formed the belief that looking into the instant set of facts, the AO had reasonable belief that the assessee had made cash payments in respect of purchase of the aforesaid properties, thereby leading to escapement of income. It is a well settled principle of law that that while recording the reasons, the AO need not establish the actual escapement of income. The belief at that time is only prima-facie and not conclusive. In the case of Raymond Woollen Mills Ltd. [ 1997 (12) TMI 12 - SUPREME COURT] observed that the Court has only to see whether there was prima-facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. Accordingly, in our view, the AO had sufficient material to form a prima facie belief that the assessee had made cash payments for purchase of aforesaid properties, thereby leading to escapement of income. Therefore, we find no infirmity in the order of Ld. CIT(Appeals) when he held that issuance of notice under Section 147 of the Act was valid in the instant set of facts. Violation of Rule 46 of the Income Tax Rules - allegation of Department that there was violation of Rule 46A of the Income Tax Rules in the instant set of facts, wherein the CIT(Appeals) did not confront the AO with the additional information on the basis of which the relief was granted to the assessee - HELD THAT:- As relief has been granted to the assessee only on the basis of the fact that on comparison of the MOU and the Registration Deed of properties which were purchased by the assessee, there was only one plot of land pertaining to survey number 171 palki which was mentioned in the MOU. The other plots of land which were purchased by the assessee did not form part of the MOU and were purchased from third parties / persons. Accordingly, we observe that no additional documents / information formed the basis for Ld. CIT(Appeals) allowing relief to the assessee which was not present before the AO. During the course of appellate proceedings, Ld. CIT(Appeals) made a comparison between the contents of MOU and the details of properties which were purchased by the assessee, and on comparison of the two, CIT(A) was of the view that since there was only one common property in the aforesaid agreements, and therefore the additions could be made only on the basis of the aforesaid property which was mentioned in the MOU and not with respect to other properties not forming part of the MOU. We are of the considered view that there was no violation of Rule 46A of the Income Tax Rules, since no additional documents / information / data was made the basis of allowing relief to the assessee which was not before the Assessing Officer at the time of framing the assessment. CIT(A) giving part relief to the assessee and excluding those plots of land which should not form part of the MOU - HELD THAT:- CIT(Appeals) while allowing the assessee s appeal observed that no additions have been made by the Assessing Officer in the case of the other family members, who were the joint holders in the aforesaid property. We observe that in the instant facts the additions were made only on the basis of MOU entered between third parties and there was no mention of the assessee s name in the MOU. Further, the aforesaid MOU on the basis of which additions were made by the Assessing Officer had also been subsequently cancelled and was not acted upon. Therefore, in view of the aforesaid judgements cited above, we are of the considered view that CIT(Appeals) has not erred in facts and in law in holding that it would not be legally correct to extrapolate the addition in the hands of the assessee on the basis of facts relating to 1.25 bighas mentioned in the MOU, to the total land of 13.75 bighas purchased by the assessee.

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• 2023 (9) TMI 1333
  Validity of assessment u/s 144C - AO without passing draft assessment order and providing an opportunity to file objections before the DRP by the assessee passed final assessment order u/s 144C - HELD THAT:- As the AO passed the final assessment order without passing draft assessment order the ratio of the decisions of Headstrong Services India Pvt. Ltd. [ 2020 (12) TMI 1086 - DELHI HIGH COURT ] and Nokia India Pvt. Ltd. [ 2017 (9) TMI 1838 - DELHI HIGH COURT ] squarely applies to the facts of the assessee s case. Thus, respectfully following the above said decisions, we quash the final assessment order passed by the AO u/s 143(3)/144C/254 of the Act for the AY 2009-10 also. Ground no.1 of cross objection filed by the assessee is allowed.

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• Customs

• 2023 (9) TMI 1399
  Seeking condonation of gross delay of 289 days in filing the appeal - HELD THAT:- The explanation offered by the appellant seeking condonation of delay not satisfied - the application seeking condonation of delay is dismissed.

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• 2023 (9) TMI 1398
  Valuation of imported goods - machinery oil /machinery lubricant oil - rejection of declared value - redetermination of value - Ash content in the samples - it was held by Tribunal that It is settled position of law that unless the transaction value could be established to be improper upon the finding that import invoices were either fabricated or fake or that any relationship exists between the importer and the exporter, the transaction value has to be accepted as correct value for assessment under Rule 3 of the Customs Valuation Rules, 2007. HELD THAT:- There are no reason to interfere with the order(s) impugned in these appeals - appeal dismissed.

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• 2023 (9) TMI 1397
  Levy of penalty - guar gum was of food grade or not - Revenue s contention that it is of food grade is based on the test reports of AES to whom the samples were sent by CRCL - valuation should be based on transaction value or not - Rejection of transaction value - Tribunal held that The impugned order is correct in rejecting the transaction value and re-determining the value based on the contemporaneous values of imports available in NIDB. HELD THAT:- There are no reason to interfere with the order(s) impugned in these appeals - appeal dismissed.

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• 2023 (9) TMI 1396
  Refund of deposit made at the time of provisional clearance of the goods - applicability of principles of unjust enrichment - HELD THAT:- This Court considered an identical question in Commissioner of Customs v. Hindustan Zinc Limited Through its Managing Director [ 2023 (9) TMI 1302 - SUPREME COURT] . The Court had in that case ruled that the judgment in Commissioner of Central Excise, Mumbai-II v. Allied Photographics India Ltd. [ 2004 (3) TMI 63 - SUPREME COURT] and the earlier judgment in Commissioner of Customs, New Delhi v. M/s. Oriental Exports, New Delhi [ 2006 (4) TMI 501 - SUPREME COURT] , were applicable and binding. The revenue s appeal must therefore be rejected - Appeal dismissed.

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• 2023 (9) TMI 1395
  Refund of Terminal Excise Duty - deemed exports - HELD THAT:- The issue in the present matter is no longer res integra in view of the authoritative pronouncement of the Apex Court in the case of SANDOZ PRIVATE LIMITED VERSUS UNION OF INDIA OTHERS [ 2022 (1) TMI 225 - SUPREME COURT] - the Apex Court has considered Chapter 8 of FTP and also the policy circular dated 15.03.2013 and held that EOU entities who had procured and imported specified goods from DTA supplier are entitled to do so without payment of duty having been ab initio exempted from such liability under para No.6.11(c)(ii) of the FTP, being deemed exports. Thus, no error has been committed by the learned Single Judge. The writ appeal, as such, is dismissed.

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• 2023 (9) TMI 1394
  Validity of summons issued in the course of investigation - DRI is a proper officer to issue SCN or not - Detention order passed against the father of the petitioner - HELD THAT:- It is well settled that investigation should not be interfered with except in grave and special circumstances and where it would be manifest that no offence had been committed. Bearing in mind the material which stands placed on the record, the relief claimed cannot be sustained - It is by now well settled that High Courts in exercise of either their inherent powers under Section 482 of the Code of Criminal Procedure, 1973 or their constitutional power flowing from Article 226 of the Constitution would interfere with an ongoing investigation or thwart it only in rare and exceptional cases and where it may be established that no offense at all appears to have been committed. The power to arrest stands conferred upon the respondents to be utilised in aid of the enquiry or investigation which may be ongoing. The respondents upon forming the requisite opinion of the presence of a party being required in the course of investigation or inquiry are duly empowered by the statute to summon persons who may then be asked to participate in the inquiry that is pending. Detention order passed against the father of the petitioner - HELD THAT:- The learned counsel completely fails to appreciate that the aforesaid detention order has come to be passed by virtue of the provisions made in Section 3 of the COFEPOSA. Section 3 is a preventive measure which is adopted in terms of the provisions contained in COFEPOSA and is designed to ensure that a person against whom requisite belief or opinion has been formed and who is habitually engaged in the commission of offences is restrained from proceeding in violation of the law. This is also evident from the following satisfaction which has come to be recorded by the competent authorities and stands so reflected in the order of detention. It is observed that while certain questions of law do appear to have been framed for further consideration, there is no restraint in the interregnum for the authorities duly empowered under the Act to proceed in accordance with law. There are no merit in the instant writ petition. It shall stand dismissed.

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• 2023 (9) TMI 1393
  Seeking release of detained goods - perishable goods - Inshell Walnuts and Almonds - seeking direction to respondent authorities to release the cargo without insisting upon NOC from first consignee as per the notification no.47/2017 dated 11.04.2017 as the said company is desirous of purchasing the cargo - HELD THAT:- It appears that there is a dispute with regard to the ownership of the goods between the petitioners of both the petitions and in absence of bills of entry being filed with the respondent authorities, it would not be possible for the custom authorities to make assessment order for determining the duty payable for release of the goods either for home consumption or for warehousing the same. Without prejudice to the rights and contentions to be raised by all the parties and to see that the perishable goods in question are released by customs after proper assessment and to keep such goods in warehouse, if required-in a refrigerated warehouse, the respondent no.5 - Zestmarine Services Private Limited is directed to file Bills of Entry in respect of all the seven Bills of Lading before the respondent - Custom Authorities within a period of one week from today - respondent Customs Authorities as well as Assessment-cum-Authorized Officer, Kandla SEZ, are directed to pass assessment order on Bills of Entry to be filed by the respondent no.5 within a period of one week from the date of receipt of the same for warehousing purpose. It is clarified that the Bills of Entry would further be assessed for home consumption as per the further orders which may be passed by this Court. Stand over to 12.10.2023 for further orders.

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• 2023 (9) TMI 1392
  Classification of imported goods - coloured rubber granules - import policy restrictions - whether the importation of goods are Restricted or Free depending upon classification of the imported goods under the First Schedule to the Customs Tariff? HELD THAT:- The description of the heading for 4001 specify that it covers products of natural rubber in primary forms or in plates, sheets or strip ; similarly the description of heading 4002 provides that it covers Synthetic rubber and factice derived from oils, in primary forms or in plates, sheets or strip . Further, heading 4003 covers reclaimed rubber in primary forms or in plates, sheets or strip and heading 4004 covers under its scope waste, parings and scrap of rubber (other than hard rubber) and powders and granules obtained therefrom . The imported goods are to be treated as finished goods instead of raw rubber in any primary forms. Thus by the scope of coverage of the chapter heading 4001 and 4002 and its tariff entries, relative Chapter Note 5(A), inasmuch as there is presence of pigments/colouring matter, carbon black and accelerators in the imported goods, it does not merit classification under heading 4001 as well as 4002. The imported goods is presented in granules of size 2mm to 4mm which is one of the primary form and are being used for outdoor rubber tiles, indoor rubber mats, rubber pavers etc. and thus are covered under chapter heading 4003. The relevant import policy for goods of chapter heading 4003 are Free and there are no restrictions on import. Thus, the impugned order proposing absolute confiscation of imported goods classifying the imported goods under tariff item 4004 0000 is not legally sustainable. From the plain reading of the entry in the restrictions placed under Basel No. B 3080 of Part-B to Schedule III, it is clear that this entry do not cover the granules of rubber derived from truck tyres. The Prior Informed Consent procedure and permission to be obtained by the importer is applicable only to waste, parings and scrap of rubber . Hence, even otherwise, irrespective of the policy condition not being applicable to imported goods of chapter 4003, there is no restriction from the point of HW Rules, 2016. The impugned order passed by the Commissioner of Customs (Appeals), JNCH, Nhava Sheva, Mumbai-II set aside - appeal allowed.

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• 2023 (9) TMI 1391
  Suspension of Customs Broker License in exercise of authority under regulation 16 of Customs Broker Licencing Regulations, 2018 - HELD THAT:- No case has been made out in the impugned order that continued operation of the appellant as customs broker would prejudice public interest or jeopardizing the investigations. The decision to suspend the licence was taken on 19th September 2022 which is more than a month after the impugned goods had been seized; moreover, statement of responsible person in the appellant-company was also recorded well before such suspension and there is nothing contained therein that could have prompted such apprehension. Many months have passed since the impugned order and the timeframe prescribed for initiation of proceedings had also elapsed in the meanwhile. Learned Authorized Representative has not been able to shed any light on such proposal. One of the essential conditions for legitimize suspension is the intent to do so. The impugned order appears to have been issued without deliberating on such intent. The revocation of suspension of the licence directed with immediate effect - impugned order set aside - appeal allowed.

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• 2023 (9) TMI 1390
  Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - Advance Authorisation scheme - recovery of Customs Duty - HELD THAT:- It is on the finding of breach of obligation to advise client to comply with statutory provisions and for reporting any non-compliance thereof and to discharge duties as customs broker with utmost speed and efficiency that the extreme detriment has been visited on the appellant. This has been rendered on the finding that no activity was undertaken at the premises of the importer or their supporting manufacturers, M/s Crocus Enterprises or M/s Maks Technologies, which, ostensibly, would have come to light had the appellant undertaken necessary inquiries before taking on their assignment. There are no evidence in the records that the appellant had not undertaken a preliminary ascertainment of the existence and identity of the importer; indeed, it is on record that the importer was an undertaking of standing. There is also no allegation about any misdeclaration in the bills of entry filed for clearance of plastic granules imported under the scheme. Doubtlessly, customs broking does fall within the logistic sector and it is not inconceivable that such brokers do undertake activities that precede as well as follow from such licenced functions which is not legal ground to bring such too within the ambit of Regulations intended for a specific purpose. Therefore, any activity that occurs after clearance of goods is clearly beyond the jurisdiction of Customs Broker Licencing Regulations, 2018. The inquiry report, as concurred with by the licencing authority, is bereft of any foundation that could lead to a conclusion that obligations in regulation 10 of Customs Broker Licencing Regulations, 2018 had been breached by the appellant - Appeal allowed.

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• 2023 (9) TMI 1389
  Suspension of license of the Custom Broker (CB) - shipping bills filed during the period of 27.02.2021 to 15.05.2021 on behalf of an exporter whose first GSTIN was Suo-moto cancelled retrospectively, and the second GSTIN although active, was non-functional at the registered premises - HELD THAT:- The Revenue has not brought forward any evidence that the earlier export documents filed by the appellant are fabricated or manipulated. The Revenue has also not been able to lead any evidence that the said exporter was not existent at the time of export, and the CB had connived in any fraud to defraud the Government exchequer. It has also been brought on record that one of the GSTINs was still in existence at the time of suspension of the appellant s license. Although there is enough power vested in the Commissioner to suspend the license of Custom Broker, in terms of Customs Brokers Licensing Regulations, 2018, however the said power which impacts the livelihood of the person and his employees needs to be exercised with caution and in accordance with the inbuilt safeguards, to prevent the arbitrary and reckless use of the power - in the present case, Commissioner has not recorded any reason for the cause of immediate suspension. Infact, there is no cogent reason or finding recorded by the Commissioner to suspend the license of the appellant two years after the date of export. The present impugned order passed under Regulation 16 is without there being any finding as to why immediate action is necessary to suspend the license - Appeal allowed.

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• 2023 (9) TMI 1388
  Mis-declaration of imported goods - Import of new footwear - Non-declaration of imported goods as stock-lot - country of origin of goods - valuation of goods - HELD THAT:- The OIO passed by the Adjudicating Authority who has passed the OIO after granting the Personal Hearing on 02/03/2011 which was attended by two Consultants on behalf of the Noticee. Non-declaration of imported goods as stock-lot - HELD THAT:- The notice, at the time of submission of B/E and the concerned Invoice, did not declare the imported goods as stock-lot. But later on, they produced a copy of a correspondence with the seller of the goods where it had been mentioned that the goods they wanted to import were stock losts. Now, from the study of the case and reply of the notice, it is observed that the notice imported the goods taking the opportunity of economic recession in European Countries which were making hectic efforts to sell their products at a reduced price with some conditions - the factor that worked behind the import of shoes at a uniform rate in this case irrespective of size and quality was only to get the benefit of stock clearance at a reduced sale price by the exporter who faced certain problems related to market economy. This is not a case of sale of seconds or old goods. The notice also admitted in their written submission that they imported new footwear and also from the correspondence made by the importer with paolo Sanini Spol, the exporter, there are no mention that the footwear so imported as of second-hand quality. Country of origin of goods - HELD THAT:- The noticee in the B/E declared the country of origin of the product as China. However, during joint examination of the consignment at ICD, it was observed by the departmental officers that there was only a nominal number of footwear that were of Chinese origin. Most of the goods were of Austrian origin - the notices therefore had misdeclared their goods as goods of Chinese origin. Valuation of goods - HELD THAT:- The notice declared the goods as stock lot and submitted in the B/E the discounted value as transaction value. Since the goods have been, as discussed before, not stock lots but new ones and are liable to be sold in India as new ones, therefore, it is observed that the value shown in the B/E was not the real value of the imported goods but a very much reduced value and had no nexus with actual sale price of the goods. Therefore, transaction value in terms of Section 14 of the Customs Act, 1962 read with Rule 3(1) of CVR 07 was not applicable - residual Rule 9 of CVR 07 is applicable in this case. The Adjudicating Authority has gone into considerable details of the consignment imported and has passed a very considered Order justifying all his findings - there are no reason to interfere with the same - appeal dismissed.

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• Insolvency & Bankruptcy

• 2023 (9) TMI 1387
  Violation of Principles of Natural Justice - Adjudicating Authority did not give opportunity to the Appellant to make its submissions - admitting Section 9 application - HELD THAT:- From the sequence of the events it is clear that the Adjudicating Authority has fixed several dates in Section 9 application after issuance of notice to the Corporate Debtor. On non-appearance of the Corporate Debtor on 22.02.2022, the Adjudicating Authority directed for ex-parte proceedings. The order dated 22.02.2022 was sought to be recalled by the Corporate Debtor by filing an application dated 09.07.2022 which application admittedly was not listed on the date when the Adjudicating Authority heard the Operational Creditor and reserved the matter. The application under Section 9 was filed in the year 2021, where repeatedly notices were issued to the Corporate Debtor. In the facts of the case and sequence of the events, there are no bonafide reason which can explain the non-appearance of the Corporate Debtor before the Adjudicating Authority. It is true that on 11.07.2022, the counsel appearing on behalf of the Corporate Debtor informed the Court that an application for recall has been filed and the Adjudicating Authority on that date has ordered the application to the listed with the Company Petition but the application stood in defect and could not be listed and the matter was heard by the Adjudicating Authority. Even the vakalatnama of counsel for the Corporate Debtor was in defect and was not before the Court. It has clearly been held that opportunity was given to the Corporate Debtor to appear and file reply and when after giving reasonable opportunity Corporate Debtor did not appear, order was passed to proceed ex-parte. I.A. filed by the Corporate Debtor having not listed, no fault can be found with the order passed by the Adjudicating Authority. The Adjudicating Authority has given reasons for admitting Section 9 application. There are no error in the order of the Adjudicating Authority warranting interference in exercise of our appellate jurisdiction - Appeal is dismissed.

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• 2023 (9) TMI 1386
  Seeking restoration of petition - condonation of delay in filing petition - non-prosecution of the case - HELD THAT:- There is no sufficient cause assigned by the Appellant for the purpose of allowing the present appeal. Without going into the merit of the case, it is observed that the Adjudicating Authority has rightly dismissed the petition for non-prosecution. Appeal dismissed.

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• 2023 (9) TMI 1385
  Approval of Resolution Plan - Non Consideration of GST liability as First Charge - failure to follow the requirements u/s 30(2) of the I B Code which mandates that the 1st Respondent, to ensure that the Resolution Plan conforms to the parameters prescribed in the said provision, in the I B Code - HELD THAT:- This Tribunal, pertinently points out that the Appellant / Applicant had filed a claim in Form-F for a sum of Rs.54,46,13,819/-, on 12.012.2018, after adjusting the receipts of Rs.30,36,36,873/-, in respect of GST Liability and the same was rejected by the 1st Respondent / Resolution Professional of the Corporate Debtor, because of the fact that the claim was resting upon the Estimates and Best Judgment Assessment orders, in the teeth of Section 62 of the KGST Act, 2017. Considering the fact that Appellant / Petitioner, came up with the same claim , sum , which arose, based on Best Judgment Assessment order, made on earlier occasion, and the regular assessment , was not made, hence, this Tribunal, is of the cocksure opinion, that the demand was not ascertained and not crystalised and placed before the 1st Respondent / Resolution Professional for consideration of the Committee of Creditors . Suffice it, for this Tribunal , to pertinently point out that the Appellant / Petitioner, is prohibited, based on the Principle of Res judicata , and by its conduct, is estopped from agitating the likewise, grounds for determination before the Adjudicating Authority / Tribunal . This Tribunal, ongoing through the impugned order passed by the Adjudicating Authority / NCLT Bengaluru Bench, is of the considered opinion, that the observations made in paragraph 18 and 19 to the effect that the claim of Applicant, would not be considered to have First Charge at par with secured creditors under the mandatory provisions of Section 82 of the Karnataka Goods and Services Act, 2017, Section 82 of the Central Goods and Services Tax Act, 2017 and Section 20 of the integrated goods and Services Tax Act, 2017 and that Section 20 of the IGST Act provides that certain provisions of CGST Act inter alia, those falling under Demands and recovery section of CGST Act shall, mutatis mutandis , apply, so far as may be, in relation to integrated tax, as they apply in relation to the Central Tax , as if they are enacted under the IGST Act etc. and that apart, a specific exception to the provisions of the Code was prescribed in the aforesaid provisions, and expressly providing and overriding effect to the I B Code, are free from any legal errors . Appeal dismissed.

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• 2023 (9) TMI 1384
  Recall of order admitting Section 7 application - non-service of notice - Appellant challenging the Order contends that it is true that registered office of the Corporate Debtor is at Mumbai however the said office is in the possession of official assignee since the year 2013 hence any notice issued to the said office in the name of Corporate Debtor has never been served. HELD THAT:- From the facts which has been brought on record it does appear that notice which was sent by the Financial Creditor to the Corporate Debtor pre filing of Section 7 Application and post filing of section 7 application returned with the remark left . Affidavit which was filed on behalf of Financial Creditor also clearly mentioned this fact which has been brought on record at page 85 of the Appeal Paper Book - It appears that due to non-service effected on the corporate debtor, the Adjudicating Authority has passed an order for paper publication on 2nd July, 2019. There is no dispute that paper publication was made at Mumbai. In support of submission of the Appellant that registered office of the Corporate Debtor is in the possession of the official assignee since 2013, the Appellant has brought on record the letter issued from Official Assignee s Office High Court, Bombay 30th July, 2021 (Page 77) which indicates that in pursuance of the Order Notice of Motion No. 1 of 2013, order dated 3rd June 2013 official assignee has asked for handing over the documents. From the facts stated, it is clear that registered office at Mumbai was not in the possession and control of the Corporate Debtor and after 2013 correspondence was made by the Corporate Debtor from Jaipur Address which was also responded by the Financial Creditor on 08th May, 2014 - In the record, there is no proof that any step was taken for serving the email nor any affidavit was filed by the Financial Creditor before the Adjudicating Authority that both the modes were adopted for service as directed vide Order dated 2nd July, 2019. The present is a case where corporate debtor was unaware of the proceedings and publication at Mumbai was not effective since registered office was not under the control and possession of the Corporate Debtor. The objection of the Respondent that Appeal is not maintainable has no legs to stand - appeal allowed.

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• 2023 (9) TMI 1383
  Rejection of application for extension of 60 days time from the date of expiry of CIRP for allowing the CoC to consider and vote upon approval of Resolution Plan - rejection on the ground that Appellate Tribunal can only extend the same - rejection also on the ground that Appellant before the Hon ble Supreme Court was granted liberty of such extension and it cannot be granted to Resolution professional now. HELD THAT:- This Tribunal by its order passed in GOVIND PRASAD TODI, SIDDHARTHA TODI VERSUS SATYA NARAYAN GUDDETI (LIQUIDATOR/ ERSTWHILE RESOLUTION PROFESSIONAL OF AJANTA OFFSET PACKAGING LIMITED) , CANARA BANK, CORPORATION BANK, STATE BANK OF INDIA, EXIM BANK, TODI INVESTORS (INDIA) PVT. LTD., VINAYAK DEALERS PVT. LTD., SOUTH CITY PROJECTS (KOLKATA) LTD., EDCL INFRASTRUCTURE LTD., AMRITVANI EXIM PVT. LTD. [ 2023 (2) TMI 486 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ] has extended the CIRP for a period of 90 days which order was challenged by Govind Prasad Todi and Siddhartha Todi before the Hon ble Supreme Court in GOVIND PRASAD TODI ANR. VERSUS SATYA NARAYAN GUDDETI ORS. [ 2023 (3) TMI 1407 - SC ORDER ], where the Hon ble Supreme Court held After arguing the matter for some time, the learned senior counsel appearing for the appellants seeks leave to withdraw this appeal with a liberty that if occasion arises, he may be permitted to apply for extension of time. The liberty was granted by the Hon ble Supreme Court to apply for extension of time. Extension of time in the CIRP has to be applied by the Resolution Professional who is the official conducting the CIRP and further when CoC has instructed the Resolution Professional to seek extension of 60 days, the application could not have been rejected only on the ground that Govind Prasad Todi and Siddhartha Todi who were granted liberty, who have not filed the application. The liberty was granted to Govind Prasad Todi and Siddhartha Todi to also file application for extension but the order of the Hon ble Supreme Court does not precluded the Resolution Professional to make application for extension of time. In the facts of the present case, when in the CIRP plans have already been received which have to be voted upon, the ends of justice shall be served in extending the period of CIRP for 60 days. Appeal allowed.

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• 2023 (9) TMI 1382
  Rejection of Section 7 Application - dismissed as barred under Section 10A of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The liability of corporate guarantor to make the outstanding payment arose only when Corporate Guarantee was invoked vide Notice dated 12th June, 2020 as per the notice invoking the corporate guarantee. 16th June, 2020 was date on which default was committed which is a date admittedly covered by Section 10A prohibition. The Adjudicating Authority did not commit any error in rejecting Section 7 Application as barred by Section 10A. There are no merit in the Appeal - the Appeal is dismissed.

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• PMLA

• 2023 (9) TMI 1381
  Money Laundering - Enforcement Directorate has an independent right to conduct an investigation into the Teachers Recruitment Scam or not - HELD THAT:- Reading the order of the Single Judge in its entirety, it is evident that the Single Judge has duly applied her mind to the question whether the investigation should be stayed. The Single Judge was of the view that such a direction could not be issued at the present stage to stultify the investigation. There are no reason to interfere with the impugned order since the consequence of doing so would be to stifle the investigation at the incipient stage. However, the petitioner is at liberty to pursue all remedies which are available in law, including under Section 482 of the Code of Criminal Procedure 1973. Since this Court had permitted the filing of applications before the Single Judge while disposing of the proceedings on 28 April 2023, the direction for the payment of costs would stand deleted - SLP disposed off.

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• 2023 (9) TMI 1380
  Money Laundering - seeking quashing of the ECIR - summons dated 8.6.2023 issued by the Enforcement Directorate - provisional attachment of property - HELD THAT:- In the instant case, cash amounting to a total of Rs. 49.80 Crore and gold jewellery valued at more than Rs. 5.08 Crore has already been seized from Ms. Arpita Mukherjee, a close associate of Shri Partha Chatterjee. The ED has also provisionally attached properties worth Rs. 71.18 Crores in this recruitment scam by way of issuance of 3 Provisional Attachment Orders (PAOs) so far in addition to the cash and gold seizure. The total seizure and attachment in the case stands at Rs. 126 Crore (approx.). The E.D. in this case before this Court has relied upon only the 4th Supplementary Complaint. As such, except the statement of Sujay Krishna Bhadra (an accused who is in custody) no materials were produced by E.D. before this Court to relate the petitioner with the ECIR under challenge - no coercive measures would be taken against the petitioner by the E.D. without adhering to Section 19 of the PMLA, 2002. Revision disposed off.

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• 2023 (9) TMI 1379
  Seeking a direction to the respondent to close / drop the proceedings against the petitioner - money laundering - Predicate offence - HELD THAT:- It is clear that in the case on hand, there is closure of predicate offence and there is no disputation or contestation that this closure of predicate offence has attained finality and has been given legal quietus. As regards THE DEPUTY DIRECTOR, DIRECTORATE OF ENFORCEMENT VERSUS EMTA COAL LIMITED ORS. ETC. [ 2023 (7) TMI 885 - SC ORDER] , we remind ourselves of the principle as laid down in KUNHAYAMMED AND OTHERS VERSUS STATE OF KERALA AND ANOTHER [ 2000 (7) TMI 67 - SUPREME COURT] to say that Hon'ble Supreme Court has declined to interfere with the Delhi High Court order which vide paragraph 16 specifically deals with the stand alone offence argument but the Hon'ble Supreme Court has put in a caveat and the caveat is recording of statement of learned Additional Solicitor General that in the event of any further action in respect of the predicate offence liberty has to be preserved for the Enforcement Directorate for reviving the proceedings. To be noted, this is captured in the third paragraph of the 06.07.2023 order of Hon'ble Supreme Court - this caveat will apply to the case on hand also and therefore when we accede to the prayer in the captioned WP it will clearly be with a similar caveat. The prayer of the writ petitioner answered in the affirmative.

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• Service Tax

• 2023 (9) TMI 1378
  CENVAT Credit - input service - Deposit Insurance Service provided by Deposit Insurance and Credit Guarantee Corporation - nexus of such service with the actual performance of the banking service provided by the respondents/assessees - HELD THAT:- The issue in the present proceedings is certainly not different which has fell for consideration of the Larger Bench in the case of M/S. SOUTH INDIAN BANK VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX-CALICUT [ 2020 (6) TMI 278 - CESTAT BANGALORE] - It is found that the Larger Bench has taken into consideration the statutory scheme of DICGC as also the mandatory requirement under the Reserve Bank of India directives to be complied by the bank like the assessee and the compliances of which were mandatory. It is in the course of availing such insurance service for the benefit of the depositors, the petitioner was required to pay the premium on which service tax was paid, and of which, input tax credit was sought to be availed. The CESTAT has rightly observed that the issue stands squarely covered by the decision of the Larger Bench. It can be construed from a plain reading of section 66D that the negative list is compiled of the services stated therein and is relied on to bring the assessee within the negative list is clause-(n) i.e. services by way of extending deposits, loans, advances etc. in so far as the consideration is represented by way of interest or discount. The expression used in clause-(n) begins with the words extending deposits, loans or advances , and such activity is represented by way of interest or deposit of money. The determining word in the clause is extending deposits, loans or advances etc. Extending deposits literally understood is the deposits, loans etc. extended by the assessee. The acceptance of deposits is a pure and simple money transaction. But the realm in which the controversy operates is after receiving the deposits from public, the assessee is under statutory obligation to insure the deposits received for conducting the bank business and extends under law services on which service tax is paid. The services provided by the assessee are not falling within the negative list. Therefore, there is relatability on a hostile consideration of business in banking between the services availed and services rendered. Thus, no substantial question of law arises in the present appeals - appeal dismissed.

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• 2023 (9) TMI 1377
  Non-payment of service tax - Works Contract Service - Erection, Installation and Commissioning Service - Repair and Maintenance Service - reverse charge mechanism - Penalty on Director u/s 78A of the Finance Act, 1994. Works Contract services including sub-contracts in respect of Railways - HELD THAT:- The department has interpreted the word Railways in the aforesaid notification and restricted it's meaning to cover only Railways meant for public carriage of passengers or goods - It is observed that there is no such restriction available in the Notification. A plain reading of the Notification reveals that the exemption is available to all Railways whether it is run by Government or the tracks are laid at private Firms. The exemption notification has a wider impact and it is sufficient to cover any infrastructure as Railway. As there is no mention of the fact that the structure has to be used for public carriage, we hold that the exemption is available to all Railway infrastructure. In the case of KONKAN RAILWAY CORPORATION LTD VERSUS COMMISSIONER OF CGST CENTRAL EXCISE [ 2023 (2) TMI 1175 - CESTAT MUMBAI] , the Tribunal has held The taxable service in Finance Act, 1994 excluding railways from the ambit of the service did not place any restriction on benefit going to private railways. The statute, too, did not consider it necessary to fall back on the definition of railways in another statute for determination of taxability and it is not open to the adjudicating authority to arrogate that privilege in an executive capacity. The intent of exclusion prior to 1st July 2012, and exemption for the period, therefore, is abundantly clear. Thus, the exemption is available to all Railway infrastructures. Accordingly, the demands confirmed are not sustainable. Repair and maintenance service provided to Railways - HELD THAT:- The Appellant has already paid service tax amounting to Rs.45,51,838/- along with interest thereon. For the balance tax of Rs. 14.69,556/-, they stated that they are not liable to pay the tax, as the abatement benefits as provided under Rule 2A of Service Tax (Determination of Value) Rules, 2006 has not been properly considered in respect of the parties M/s Rites (Haldia) and M/s Rites (Chandrapura). The abatement has been completely denied on the service provided to M/s Bhushan Steel Limited. - The balance demand of service tax of Rs. 14.69,556/-,is not sustainable and therefore, the same is set aside. Demand under reverse charge mechanism under the category of Goods Transport Agency Service , Legal Consultancy Service , Repair Maintenance Service and Rent a Cab Service - HELD THAT:- In the SCN only payment of Rs. 17,98,959/-has been considered. The appellant stated that the balance tax of Rs.76,148/-is not payable by them. The Appellant explained the reasons for the same which are detailed in their submissions mentioned in Paras 6, 7.1, 7.2 and 7.3 supra. The reasons for the difference is mainly due to wrong adoption of effective rate of RCM, incorrect abatement given to GTA service and incorrect adoption of rate of service tax. We agree with the calculation submitted by the Appellant mentioned in Paras 6, 7.1, 7.2 and 7.3 supra . Accordingly, the balance tax of Rs.76,148/- is not sustainable and therefore, we set aside the same. Penalty on Director u/s 78A of the Finance Act, 1994 - HELD THAT:- The Appellant has already paid the service tax along with interest and the same has been appropriated in the impugned order. There is no evidence brought on record to establish suppression of fact with an intention to evade payment of tax. Accordingly, we hold that no penalty imposable under section 78 of the Finance Act, 1994 and the same is set aside. No penalty imposable under Section 77(1)(a) of the Finance Act, 1994 and the same is set aside. There is no evidence available to implicate the Director of the Firm in non payment of service tax. As all the demands confirmed in this order has already been paid along with interest and the sane has already been appropriated in the impugned order, the penalty imposed on the Director under section 78A of the Finance Act, 1994 is set aside. Appeal disposed off.

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• 2023 (9) TMI 1376
  Levy of service tax - Business Auxiliary Services - providing travel relating services to both domestic as well as international travellers - export of services - HELD THAT:- The appellant filed four appeals before the Tribunal but the Tribunal vide its Final Order dated 28.07.2016 disposed of three appeals only and the present appeal could not be tagged with the earlier appeals as the same was transferred to the CESTAT, Chandigarh for disposal. While disposing of the ROM Application, the Tribunal in Para 9 has held that appeal No. ST/188/2010 filed by Revenue against the impugned order dated 29/10/2009 is rejected. The Cross Objection filed by the assessee is also disposed of. Appeals filed by BTPL (ST/104/2010, ST/55430/2013 and ST/54736/2014) were disposed of in view of above findings on export of services. The department appeal before the Hon ble Apex Court was also dismissed as not pressed for as reported in the Supreme Court Website. Following the ratio of the said decision in the appellant s own case M/S BIRD TRAVELS (P) LTD. VERSUS CCE, NEW DELHI. [ 2017 (3) TMI 1930 - CESTAT DELHI] , the appeal of the appellant allowed on the same terms as was allowed in terms of the decision of the CESTAT, New Delhi in M/S BIRD TRAVELS (P) LIMITED VERSUS CCE, DELHI-I AND CST-DELHI-I (VICE-VERSA) [ 2016 (8) TMI 720 - CESTAT NEW DELHI] . Appeal disposed off.

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• 2023 (9) TMI 1375
  Levy of Service Tax - Commercial and Industrial Construction service (CICS) - activity of Trenching and Laying of PLB pipes and cable works for BSNL - HELD THAT:- In the admitted facts and circumstances, the Appellant has not provided any taxable service under any clause or sub-section (105) of Sec 65 of the Finance Act, 1994 in respect of their activity of laying cables under or alongside roads for BSNL. So far as the amount collected from the service receiver and deposited by the Appellant, it is held that the taxes have been rightly deposited and Appellant shall not be entitled to any refund of the same. In the circumstances, all penalties imposed are set aside. Demand set aside - appeal allowed.

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• 2023 (9) TMI 1374
  Levy of Service Tax - Residential Complex Service - carrying out activity of Construction of Residential Complex (With material) as a developer, where the contract was executed before 01.06.2007 and where services were provided before and after 01.06.2007 - refund of service tax paid during investigation - refund is barred by Section 73 (3) of Finance Act, 1994 or not. Whether the construction of residential complex with material is taxable before 01.06.2007? - HELD THAT:- In this case undisputedly the construction of residential complex was provided by the appellant along with material which stands established and admitted as per the show cause notice wherein the demand was raised after extending the abatement of 67% which is given only when the service is provided along with material. Therefore, the fact that the construction was provided along with material is not under dispute. If this is be so then the service is clearly classifiable under works contract service and up to 01.06.2007, the service tax was not leviable on works contract service was held by the Hon ble Supreme Court in the case of Total Environment Building System P. Ltd [ 2022 (8) TMI 168 - SUPREME COURT ]. As regard the period post 01.06.2007, the demand is not sustainable on the ground that despite the service of works contract service, the demand was raised under construction of residential complex. Since the service tax of works contract service demanded under different head i.e. Construction of Residential Complex the same is not legal and correct. It is found that as per the Board Circular No. 108/02/2009 dated 29.01.2009, the construction service provided by the builder/developer was not taxable up to 01.07.2010. This particular issue has been considered by this Tribunal in the case of COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, VISAKHAPATNAM - I VERSUS M/S PRAGATI EDIFICE PVT LTD (VICE-VERSA) [ 2019 (9) TMI 792 - CESTAT HYDERABAD] where it was held that It is well settled legal position that whether the service is rendered as service simpliciter or as a works contract, no service tax can be levied on construction of residential complex prior to 01.7.2010. Thus, up to 01.07.2010 there was no service tax on the Construction of Residential Complex. Therefore, for this reason also the demand is not sustainable, hence, the same is set aside. Refund in respect of the deposit made against the aforesaid demand - HELD THAT:- Since the demand itself is set aside, the appellant is entitled for the refund as consequential benefit. The contention of the revenue is that the deposit made by the appellant is covered by the provision of Section 73 (3) of Finance Act, 1994 - It is found that in case of payment made under 73 (3), firstly the assessee is required to pay the amount of service tax along with interest and same need to be intimated to the department and simultaneously the department is not supposed to issue the show cause notice - In the present case admittedly the appellants were issued show cause notice demanding service tax, therefore, this case is not covered by provision of 73 (3) of the Finance Act, 1994. Hence, the rejection of refund on that count is baseless and not tenable. The demand of service tax is set aside. Consequently, the appellants are entitled for the refund - Appeal allowed.

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• Central Excise

• 2023 (9) TMI 1373
  Method of Valuation - Related party transaction - Sale to inter-connected undertakings for the period prior to 01.03.2013 - applicability of rule 11 of the Valuation Rules read with rule 4 and rule 2 (b) - case of the Revenue is that the duty should have been paid on the price at which the appellant had sold the goods to independent buyers in the greatest aggregate quantity. HELD THAT:- In the impugned order, and the OIO the value was determined as per Rule 11 read with Rule 4. We find that Rule 11 can be applied only when the situation is not covered by any of the previous valuation rules. It is undisputed that the appellant and JSPL and JPL are related persons. Therefore, it must be examined if they can be covered by Rule 10 (a) or Rule 10(b) - If the appellant and JSPL an JPL were related persons only because they were interconnected undertakings and they were not also related in any of the other three ways [clauses (i) (ii) or (iv) of clause (b) of sub-section (iii) of Section 4] or the appellant and JSPL or JPL are the holding or subsidiary companies of each other, then valuation should be done as if they are not related persons. In this case, there is no allegation or evidence that JSPL and JPL are connected to the appellant in any of the other three ways. There is no allegation that the appellant is either the holding or the subsidiary company of either JSPL or JPL. The only allegation is that they are associated companies and hence they are interconnected undertakings. It has also been alleged that JPL is the subsidiary of the JSPL, i.e., one of the buyers is the subsidiary of another buyer. Therefore, this case falls squarely under section 10 (a) of the Valuation Rules and duty was required to be paid as if the appellant and JSPL and JPL were not related persons, i.e., on the transaction value. The demand of duty under Rule 11 of Valuation Rules cannot, therefore, be sustained and needs to be set aside - impugned order set aside - appeal allowed.

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• 2023 (9) TMI 1372
  Clandestine Removal - Applicability of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - failure to file declaration under rule 6 of Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - suppression of installed machinery - scope for any mitigating circumstances to be considered for levy under any other provision of law or to be left out of assessment or not - presumption of having commenced production on the appointed date - Recovery alongwith interest and penalties - HELD THAT:- The claim of the appellant that licence for manufacture of gutkha had not been obtained appears to have been overlooked even though it should have been possible to have this aspect verified. Sadly, that did not happen. It was improper on the part of the adjudicating authority to assume to the contrary and to presume that either the administration of the state government was lax or that the appellant had operated outside the law with not a whiff of illegal activity coming to the public eye. No inquiry was taken up to ascertain destination of impugned product , if any, had been manufactured from deployment of machine intended for manufacture of licenced product. There is no evidence of clandestine production. There is no evidence to suggest that appellant had used available machines to manufacture gutkha during the disputed period. The impugned order is silent about the state of affairs that prevailed prior to the Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 coming to force or any valid reason to suspect that appellant was manufacturing the product. The presumption owing to which the Rules were said to be applicable is not acceptable and the collection of tax on such assumptions is unthinkable. The appeal is allowed.

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• 2023 (9) TMI 1371
  Recovery of excess refund sanctioned to the assessee in the initial month where the Cenvat credit was not fully utilized - HELD THAT:- The similar issue has been dealt with by this Tribunal in the case of M/s Singla Cables [ 2015 (2) TMI 381 - CESTAT NEW DELHI] , wherein this Tribunal has recorded overall there was no excess availment of exemption under Notification No. 56/2002-CE, as the excess quantum of refund under Notification No. 56/2002-CE during February 2006 to April 2006, was neutralized by lesser quantum of refund under this notification during December 2006. The refund claim of the appellants for the subsequent period, could not be rejected on the ground that the appellant has taken excess refund for the period prior to 22.12.2002, therefore, no demand is sustainable against the appellant as demanded in view of the letter dated 03.06.2003 by the Deputy Commissioner and the refund for the period August, 2006 to October, 2006 were not required to be appropriated. Appeal allowed.

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• 2023 (9) TMI 1370
  Compounded Levy Scheme - Abatement of duty - appellant availed abatement of duty for the days the machine was sealed and not in operation - HELD THAT:- The appellant have followed the procedure for taking abatement of duty provided under Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 . From the plain reading of the Rule 10 it is clear that the abatement is available to the appellant on following the condition laid therein. As per the condition the appellant has to intimate the jurisdictional officer in advance regarding sealing and de-sealing of the machines. In the present case there is no dispute that the intimation was given well in advance and the Jurisdictional Range Superintendent has de-sealed and re-sealed the machine and the machine was operated only during that period - In the present case, the appellant is eligible for abatement in principle and under no circumstances the full duty can be demanded for the period of abatement when the machine was not in operation. This issue has been considered in various judgments. In the case of THE COMMISSIONER VERSUS M/S THAKKAR TOBACCO PRODUCTS P. LTD. [ 2015 (11) TMI 319 - GUJARAT HIGH COURT] the Hon ble Gujarat High Court considered the same issue, where it was held that When the rules do not provide for the manner in which duty is required to be abated, nor do they provide that abatement shall be by an order of the Commissioner or any authority, but nonetheless provide for abatement of duty and the extent of entitlement to such abatement, no fault can be found in the approach of the assessee in suo motu taking the benefit of such abatement. In the case of COMMISSIONER OF CENTRAL EXCISE, DELHI-I VERSUS SHAKTI FRAGRANCES PVT. LTD. UNIT-II [ 2015 (10) TMI 1040 - DELHI HIGH COURT] , the Hon ble Delhi high Court also considered the similar issue where it was held that On a collective reading of Rules 9 and 10 of the PMPM Rules, the Court is of the view that the failure to make the payment of duty on fifth day of every month cannot result in depriving the assessee of the pro rata abatement of duty which he is in any way entitled to since admittedly in the present case there has been a closure of the factory from 14th to 31st August, 2012 and an abatement order has also been passed on 28th August, 2012. However, the assessee would be liable to pay the interest for the period of late deposit of duty. The demand is not sustainable. Accordingly, the impugned order is set aside. Appeal is allowed.

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• CST, VAT & Sales Tax

• 2023 (9) TMI 1369
  Time limitation - present Writ Petition was filed by the petitioner on 04.07.2022 immediately after the impugned order dated 01.06.2022 was served within the statutory period prescribed for filing the appeal before the expiry of limitation for filing statutory appeal before the Appellate Authority had expired - Wrongful determination of taxable turnover under Rule 8(5)(d) of the TNVAT Rules, 2007, r/w Section 5 of the TNVAT Act, 2006. HELD THAT:- Section 5(1) of the TNVAT Act, 2006 is the charging provisions for works contract. The taxable turnover is to be determined under Rule 8(5) of the TN VAT Rules,2007. Only the amounts specified in Clauses (a) to (i) to Rule 8(5) of the TNVAT Rules, 2007 are to be allowed to be deducted for determining the taxable turnover in the case of works contract - If amount is not ascertainable from the books of accounts maintained and produced by a dealer before the assessing authority, deduction shall be of such amount as is calculated at the rate specified in column (3) of the Table to Rule 8(5) of the TNVAT Rules, 2007. Since, it is the case of the petitioner that few more TDS certificate have been issued to the Petitioner by the Greater Corporation of Chennai, the petitioner is directed to furnish the same to the respondent within a period of thirty (30) days from the date of receipt of a copy of this Order. The 1st respondent is directed to issue a corrigendum to the impugned order by revising the tax liability after adjusting the TDS certificates said to have been issued during the pendency of this Writ Petition, within a period of sixty (60) days from the date of receipt of a copy of this order. The petitioner shall thereafter file an appeal before the Appellate Authority under the provisions of the TNVAT Act, 2006, within a period of ninety (90) days from the date of receipt of a copy of this order. Petition dismissed.

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• 2023 (9) TMI 1368
  Principles of natural justice - rejection of application for recovery of arrears in mechanical manner without assigning any reasons - authority to adjust under Rule 51 of the Bombay Sales Tax Rules, 1959 against dues payable under the Maharashtra Purchase Tax on Sugarcane Act, 1962 - HELD THAT:- The reply affidavit does not justify order dated 21st August 2019 passed by the Deputy Commissioner of State Tax in rejecting the Petitioner s application under Section 7 of the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Ordinance, 2019. It does not furnish any reasons whatsoever to disentitle the Petitioner for such settlement. Insofar as the refund adjustment order is concerned, it also appears that the Deputy Commissioner has proceeded to issue such orders patently without jurisdiction as he could not have assumed jurisdiction of an authority under the 1962 Act. On such count, the impugned refund adjustment order is rendered bad and illegal. It appears that although such refund order is passed on 25th July 2019, the Deputy Commissioner has proceeded to exercise jurisdiction under Rule 51 of the Bombay Tax Rules, 1959 (the 1959 Rules), whether it was at all permissible to invoke the provisions of the 1959 Rules is another question, which also goes to the root of the matter. Be that as it may, the refund adjustment order cannot be sustained for want of jurisdiction. The impugned order dated 21st August 2019 is quashed and set aside. The refund application of the Petitioner would be required to be restored to the Deputy Commissioner to be decided in accordance with law - Petition allowed.

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• 2023 (9) TMI 1367
  Validity of assessment order - disallowance of claim of exemption made by the petitioner under Section 6(2) of the Central Sales Tax Act. 1956 - denial on the ground that the sale in question to the ultimate buyer was not taken place during the inter-State movement of the goods in question and according to the Assessing Officer sale by the petitioner to its ultimate buyer took place prior to the purchase by it from its seller - HELD THAT:- On a plain reading of Section 3 along with explanation (i) and (ii) and Section 6(2) of the Central Sales Tax Act along with the aforesaid Trade circular it clearly appears that the commencement of movement of the goods is effected in case of movement from one State to another State from the time of delivery of such consignment to the transporter and is terminated at the time when delivery is taken from such transporter and also is effected by transfer of documents of title of such consignment to a subsequent buyer during the movement from one State to another State. The main grounds of refusal to grant exemption to the petitioner, under Section 6(3) of the Central Sales Tax Act, 1956, by all the Authorities below are that the transfer of title/sale by the petitioner to the ultimate buyer was effected before the commencement of movement and not during the movement of the goods in question which finding on considering the facts and circumstances of the case and provisions of law, is perverse and misinterpretation of relevant provisions of the Act and the notification in question. The respondents could not show any piece of evidence to establish that the subsequent sale to the ultimate buyer effected prior to the commencement of movement of goods in question as defined under Section 6(2) read with explanation 2 and 3 under Section 3 of the Central Sales Tax Act as well as the aforesaid notification dated 4th October, 2010. The impugned order of all the impugned Authorities are not sustainable in law - Petition disposed off.

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• 2023 (9) TMI 1366
  Industrial Promotional Assistance (IPA) scheme - principle of promissory estoppel - whether the respondent authorities can claim to have changed their policy midway vis- -vis the petitioners and the entities covered by the special package only? - HELD THAT:- Nothing in the materials on record or from the arguments of the respondent authorities indicate that there was a declared change of policy or withdrawal of the special package given to the petitioners at any point of time. In the present case, not only was a special package specifically granted to the petitioners on March 2, 2006, but the respondent authorities went on continuously acting on the same for more two years by duly disbursing the subsidies in favour of the petitioners - The present case is not a case where the State made a promise of giving a subsidy, but subsequently changed the policy decision, thereby depriving prospective applicants for such subsidy from getting the subsidy. The attempt of the respondent authorities to invoke the principles of the 2004 scheme and the caps stipulated therein as well as the principles embodied in the 2000 scheme, per se, is entirely mala fide and arbitrary and designed to defeat the petitioners legitimate claim for the balance amount under the special package - there is no scope of giving a premium to such arbitrary endeavour of the State. The respondent authorities to ensure that the balance amount due to the petitioners, to the tune of Rs. 1,18,22,02,436/-, in terms of the break-up given in the supplementary affidavit filed by the petitioners today, to which the petitioners are entitled to under the special package-in-question, be disbursed to the petitioners at the earliest, positively within three months from date - Application allowed.

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• 2023 (9) TMI 1365
  Validity of preassessment notices - challenge on the premise that the impugned notices are barred by limitation in terms of Rule 5 (6) of the Central Sales Tax (Puducherry) Rules 1967 - time limitation - HELD THAT:- Though the question here relates to one of limitation, this Court is not inclined to entertain the batch of writ petitions at the stage of show cause notice for it is trite law that though there is no absolute bar or embargo against entertaining writ petitions against notices, however, interference should be in rare cases and not as a matter of routine. Though, the restriction is self imposed it has been consistently held that High Court shall exercise restraint in entertaining writ petitions under Article 226 of the Constitution of India at the stage of show cause notice. This Court is of the view that whether the notices are barred by limitation or not can be adjudicated by the authority issuing the notice and it is open to the petitioner to submit its objection to the proposal including the plea of limitation. Limitation is a mixed question of fact and law which is yet another reason as to why this Court is not inclined to entertain the writ petition at the stage of show cause notice. The writ petitions are disposed of with liberty to the petitioner to file their objections within a period of 6 weeks from the date of receipt of a copy of this order, if any such objections are filed, the Respondent shall consider the same after providing the petitioner reasonable opportunity of personal hearing. Petition disposed off.

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• Indian Laws

• 2023 (9) TMI 1364
  Tenure of Judicial members of CESTAT - age of retirement would be 62 years or not - HELD THAT:- It would be wholly unjust to allow the tenures of the four judicial members to lapse between 18 April, 2023 and 9 May, 2023. Though some of them have applied for selection in pursuance of the limited vacancy circular, this cannot deprive them of the right to assert that they are entitled to continue until the age of 62 years particularly in view of the order of this Court dated 21 August, 2018. It is directed that the four Judicial Members, whose names are set out in the tabulated statement in the order dated 3 March, 2023, shall continue to remain in service pending final disposal of the Writ Petition. The Writ Petition shall be listed for hearing and final disposal on 11 July, 2023.

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• 2023 (9) TMI 1363
  Dishonour of Cheque - legally enforceable debt or not - Cheque given as security - incomplete signature on the cheque - HELD THAT:- The case of the petitioner is supported that the cheque issued was undated and given as a security. The Signature on the cheque is also incomplete - As such on the date of presentation of the cheque, the company which allegedly issued the cheque was no more existence. It is thus clear that the mandatory provision of section 138 N.I. Act is not present in the present case. The presumption as to the debt and/or liability has also been rebutted by proving that the cheque with incomplete signature was subsequently dated and submitted 8 months after the company which allegedly issued it had closed down, with no outstanding dues. Revision allowed.

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• 2023 (9) TMI 1362
  Dishonour of Cheque - insufficiency of funds - Legally enforceable debt or not - HELD THAT:- The petitioner has not disputed the documents executed. In such circumstances, the Magistrate's Court convicted the petitioner under Section 255(2) of the Code of Criminal Procedure for the offence under Section 138 of the Negotiable Instruments Act and sentenced the petitioner to undergo simple imprisonment for three months and to pay a fine of Rs. 15 lakhs. It was also ordered that in case of default, the petitioner shall undergo a further period of simple imprisonment for one month. The strenuous argument made on behalf of the revision petitioner is that an agreement, the consideration or object of which is forbidden by law and if permitted, it would defeat the provisions of any law, cannot be a debt as contemplated under the Explanation to Section 138 of the Negotiable Instruments Act. The debt is based on Ext.P8 Letter of Acknowledgment executed between the parties and since the sale agreement and Ext.P8 Letter of Acknowledgment are executed to undervalue a property, any debt arising therefrom cannot be subject matter of proceedings under Section 138 of the Negotiable Instruments Act. After failing to honour the cheque issued in consideration of the purchase of property, now the petitioner cannot be heard to contend that the debt is not a legally enforceable debt and a proceeding under Section 138 is not maintainable. Transaction is admitted. Issuance of cheque is not disputed. The 1st respondent has not violated any procedure prescribed in Sections 138 and 139 of the Negotiable Instruments Act. In the facts of the case, the 1st respondent cannot be heard to contend that the debt is not enforceable through Section 138 proceedings - petition dismissed.

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• 2023 (9) TMI 1361
  Dishonour of Cheque - absence of a notice of demand being served on the company - compliance with the proviso to Section 138 of NI Act or not - company could now be arraigned as an accused or not - HELD THAT:- In the present case:- a) The company has not been made an accused nor was any notice served upon the company. b) The petitioner has been made an accused as the Director of the company, who signed and issued the cheque for and on behalf of the company. In the absence of the company being arraigned as an accused, a complaint against the petitioner is not maintainable. Revision allowed.

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• 2023 (9) TMI 1360
  Dishonour of Cheque - insufficient funds - discharge of legally enforceable debt or not - HELD THAT:- As per Section 18 of the Limitation Act the acknowledgement should be in written within the limitation period but in this case there is no written acknowledgement by the petitioner. Though in the complaint there is an averment that the petitioner repaid a sum of Rs.1,20,000/- on 01.12.2016 no records produced to show that the petitioner had given written acknowledgment. Mere averments in the complaint are not sufficient to hold that there is an acknowledgment. Therefore the averments made in the complaint show that the cheque was issued for time barred debt. In this context the learned counsel appearing for the petitioner relied on various judgments - In M/S. JAGE RAM KARAN SINGH ANR. VERSUS STATE ANR. [ 2019 (8) TMI 310 - DELHI HIGH COURT] where it was held that The Appellate Court has rightly held that the alleged responsibility of the respondent No.2, if any, had already become time-barred as on the date of the issuance of cheque and, therefore, the same cannot be said to be in discharge of a legally enforceable debt or liability. Thus, it is clear that if cheque was issued for time barred debt then the proceedings under Section 138 of the Negotiable Instruments Act would not attract. In this case also cheque was issued for time barred debt, thereby the case laws submitted by the learned counsel for the petitioner are squarely applicable to the present facts of the case. Petition allowed.

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• 2023 (9) TMI 1359
  Dishonour of Cheque - vicarious liability of the director - liability on non-executive directors - Section 141 of the Negotiable Instruments Act - HELD THAT:- Where a non-executive director is sought to be made as an accused in the criminal complaint, there must be necessary averments to show as to how and in what manner they were in charge and responsible for the affairs of the company and for the conduct of the business. A mere bald statement to the effect that they are in charge and responsible for the day-to-day affairs of the company is not sufficient. This Court is convinced that the complaint does not satisfy the requirements u/s.141 of the Negotiable Instruments Act and the petitioners, being non-executive directors, cannot be roped in as accused persons without there being a specific plea as to how and in what manner they were in charge and responsible for the conduct of the business of the company. Hence, the continuation of the proceedings as against the petitioners will only result in abuse of process of Court, which requires the interference of this Court in exercise of its jurisdiction u/s.482 Cr.P.C. These Criminal Original Petitions are allowed.

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