TMI Tax Updates - e-Newsletter
October 30, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Law of Competition Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. Input Tax Credit on Construction Cost in relation to Immovable Property- an analysis based upon the recent Supreme Court’s Judgement in Safari Retreat’s case

   By: CAJOYDEB BHATTACHARYA

2. Right to avail ITC is conditional right

   By: Bimal jain

3. New Rule 47A - Time limit for issuance of Self-Invoice under RCM

   By: Shivam Agrawal

4. Constitutional Validity upheld for TOLA which Extends Income Tax Reassessment Time limit

   By: Bimal jain

News

1. Barring of GST Return on expiry of three years

2. 82nd Meeting of Network Planning Group under PM GatiShakti evaluates key Infrastructure projects

3. Pradhan Mantri Mudra Yojana

4. CBDT notifies Tolerance Range for Transfer Pricing for A.Y 2024-25 as per proviso to sub-rule (7) of rule 10CA of the Income-tax Rules, 1962

Notifications

Central Excise

1. 27/2024 - dated 28-10-2024 - CE

Seeks to amend No. 11/2017-Central Excise, dated the 30th June,2017 so as to align it with amended Fourth Schedule to Central Excise Act, 1944

Customs

2. 71/2024 - dated 29-10-2024 - Cus (NT)

Land Customs Stations and Routes for import and export of goods - Notifying Ultapani LCS route Road from Ultapani via Saralpara via Naharani (SSB Camp) to Sarpang District (Bhutan) by amendment of Principal Notification No. 63/1994-Customs (N.T.) dated 21st November, 1994

GST - States

3. FD 02 CSL 2024 - dated 23-10-2024 - Karnataka SGST

Notification No. (09/2024) No. FD 02 CSL 2024, dated: 16th October 2024

4. (09/2024) FD 02 CSL 2024 - dated 16-10-2024 - Karnataka SGST

Amendment in Notification No. (13/2017) No. FD 48 CSL 2017, dated the 29th June, 2017

5. (08/2024) FD 02 CSL 2024 - dated 16-10-2024 - Karnataka SGST

Amendment Notification No. (12/2017) No. FD 48 CSL 2017, dated the 29th June, 2017

Circulars / Instructions / Orders

Customs

1. Instruction No. 25/2024 - dated 28-10-2024

Revised List of High End and High Value used/refurbished Medical Equipment other than critical case medical equipment

Highlights / Catch Notes

GST

• Secondment of employees and expats: No invoicing, no tax liability - Circular prevails.

  Case-Laws - HC : In cases involving secondment of employees and placement of foreign expatriates to assist functions, the value ascribed to supply of goods and services is regulated by Rule 28 of Central Goods and Services Tax Rules, 2017. Despite payments made, no invoices were raised by entities for services provided by related foreign entities. The Circular's stance treating value as 'Nil' in such cases may be contentious or contrary to Second Proviso of Rule 28. However, as no invoices were generated in present petitions, the value must be treated as 'Nil' per Circular's terms. Consequently, no tax liability arises, rendering impugned Show Cause Notices futile and impractical. The High Court set aside the Show Cause Notices and allowed the petition.
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• Bail Denied in Fraud Case Involving Fake GST Firms and Unauthorized Use of PAN, Aadhaar; Economic Impact Cited.

  Case-Laws - HC : Economic offenses involving large-scale fraud, money laundering, and corruption are viewed seriously as they affect the economic fabric of society. The present case relates to registration of fake GST firms using the informant's PAN and Aadhaar cards without consent, resulting in illegal profits through fund transfers to other accounts, creating a money trail of crores. The applicant's involvement in these transactions with fake firms is evident. Though released on bail in the CGST Act case, the present IPC offense is distinct, not amounting to double jeopardy. Economic offenses warrant denying bail, especially when the accused holds influence. The chargesheet submission and rejection of co-accused's discharge application indicate sufficient evidence. Bail considerations are case-specific, focusing on securing the accused's presence for trial. Given the large-scale economic impact, bail is denied to the applicant.
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• Bail Denied in Major Economic Crime Case Involving Fraud, Money Laundering, and Fake Firm Registrations.

  Case-Laws - HC : Economic offences involving large-scale fraud, money laundering, and corruption are viewed seriously as they impact the economic fabric of society. Bail may be denied in such cases, especially if the accused holds a position of influence or power. This case involves a money trail of crores resulting from the registration of fake firms using Aadhaar and PAN cards, affecting society on a large scale. The discharge application of one accused was rejected, indicating the charges are proven. Once a chargesheet is submitted and discharge is rejected in an economic offence with a substantial money trail, the case for bail is not made out, and such accused cannot be dealt with leniently. The court must be cautious in exercising discretion u/s 438 of CrPC in economic offences with significant societal impact. Precedents alone cannot be the basis for granting or refusing bail; considerations must be case-specific, focusing on securing the accused's presence for trial. Based on the nature of the accusation, the applicants' roles, and the reasons given in judgments, this is not found to be a fit case for granting bail.
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• Failed prosecution against company MD for alleged tax evasion; no active role found. Court allows probe sans coercive steps for 6 weeks.

  Case-Laws - HC : Petition challenging initiation of criminal proceedings against petitioner, Managing Director of a company, for alleged tax evasion by misrepresenting vehicle ownership to evade motor vehicle tax. Court observed petitioner not directly involved in alleged forgery or alteration of documents by educational society. Petitioner having fixed abode, apprehension of absconding unfounded. Directed police to investigate without coercive steps against petitioner for six weeks, petitioner to cooperate. Matter listed after four weeks for filing counter-affidavit.
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• Vouchers as Movable Property: GST Applied to Trading and Facilitation of Vouchers as Goods and Services.

  Case-Laws - AAAR : Vouchers are instruments representing value that facilitate supply of goods or services. They qualify as movable property and constitute 'goods' under GST laws. Trading in vouchers for consideration amounts to supply of goods u/s 7(1)(a) of CGST Act. When vouchers represent right to receive goods/services at future date without physical exchange, trading activity involves transfer of such rights, treated as supply of service. For intermediaries arranging distribution/sale of discount vouchers earning commission/discount, GST liability arises on service of facilitating voucher distribution. Trading in vouchers is taxable event, time of supply being when vouchers are traded/sold, with value being margin between buying and selling price. Supply of vouchers is taxable as goods u/s 12(4), while commission/discount earned is taxable service.
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Income Tax

• Extended due date for filing Income Tax returns for companies to 15th Nov 2024 for AY 2024-25 -25.

  Circulars : The circular extends the due date for furnishing return of income for the Assessment Year 2024-25 from 31st October 2024 to 15th November 2024 for assessees referred to in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Income-tax Act, 1961. The Central Board of Direct Taxes (CBDT) exercised its powers u/s 119 of the Act to grant this extension.
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• Tax penalty quashed after errors rectified in revised assessment order.

  Case-Laws - HC : The High Court quashed the penalty imposed u/s 270A, holding that the foundation for penalty proceedings was extinguished due to the subsequent rectification order. The initial assessment order failed to grant credit for TDS, prompting the petitioner to file a rectification application u/s 154. Despite delays, the rectification order was eventually passed, merging the original assessment order. Consequently, the demands, penalties, and issues arising from the initial assessment order lost sanctity. The court ruled that no further action could be taken based on the flawed initial assessment after the rectification order addressed the errors, rendering the penalty proceedings inconsequential.
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• High Court overturns penalty for alleged income misreporting; case remanded for reconsideration of immunity request.

  Case-Laws - HC : This case pertains to the imposition of penalty u/s 270AA for under-reporting of income due to misreporting. The assessee had availed interest-bearing loans and advanced unsecured loans, with the interest payable on certain loans being higher than the interest earned. The Assessing Officer (AO) made an addition on account of the negative interest spread and initiated penalty proceedings, alleging misreporting of income. However, the High Court observed that prima facie, it did not appear to be a case of misreporting as the facts were disclosed by the assessee. The AO passed the penalty order without considering the assessee's contentions due to technical difficulties. The High Court set aside the AO's order and remanded the matter for fresh consideration of the assessee's request for immunity from penalty u/s 270AA.
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• High Court Confirms Assessing Officer or Authorized Authority Can Issue Section 143(2) Notices Under Income Tax Act.

  Case-Laws - HC : The High Court examined the jurisdiction of the Assessing Officer (AO) and the prescribed income-tax authority to issue notices u/s 143(2) of the Income Tax Act. It held that either the AO or the prescribed authority can issue such notices, as evident from the expression "as the case may be" in Section 143(2). The Central Board of Direct Taxes (CBDT) is empowered u/r 12E of the Income Tax Rules to authorize an Income Tax Officer as the prescribed authority for issuing notices u/s 143(2). In the present case, the CBDT had authorized the Assistant/Deputy Commissioner of Income Tax (International Taxation), Circle-1(1)(1), Delhi, to act as the prescribed authority. Therefore, the notice issued by this officer u/s 143(2) was valid and within jurisdiction. The contention that only National Faceless Assessment Centre officers can issue such notices was rejected as unsupported by the provisions. The prescribed authority can issue, not merely serve, notices u/s 143(2). Once the jurisdiction to issue notice u/s 143(2) is established, the AO cannot be faulted for completing the assessment.
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• Indian Court Allows Belated Foreign Tax Credit Claim Despite Delayed Form Filing.

  Case-Laws - HC : The High Court, following the judgment in G.M. Knitting Industries (P.) Ltd., held that filing a foreign tax credit claim u/r 128 is directory and not mandatory. The petitioner, an Indian resident working in the UK, filed an Indian tax return claiming foreign tax credit u/s 90 but uploaded Form 67 with delay due to COVID-related difficulties in obtaining foreign documents. The court condoned the delay, noting Sections 90, 90A, and 91 aim to avoid double taxation. Despite the delayed Form 67 filing, the impugned order was set aside, allowing the foreign tax credit claim under Article 24 of the India-UK tax treaty.
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• Tax Investigation Transfer Centralized for Coordination After Discovery of Lottery Links in West Bengal.

  Case-Laws - HC : Transfer of case u/s 127 - sufficient material existed for transfer from Income Tax Office, Corporate Ward-2(3), Chennai to DCIT, Circle-4(4), Kolkata ('Central Circle'). Search and seizure u/s 132 revealed incriminating documents connecting petitioner's involvement in lottery business operations in West Bengal as sub-distributor, stockist, printing press, etc. Considering petitioner's reply, transfer ordered to centralize investigation along with eight other similar cases. Contentions of lack of opportunity or insufficient material rejected. Transfer for coordinated investigation in public interest permissible despite inconvenience. No prejudice caused as no adverse assessment order passed, only transfer u/s 127. Strict interpretation of taxing statute warranted. Writ petition dismissed.
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• Unfair Tax Penalty Imposed: Lack of Reasonable Opportunity Violates Natural Justice.

  Case-Laws - HC : Penalty u/s 271(1)(c) was imposed in violation of principles of natural justice by not granting reasonable opportunity to the petitioner. The ITAT passed orders on 09.01.2024 and 10.01.2024, but the respondent remained inactive for nearly five months. At the eleventh hour, on 19.07.2024, the respondent issued notice quantifying the penalty amount and calling upon the petitioner to pay, without providing adequate time for submitting contentions and documents despite requests. The respondent proceeded to pass orders on 30.07.2024 rejecting submissions and on 31.07.2024 imposing penalty u/s 271(1)(c), in violation of principles of natural justice. The High Court set aside the impugned orders on this ground.
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• Software Support Payments Ruled Non-Taxable Under FIS; Tribunal Finds 'Make Available' Condition Unmet in India-USA DTAA Case.

  Case-Laws - AT : The assessee received amounts from Indian customers for supplying software updates, patches, and on-call support services. The issue pertained to taxability of these receipts as Fee for Technical Services (FTS)/Fee for Included Services (FIS) under the Income Tax Act and India-USA Double Taxation Avoidance Agreement (DTAA). The assessee contended that on-call support services cannot be treated as FIS under Article 12(4)(a) of the DTAA, as it is not ancillary to royalty income, or under Article 12(4)(b), as no technical knowledge, know-how, or skill was made available to the service recipient. The Assessing Officer invoked Article 12(4)(b) to tax the receipts, but failed to establish the 'make available' condition through cogent evidence. The Tribunal held that for the 'make available' condition to be satisfied, the service recipient must be capable of performing such services independently without the service provider's aid. As the assessee continued providing on-call support services yearly, it proved that technical knowledge was not transferred to the recipients. Hence, the receipts were not taxable as FIS under Article 12(4)(b) of the DTAA. Regarding interest on refund u/s 244A, the Tribunal directed the Assessing Officer to verify the assessee's claim an.
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• Tribunal Rules PCIT's Invocation of Section 263 Incorrect; AO's Inquiry on Undisclosed Cash Sales Deemed Sufficient.

  Case-Laws - AT : The crux of the case revolves around the applicability of Section 69A read with Section 115BBE of the Income Tax Act on the addition made by the Assessing Officer (AO) towards undisclosed cash sales. The Principal Commissioner of Income Tax (PCIT) invoked Section 263, deeming the AO's order erroneous for not taxing the addition as unexplained money u/s 69A at the higher rate prescribed in Section 115BBE. However, the Tribunal held that the PCIT erred in invoking Section 263 for the following reasons: 1) The AO made the addition after due inquiry and show-cause, considering it as unrecorded cash sales based on seized material, not unexplained money u/s 69A. 2) The source of the addition was explained by the assessee, and the AO took a plausible view on the matter. 3) The amount of addition was disputed, being a mathematical extrapolation challenged by the assessee. 4) The AO consciously did not invoke Section 69A or Section 115BBE while making the addition, aware of the provisions. 5) No corresponding assets were found during the search to treat the addition as unexplained money. 6) The PCIT merely intended to amend the tax rate without finding any error or prejudice in.
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Customs

• India Revises List for Importing High-Value Refurbished Medical Equipment; Excludes Critical Care Devices.

  Circulars : This instruction revises the list of high-end and high-value used/refurbished medical equipment, other than critical care medical equipment, that can be imported into India. The revised list contains 38 types of equipment, including MRI, CT, PET-CT, mammography, radiotherapy devices, robotic surgical systems, ophthalmic laser systems, endoscopes, orthopaedic navigation systems, and dental imaging systems like CBCT. It outlines conditions for import, such as residual life, warranties, availability of service and spares, disposal norms, and statutory clearances. The equipment must be enlisted by the health ministry, and importers need authorization from DGFT if the import policy is restricted. Customs authorities shall verify documents before clearing consignments. The instruction supersedes the previous list and aims to regulate imports of such refurbished medical devices.
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• New land customs route notified for India-Bhutan trade via Ultapani.

  Notifications : This notification amends the existing Principal Notification No. 63/1994-Customs (N.T.) dated 21st November 1994 to notify the Ultapani Land Customs Station (LCS) route. The road from Ultapani via Saralpara via Naharani (SSB Camp) to Sarpang District (Bhutan) has been notified as an approved route for import and export of goods across the land frontier with Bhutan. This amendment has been issued by the Central Board of Indirect Taxes and Customs u/s 7 of the Customs Act, 1962, exercising powers to notify LCS routes.
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• Gift deed by defaulter to obstruct recovery labeled fraudulent; petitioner's conduct questionable.

  Case-Laws - HC : The court held that the gift deed executed by the defaulting brother in favor of the petitioner was a fraudulent attempt to obstruct the government from recovering legitimate dues. The timing of the gift deed, soon after the defaulter order, raised suspicion. The petitioner's conduct was questionable, including suppressing vital documents. The transaction appeared solely aimed at obstructing the sale of property to recover government dues. The court dismissed the petition with costs, stating that a petitioner with such conduct does not deserve extraordinary writ jurisdiction's assistance. The respondents were directed to initiate recovery proceedings against the petitioner for the defaulted dues.
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• High Court Orders Investigation into Revenue's Contradictory Statements on Test Reports; Disciplinary Actions Expected.

  Case-Laws - HC : The High Court expressed concerns over the Revenue's representative's contradictory statements regarding the availability of test reports issued by IRMRA during the main appeal hearing and the subsequent rectification application hearing before the Tribunal. The Court directed the Joint Chief Department Representative, Mumbai Bench CESTAT, to conduct a detailed inquiry into how such an incident occurred, identify the responsible individuals, and report to the Court on the disciplinary actions taken or proposed against those from the Revenue Department, as well as any actions against private individuals involved. The Court emphasized the seriousness of the matter, considering the high financial stakes and the series of appellants before the Tribunal.
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DGFT

• Revised import norms for Shea Stearine exports set; Oil content testing mandated.

  Circulars : This public notice modifies the Standard Input Output Norm (SION) E-125 for the export of Shea Stearine. It amends the import entitlements for Shea Nuts, Shea Butter, Activated Bleaching Earth, and Acetone required for producing 1 MT of Shea Stearine for export. The notice specifies the revised quantities of import items and provides a formula to adjust the permitted quantity of Shea Nuts based on their oil content. It mandates customs authorities to test and endorse the oil content on import bills of entry. The SION is valid until 31.03.2027 and subject to reassessment to reflect industry pricing dynamics.
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• Major updates on RoDTEP rates for exported products across sectors like food, chemicals, plastics, and machinery.

  Notifications : This document provides details on changes to the Remission of Duties and Taxes on Exported Products (RoDTEP) Schedules, specifically Schedule 4R, 4RE, and Annexures B, C, and D, consequent to amendments in the Customs Tariff Act. It lists tariff items along with their descriptions, recommended RoDTEP rates as a percentage of FOB value, caps in rupees per unit quantity, and the applicable unit quantity codes. The changes cover various product categories, including food items, chemicals, plastics, textiles, base metals, machinery, vehicles, aircraft, and arms/ammunition components. The notification aims to align the RoDTEP rates with the revised tariff structure, facilitating the remission of duties and taxes for exported goods.
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Corporate Law

• Bank's Fraud Declaration Overturned Due to Lack of Due Process; Emphasizing Natural Justice for Affected Borrowers.

  Case-Laws - HC : Writ petition allowed. Impugned order by respondent bank declaring petitioner as 'fraud' set aside for lack of due process. No show cause notice issued to petitioner proposing fraud classification. Petitioner not informed about upload on RBI's Central Fraud Registry. No relevant documents like forensic audit report supplied. No hearing afforded before fraud declaration on 20.06.2019. Supreme Court in State Bank of India vs. Rajesh Agarwal held principles of natural justice must be followed while enforcing RBI's Master Directions on Fraud. Civil consequences jeopardize borrower's business future, necessitating hearing before declaring ineligibility for institutional finance under Clause 8.12.1. Impugned order quashed for violating natural justice.
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• Court Orders Suspension of Board for Non-Compliance, Mandates RBI Oversight by December 2024.

  Case-Laws - HC : This case pertains to a writ petition filed by a company invoking Article 226 of the Constitution, seeking directions to the Reserve Bank of India (RBI) to initiate action against Exclusive Capital Limited under Chapter IIIB of the RBI Act, 1934. The Court held that a writ of mandamus lies when statutory authorities fail to exercise their powers, leading to irreparable harm to statutory rights. Despite repeated reminders, Exclusive Capital Limited's management failed to provide organizational details, statutory compliance records, personnel particulars, and financial statements, indicating mismanagement. The company's reply denied RBI's concerns and claimed the conversion of OCDs into CCPS was to restore leverage ratio, and that RBI regulations were inapplicable. The Court distinguished the Krishnakrupa case, where the High Court refused to interfere in RBI's banking affairs. Finding ample material warranting an inquiry into Exclusive Capital Limited's affairs and RBI's failure to exercise supervisory powers, the Court directed the suspension of the company's Board of Directors until further orders and compliance reporting on 02.12.2024.
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• Expenditure Department's memo not anti-competitive; can't be re-litigated after Supreme Court ruling.

  Case-Laws - AT : Res judicata principle applies - Department of Expenditure (DOE) not an 'enterprise' u/s 2(h) of Competition Act, 2002 - Office Memorandum (OM) issued by DOE not an agreement u/s 3(4) and Section 3(1) of the Act. Supreme Court held DOE cannot be considered an enterprise regarding OM dated 24.03.2006. Appellant approached Respondent again with same facts, parties and prayer which was previously declined. Appellate Authority upheld earlier order, no further appeal filed. Legal maxim 'nemo debet lis vexari pro una et eadem causa' applies - no man should be vexed twice for same cause. Issues cannot be re-agitated as two courts already held DOE not an enterprise and OM not an agreement violating Section 3(4). Appeal dismissed.
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IBC

• Court Upholds Resolution Plan Approval, Dismisses Misallocation Claim; Affirms Enhanced Creditor Assessment Role Under IBC.

  Case-Laws - AT : The court upheld the approval of the resolution plan, rejecting the wrongful allocation of Rs. 79 lakhs as the liquidation value. The Supreme Court's decision in Amit Metaliks Limited, considering Sections 30(4)(2) and 53, held that the NCLAT rightly observed that the amendment to Section 30(4) amplified the CoC's considerations for exercising commercial wisdom regarding the viability and feasibility of the resolution plan, ensuring fair distribution among similarly situated creditors. The court relied on Amit Metaliks and Paridhi Finvest Pvt. Ltd., where the dissenting financial creditor's claim for the liquidation value payment was rejected. Despite the pending larger bench interpretation of Section 30(2)(b)(ii), the Supreme Court's decision in Amit Metaliks is subsisting, leading to the dismissal of the appeal.
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Indian Laws

• Court Dismisses Petitioner's Auction Refund Claim; Allows Enjoyment of Property Without Title Deeds.

  Case-Laws - HC : The court dismissed the petition challenging the auction process for sale of the property and seeking refund of the purchase price paid by the petitioner as the successful auction purchaser. The property was initially attached by the competent authority under the Maharashtra Protection of Interest of Depositors (MPID) Act due to the financial establishment's failure to return deposits. Subsequently, the designated court released the property from attachment, enabling its sale through auction under due process of law. The court held that once the property vested in the competent authority and was sold to the petitioner after lifting the attachment, the petitioner could enjoy the property without requiring title deeds. The court clarified that the secured creditor's rights flow from agreements creating security interest, which was not applicable in this case involving attachment under the MPID Act. Consequently, the petitioner's claims for refund, interest, damages, and compensation were rejected as lacking merit.
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• Stamp Authorities Can't Challenge Court-Approved Auction Sale Price as Market Value, Says Supreme Court Ruling.

  Case-Laws - HC : This case deals with the levy of deficit stamp duty and penalty in a court-conducted auction sale. The key points are: In a court-supervised auction sale, the stamp authorities cannot determine the true market value of the property sold and levy stamp duty based on that valuation. Once the bid is accepted by the court-appointed committee and the sale is confirmed at the bid price, which is above the reserve price, that price is considered the market value. The Supreme Court has conclusively held that in a court auction, the registering authority cannot question the market price determined by the court's sale process, as it would amount to sitting in appeal over the court's decision. The transparent court auction process is considered one of the best methods to determine market value. The High Court allowed the petition based on the Supreme Court's ruling in ASL Vyapar Pvt Ltd and its own decision in Spectrum Constructions.
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• Court Dismisses Pre-Trial Petition, Emphasizes Evidence Evaluation During Trial for Negotiable Instruments Act Complaint.

  Case-Laws - HC : Validity of a complaint filed u/s 138 of the Negotiable Instruments Act through a Power of Attorney. The court held that it can quash complaints at the pre-trial stage u/s 482 of CrPC if unimpeachable material indicates the accused was not involved or no offense is made out. However, following the Supreme Court's ruling in Rathish Babu Unnikrishnan v. State, the court must examine whether the factual defense disproves the entire allegations. The complaint mentioned the authorized representative had personal knowledge and competence to file the case. While the petitioner raised questions about the attorney's capability, the extent of knowledge, and the validity of the compromise deed, these issues did not disprove the allegations and can be determined during trial after evidence is led. The court dismissed the petition, finding that the petitioner raised questions of fact and law better left for adjudication at the trial stage.
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SEBI

• New Reporting Rules for Research Analysts and Proxy Advisers to Boost Transparency in Securities Market.

  Circulars : This circular from SEBI provides the periodic reporting format for Research Analysts and Proxy Advisers. Key points: - Research Analysts (RAs) are required to furnish periodic reports to the Research Analyst Administration and Supervisory Body (RAASB), while Proxy Advisers (PAs) must submit reports to SEBI. - The reports must be submitted half-yearly within 30 days from the end of each half-year (September 30 and March 31). - Detailed formats are prescribed for RAs (Annexure I) and PAs (Annexure II) to provide information on their operations, compliance, clients, fees, complaints, and other aspects. - The formats require comprehensive details on the entity, its employees, directors, shareholding, bank accounts, certifications, inspections, advertisements, services offered, and complaints received/resolved. - For RAs, specific details on research reports, recommendations, public appearances, and investor charter/complaints disclosure are sought. - For PAs, details on voting recommendations, reports issued for company meetings, clients/subscribers, and fees received are mandated. - The circular aims to enhance transparency, disclosure, and oversight of RAs and PAs to protect investor interests and regulate the securities market effectively.
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VAT

• Service Tax Exclusion in VAT Calculation Confirmed; Petition Allowed Under Gujarat VAT Act 2003.

  Case-Laws - HC : The petitioner is required to calculate taxable turnover by excluding turnover not subjected to tax, exempt goods, and labor/service charges for works contracts as per Section 14 of the Gujarat Value Added Tax Act, 2003. VAT is payable on the taxable turnover, with an option for lump sum tax u/s 3 read with Section 14. The issue pertains to whether the 'service tax' component collected by the petitioner should be included in the 'sale price' for VAT calculation. Referring to the Ambuja Cement Ltd. case, the Court held that the definition of 'sale price' u/s 2(24) is inclusive, not exhaustive. However, the intention is to include only specified duties/taxes like excise/customs, not service tax. Therefore, the petitioner is not liable to include the 'service tax' component in the 'sale price' for VAT computation. The orders setting aside composition tax permission solely on this ground are quashed, and the petitions are allowed.
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Service Tax

• Bank served with tax demand but no penalty due to unintentional non-disclosure.

  Case-Laws - HC : The appellant was liable to pay service tax on banking and financial services, but their failure to do so was not willful or deliberate. The non-disclosure of certain assessable items does not attract the extended period of limitation under the proviso to Section 73 of the Finance Act, 1994. No penalty is imposable on the appellant, but they must pay interest on the belated payment of tax u/s 75 of the Finance Act, 1994. The High Court partially allowed the appeal, holding that no penalty is payable by the appellant under any provisions of the Act, but they must pay interest on the belated tax payment.
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• Court Clarifies CENVAT Credit Rules: Defines "Total Credit Taken" and Classifies Trading as Exempted Service, Allowing Appeal.

  Case-Laws - HC : Reversal of CENVAT credit u/r 6(3A)(c)(iii) of the CENVAT Credit Rules, 2004. It clarifies that the term 'total CENVAT credit taken' used in the provision is unambiguous and should be interpreted as 'common input services taken' during the financial year, not the total CENVAT credit. The court held that the distortion in the old Rules was cured to ensure manufacturers/service providers do not pay reverse/pay excess amounts u/r 6(3A)(c)(ii). The trading activities carried out were considered "exempted service" within the CENVAT Credit Rules, 2004, both before and after the amendment. The relevant provisions, Rules 2(e) and 6, underwent changes, addressing the distortion arising from strict application of the old format. The impugned order was set aside, and the appeal was allowed, entitling the appellant to consequential relief, if any.
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Central Excise

• Revised excise duty rates on blended aviation fuel: 2% for regional flights & 11% others.

  Notifications : This notification amends the Central Excise notification No. 11/2017 to align it with the amended Fourth Schedule of the Central Excise Act, 1944. It inserts two new entries in the table, levying 2% excise duty on blended aviation turbine fuel drawn by selected airline or cargo operators for regional connectivity scheme flights from UDAN airports, and 11% duty on other blended aviation turbine fuel. The amendment comes into force from 29th October, 2024.
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Case Laws:

• GST

• 2024 (10) TMI 1534
  Liability of tax on supply - secondment of employees - placement of foreign expatriates to aid and assist in the functions being carried out by the writ petitioners - value to be ascribed to the supply of goods and services and which is regulated by Rule 28 of the Central Goods and Services Tax Rules, 2017 - HELD THAT:- Undisputedly, although payments, as asserted in the counter affidavit, were made, no invoices came to be raised by the writ petitioners entities in connection with the services provided by their related foreign. It is in the aforesaid backdrop that learned counsels had drawn our attention to the prescriptions contained in Para 3.7 of the Circular. It would perhaps be impossible for any of the respondents to assert that once the value of such services were to be treated or accepted to be Nil , no further tax implication under the Act would arise. While the correctness of the position as advocated in terms of that Circular may be questioned on the ground of whether it would be consistent with the statutory provisions or may be viewed as being contentious or contrary to the intent of the Second Proviso to Rule 28 itself, it is constrained to proceed further on the basis thereof - In the facts of the present writ petitions, it is conceded that no invoices were generated. In view of the above and in light of the explicit terms of the Circular, the value of the service rendered would have to be treated as Nil . This would lead one to the inescapable conclusion of no perceivable or plausible tax liability possibly being created. Consequently, the proceedings initiated in terms of the impugned SCNs and their continuance would be futile and impractical. The impugned SCNs are essentially rendered impotent and would serve no practical purpose. The impugned SCN is set aside - petition allowed.

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• 2024 (10) TMI 1533
  Seeking grant of bail - double jeopardy - main argument of the applicant is with respect to double jeopardy as the applicant has already been released on bail in the offence under CGST Act and the present case involves the same offence, therefore, detention of the applicant in jail would amount punishing him for the second time for the same offence - HELD THAT:- It would be appropriate to understand the legal principle of double jeopardy which prevents an individual from being prosecuted twice for the same offence after being acquitted or convicted. It is designed to protect individual/person from risk of being subjected to multiple prosecution or punishment for the same crime. This principle exists in many legal systems including that in India. The key aspect of double jeopardy includes once same offence, i.e. the rule applies only if the second prosecution is for the same offence as the first. Secondly, final verdict, i.e. double jeopardy protection applies once there is final judgement (either conviction or acquittal). The purpose is to ensure fairness and prevent abuse of law. In the present case, where the present first information report has been lodged for the offence under IPC and the charge sheet has been submitted after investigation collecting material from the GST department also, the complaint under CGST Act does not involve the same offence, therefore, the argument as placed by learned counsel for the applicant has no legs to stands. In the facts of the present case, the involvement, knowledge and actions following the deposit determines that the applicant was involved in respect of transactions which he had with fake GST firms which were registered by using PAN Card and Aadhaar Card of the informant - the illegal profits as made by the fake GST firms registered on the basis of PAN and Aadhaar Cards of the informant, were made to appear legitimate by moving money / funds to the Bank accounts of others, may be company or firm or relatives accounts. The present case relates to economic offences. Such offence like large scale fraud, money laundering and corruption, are often viewed seriously because they affect the economic fabric of the society. The Courts may deny bail in such cases especially if the accused holds a position of influence or power. In the present case, money trail of crores, which affects the society at large scale, is involved which started from registration of fake firms by using Aadhaar and PAN Cards of the informant who had not applied for such registration. From the report also it is clear that the discharge application of one of the accused has been rejected and it shows that the charges are proved and once on the basis of material collected chargesheet has been submitted, discharge is rejected, the case of bail is not made out in economic offence where money trail of crores has been found which is a result of registration of fake firms. Offence under the IPC is made out and such accused cannot be dealt with easy hands. The applicant is also chargesheeted hence to be dealt with the same rod. The Apex Court has, in the case of P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [ 2019 (12) TMI 186 - SUPREME COURT] , held that precedent of another case alone will not be the basis for either grant or refusal of bail though it may have bearing on principle and the consideration will have to be on case-to- case basis on facts involved therein and securing the presence of the accused to stand trial. This is not a fit case for granting bail - the bail applications preferred by the applicant Sanjay Dhingra are rejected.

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• 2024 (10) TMI 1532
  Seeking grant of bail - fraudulent availment of Input Tax Credit (ITC) - criminal conspiracy under Section 120-B IPC - existence of evidence to establish conspiracy or not - economis offences involving large-scale fraud and money laundering - HELD THAT:- The principal of bail is the rule, jail is the exception is a fundamental concept in criminal law, where the criminal justice system recognizes the importance of personal liberty and the presumption of innocence until proven guilty. This principal emphasizes that an accused should ordinarily be granted bail unless there are compelling reasons to detain him in custody. But there are exceptions to the aforesaid principal. While, the general rule favours granting bail, there are several exceptions where courts may deny bail due to specific circumstances. The present case relates to economic offences. Such offence like large scale fraud, money laundering and corruption, are often viewed seriously because they affect the economic fabric of the society. The Courts may deny bail in such cases especially if the accused holds a position of influence or power. In the present case, money trail of crores, which affects the society at large scale, is involved which started from registration of fake firms by using Aadhaar and PAN Cards of the informant who had not applied for such registration. The Apex Court in the case of Manish Sisodia v. Central Bureau of Investigation, [ 2023 (11) TMI 63 - SUPREME COURT ], has discussed about the constitutional mandate which is higher law and accordingly it is the basic right of person charged of offence and not convicted be ensured and given a speedy trial, thus, where the trial is not proceeding for the reasons not attributed to the accused, the Court unless there are good reasons may well be guided by exercising power to grant bail. This would be true, the trial would take years. From the report also it is clear that the discharge application of one of the accused has been rejected and it shows that the charges are proved and once on the basis of material collected chargesheet has been submitted, discharge is rejected, the case of bail is not made out in economic offence where money trail of crores has been found which is a result of registration of fake firms. Offence under the IPC is made out and such accused cannot be dealt with easy hands. Hon ble Apex Court in the case of Directorate of Enforcement v. M. Gopal Reddy and another, [ 2023 (2) TMI 1045 - SUPREME COURT ] has held that in the economic offences which are having great impact on the society, the court must be slow in exercising discretion under Section 438 of Cr.P.C. Law on consideration of the Court to grant or refusal of bail has been settled by the Apex Court in a catena of decisions. In the case of Kalyan Chandra Sarkar v. Rajesh Ranjan [ 2004 (3) TMI 763 - SUPREME COURT ], the Supreme Court has held that the court granting bail should exercise its discretion in a judicious manner and not as a matter of course. The Apex Court has, in the case of P. Chidambaram v. Directorate of Enforcement [ 2019 (12) TMI 186 - SUPREME COURT ], held that precedent of another case alone will not be the basis for either grant or refusal of bail though it may have bearing on principle and the consideration will have to be on caseto-case basis on facts involved therein and securing the presence of the accused to stand trial. Having gone through the submissions of learned counsel for the parties, nature of accusation of offence, role of the applicants as well as reasons given in judgements, this is not found to be a fit case for granting bail - bail application rejected.

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• 2024 (10) TMI 1531
  Petition filed against the rejection order passed by the respondent - HELD THAT:- In the present case, it appears that the petitioner has made the pre-deposit for filing the appeal on 13.03.2024. Thereafter, the appeal was filed manually by the petitioner on 22.03.2024, which was well within the period of limitation. However, the said appeal was rejected by the respondent vide order dated 26.07.2024 stating that the appeal has to be filed only through online portal. In the meantime, the time limit for filing the appeal was expired, due to which, when the petitioner made an attempt to file an appeal through online portal, the same was not accepted by the portal on the aspect of limitation. Further, it appears that pursuant to the initial assessment order, the admitted tax amount was also paid by the petitioner on 04.03.2024. When such being the case, this Court is of the view that the justice has to be rendered to the petitioner by providing an opportunity to present their case before the concerned Authority and the matter has to be adjudicated on merits. Therefore, in the interest of justice, this Court is inclined to set aside the impugned order passed by the respondent dated 26.07.2024. The impugned order passed by the respondent dated 26.07.2024 is set aside - Appellate Authority/respondent is directed to take the appeal, which was filed manually by the petitioner on 22.03.2024, on record and pass appropriate orders on merits and in accordance with law, after providing an sufficient opportunity to the petitioner, within a period of 6 months from the date of receipt of copy of this order - the writ petition is disposed off.

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• 2024 (10) TMI 1530
  Prayer for setting aside and quashing of the orders - grant of refund with interest - expired -E-way bills - HELD THAT:- In the E-way bills, the distance has been mentioned as 978 kms. The E-way bills were generated on 26.12.2022 at 6:27 pm and was valid upto 31.12.2022 till 11:59 pm. It is an admitted position that E-way bills were not extended. As per Rule 138 (10) of the RGST/CGST Rules 2017, validity of E-way bill may be extended within eight hours from the time of its expiry. The vehicle was seized at 5:45 pm at Beawar on 01.01.2023 and the E-way bills were not extended prior to that. The defence taken up by the petitioner with regard to breakdown of the vehicle because as per the E-way bill is not convincing, the vehicle should have reached Noida on or before 31.12.2022 and as per the defence taken up by the petitioner, the vehicle was at Rajasamand on 31.12.2022. If the vehicle was under repair in Rajasamand on 31.12.2022, there was no possibility of vehicle reaching Noida before the expiry of the period of E-way bill. Petitioner thus should have applied for extension of the E-way bill. Even if the authorities have not considered the repair bill, it is not inclined to entertain the present petition, as the repair bill which is dated 31.12.2022 are not satisfying, the date on which the E-way bills expired and the date on which the goods should have reached Noida. There are no force in the present civil writ petition and the same is accordingly, dismissed.

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• 2024 (10) TMI 1529
  Challenge to SCN and summary of SCN - jurisdiction to issue SCN - taxabaility of transaction of sale of securities (i.e. Stock) - HELD THAT:- This Court with regard to the order passed by this Court in M/S PADAM KUMAR JAIN VERSUS THE STATE OF JHARKHAND THROUGH THE COMMISSIONER, STATE TAX DEPARTMENT, RANCHI; JOINT COMMISSIONER OF STATE TAX; ASSISTANT COMMISSIONER OF STATE TAX; STATE TAX OFFICER, CHAIBASA CIRCLE, CHAIBASA [ 2024 (7) TMI 1546 - JHARKHAND HIGH COURT] stating that the issue involved in that writ petition is similar to the present one, where it was held that issue involved in this writ petition has already been decided by this Court in M/S. PADAM KUMAR JAIN VERSUS THE STATE OF JHARKHAND; JOINT COMMISSIONER OF STATE TAX; ASSISTANT COMMISSIONER OF STATE TAX; STATE TAX OFFICER, CHAIBASA CIRCLE, JHARKHAND [ 2024 (7) TMI 1537 - JHARKHAND HIGH COURT] where it was held that Considering the contentions made by the learned counsels for the parties, without going into merits of the case, the writ application is disposed of permitting the petitioner to proceed in accordance with law and file an appeal also raising the very issue of jurisdiction that has been raised in this writ petition. Petition disposed off.

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• 2024 (10) TMI 1528
  Violation of principles of natural justice - lack of knowledge of proceedings originating in the intimation - notices were uploaded in the view additional notices and orders tab of the GST portal - no reasonable opportunity to contest the tax demand - petitioner agrees to remit 10% of the disputed tax demand as a condition for remand - HELD THAT:- Since the documents on record indicate clearly that the petitioner was not heard before the impugned order was issued, it is just and appropriate that an opportunity be provided to the petitioner albeit by putting the petitioner on terms. The impugned order dated 09.09.2023 is quashed subject to condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice with in the aforesaid period - Petition disposed off by way of remand.

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• 2024 (10) TMI 1527
  Rejection of petitioner s appeal on the ground of limitation - availment of ITC by the petitioner - HELD THAT:- The petitioner has placed on record evidence that an online appeal was filed on 31.01.2024 after remitting the requisite pre-deposit. The assessment order was issued on 09.09.2023 and the period of limitation, without condonation, expired in early December 2023. The 30 day period for condonation would have expired in early January 2024 and the appeal was filed shortly thereafter. In the overall facts and circumstances, this is an appropriate case to direct the appellate authority to receive and dispose of the appeal on merits. Petition is disposed of by directing the appellate authority to receive and dispose of the appeal on merits subject to being satisfied that the 10% pre deposit was received. The impugned order is set aside for such purpose.

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• 2024 (10) TMI 1526
  Violation of principles of natural justice - no personal hearing was offered to the petitioner - GST was imposed on amounts payable by the petitioner - trade payable - HELD THAT:- It is unclear from the impugned order as to the basis for imposing GST on total trade payables. It further appears that the amount specified as turnover was taken directly from the balance sheet of the petitioner. Similarly, GST was imposed on employee benefit expenses by taking the amounts from the profit and loss account of the petitioner for the year 2017-18. Once again, it is unclear as to how liability was imposed with regard to employee benefit expenses incurred by the petitioner. In these circumstances, the impugned order cannot be sustained. The impugned order dated 29.12.2023 is quashed and the matter is remanded for reconsideration - Petition disposed off by way of remand.

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• 2024 (10) TMI 1525
  Challenge to assessment order on the ground that a personal hearing was not provided by the petitioner - violation of principles of natural justice - HELD THAT:- As per sub-section (4) of Section 75 of the Tamil Nadu Goods and Services Tax Act, 2017, a personal hearing is mandatory either if requested for or if an order adverse to the tax payer is proposed to be issued. The documents on record include the reply of the petitioner. Such reply deals with each alleged defect. The petitioner also enclosed 10 annexures in support of such reply. In these circumstances, the denial of a personal hearing undoubtedly contravenes the statutory prescription in such regard. Hence, the impugned order is not sustainable. The impugned order dated 19.12.2023 is quashed and the matter is remanded for re-consideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of two months - Petition disposed off.

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• 2024 (10) TMI 1524
  Maintainability of petition - availability of alternative remedy - Levy of interest and penalty - petitioner s claim for input tax credit under GSTR 3B returns in respect of certain months for the period 2018-19 has been confirmed already - HELD THAT:- The petitioner has equally efficacious remedy of statutory appeal under Section 107 of the CGST/SGST Act, 2017 against the impugned order. The present writ petition is disposed of with liberty to the petitioner to file appeal against the impugned order under Section 107 of the CGST/SGST Act, 2017, if he is so advised.

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• 2024 (10) TMI 1523
  Challenge to assessment order - petitioner submits that the petitioner reply and documents have not been considered while denying the TRAN 1 credit - violation of principles of natural justice - HELD THAT:- Under Sub Section 11 of Section 107 of the CGST/SGST Act, the Appellate Authority exercise almost the original jurisdiction and it can call for further reports, make enquiry and consider arguments, documents as may be rationally submitted by the assessee. When the Appellate Authority vested with such an ample power would correct any mistake committed by the assessing authority, this Court finds no grounds to entertain this writ petition. Therefore, the present writ petition is hereby dismissed, leaving it open to the petitioner to avail the remedy of appeal, if he is so advised against the impugned order.

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• 2024 (10) TMI 1522
  Challenge to assessment order - mismatch between the GSTR 3B returns and the auto-populated GSTR 2A returns - petitioner was not provided a reasonable opportunity to contest the tax demand - violation of principles of natural justice - HELD THAT:- Undoubtedly, the petitioner was negligent in not monitoring the GST portal, in spite of being a registered person. In these circumstances, the impugned order calls for interference, albeit by putting the petitioner on terms. The impugned order dated 11.10.2023 is quashed and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to with in two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.

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• 2024 (10) TMI 1521
  Challenge to assessment order - failure to consider all the GSTR-3B returns filed by the petitioner - violation of principles of natural justice - HELD THAT:- The petitioner placed on record the GSTR 3B returns for several months. On comparing the impugned order against the GSTR 3B return for the month of May 2022-2023, it is evident that the turnover reflected in one single month has been compared with the turnover reflected in the GSTR 7 return filed by the counter party. Given the fact that the GSTR 7 return is an annual return, the comparison made by the adjudicating authority is undoubtedly unsustainable. At the same time, it should be noticed that the petitioner was provided multiple opportunities but failed to respond to either the notice in GSTR ASMT-10 or the show cause notice. Also, the petitioner submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand. The impugned order dated 07.09.2023 is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand with in a period of three weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice with in the aforesaid period - As a corollary of the assessment order being quashed, the bank attachment stands raised - Petition disposed off.

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• 2024 (10) TMI 1520
  Challenge to assessment order - mismatch between the GSTR 3B and GSTR 2A returns - vague SCN - Lack of details in the SCN - Violation of principles of natural justice - HELD THAT:- On perusal of both the show cause notice and the summary thereof, it is evident that the said show cause notice is vague and does not contain sufficient particulars to enable the taxpayer to effectively show cause in respect of the proposed tax demand. It is also evident that no personal hearing was offered under the show cause notice and the entry in the relevant column is not applicable . The impugned order is quashed and the matter is remanded for reconsideration. The respondent is permitted to issue a fresh show cause with sufficient particulars to enable the petitioner to respond thereto. Further proceedings, if any, shall be undertaken in accordance with law - Petition disposed off.

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• 2024 (10) TMI 1519
  Challenge to letter rejecting Petitioner s bid for providing man power services to Respondent No.2 - rejection of Letter of Intent by which Respondent No.2 asked Respondent No.3 i.e. M/s. Frontier Ex Servicemen Association, Latur to comply with certain conditions for issuance of work order in its favour - Respondent submitted that the Petitioner s contention of Respondent No.3 having submitted documents of another entity was plainly misconceived - HELD THAT:- Petitioner on a perusal of the said GST Registration Certificate fairly accepted the contention of Respondent No. 3. The petition being devoid of merit, the same is accordingly dismissed.

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• 2024 (10) TMI 1518
  Seeking to quash the order passed by the authority under Section 77 of the Orissa Value Added Tax Act, 2004 - seeking to issue direction to the opposite parties to allow the petitioner to participate in the proceeding of the appeal, which has been rejected without giving opportunity of hearing to it - principles of natural justice - HELD THAT:- This Court finds that against the assessment order passed by the Assessing Officer, the petitioner preferred appeal, but, however, without complying the requirement of law by depositing 10% of the tax. In that view of the matter, the order dated 28.12.2022 and 15.09.2023 passed by the authority under Section 16 of the Orissa Value Added Tax Act, 2004 vide Annexure-2 4 is quashed and the matter is remitted back to the appellate authority to decide the appeal afresh by passing appropriate order in accordance with law after giving opportunity of hearing to the petitioner, subject to its depositing of 10% of the tax demanded. Petition disposed off by way of remand.

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• 2024 (10) TMI 1517
  Challenge to order-in-original - wrong availment of Input Tax Credit (ITC) - petitioner s reply was not taken into consideration - violation of principles of natural justice - HELD THAT:- On examining the impugned order, it is evident that the respondent proceeded on the basis that the petitioner had reversed the ITC in the GSTR-9 return and that the GSTR-9 return was unavailable. On perusing the reply of the petitioner, there is no assertion therein that the ITC was reversed in the GSTR-9 return. Thus, there appears to be a disconnect between the reply and the findings recorded in the impugned order. Hence, the impugned order calls for interference. The impugned order dated 27.12.2023 is quashed subject to the petitioner paying 10% of the disputed tax demand as agreed to with in a period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a detailed reply to the show cause notice with in the aforesaid period by enclosing all relevant documents - Petition disposed off.

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• 2024 (10) TMI 1516
  Challenge to assessment order - petitioner was not provided a reasonable opportunity to contest the service tax demand - violation of principles of natural justice - HELD THAT:- The petitioner averred that the services of a consultant were availed of to handle service tax compliances and that she was unaware of proceedings culminating in the impugned order because she was not kept informed by such consultant. It also appears that the petitioner was running a beauty parlour. While the explanation of the petitioner is not totally convincing, it appears that the tax demand against a person carrying on business on a very small scale has been confirmed without such person having been heard. The impugned order is quashed and the matter is remanded for reconsideration subject to the petitioner remitting 20% of the tax demand with in a period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice with in the aforesaid period - Petition disposed off.

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• 2024 (10) TMI 1515
  Challenge to impugned order of the appellate authority under the CGST Act confirming the order of the adjudicating authority - appellable order before the Tribunal - HELD THAT:- Let the respondents file affidavit-in-opposition with in four weeks, petitioner to file reply there to, if any, with in two weeks thereafter. List this matter for final hearing in the monthly list of June, 2024.

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• 2024 (10) TMI 1514
  Dismissal of petition - Rejection of appeal both on the ground of not filing such appeal online and for not making the pre-deposit - HELD THAT:- The order in original is dated 09.03.2023. Therefore, no useful purpose would be served by entertaining the present writ petition because the appellate authority would not be in a position to entertain an appeal under Section 107 of applicable GST statutes. Petition is disposed of by leaving it open to the petitioner to challenge the order in original by way of writ petition before this Court. There will be no order as to costs.

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• 2024 (10) TMI 1513
  Time limitation of filing appeal - rejection of petitioner s appeal on the ground of delay - HELD THAT:- The facts on record indicate clearly that the appeal was filed on 16.02.2024, whereas the condonable period expired on 13.02.2024. Consequently, the appellate authority cannot be faulted for rejecting the appeal. However, considering the extent of delay beyond the condonable period, it is an appropriate case to direct the appellate authority to consider and dispose of the appeal on merits. The impugned order is set aside and the appellate authority is directed to receive and dispose of the appeal on merits without going into the question of limitation provided such appeal is re-presented by the petitioner with in a maximum period of 10 days from the date of receipt of a copy of this order. Petition disposed off.

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• 2024 (10) TMI 1512
  Challenge to assessment order - relevant exemption Notification was not taken into consideration - violation of principles of natural justice - HELD THAT:- The petitioner has placed on record the reply dated 22.12.2023 to the show cause notice. The said reply does not contain any indication that any documents were annexed thereto. In the absence of documentary proof of the nature of services provided by the petitioner, it was clearly not possible for the assessing officer to arrive at a conclusion with regard to the claimed exempted nature of services. It should, however, be recognized that the tax liability was confirmed without considering the contention of the petitioner that the relevant services are exempted. Solely for this reason, albeit by putting the petitioner on terms, the impugned order calls for interference. The impugned assessment order dated 29.12.2023 is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand with in a period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit additional documents in support of the contentions raised in the reply with in the aforementioned period - Petition disposed off.

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• 2024 (10) TMI 1511
  Challenge to assessment order - ITC availed in excess - HELD THAT:- There is contradiction between the returns relied on by the petitioner and those relied on by the respondent. For the just determination of this controversy, this aspect needs to be re-examined. Solely for that reason, the impugned order calls for interference. The impugned assessment order is quashed and the matter is remanded for reconsideration. The petitioner is permitted to once again submit the GSTR 3B and GSTR 9 returns before the assessing officer within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.

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• 2024 (10) TMI 1510
  Challenge to order and recovery notice related to discrepancies in GST returns - petitioner asserts that he was unaware of the notices and the impugned order until receipt of information from the Indian Overseas Bank with regard to the attachment of his bank account - Violation of principles of natural justice - HELD THAT:- The petitioner has asserted that he is 74 years old and was unwell from September, 2023 onwards. He has also placed on record medical certificates relating to his ill health and that of his daughter. The impugned order discloses that the petitioner was not heard before such order was issued. The petitioner is not entirely blameless because the petitioner was under an obligation to monitor the GST portal continually. In these circumstances, albeit by putting the petitioner on terms, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand. The impugned order is quashed and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand with in a period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to show cause notice dated 12.07.2023 with in the aforesaid period - Petition disposed off by way of remand.

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• 2024 (10) TMI 1509
  Seeking cancellation of the GST registration with effect from 30.05.2023 - HELD THAT:- Petitioner applied for cancellation of the GST registration on 30.05.2023. However, the application was rejected by an order dated 07.12.2023. Thereafter petitioner applied again on 14.12.2023 on which a query was raised on 19.01.2024 which as per the petitioner has been duly replied to, however, the application has not yet been disposed of. The petition is disposed of directing the respondent to dispose of the application of the petitioner seeking cancellation of the GST registration with in a period of four weeks from today.

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• 2024 (10) TMI 1508
  Violation of principles of natural justice - petitioner s reply to the SCN has not been considered while passing the impugned order - invocation of extraordinary jurisdiction of this Court under Article 226 of the Constitution of India - HELD THAT:- The ground urged in the present writ petition that some of the arguments or some of the contentions raised in reply to the show cause notice has not been considered by the Assessing Officer, cannot be enforced by this Court while invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. There aee no no substance in the present writ petition, which is here by dismissed.

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• 2024 (10) TMI 1507
  Challenge to assessment order - petitioner asserts that he was unaware of these notices and the impugned assessment orders since they were uploaded on the portal without being served on the petitioner through any other mode - violation of principles of natural justice - petitioner agrees that the petitioner would remit 10% of the disputed tax demand as a condition for remand - HELD THAT:- The documents on record indicate that the assessment orders were preceded by an intimation and a show cause notice. The assessment orders also disclose that three opportunities were provided to the petitioner for a personal hearing in December 2023. As a registered person under applicable GST enactments, the petitioner is under an obligation to monitor the portal continually. Therefore, the explanation of the petitioner for non participation in proceedings is not convincing. However, the fact remains that the petitioner did not participate in proceedings and therefore could not place its objections on record with regard to the tax demand. Solely for the purpose of providing an opportunity to the petitioner, the impugned assessment orders are interfered with albeit by putting the petitioner on terms. The impugned assessment orders are quashed subject to the condition that the petitioner remits 10% of the disputed tax demand in respect of each assessment period with in a maximum period of three weeks from the date of receipt of a copy of this order - Petition disposed off.

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• 2024 (10) TMI 1506
  Rejection of petitioner s appeal against the cancellation of GST registration - HELD THAT:- In the case of M/S. SPARTA FOOD FACTORY INDIA PVT. LTD. VERSUS SUPERINTENDENT OF GST CENTRAL EXCISE, THE ADDITIONAL COMMISSIONER OF GST CENTRAL EXCISE (APPEALS) [ 2024 (3) TMI 160 - MADRAS HIGH COURT] , in substantially similar circumstances, the appellate authority is directed to consider the appeal on merits. In this case, the appeal was filed on 19.07.2023 with a delay of about 152 days. In the overall facts and circumstances, especially by taking note of the fact that the petitioner filed returns up to the date of cancellation and remitted taxes along with interest thereon, this is an appropriate case to direct the appellate authority to receive and dispose of the appeal on merits. The appellate order impugned herein is quashed and the matter is remanded for re-consideration. The appellate authority is directed to receive and dispose of the appeal on merits with in a period of sixty days from the date of receipt of a copy of this order after providing a reasonable opportunity to the petitioner - Petition disposed off by way of remand.

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• 2024 (10) TMI 1505
  Taxable supply or not - salary paid to seconded employees - HELD THAT:- Since a prima facie case is made out and several High Courts granted interim relief and are also examining whether such an arrangement would qualify as a taxable supply, there shall be an interim stay of further proceedings pursuant to the impugned order until the matter is heard next. List the matter on 08.04.2024.

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• 2024 (10) TMI 1504
  Challenge to assessment order - alleged mismatch between the GSTR-3B and GSTR-2A returns as also between the GSTR-3B and GSTR-1 returns - petitioner was unaware of the initiation of proceedings by issuing a notice in Form ASMT-10 followed by the intimation and show cause notice since such notices were uploaded on the view additional notices and orders tab of the GST portal - violation of principles of natural justice - HELD THAT:- As a registered person, the petitioner is under an obligation to monitor the GST portal continually. Therefore, the explanation that the petitioner was completely unaware of proceedings is not convincing. At the same time, it is noticeable that the confirmed demand relates to discrepancy between the GSTR-3B and GSTR-2A returns. The GST Department issued multiple circulars to deal with this issue, since it is a recurrent issue. Therefore, in my view, the petitioner should be provided an opportunity to contest the tax demand, albeit by putting the petitioner on terms. The impugned assessment order is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand with in a period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice with in the aforementioned period - Petition disposed off.

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• 2024 (10) TMI 1503
  Challenge to assessment order - discrepancy between Form 26AS and the petitioner s returns - personal hearing was granted or not - violation of principles of natural justice - HELD THAT:- The documents on record clearly indicate that the assessment order was preceded by a show cause notice, which indicates that a personal hearing was offered. However, the assessment order also discloses that the petitioner was not heard. The petitioner is a civil works contractor and it is quite common for such civil work contractors to receive payments in the form of mobilization advances and against running account bills. The operative portion of the impugned assessment order clearly indicates that the tax liability was confirmed by disregarding the objections of the petitioner that the receipts in Form 26AS cannot be treated as the turnover. In these circumstances, the interest of justice demands that the petitioner should be heard. Solely for this reason, the impugned assessment order warrants interference, albeit by putting the petitioner on terms. The impugned assessment order is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. Subject to being satisfied that 10% of the disputed tax demand was received, the assessing officer is directed to provide a reasonable opportunity, including a personal hearing, and thereafter issue a fresh assessment order in accordance with law with in a maximum period of two months thereafter. Petition disposed off.

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• 2024 (10) TMI 1502
  Alleged availment of fake input tax credit by the petitioner - threshold limit of 500 lakhs crossed or not - Section 132(5) of the Central Goods and Services Act, 2017 - HELD THAT:- As on today, there is no apprehension that the petitioner is being arrested by the respondent. However, it is made clear that if the respondent intends to arrest the petitioner, the respondent shall give 48 hours prior notice to the petitioner on his registered email. The petition is disposed of with liberty to the petitioner to approach this Court if the occasion arises.

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• 2024 (10) TMI 1501
  Power of review inherent in the court - modification of the directions of this Court - HELD THAT:- The order is recalled - Against statutory order, there is no question of representation for redressal of the petitioner s grievance. Petitioner has remedy of Appeal/Review or Writ Petition is required to be examined. The present M.J.C. petition stands allowed while restoring C.W.J.C. No. 6795 of 2020 on the file. Registry is hereby directed to list C.W.J.C. No. 6795 of 2020 before the concerned roster Bench for deciding the matter on merit.

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• 2024 (10) TMI 1500
  Condonation of delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition disposed off.

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• 2024 (10) TMI 1499
  Levy of additional tax on vehicles misused - tax evasion and fraud against a Managing Director and an educational society - Section 3-A of the Andhra Pradesh Motor Vehicles Taxation Act, 1963 - HELD THAT:- Admittedly, the petitioner is the Managing Director of M/s. NSPIRA Management Services Private Limited since 2017 onwards. He is nothing to do with M/s. Narayana Educational Society. Going by the record, the accusation that has been made against M/s. Narayana Educational Society is that it is involved in tax evasion by altering vehicle purchase invoices and deceitfully misrepresented ownership to the Regional Transport Authority. The only accusation against the petitioner herein is that he being the Managing Director of M/s. NSPIRA Management Services Private Limited, has purchased the vehicles in the name of M/s. Narayana Educational Society and caused loss to the Government to a tune of Rs. 4.48 Crores by resorting to tax evasion. On a perusal of the complaint further goes to show that the same has been given on 03.03.2024 and the same has been registered as a case in crime No.45 of 2024 of Balajinagar Police Station, SPSR Nellore district on 04.03.2024 at about 2.00 AM, for the offences punishable under Sections 120-B, 420, 467, 471, 477-A read with 34 IPC. It is not the case of the prosecution that it is the petitioner herein, who has forged or altered the documents Since the petitioner herein is Managing Director of M/s. NSPIRA Management Services Private Limited and has a fixed place of abode, the question of his absconding would not arise. The police concerned are directed to conduct investigation without taking any coercive steps against the petitioner herein, for a period of six (6) weeks. The petitioner herein is directed to cooperate with the investigating agency - List the matter after four (4) weeks for filing counter affidavit.

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• 2024 (10) TMI 1498
  Levy of GST on mining lease amounts paid by the petitioner to the Government - HELD THAT:- Division Bench Judgment in a batch of cases where the lead case is A.Venkatachalam v. Assistant Commissioner (ST), Palladam [ 2024 (2) TMI 488 - MADRAS HIGH COURT ] held that In the cases, where the challenge is made to the show cause notices, the writ petitioners shall submit their objections / representations within a period of four weeks from the date of receipt of a copy of this order. In view of the said judgment, this petition is liable to be disposed of on the same terms insofar as it relates to the issue of mining lease. Consequently, the petitioner is permitted to submit his reply to the intimation with in a maximum period of four weeks from the date of receipt of a copy of this order. Petition disposed off.

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• 2024 (10) TMI 1497
  Levy of GST on seigniorage fee and turnover from quarrying - HELD THAT:- Division Bench Judgment in a batch of cases where the lead case is TVL. A. VENKATACHALAM VERSUS THE ASSISTANT COMMISSIONER (ST) [ 2024 (2) TMI 488 - MADRAS HIGH COURT] held that In the cases, where the challenge is made to the show cause notices, the writ petitioners shall submit their objections / representations within a period of four weeks from the date of receipt of a copy of this order. In view of the said judgment, this petition is liable to be disposed of on the same terms insofar as it relates to the issue of seigniorage fee. Consequently, the petitioner is permitted to submit his reply to the intimation with in a maximum period of four weeks from the date of receipt of a copy of this order. The issue relating to GST on turnover from quarrying shall be proceeded with by both parties in accordance with law. Petition disposed off.

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• 2024 (10) TMI 1496
  Challenge to SCN calling upon the petitioner to show cause with regard to GST liability under applicable GST laws in respect of both seigniorage fee and turnover from sale of quarried minerals - HELD THAT:- Division Bench Judgment in a batch of cases where the lead case is TVL. A. VENKATACHALAM VERSUS THE ASSISTANT COMMISSIONER (ST) [ 2024 (2) TMI 488 - MADRAS HIGH COURT] where it was held that it is made clear that there shall be no recovery of GST on royalty until the Nine Judge Constitution Bench takes a decision. This petition is liable to be disposed of on the same terms as regards the imposition of GST on seigniorage fee. With regard to GST on turnover, the parties shall proceed further in accordance with law.

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• 2024 (10) TMI 1495
  Demand against the petitioner - petitioner submits that during the time when the subject SCN were issued, the registration of the petitioner stood cancelled retrospectively and as such petitioner could not access the GST portal and it is only after the cancellation has been made prospective from the date of SCN, the petitioner has been able to access the portal - HELD THAT:- Since petitioner was unable to upload the reply to the said Show Cause Notices, it is felt that an opportunity should be granted to the petitioner to respond to the Show Cause Notices and Show Cause Notices should be re-adjudicated. Accordingly, impugned orders both dated 13.12.2023 are set aside. The proceedings are restored on the record of the Proper Officer. Petitioner shall now upload a reply to the Show Cause Notices dated 18.09.2023 and 29.09.2023 within a period of one week from today. Thereafter the Proper Officer shall adjudicate the Show Cause Notices in accordance with law. Petition disposed off.

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• 2024 (10) TMI 1494
  Condonation of delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition disposed off.

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• 2024 (10) TMI 1493
  Levy of GST on mining lease amounts paid by the petitioner to the Government - applicability of N/N. 13/2017 - Central Tax (Rate) - HELD THAT:- Division Bench Judgment in a batch of cases where the lead case is A.Venkatachalam v. Assistant Commissioner (ST), Palladam, in W.P.No.30974 of 2022 [ 2024 (2) TMI 488 - MADRAS HIGH COURT] held that that In the cases, where the challenge is made to the show cause notices, the writ petitioners shall submit their objections / representations within a period of four weeks from the date of receipt of a copy of this order. In view of the said judgment, this petition is liable to be disposed of on the same terms. Consequently, in this case, the petitioner is permitted to submit his reply to the intimation with in a maximum period of four weeks from the date of receipt of a copy of this order.

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• 2024 (10) TMI 1492
  Cancellation of sale order - forefeiture of security deposit - petitioner s firm is debarred from participating in any online Forward Auction conducted by RSP for a period of six months - HELD THAT:- This Court finds that the black listing period has already been over, but there is forfeiture of Security Deposit as well as Performance Guarantee made by the petitioner, which has been done without complying the principle of natural justice. Therefore, the same cannot be sustained in the eye of law. In M/S KULJA INDUSTRIES LIMITED VERSUS CHIEF GEN. MANAGER WT. PROJ. BSNL OTHERS [ 2013 (10) TMI 733 - SUPREME COURT] , the apex Court held, if State or its instrumentality takes decision on blacklisting then such decision is subject to judicial review on grounds of principles of natural justice, doctrine of proportionality, arbitrariness and discrimination under Article 14 of the Constitution of India. This Court is of the opinion that the order dated 26.06.2023 under Annexure-22 cannot be sustained in the eye of law and is liable to be quashed and is hereby quashed - Petition allowed by way of remand.

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• 2024 (10) TMI 1491
  Seeking to quash the order passed without granting any opportunity of personal hearing to the Petitioner and an ex-parte order has been passed - violation of principles of natural justice - HELD THAT:- Considering the contentions raised by the learned counsel appearing for the parties, but, however without expressing any opinion on the merits of the case, since the State Tax officer while passing the order dated 26.04.2023 has not been given opportunity of hearing to the Petitioner, the said order cannot be sustained in the eye of law. Accordingly, the order dated 26.04.2023 is liable to be quashed and is hereby quashed. Therefore, this Court remits back to the very same authority to rehear the matter afresh in accordance with law after giving opportunity of hearing to the Petitioner taking into consideration the ratio decided by this Court in KHANI KHYATIGRASTA GRAMYA COMMITTEE VERSUS THE COMMISSIONER OF COMMERCIAL TAX GST AND ANOTHER [ 2023 (11) TMI 1220 - ORISSA HIGH COURT] . Petition disposed off.

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• 2024 (10) TMI 1490
  Challenge to corrigendum issued by opposite party no.3 - reimbursement of additional tax which has already been deducted from its running bills and to be deducted from final bills after coming into force of the Goods and Service tax, as per the claim of the petitioner and in view of the office memorandum - HED THAT:- This Court finds that payability of GST amount is under consideration, which emanates from the terms and conditions of the contract floated in the tender documents and subsequently corrigendum issued by the authority. Thereby, any dispute with regard to payment of tax, which forms part of the tender documents, can only be resolved as per the terms and conditions prescribed in the tender documents. Since there is disputed questions of fact with regard to payment of GST amount, the same can be resolved by the competent forum in terms of the DTCN/agreement executed between the parties and, as such, this Court is not inclined entertain this writ petition. However, the petitioner is permitted to approach the appropriate forum in terms of the DTCN/agreement, which is applicable to it for realization of GST amount, pursuant to the tender call notice issued by the authority under Annexure-1 and corrigendum under Annexure-5. Petition disposed off.

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• 2024 (10) TMI 1489
  Taxability of Vouchers themselves, or the act of supplying them - GST rate of tax and the value of supply at which this would be taxable - Appellant is not the issuer of the voucher, but is the third party who buys and sells the vouchers. What is a Voucher? - HELD THAT:- Section 2 (118) of GST Act defines: voucher means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services or both and where the goods or services or both to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument. Thus, as per GST laws, a voucher is an instrument that entitles the holder to receive goods or services or a discount on goods or services upon redemption. Vouchers are instruments representing value to facilitate a supply. Vouchers include gift cards, discount coupons, prepaid instruments, and similar items. Is Voucher goods or service? - In the instant case the Appellant purchases the vouchers by paying a consideration to the issuer. The vouchers are also sold to the clients of the Appellant for a consideration. The vouchers have both a value and an ownership, which is transferred by the issuer of these vouchers to the appellant, and then to the ultimate beneficiary who redeems the voucher. The vouchers qualify to be considered as movable property and the goods . Whether the vouchers are in the nature of actionable claims? - Actionable claim qualifies as goods . Actionable claim is defined to have the same meaning as assigned to it in section 3 of the Transfer of Property Act, 1882. Thus, actionable claim is a claim to an unsecured debt or a claim to any beneficial interest in movable property that is not in the possession of the claimant. Transactions/activities in actionable claims are kept outside the ambit of GST, except for the following claims: betting, casinos, gambling, horse racing, lottery and online money gaming. Actionable claims are considered goods under the CGST Act but have some special rules. They are only taxed when transferred, sold, or given away for a price. This means that GST is not charged on the debt itself but only on the supply of the right to recover the debt. This is because actionable claims are neither a supply of goods nor services as per Schedule III of the CGST Act. GST liability arises when the claim is assigned, sold, or disposed of for consideration. In case of Vouchers, it has already been observed that Voucher by itself is a movable property, and hence constitutes goods. Since the Voucher is in the possession of the claimant at the time of claim, hence it cannot be considered as actionable claim. Here the appellant is involved in trading of vouchers for a consideration in the course of furtherance of business. Though profit motive is not a requisite for the term supply, yet it is a fact that the Appellant is selling these vouchers at a profit. Thus, the impugned transaction amounts to supply of goods in terms of Section 7(1) (a) of the CGST Act 2017. Appellant bought a gift card worth Rs. 1000/- from XYZ Company at a discount of 3% - If the coupons/vouchers represent a right to receive goods or services at a future date, and the trading activity involves the transfer of these rights without any physical goods being exchanged, it has to be considered a service since as per the GST law, the activity of providing or transferring a right to use goods or services is service. Since coupons/vouchers are essentially instruments granting such a right, trading in them falls under the service category. For an intermediary who arranges the distribution or sale of discount vouchers and earns a commission (in the form of discount in the instant case), the GST liability is determined based on the nature of the service provided-facilitating the distribution of vouchers and earning a commission fee/discount. In the instant case the appellant is engaged in trading of Vouchers/coupons and getting commission in the form of discount, on such services which are taxable. Thus, trading in Vouchers/coupons, being a service, is the taxable event where the time of supply is when the Vouchers/coupons are traded or sold. The value of service shall be the margin between the buying and selling price of the coupons. Order: (i) We set aside the impugned ruling given vide UP ADRG - 43/2024 dated 20.02.2024 passed by the Authority for Advance Ruling against the Appellant. (ii) The Supply of Gift cards/ Vouchers/ pre-paid Vouchers are taxable as supply of goods and the time of supply shall be decided as per Section 12 (4) of the CGST Act, 2017. (iii) We hold that GST is applicable on the commission/discount earned in the trading of Vouchers/Coupons by the appellant and the time of supply will be the time when the Vouchers/Coupons are traded or sold. The value of service shall be the margin between the buying and selling price of the Vouchers/Coupons. The Ruling given hereinabove applies to the unique facts and circumstances of the appellants matter in appeal and is based upon the submissions and evidences made available in this regard. This ruling is valid only within the jurisdiction of Authority for Advance Ruling, Uttar Pradesh in terms of the provisions of The Central Goods and Services Tax act, 2017 and Uttar Pradesh Goods and Services Tax Act, 2017.

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• Income Tax

• 2024 (10) TMI 1488
  Penalty imposed u/s 270A when the rectification application itself was pending - while computing the tax liability of the petitioner, the AO did not give credit of the TDS and charged interest for alleged non-payment of taxes - case of the petitioner is that since non-grant of the TDS was a mistake apparent on a face of the record , the petitioner made an application under Section 154 seeking correction of this apparent mistake - due to Technical difficulties delayed the uploading of the application, but it was eventually filed on 27 April 2022 HELD THAT:- The petitioner would be correct in his contention that in view of the subsequent developments and in pursuance of the orders passed by this Court, a rectification order was passed. Also the demand raised under the rectification order, which was for payment of tax of Rs. 303/- was complied by the petitioner. In this view of the matter, the penalty proceedings are also rendered inconsequential as the very foundation of such penalty proceedings stood extinguished in view of rectification order being passed. Admittedly, the demand and penalty proceedings under the Assessment Order dated 30 March 2022 would lose their sanctity, in view of the rectification order dated 3 January 2023, as necessarily, the assessment order has merged into the rectification order dated 3 January 2023. In view of the clear position which was brought about from the compliance of the rectification order 3 January 2023, the application of the petitioner under Section 270AA of the Act although was filed on 7 January 2023, need not be taken forward. This for the reason that in view of the order dated 3 January 2023, passed on the rectification application of the petitioner, the issue in regard to the demands as also the penalty or any other issue which would possibly arise under the Assessment Order dated 30 March 2022, which was apparently held to be not correct, was accordingly interfered in the rectification proceedings. Thus, the assessment order as originally passed cannot continue to prejudice the petitioner for any actions to be taken thereunder. In the aforesaid circumstances, we are inclined to allow the petition. The order passed u/s 270A is quashed and set aside.

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• 2024 (10) TMI 1487
  Penalty u/s 270AA - assessee s case was one of under-reporting of income in consequence of mis-reporting - HELD THAT:- The controversy relates to the income and expenditure booked on account of interest accrued and payable. The petitioner had availed certain interest-bearing loans, and at the same time, had also advanced unsecured loans. AO found that the interest payable in respect of certain loans advanced by the assessee was higher than the interest at which the funds were arranged. For the aforesaid reason, the assessee had made an addition being on account of the negative spread of interest. Prima facie, this case would not be one of mis-reporting as the facts on the basis of which additions have been made appear to be disclosed by the assessee. AO had issued the Show Cause Notice dated 17.09.2024 to the assessee calling upon him to show cause as to why his application for immunity from imposition of the penalty not be rejected on the ground that the petitioner s case was of under reporting of income on account of mis-reporting. The petitioner claims that he had attempted to seek an adjournment online, however, he faced with certain technical difficulties and was not able to do so. As noted that consequently, the impugned order has been passed without considering the contentions of the petitioner, as sought to be advanced before this Court. Revenue fairly states that in the given circumstances, the matter may be remanded to the AO to consider the request of the petitioner for immunity from imposition of the penalty u/s 270AA afresh. This course commends to this Court. We, accordingly, set aside the impugned order passed by the AO u/s 270AA of the Act and remand the matter to the AO to consider afresh.

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• 2024 (10) TMI 1486
  Jurisdiction of Assessment Unit, Income Tax to impose penalty u/s 271 (1) (c) - whether Petitioner has concealed its income? - TP adjustment in respect of payment of royalty - payment of management fees afresh in the light of the compliance report, modified income-tax return, and the APA. HELD THAT:- We find substance in the contention of the Petitioner that, in the facts and circumstances of the case, the Respondents have no jurisdiction to initiate the impugned penalty proceedings and more particularly considering the fact that although the final Assessment Order was passed on 30 August 2018 for the Assessment Year 2013-2014, the Petitioner, on the next day, had filed the modified return of income, which was within the prescribed period of limitation from the date of the APA, as permissible in law, and therefore there could not have been any event of concealment of income by the Petitioner. Let the Respondents respond to this Petition by filing a Reply Affidavit on such contentions raised by the Petitioner. The same shall be served on the Petitioner well in advance. Stand over to 26 November 2024. Till the adjourned date of hearing, order passed under Section 271 (1) (c) of the Act, shall remain stayed.

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• 2024 (10) TMI 1485
  Notice u/s 143(2) - Jurisdiction of AO to issue notices - Authority to issue notices u/s 143(2) - notice u/s 143 (2) of the Act has been issued by the ACIT/ DCIT (International Taxation), Circle-1(1)(1), Delhi HELD THAT:- A plain reading of Section 143 (2) of the Act clearly indicates that either of the two authorities either the AO or the prescribed income-tax authority can issue a notice u/s 143 (2) of the Act. The expression as the case may be also indicates the same. Revenue also referred to Section 12E of the Income-Tax Rules, 1962 (hereafter the Rules) which expressly provides that the Central Board of Direct Taxes (hereafter the CBDT) can authorise an Income-tax Officer to act as a prescribed authority under Section 143 (2) of the Act. In the present case, the CBDT had issued a notification dated 12.05.2022 and 28.05.2022, in exercise of powers under Rule 12E of the Rules, and had authorised the Assistant Commissioner of Income Tax/ Deputy Commissioner of Income Tax (International Taxation), Circle-1(1)(1) Delhi to act as the prescribed income-tax authority for the purpose of issuance of notice u/s 143 (2) of the Act. In the present case, the impugned notice under Section 143 (2) of the Act has been issued by the ACIT/ DCIT(International Taxation), Circle-1(1)(1), Delhi. In view of the above, the contention that the said Income Tax Officer did not have the jurisdiction to issue a notice u/s 143 (2) of the Act, is devoid of any merit. The contention that other than the Assessing Officer, only the authorised Income Tax Officers of the National Faceless Assessment Centre (NaFAC) can issue a notice under Section 143 (2) of the Act as the same would be in furtherance of automation of such process, is also unmerited. This proposition is not supported by the plain language of Section 143 (2) of the Act or Rule 12E of the Rules. Rule 12E of the Rules does not confine the power of the CBDT to authorise only the Income Tax Officers of the NaFAC as the prescribed authority for the purposes of Section 142 (1) of the Act. The contention that the prescribed income tax authority can only serve a notice under Section 143 (2) of the Act but cannot issue it, is insubstantial. We are unable to accept that the AO did not have the jurisdiction to issue the impugned notices dated 10.07.2024 and 06.09.2024 under Section 142 (1) of the Act or that the same are beyond the period of limitation. Once it is accepted that the AO has the jurisdiction to issue a notice under Section 143 (2) of the Act which is also the contention of the petitioner in this case the AO cannot be faulted for proceeding to complete the assessment.

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• 2024 (10) TMI 1484
  Writ petition filled beyond the statutory limitation period - violation of principles of natural justice as the personal hearing had not been given to the appellant dealer - HELD THAT:- Today when the matter is taken up for hearing Additional Government Pleader appearing for the respondent Revenue has produced the original file, where we were able to find that, the notice of personal hearing dated 11.02.2019 had been issued by the Revenue which was received by the appellant dealer on 13.02.2019 by putting the seal as well as signature of the appellant dealer. That apart, on 19.02.2019, a manuscript reply also had been sent by the appellant dealer to the said notice dated 11.02.2019. When that being so, it cannot be stated that, no opportunity of personal hearing had been given to the appellant dealer, therefore, on that ground, the writ petition cannot be entertained. Even though arguments were advanced to some extent counsel appearing for the appellant, on the merits of the case, we are not impressed with the same, the reason being that, since the learned Judge through the impugned order had permitted the writ petitioner to file the statutory appeal within four weeks time, where further direction also had been given by the writ Court to entertain such an appeal without reference to the limitation, however by ensuring the compliance of all other statutory conditions, including pre-deposit, the question of canvassing the merits of the case before this Court at this juncture does not arise. As against the order impugned dated 17.10.2022, as we stated, the appeal has been presented on 22.12.2022, but has been filed only on 14.09.2024, therefore, unnecessarily the appellant dealer has delayed the matter instead of filing appeal by filing the present intra Court appeal, therefore, for all these reasons, we are not inclined to entertain this appeal and the order passed by the learned Judge which is impugned herein dated 17.10.2022 since is to be sustained by giving two weeks time to the appellant to file a statutory appeal before the appellate forum. Accordingly, this Writ Appeal is dismissed. It is made clear that, within two weeks from the date of receipt of a copy of this order, if no appeal is filed, it is open to the Revenue / Assessing Authority to proceed in accordance with law pursuant to the order impugned before the writ Court.

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• 2024 (10) TMI 1483
  Foreign Tax Credit [FTC] claim r/w Article 24 of India-UK Tax Treaty ( DTAA ) - HELD THAT:- This Court, by following the judgment of G.M. Knitting Industries (P.) Ltd. [ 2015 (11) TMI 397 - SC ORDER ] held that filing of foreign tax credit in terms of Rule 128 is only directory in nature and not mandatory. In the present case the petitioner was working in United Kingdom. The petitioner filed return of income in India for the assessment year 2020-2021 on 21.09.2020 showing the income earned in the foreign country, in which he claimed being TDS credit before United Kingdom, as FTC u/s 90. But the petitioner uploaded Form 67 with delay, which he suppose to upload while filing the return of income. As noted that Section 90, Section 90A and Section 91 of the Income Tax Act of 1961 have been drafted specifically to avoid the burden of double taxation. In the present case, even though the petitioner had not uploaded Form-67 while filing return of tax, later he uploaded the same with delay and that too due to Covid out break he was not able to get necessary documents from the foreign country, which appears to be genuine. Therefore this Court is inclined to condone the delay in filing Form 67 and the impugned order is liable to be set aside.

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• 2024 (10) TMI 1482
  Validity of reopening of assessment - notice issued after expiry of normal period of limitation that is four (4) years - change of opinion - tangible materials material found or not? - HELD THAT:- Petitioner had furnished all the documents required for completing the assessment u/s 143(3) of the Income Tax Act, 1961. In the returns that was filed by the Petitioner on 15.09.2013, the Petitioner has disclosed the entire amount received under the aforesaid Agreement but claimed as capital gains instead of treating them as business income. Since the assessment was completed after furnishing all the documents including the two mentioned agreement, it has to be construed that the Impugned Order is inspired from change of opinion and therefore, it has to be quashed in the light of the decision of Kelvinator of India Limited [ 2010 (1) TMI 11 - SUPREME COURT ] Since the notice itself has been issued after expiry of four (4) years, the Department could have invoked Section 147 only if tangible materials were available and that there was failure on the part of the Petitioner to disclose materials/documents and informations which were required for completing the assessment u/s 143(3) of the Income Tax Act, 1961. Decided in favour of assessee.

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• 2024 (10) TMI 1481
  Transfer of case u/s 127 - sufficient material for transfer or not? - transfer from the Office of Income Tax, Corporate Ward-2(3), Chennai to the Office of the DCIT, Circle- 4(4), Kolkata ( Central Circle ) - transfer order has been passed to centralize the case of the petitioner for effective and co-ordinated investigation along with other cases - HELD THAT:- Though petitioner contended that the petitioner is having their registered office at Chennai and no business activities were carried out at Kolkata, but upon search and seizure carried out u/s 132 on 12.10.2023 by the Authorised Officer under the control of the Principal Director of Income Tax (Investigation), Kolkata, number of incriminating documents and materials came to be seized, which were directly connecting with the involvement of the petitioner in the business operation of Lottery in the state of West Bengal in different capacities such as Sub-distributors, Stockist, Printing press, etc. Since all the materials have been collected in Kolkata Central Circle, the 1st respondents, taking into consideration of the reply filed by the petitioner, decided to transfer the petitioner s case to the Central Circle, Kolkata. It is pertinent to note that apart from the petitioner case, there were eight other cases, which were found indulging similar activities as that of the petitioner in conducting the business operations of lottery, the 1st respondent ordered transfer of all cases to the Central Circle of Kolkata for the purpose of coordinated investigation in Lottery Group. No substance in the contentions raised by petitioner that the respondents failed either to provide an opportunity or lack of sufficient materials to transfer the case from ITO, Corporate Ward 2(3), Chennai to DCIT, Central Circle 4(4), Kolkata. Accordingly, the Issue Nos. 1 and 2 are answered. Whether the respondents have provided an opportunity for filing a reply and personal hearing before passing the impugned Notification? - The paramount consideration for transfer should be the public interest and the power is to be guided and controlled to serve the purpose of the Act. If the transfer is being made for the purpose of co-ordinated investigation for the purpose of assessment and collection of tax in a more convenient or efficient way, then it will be a good ground for transfer. In the present case, this Court does not find any irregularity or infirmity in passing the impugned Notification by the 1st respondent ordering transfer of the case of the petitioner to DCIT, Central Circle, Kolkata along with other cases only for the purpose of co-ordinated investigation in Lottery Group. No doubt, transfer of a case from the place where the assessee has its place of residence or business to another place causes inconvenience but if it is necessary in the public interest then the transfer on the ground of proper and co-ordinated investigation cannot be held to be impermissible in law. No prejudice that would be caused due to the present notification to the petitioner because no final assessment order adverse to the petitioner was passed, except the transfer of the petitioner s case by invoking Section 127 of the Act from ITO, Corporate Ward-2(3) to DCIT, Central Circle, Kolkata. Income Tax Act, being a taxing statute, very strict interpretation has to be given and in the absence of any prejudice caused to the petitioner, the challenge to the impugned notification has to be rejected. WP dismissed.

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• 2024 (10) TMI 1480
  Validity of the Section 234E - processing TDS statements u/s 200A - HELD THAT:- In the present case, the respondent had imposed the late fee only u/s 234E of the Act. However, Section 200A of the Act was not introduced during the said assessment years and it was introduced only with effect from 01.06.2015 . Therefore, in the absence of any provisions under Section 200A the respondents ought not to have imposed late fee under Section 234E while processing the applications for TDS u/s 200A. Hence, in such view of the matter, this Court is of the opinion that the impugned Demand Intimation Letters are liable to be set aside. Decided in favour of assessee.

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• 2024 (10) TMI 1479
  Penalty u/s 271(1)(c) - Violation of principles of natural justice in passing penalty orders without granting reasonable opportunity to the petitioner. HELD THAT:- When the ITAT passed orders as early as on 09.01.2024 and 10.01.2024, it is not known as to what prevented the respondent from acting in consequent to the order passed by ITAT immediately, rather than to wait till the fag end of six months expiry time and to issue notice on one fine day, i.e., 19.07.2024, by quantifying the penalty amount and calling upon the petitioner to pay the penalty amount, the petitioner, who has issued with such notice all of a sudden, sought for two weeks time to putforth their contention and to file supportive documents, which the respondent refused to grant citing the expiry of time period as reason for such refusal. Thus, it is clear that the respondent remained a mute spectator for nearly five months, right from the date, on which, the orders were passed by ITAT i.e. on 09.01.2024 and 10.01.2024 and at the eleventh hour, the respondent issued notice dated 19.07.2024 and called upon the petitioner to show cause to why, penalty should not be imposed and though the petitioner appeared in person and sought time on two occasions, the respondent, without acceding to any of such request made by the petitioner, proceeded to pass orders, thereby, giving effect order to the directions issued by CIT (Appeals) and ITAT on 30.07.2024, by rejecting the submission filed by the petitioner and very next date, i.e. on 31.07.2024 passed the impugned orders imposing penalty under Section 271 (1) (c) which is in violation of principles of natural justice. Hence, this Court is inclined to set aside the impugned orders.

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• 2024 (10) TMI 1478
  Rejection of Condonation of delay in filing income tax returns - as per petitioner reasons such as the impact of Covid-19 on operations, loss leading to non-payment of electricity charges, and corruption of computer data lead to delay - HELD THAT:- On perusal of records, it is seen that due to outbreak of Covid-19 and lock down throughout the Country since March 2020, the petitioner- Company s operations were stopped abruptly, therefore, the petitioner- Company faced with a huge loss, resulting in non-payment of the electricity charges, due to which, power connections were also cut in the Factory, apart from the same, due to non-usage of the Computer, the server of the Computer, where, the petitioner used to maintain accounts got corrupt and hence, all the Computer data backups were lost, hence, the petitioner was not in a position to file Income Tax Returns in time, however, as and when, the petitioner was able to reconstruct the lost records, they filed returns for the AY 2021-22 and that since there happened to be delay of nine months in filing the returns, (as the due date for filing the returns was on or before 15.03.2022), the petitioner has rightly taken out an Application for condonation of the delay, clearly setting out the reasons for the delay. Thus, the delay on the part of the petitioner in filing the returns is neither willful nor wanton, but, purely owing to unforeseen circumstances, therefore, the respondent before rejecting the application ought to have taken into consideration of all the aforesaid aspects. Respondent also failed to consider the vital factor that the petitioner is not a habitual offender, to file returns with a delay and that excluding the subject AY (i.e. 2020-21) the petitioner has been prompt in filing the returns in respect of the past Assessment Years and subsequent Assessment Years. Hence, this Court is of the considered view that the reasons assigned by the petitioner for the delay is genuine and reasonable, and is inclined to condone the delay, however, subject to payment of costs, as agreed by the petitioner.

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• 2024 (10) TMI 1477
  Bogus purchases - information received from the Sales Tax Department, Maharashtra - CIT(A) deleted part addition - HELD THAT:- As regards the submission of the DR that the amount continues to represent unsubstantiated and non-genuine purchases which remain unexplained and unverifiable, it is pertinent to note that the assessee furnished detailed documents, as noted in the foregoing paragraph and also taken note of by CIT(A) of its order, which as evident from the record were neither been controverted by the AO nor stated to be false and bogus. The fact that the assessee failed to furnish the information in the format required by the AO cannot be the sole basis for treating the purchases as bogus. We agree with the findings of the CIT(A) in deleting the addition of the balance amount. As a result, the impugned order on the issue under consideration in the present appeal before us is upheld and the ground raised by the Revenue is dismissed.

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• 2024 (10) TMI 1476
  Estimation of income - bogus purchases - AO has only estimated the profit from the alleged bogus purchases @ 12.50% - contention of the assessee that it has furnished the details relating to purchases, payments made to the supplier, confirmation from the supplier and also the details of sale of products to various persons - HELD THAT:- The assessee herein has furnished all details evidencing the purchases, confirmation from the suppliers, the details of sales made out of those purchases. There is no evidence to show that the money given towards purchases was flown back to the assessee. AO has accepted the sales. Accordingly, we are of the view that the impugned addition cannot be sustained, in the facts and circumstances of the case. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition relating to alleged bogus purchases. Appeal filed by the assessee is allowed.

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• 2024 (10) TMI 1475
  FTS/FIS/Royalty receipt - Taxability of the amounts received by the assessee from the Indian customers towards supply of software updates and patches and on-call support services - Fee for Technical Services (FTS)/Fee for Included Services (FIS) under the Income Tax Act as well as under India USA Double Taxation Avoidance Agreement (DTAA) - as submitted by the assessee that on-call support services cannot be treated as FIS either u/Article 12(4)(a) of India USA tax treaty as it is not ancillary to any royalty income or u/Article 12(4)(b) as no technical knowledge, know-how, skill etc. was made available to the service recipient while providing on-call support services. HELD THAT:- Being conscious of the fact that the receipts can no more be treated as royalty income in view of change in legal position due to the ratio laid down in case of Engineering Analysis Centre of Excellence Pvt. Ltd. [ 2021 (3) TMI 138 - SUPREME COURT] and secondly, it cannot be treated as FIS under Article 12(4)(a) of India USA DTAA, the AO has taken a conscious decision not to invoke Article 12(3) and Article 12(4)(a) of India USA DTAA to tax the receipts. Thus, the only course left open with the AO to rope in the receipts within tax net is to invoke Article 12(4)(b) of India USA DTAA. However, the said provision requires fulfillment of the make available condition. A reading of the assessment orders should reveal that except making general observations that while rendering services the assessee has made available technical knowledge, know-how, skill etc. to the recipient of services, the Assessing Officer has not brought on record any cogent material/ evidence to establish such fact. Even, same is the position with learned DRP as no effort has been made by learned DRP to establish that make available condition stands satisfied. Now, it is fairly well settled that technical knowledge, knowhow, experience, skill etc. are made available to a service recipient when the service recipient is capable of performing such services independently on its own without requiring the aid and assistance of the service provider. No material has been brought on record by the Revenue Authorities to establish that the service recipients, while availing service from the assessee, have also acquired technical knowledge, know-how, skill etc. concerning such services, which enabled them to perform such services independently in future. Assessee continues to provide on-call support services year-after-year goes to prove that the technical knowledge, know-how, skill etc. relating to such services have not been transferred to service recipients. It appears that being conscious of the fact that the receipts cannot be made taxable as royalty income under Article 12(3) or as FIS under Article 12(4)(a) of India USA treaty, the Assessing Officer has made a futile attempt to make the receipts taxable under Article 12(4)(b) by adopting trial and error method. In view of the aforesaid, we hold that the receipts are not taxable as FIS under Article 12(4)(b) of India USA DTAA. Computation of interest on refund u/s 244A - it is the contention of the assessee that interest u/s 244A of the Act has to be computed up to the date of issuance of refund voucher - HELD THAT:- Having considered rival submissions, we direct the Assessing to verify assessee s claim and compute interest in accordance with law.

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• 2024 (10) TMI 1474
  Revision u/s 263 - as per CIT assessment order passed by AO u/s 143(3) r.w.s 153A is found to be erroneous in so far as it is prejudicial to the interest of the revenue - addition made by AO towards the undisclosed cash sales should be taxed as unexplained money u/s 69A r/w section 115BBE - HELD THAT:- PCIT did not find error or prejudiced with the quantum and the manner the assessment proceeding is carried out by the ld. AO. PCIT merely initiated proceeding just to amend the rate of tax to be charged on the disputed addition. As we note that the addition has been made by making the extrapolation and no clear finding on facts of undisclosed amount. As there is no clear material which is to be charged at special rate merely the inference about the sales based on the those seized record taking weighted average will not suggest that the amount as unexplained money. It is not the case of the revenue that the assessee is found in possession of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the AO satisfactory. As is not disputed about the source of money wherein the revenue contended that the same whatsapp chat suggest part of the money reflected in the books and part not. Thus, the source of addition made is explained by the assessee and ld. AO has taken a plausible view on the matter. Not only that the amount of addition is disputed and as supported by the seized material it is merely mathematical calculation which is disputed by the assessee and therefore, the case of the assessee is squarely covered by the decision of our High Court in the case of Manna Trust [ 2022 (1) TMI 693 - RAJASTHAN HIGH COURT ] Not only that as regard the chargeability of disclosed income the Gujarat High Court in the case of PCIT Vs. Dharti Estate [ 2024 (1) TMI 1197 - GUJARAT HIGH COURT ] has held that when the assessing officer has made sufficient inquiry and as such during the course of assessment included. The Hon ble Gujarat High Court also held that there was nothing stated in either pre-amended or post amended provisions of section 115BBE that when the assessee surrendered undisclosed income during the search action for the relevant years, higher tax rate is required to be charged. When the order passed by the ld. AO is perfectly dealing with the issue and there is no error or prejudice as such ld. PCIT cannot invoke the provision of section 263 just to say different rate of levy of the tax when ld. AO was already aware about the issue on hand of cash sales. Provisions of explanation 2 of section 263 PCIT should have at list satisfied herself before invoking the provisions, that in fact the assessee is found to be the owner of any money, bullion, jewellery or other valuable article the answer is no even the quantification of cash sales is on extrapolation of taking weighted average of sales based on the instances found at the time of search and the assessee challenged the finding of the ld. AO. Thus, the addition made by the ld. AO being under disputed and while making the addition the ld. AO has not discussed or referred the section 69A of the Act the ld. PCIT cannot hold here view when that of the view of the ld. AO when the ld. AO has consciously added the said sum as business income. AO made the addition after giving a specific show-cause notice to the assessee wherein the ld. AO based on the seized material extrapolated the income on weighted average and considered the cash sales. Thus, it was not the case of revenue for undisclosed income apparen and evident. The assessee challenged that addition before the ld. CIT(A) and therefore, the matter is under dispute. On that disputed addition ld. CIT(A) intend to levy the rate of addition for section 68, 69, 69A,B, C D of the Act. When the addition is under dispute and while making that addition ld. AO did not invoke those provisions consequent thereupon, ld. PCIT cannot impose upon her view on the ld. AO when the ld. AO with his open eyes considered the addition as unrecorded cash sales as business income of the assessee. On that pages it is apparent that he intend to tax cash sales which was in part cheque and part in cash so one transaction cannot be considered for separate two treatment under the Act. We also note that it was not the case of the revenue on the variation in stock was found, variation in the investment in the assets, no loan taken or given out of books were found and no proof of unaccounted purchase were found. Thus, merely on sum slip found in the whatsapp, addition were made and that cannot be considered as unexplained credit in the hands of the assessee company. It is not a cash of revenue that ld. AO was not aware about the provision of section 115BBE, AO was conscious about the provision of section 115BBE of the Act, because while dealing with the addition of unaccounted cash found for an amount was added and while doing so he invoked the provision of section 115BBE of the Act while dealing with the subsequent year case. Here also while invoking the provision of section 263 there is no variation was proposed in the computation of income of the assessee, but only for rate of tax and that with the facts already on record being disputed and not crystallized the order is neither erroneous nor prejudicial to the interest of the revenue. Not only that as argued by assessee their case is also covered with the decision of M. P. High Court in the case of PCIT Vs. Prakhar Developers P. Ltd. [ 2024 (4) TMI 498 - MADHYA PRADESH HIGH COURT ] as held that once order has been passed taking prior approval then again invoking the provision of section 263 was not correct. Similar view was taken by Patna High Court in Gyan Infrabuild P. Ltd. [ 2024 (5) TMI 732 - ITAT PATNA ] Ld. PCIT on the same very issue out of other year selected only for two year and other order on the same very issue could not found the order erroneous and has not proposed any action when the nature of addition being same. AO has already invoked the provision of section 11BBE for A. Y. 2020-21 while dealing with the addition and while making cash sales addition he has taken a conscious decision not to invoke that provision. Even the view and the addition being debatable and the matter was under dispute before ld. CIT(A) ld. PCIT should not considered merely on the charge of rate of tax order as prejudicial and that too without proving that it was in fact erroneous or prejudicial to the interest of the revenue. In the search no corresponding assets was found and the addition was made merely on slip found to be recorded in the iphone and the working of sales made based on the weighted average. Ld. AO consciously not invoked the deemed provision and not charged the income under the other income head and has added cash sales. Thus, we do not agree with PCIT as the order has been passed without proving that order of the ld. AO is erroneous and prejudicial to the interest of revenue and therefore we see not reasons to sustain the same. Assessee appeal allowed.

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• 2024 (10) TMI 1473
  Ex parte order of CIT(A) - denial of principle of natural justice - Penalty u/s 271B imposed - As argued that assessee could not get reasonable opportunity of being heard from the CIT (A) - HELD THAT:- As first notice was given to the assessee in the month of December, 2020 which was complied with by the assessee, but thereafter there were long gap of almost 22 months when another notice on 3rd November, 2022 was issued for enablement of Window, which did not require any response neither there was any such option. Again, thereafter there was complete silence for around 19 months before issuing notices on 11.06.2024, 28.06.2024 and 09.07.2024 which shows that within a short span of time three notices were issued to the assessee but was not sufficient to collect all the documents and other required information for furnishing before Ld. CIT (A). Thus, the opportunity of hearing means opportunity of proper hearing and a reasonable time is to be granted to the respective party and even otherwise, CIT (A) has passed an ex parte order - Therefore, without commenting anything on merits, we feel it proper and appropriate to restore the matter back to the file of ld. CIT (A) for afresh decision. Appeal of the assessee is restored back to the file of the ld. CIT(A) for afresh decision.

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• Customs

• 2024 (10) TMI 1472
  Fraud practised by the defaulter and his brother only to obstruct the government from recovering its legitimate dues - Petitioner s brother was declared a defaulter regarding payment of the customs dues and after receipt of this order, the defaulting brother purported to gift his share to his brother by a registered gift deed - main argument is that the attachment order under the Customs (Attachment of Property of Defaulter for Recovery of Government Dues) Rules, 1995 (said Rules) was made only on 26 June 2013; therefore, there was nothing wrong with the registered gift deed dated 6 May 2006 HELD THAT:- The fact that the gift deed was executed soon after the original order was made declaring the Petitioner s brother a defaulter is not a circumstance that can be lightly ignored. The defaulting brother has purported to transfer 50% of his share to the Petitioner. This is a case where an apparent attempt was made by the defaulting brother and the present Petitioner to obstruct the recovery of legitimate dues. The Petitioner s conduct has not been above board. The vital document, the order dated 30 November 2005, was not enclosed along with the Petition. In fact, it was suppressed. This document was extremely vital to test the Petitioner s case, yet it was suppressed. Further, on the transaction, at least a very strong prima facie case is made out that the Petitioner and his brother executed the sale deed dated 6 May 2006 after it was clear the brother would have to pay the government dues, if necessary, through the sale of the said flat. This transaction was entered into solely to obstruct such sale and, consequently, the recovery of legitimate government dues. Such a Petitioner does not deserve any assistance from the Writ Court exercising equitable and extraordinary jurisdiction under Article 226 of the Constitution. It is well settled that the equitable and extraordinary jurisdiction of this Court is not to be exercised merely upon the Petitioner making out some legal point. This jurisdiction is essentially discretionary, and the Petitioner s conduct is a factor for considering the exercise of discretion. The Affidavit also refers to the registered gift deed and all clauses there stating that from the date of execution of the gift deed, the donee, i.e., Petitioner herein, shall pay other legitimate government and society dues . In this case, though interim relief was explicitly denied long ago, we are surprised that the respondents took no action to recover dues. We dismiss this Petition at Rs 25,000/-. The petitioner should pay the cost to the Maharashtra State Legal Services Authority within four weeks from today.

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• 2024 (10) TMI 1471
  Provisional release of the goods being tyres under consideration on the conditions - as argued Tribunal has not considered the test reports issued by IRMRA and no opportunity of hearing was afforded to the investigating agency and, therefore, there is violation of principles of natural justice - HELD THAT:- Revenue s representative conceded before the Tribunal that although during the course of the hearing of the main appeal, a specific question was put by the Bench on the test reports, the said representative replied specifically that there were no such test reports available. However, during the course of the hearing for rectification application, the said representative conceded the fact that the IRMRA reports were not filed earlier and also same was not brought to the notice of the Bench at the time of the hearing and same have been made available to the Bench in the course of the rectification hearing. It is important to note that the representative who appeared in the main appeal for the Revenue and the representative who appeared for the Revenue for the rectification application hearing is the same representative, Mr. Deepak Sharma, Assistant Commissioner for Revenue. We fail to understand as to on what basis when the main appeal was being argued and on a specific question being raised by the Bench, the said representative stated that there are no such reports available and if the said representative was not sure, he ought to have requested the Tribunal for some time to verify and ascertain the correct position. Having not done so, now the said representative has conceded in the course of the rectification hearing that although these reports were available, the same were not filed and the same was not brought to the notice of the Bench. This is a serious matter that requires consideration by the highest officer of the department as to how such a thing could happen. This is a case where there were a series of appellants before the Tribunal and the financial stakes were high. Therefore, we direct the Joint Chief Department Representative, Mumbai Bench CESTAT, to conduct a detailed enquiry and report to this Court on how this was possible and who was responsible for such an incident. The said authority should investigate all the persons involved and report to this Court what disciplinary action (if any) is taken or proposed to be taken against the persons responsible if they are from the Revenue Department and if some private persons are involved, what action is proposed to be taken against them.

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• 2024 (10) TMI 1470
  Validity of Order in Original imposing penalties upon the Petitioner under Sections 112 (b) and 114AA of the Customs Act - allegation of denial of the opportunity to cross-examine the persons given statements in the adjudication proceedings - HELD THAT:- In the case of Manjeet Singh vs Union of India and others [ 2022 (10) TMI 893 - BOMBAY HIGH COURT] a Co-ordinate Bench of this Court in similar circumstances declined to deviate from the self-imposed restriction regarding exhaustion of alternate remedies. Even in that case, the complaint was about not granting cross-examination opportunities. The Co-ordinate Bench relied upon the decision of this Court in Haresh Nagindas Vora [ 2017 (6) TMI 964 - BOMBAY HIGH COURT] to hold that the Petitioner cannot easily bypass the statutory remedy of appeal and insist upon the matter being considered on merits in the Writ Petition. From the perusal of the impugned order, at least prima facie, we find that this is not a case of no notice or no opportunity to defend the allegations in the show cause notice. At the highest, this is a case where the allegation is of insufficient opportunity because of the denial of cross-examination of some of the persons who made statements in the adjudication proceedings. Therefore, prima facie proof of prejudice may be necessary. All these are matters that can be looked into by the Appellate Authority. We decline to entertain this Writ Petition but leave it open to the Petitioner to pursue the remedy of appeal by complying with the mandatory conditions prescribed under the law.

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• 2024 (9) TMI 1649
  Seeking a direction to the Commissioner (Appeals) to hear appeal without insisting upon the mandatory deposit of Rs. 3.375 Crores corresponding to 7.5% of the penalty amount - Without going into the merits of the matter, after the petition was argued for some time, petitioner sought leave to withdraw the petition with liberty to file a fresh petition. HELD THAT:- Petition dismissed as withdrawn with the liberty as prayed for.

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• Corporate Laws

• 2024 (10) TMI 1469
  Quashing the Impugned Action of the Respondent Bank by which it has arbitrarily, unfairly and unreasonably invoked the Fraud Circular against the Petitioner and declared his account as fraud - no event of wilful default or fraud qua the account of MBSL - HELD THAT:- The counter-affidavit by the respondent-bank contains no indication that any SCN was issued to the petitioner proposing his classification or categorization as fraud , nor was he informed about the uploading of his name on the Central Fraud Registry of the RBI. There is no iota of an averment that any relevant documents, including the copy of the forensic audit report, were ever supplied to him. Evidently, no hearing was afforded to the petitioner, nor was he ever communicated of the decision of the respondent-bank dated 20.06.2019. In the causa c l bere STATE BANK OF INDIA ORS VERSUS RAJESH AGARWAL ORS [ 2023 (3) TMI 1205 - SUPREME COURT] , the Supreme Court was dealing with a matter where the petitioner had been classified or categorized as fraud under the same Master Directions on Fraud by the RBI and after examining a plethora of case laws on the subject, it was held that the principles of natural justice have to be read, while interpreting and enforcing the Master Directions on Fraud by the RBI. There is no gainsaying that the civil consequences jeopardize the future of the business of the borrower, and the principles of natural justice necessitate providing an opportunity for a hearing before declaring the borrower ineligible to access institutional finance under Clause 8.12.1 of the Master Directions on Frauds. The present writ petition is allowed and the impugned order dated 20.06.2019 passed by the respondent-bank and the consequential action declaring, classifying or categorizing the petitioner as fraud is hereby set aside/quashed.

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• 2024 (10) TMI 1468
  Oppression and Mismanagement - Maintainability of the present writ petition preferred by the petitioner company invoking Article 226 of the Constitution of India, 1950 - seeking issuance of directions to respondent No. 1/RBI to initiate action against respondent No. 2 company i.e. Exclusive Capital Limited in terms of the provisions contained in Chapter IIIB of the Reserve Bank of India Act, 1934 - HELD THAT:- It is well ordained in law that a writ of mandamus lies where there is shown a failure to exercise the powers vested in statutory authorities and delay in exercise of its powers might bring about irreparable injuries to statutory rights. Despite repeated reminders, the present management of respondent No. 2 company has not shared several details in the nature of organizational structure of the respondent No. 2 company, list of secretarial records, statutory compliances, detailed particulars of all the managerial personnel (current and former) scope of their respective roles/responsibilities along with the details of their remuneration/perks and benefits, in particular the copies of the audited and unaudited financials of the company with schedule and trial balances besides the list of list of receivables and payables besides list of secured and unsecured creditors, and such non-compliances assumes significance that all is not well in running the affairs of respondent no. 2 company by the present management. It would be expedient to point out that the respondent No. 2 company in its reply-cum-affidavit through Mr. Achal Kumar Jindal dated 25.09.2024, filed in response to the Status report filed by the respondent No. 1/RBI dated 13.08.2024, has simply made bald denial with regard to the issues and concerns which have been raised by the respondent No. 1/RBI. It is stated that in order to restore the leverage ratio, the OCDs were converted into the CCPS vide the resolution dated 27.09.2022. As regards the OCDs of Rs. 315 crores, having been received without permission, it is sought to be canvassed that it neither qualifies to be a public fund nor Regulation 61 of 2016 of the RBI Master Directions are applicable. The decision in the case of Krishnakrupa Owners Association v. Reserve Bank of India was rendered in the context of decision taken by the RBI under Section 39A of the Banking Regulation Act, 1949, whereby certain conditions had been imposed on the petitioner including the restrictions, which restrained the respondent No. 3 from paying more than Rs. 10,000/- to its depositors. The High Court refused to exercise its jurisdiction and interfere in the banking affairs of the respondent No. 3 since it was held that the RBI, which was an expert body, was already seized of the matter. Thus, finding no legally sustainable challenge to the maintainability of present writ petition, and given that it is evident that respondent No. 1/RBI has thus far failed to exercise its supervisory powers, it becomes imperative that certain directions be issued to respondent No. 1/RBI to intervene in the matter and to ensure the enforcement of binding regulations provided under the RBI Act. There are cogent and ample material on the record that warrant full and thorough inquiry into the affairs of the respondent No. 2 company. It is hereby directed that the Board of Directors of respondent no. 2 company shall remain suspended with immediate effect till further orders - Re-notify for compliance on 02.12.2024.

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• Law of Competition

• 2024 (10) TMI 1467
  Principle of res judicata - Department of Expenditure (DOE) is an enterprise under Section 2(h) of the Competition Act, 2002 - Office Memorandum (OM) issued by DOE constitutes an agreement under Section 3(4) and Section 3(1) of the Act or not - HELD THAT:- The issue as to whether the Respondent No. 2 is an enterprise and OM 1 is an agreement has already been decided by the Respondent No. 1 in case no. 39 of 2010 decided on 15.09.2010 holding that neither the Respondent No. 2 is an enterprise within the meaning of Section 2(h) nor OM1 is an agreement between Respondent No. 2, 3 and 4. It is pertinent to mention that the Hon ble Supreme Court in CCI Vs. Co-Ordination Committee of Artists and Technicians of W.B. Film and Television and Ors. [ 2017 (3) TMI 1692 - SUPREME COURT ] has held that the Department of Expenditure, Ministry of Finance, Government of India, cannot be considered or regarded as an enterprise in terms of Section 2(h) of the Act, 2002 in relation to the Office Memorandum dated 24.03.2006. Thus, it is very well proved that the Appellant has approached the Respondent No. 1 by filing second information on the same facts and circumstances against the same opposite parties with the same prayer which has already been declined in the first information filed by the Appellant and the order of the CCI was tested and upheld by the Appellate Authority when the appeal of the Appellant was dismissed and no further appeal by the Appellant was carried to the Hon ble Supreme Court which seal the fate of the Appellant in so far as this litigation is concerned. In this view of the matter the salutary principle / legal maxim that nemo debet lis vexari pro una et eadem causa would spring in to the action that no man should be vexed twice for the same cause which has been adjudicated in the present case by the Appellant because even if it is presumed that the economic activities are dynamic, as stated by the Appellant, the fact remains that the two courts have already held that the Respondent No. 2 is not an enterprise and OM1 is not an agreement inviolation of Section 3(4) of the Act, therefore, these issues cannot be reagitated and the court cannot be called upon to decide the same by passing a lengthy judgment and the wasting time which may be used for disposal of a genuine case, therefore, the present appeal is found without any merit. Appeal dismissed.

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• Insolvency & Bankruptcy

• 2024 (10) TMI 1466
  Approval of the resolution plan - wrongful allocation of Rs. 79 lakhs as the liquidation value - HELD THAT:- The Hon ble Supreme Court in M/s Amit Metaliks Limited Anr. [ 2021 (6) TMI 684 - SUPREME COURT ] while taking into consideration Section 30(4)(2) and Section 53 held that the NCLAT was right in observing that such amendment to sub-section (4) of Section 30 only amplified the considerations for the CoC while exercising its commercial wisdom so as to take an informed decision in regard to the viability and feasibility of resolution plan with fairness of distribution amongst similarly situated creditors and the business decision taken in exercise of the commercial wisdom of CoC does not call for interference unless creditors belonging to a class being similarly situated are denied fair and equitable treatment. In the case of Paridhi Finvest Pvt. Ltd. [ 2024 (2) TMI 557 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ], the case of the Appellant was that he was not paid the amount as per the liquidation value though the Appellant being a dissenting financial creditor was entitled for payment of amount as per liquidation value. In this case, the Court relied upon the decision in the case of Amit Metaliks and the decision in the case of Paridhi Finvest Pvt. Ltd. was upheld by the Hon ble Supreme Court and the appeal was dismissed. Although, the interpretation of Section 30(2)(b)(ii) of the Code is pending by a larger bench but at present the decision of the Hon ble Supreme Court in the case of Amit Metaliks is subsisting, therefore, relying upon the said decision, we hold that there is no error in the order of the Tribunal which calls for any interference by this Court and hence, the appeal is hereby dismissed.

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• Service Tax

• 2024 (10) TMI 1465
  Wilfull failure to pay tax and suppressed the value of service in the returns filed in ST-3 - Suppression for mere non-declaration of details - Invocation of extended period of limitation in terms of proviso to Section 73 of the Finance Act, 1994 - whether the appellant can be fastened with a liability to pay service tax and penalty? HELD THAT:- The service tax of banking and financial service was altered with effect from Finance (No.2) Act, 2004 dated 10.09.2004 by Substituting the definition of banking and other financial services . Prior to the aforesaid period, the definition read differently. The petitioner has paid the Service Tax on 03.07.2008 i.e. within 115 days from the date of receipt of Show Cause Notice. We are of the view that the appellant was entitled to take a bonafide stand that no service tax was payable in the context of collection of penal charges although it could be concluded that it was liable to pay service tax. There is no record to show that failure to pay service tax was wilful and deliberate as held in Pushpam Pharmaceuticals Co. [ 1995 (3) TMI 100 - SUPREME COURT] Hon ble Supreme Court in Uniworth Textiles Ltd.,[ 2013 (1) TMI 616 - SUPREME COURT] has held that if non-disclosure of certain items assessable to will not invite the wrath of the proviso for the non-payment of duty on disclosed items, after inquiry from the department concerned and does not attract the proviso. Thus, we are inclined to hold no penalty is payable by the appellant under any of the provisions of the Act. Since tax payable has been accepted by the appellant, appellant shall also pay interest on belated payment of tax under Section 75 of the Finance Act, 1994. We therefore, partly allow the appeal and answer the substantial questions of law partly in favour of the appellant by holding no penalty is imposable on the appellant. The appellant shall pay interest under Section 75 of the Finance Act, 1994 within a period of thirty days from the date of receipt of a copy of this order, if same has not been already paid.

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• 2024 (10) TMI 1464
  Demand of Service Tax dropped by the CESTAT on the income shown as non-taxable in Financial Data Summary Sheets (FDSS) - Whether the Respondent / Assessee is liable to pay Service Tax on difference in figure of Income in Form ST-3 and Form 26AS? - HELD THAT:- As functioning of the respondent as a Multi-Modal Transport Operator and who is stated to have made payments toward customs duty, air freight, ocean freight and surcharges for and on behalf of various clients. From the material which was gathered in course of the enquiry as well as the verification details provided, the authorities had found that the payments made by the respondent were being reimbursed by the individual clients and the issue was thus clearly confined to that of a reimbursement of expenses incurred for and on their behalf. The respondent also did not place reliance on any material which may have indicated that the reimbursements were subject to a mark up that may have been charged by the respondent. CESTAT has ultimately observed non-taxable amount includes amounts like customs duty, BAF CAF charges, ocean freight and air freight. All these amount are paid by the appellant on behalf of the client and later on are reimbursed. Thus, same cannot be taxed as they are in nature of reimbursements. Bearing in mind the aforesaid, we find no substantial issue of law that can be said to arise in this appeal.

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• 2024 (10) TMI 1463
  Reversal of CENVAT Credit - total Cenvat credit taken instead of common Cenvat credit taken for the purpose of reversal of credit under Rule 6(3A) (c) (iii) of the Cenvat Credit Rules, 2004 - the term total Cenvat Credit taken used in the provision of Rule 6(3A)(c)(iii) of Cenvat Credit Rules, 2004 is unambiguous or not - Whether the 2nd respondent is correct in placing reliance on the Stay Order of the Hon ble Tribunal in the case of Thyssenkrupp Industries [ 2014 (10) TMI 476 - CESTAT MUMBAI ] to hold that only total Cenvat credit taken should be considered in the formula under Rule 6(3A)(c)(iii) of Cenvat Credit Rules, 2004? - failure of the appellant to maintain separate account as is contemplated under Rule 6(2) of the CENVAT Credit Rules, 2004. HELD THAT:- It is evident that it is the common input services taken during financial year and not the total CENVAT credit which has to be considered for reversal under Rule 6 (3A)(c)(ii) of the CENVAT Credit Rules, 2004. The distortion in the old Rules as it stood during the period in dispute in Rule 6 (3A)(c)(ii) of the CENVAT Credit Rules, 2004 was cured to ensure both manufacturers/service providers do not pay reverse/pay the amount under Rule 6 (3A)(c)(ii) of the CENVAT Credit Rules, 2004 in excess - the trading activities carried out by the appellant were exempted service within the meaning of the provisions of the CENVAT Credit Rules, 2004. The trading activities carried out by the appellant were exempted service both before and after amendment to the Rules. As far as the present dispute is concerned, Rule 2(e) of the CENVAT Credit Rules, 2004 is relevant as it stood prior to 2016. It has not undergone any change for the purpose of this inquiry. Similarly, Rule 6 of the CENVAT Credit Rules, 2004 also underwent few changes - During the period in dispute between April 2013 to March 2015, the Rule 6 of the CENVAT Credit Rules, 2004 read slightly different from how it read after the amendment vide Notification No.13/2016-CE (NT) dated 01.03.2016. The traded goods became exempted goods defined in Rule 2(d) of the CENVAT Credit Rules, 2004 and included non-excisable goods cleared for a consideration from the factory under the new dispensation. All through the period right from inception till 2016, the provisions read identically. For the Assessment Years 2011-2012, 2012-2013 and 2015- 2016, the appellant s appeal was also allowed by the Tribunal. The dispute in these two cases pertain to the Assessment Years 2013-2014 and 2014-2015 which prior to 2016. Since, the provisions have been amended to remove distortion arising out of strict application of the old format, we see no reasons to take a different stand in this appeal. The appellant shall be entitled for consequential relief if any - the Impugned Order deserves to be set aside and is accordingly set aside - Appeal allowed.

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• 2024 (10) TMI 1462
  Non-payment/ short payment of service tax - demand of service tax + Education Cess+ Secondary Higher Education Cess - HELD THAT:- Appellant in the present case even before the Original Authority did not contested anything in the show cause notice except for certain computations - The findings or facts rendered by both the authority no nonpayment/ short payment of service tax cannot be faulted with. Even as per the calculation chart submitted by the appellant they have admitted that short payment of service tax to the tune of Rs 5,44,492/- That being so, the quantum of short payment needs to be re-determined after allowing the deduction of the amount claimed by the appellant to be towards service tax paid by Hindalco. For the limited purpose of re-computing the demand after allowing this deduction from the gross value matter is remanded back to the original authority. The findings recorded by the authorities below cannot be disputed in respect of limitation, as the appellant was well aware that he was providing taxable services and short paid the service tax, even after issuing invoices indicating the services tax payable and collecting the same from the service recipient. Before the original authority appellant have specifically admitted and has stated that they do not intend to contest the demand made on any ground other than the quantification. In view of the specific averments made by the appellant to this effect in their submissions to the adjudicating authority and during the course of hearing before him, we are not inclined to admit any such plea at this stage. These pleas have been subsequently raised by the counsel for the appellant at the time of hearing before us. Thus, we uphold the penalties imposed upon the appellant under Section 77 78. However the quantum of penalty under Section 78 shall have to be determined after re-computation of the demand in the remand proceedings. We remand the matter to original authority for the limited purpose.

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• 2024 (10) TMI 1461
  Interpretation of N/N. 01/2006-ST for availing abatement on services provided - Department has entertained a view that the service of the insulation provided by the appellant falls outside the preview of the eligibility criteria for the abatement as per Notification No. 01/2006-ST dated 01.03.2006 as amended - HELD THAT:- The matter is no longer res Integra as the issue at hand has already been decided by the Tribunal in the similar circumstances in favour of the appellant. The relevant extract of the order in case of RUDRA ENGINEERING VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VADODARA-I [ 2024 (2) TMI 1450 - CESTAT AHMEDABAD] has held that From the definition of Works Contract Service, it is clear that only specified categories of works contract are considered for levy of Service Tax under the said definition. These are enumerated in clauses (a) to (e). We find that in clause (a) thermal insulation also mentioned and in the present matter appellant had also paid VAT/ sales tax on goods which is used in installation of thermal insulation. We find that the impugned activity of the assessee was nothing but works contract service . The facts of the present matter are similar to the matter decided by the Division Bench of this Tribunal - the impugned order in appeal without any merit and therefore the same is set aside - appeal allowed.

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• Central Excise

• 2024 (10) TMI 1460
  Justification of reduced penalty - setting aside refund sanction by Assistant Commissioner due to penalty reduction - HELD THAT:- A perusal of section 11AC of the Central Excise Act shows that the section itself provides for penalty equal to 100% and further provides that if the demand is paid along with penalty within 30 days of the order, the penalty shall be only 25%. Thus, both the penalty of 100% and its reduction to 25% on fulfilment of some conditions are mandatory. Even if penalty of 100% is imposed and it is not mentioned in the order in original that the penalty shall stand reduced to 25% if the duty, interest and penalty were paid within 30 days, if the assessee pays within 30 days and thereby fulfils the requirements for reduction of penalty, it will be entitled to that reduction. In this case, the Commissioner did indicate in his order about reduction of penalty but the Tribunal did not mention it in its order. However, that does not mean that the Tribunal has enhanced the penalty to 100% even though the appellant had fulfilled the conditions for reduced penalty. The Commissioner (Appeals) clearly mis-read the Tribunal s order and on that ground set aside the refund sanctioned by the Assistant Commissioner. The impugned order is set aside - the order of the Assistant Commissioner is restored - appeal allowed.

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• 2024 (10) TMI 1459
  Confiscation of boxes of branded ceramic floor / wall tiles seized at the premises[693 boxes] - boxes of ceramic glazed wall tiles cleared from the factory without payment of appropriate Central Excise duty and without declaring correct MRP - imposed a fine and penalty in lieu of confiscation - imposition of personal penalty of Rs.15,000/ under Rule 26 of Central Excise Rules, 2002 on Managing Partner - Whether MRP could be revised in regard to ceramic tiles which were manufactured and cleared from the factory of the manufacturer prior to 28/02/2008? - HELD THAT:- As there has been enough litigation as stated by the appellant and appeal of the department is pending in Supreme Court without stay. This Court also finds that the legal proposition about alteration of MRP as laid down in the case of Acme Ceramics[ 2014 (10) TMI 14 - CESTAT AHMEDABAD] is clear on this aspect which has been followed even in number of cases as cited (supra) and which concludes that absence of provision relating to demand of duty in case of change of MRP and from whom for the period 01.03.2008 is fatal to the Revenue s case. In view of consistent decisions of this bench this court is inclined to follow the aforesaid decisions in this case also and holds that the lack of provision at the relevant time goes against the Revenue. This court also finds that the case law cited by the learned Advocate cited above that if there is no demand of duty there cannot be any imposition of penalty and fine is relevant for setting a side penalties. The appeals filed by the appellants are therefore, liable to succeed and same are allowed with consequential relief.

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• CST, VAT & Sales Tax

• 2024 (10) TMI 1458
  Maintainability of the petitions in view of availability of the alternative remedy of filing statutory appeal under Section 73 of the Gujarat Value Added Tax Act, 2003 - whether the liability of payment of Value Added Tax would include service tax component collected by the petitioner from customers or not? - HELD THAT:- The petitioner is required to calculate the taxable turnover of its sales under the provisions of Section 14 of the Act by excluding the amount of turnover of sales not subjected to tax under the Act and turnover of goods declared exempt and in case of turnover of sales in case of the works contract, charges towards labours, service and other like charges and subject to such conditions as may be prescribed. Accordingly, VAT is payable upon the taxable turnover and as per the provision of Section 3 read with Section 14 of the Act, it provides for option for payment of lump sum tax in lieu of tax on turnover of sales. On perusal of the interpretation made by the respondent authority, whether the service tax component collected by the petitioner could be said to be sale price or not is answered by this Court in the case of Ambuja Cement Ltd. [ 2016 (4) TMI 1399 - GUJARAT HIGH COURT] while deciding the issue as to whether the total taxable turnover of purchases liable for purchase tax would include Value Added Tax component or not. It is pertinent to note that definition of taxable turnover of purchase is mirror image of definition of taxable turnover of sales under Section 2(33). When the word includes is used in the definition of Section 2(24) of the Act, it is clear that legislature does not intend to restrict the definition, it makes the definition enumerative and not exhaustive as held by this Court and therefore, in ordinary meaning, it has to be extended to bring within the term certain matters which in its ordinary meaning it may or may not comprise. Inclusion of the words duties levied or leviable under the Central Excise Tariff At, 1985 or Customs Act, 1962 and any sum charged for anything done by the dealer in respect of the goods before the delivery thereof would indicate that the legislator intend to include only those duties/taxes within the purview of the expression sale price . Therefore, the intention of the legislature to exclude the service tax component from the ambit of sale price is clear, as otherwise, the same would also have found place in the categories enumerated thereunder. The impugned orders passed by the respondent authority setting aside the permission granted under Section 14D of the Act for payment of composition tax only on the ground that petitioners have not paid the VAT on the service tax component which ought to have been included in the sale price is squarely covered in favour of the petitioners and on the same analogy for excluding Value Added Tax from purchase price in case of Ambuja Cement Ltd., the petitioners are not liable to include the service tax component as part of the sales price so as to pay VAT thereon. All these petitions succeed and are accordingly allowed.

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• Indian Laws

• 2024 (10) TMI 1457
  Attachment of the properties on default of return of deposits - Prayer for quashing and setting aside the auction process in respect of sale of the subject property - challenge to auction in which the Petitioner itself is declared as successful auction purchaser - alleged suppression of material facts in contravention of section 55 (1) (a) of the Transfer Of Property Act, 1882 - HELD THAT:- The attachment of the properties on default of return of deposits u/s. 4 of the MPID Act starts with a non-obstante clause and it provides that when the Government is satisfied that any Financial Establishment has failed to return the deposit after maturity or on demand by the depositor, or to pay interest or other assured benefit, or to provide the service promised against such deposit, or where the Government has reason to believe that any Financial Establishment is acting in a calculated manner detrimental to the interest of the depositors with an intention to defraud them and if the Government is further satisfied that such financial Establishment is not likely to return the deposits or pay the interest or other benefits assured, the Government may in order to protect the interest of the depositors, issue an order in the Official Gazette attaching the money or other property believed to have been acquired by such Financial Establishment either in its own name or in the name of any other person from out of the deposits collected by such Financial Establishment. In the present case, Respondent No. 3 is duly constituted Competent Authority and it has exercised power u/s. 5(3) by applying to the designated Court and subject property was attached. The Designated Court u/s. 6 of the MPID Act has passed an order after investigation, to release the subject property from attachment u/s. 7(6) of the MPID Act - It is therefore clear that the subject property was first vested in the Competent Authority by operation of law and thereafter sold through the auction under process of law and the attachment of ED has been lifted by the Designated Court u/s. 7(6) of the MPID Act. It is therefore clear that the enforcement of right of the secured creditor flows from an agreement / instrument / document and secured asset means property on which security interest is created. Security interest means right, title or interest of any kind upon the property created in favour of the secured creditor including mortgage, charge, hypothecation, assignment or any right, title or interest of any kind on tangible asset retained by the secured creditor etc. The very basis of the Petitioner s case seeking refund of the purchase price paid, is that the subject property cannot be utilized by the Petitioner. This argument is based on the alleged non-availability of the title deeds. Once the subject property vested in the Competent Authority and is sold to the Petitioner under due process of law and once the attachment of ED is lifted by the order of designated MPID Court, nothing more is required, for the Petitioner to enjoy the subject property. Having held that the Petitioner is not entitled to refund of the principal amount (purchase price paid), it is not necessary to labour any further about grant of interest as claimed by the Petitioner or otherwise. For the same reason, even the Petitioner s prayer for damages / compensation is only stated to be rejected. There are no merits in the Petition and the same is accordingly dismissed.

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• 2024 (10) TMI 1456
  Levy of deficit stamp duty and penalty - whether in a case where a sale is conducted by a Court or under the aegis of Court (like in the present case), the stamp authorities can embark upon a journey to determine the true market value of the property [sold in an auction conducted by the Court or under the aegis of the Court] and levy stamp duty thereon? - HELD THAT:- The issue raised in the present Petition is squarely covered by a decision of a Division Bench of this Court in the case of SPECTRUM CONSTRUCTIONS AND DEVELOPERS LLP VERSUS STATE OF MAHARASHTRA THROUGH JOINT DISTRICT REGISTRAR, COLLECTOR OF STAMPS, RAIGAD [ 2022 (1) TMI 1469 - BOMBAY HIGH COURT] as well as a decision of the Hon ble Supreme Court in the case of ASL Vyapar Pvt Ltd [ 2022 (11) TMI 1385 - SUPREME COURT] . In the case of Spectrum Constructions also the Petitioner was a successful bidder for purchase of certain immovable property for an amount of Rs. 1,66,57,920/-. This property was purchased by Spectrum Constructions pursuant to a sale conducted by a Committee constituted by the Hon ble Supreme Court under the Chairmanship of the Hon ble Mr. Justice R. M. Lodha (former Chief Justice of India), to oversee the disposal of lands held by a company called PACL Ltd. The reserve price fixed for the property was Rs. 83,28,960/- and the bid of the Petitioner was higher than that. The Petitioner also paid full stamp duty on the consideration paid for purchasing the property in question. Thereafter, the Petitioner (i.e. Spectrum Constructions) received a demand notice from the Stamp Authorities for payment of deficit stamp duty and penalty. As laid down by the Division Bench in Spectrum Constructions, once the bid of the Petitioner was accepted by the Justice Lodha Committee, and the sale was confirmed at a price bid by the Petitioner, and which was above the reserve price, there was no question of the Stamp Authorities determining any other value. That would be taken as the market value. This issue has now been conclusively settled by the Hon ble Supreme Court in the case of ASL Vyapar Pvt Ltd. A three Judge Bench of the Hon ble Supreme Court has clearly opined that in a Court auction, often the price obtainable may be slightly less as any bidder has to take care of a scenario where the auction may be challenged which could result in passage of time in obtaining perfection of title, with also the possibility of it being overturned - The logic is that an auction of a property by the Court is possibly one of the most transparent methods by which the property can be sold. Thus, to say that even in a Court monitored auction, the Registering Authority would have a say on what is the market price, would amount to the Registering Authority sitting in appeal over the decision of the Court permitting sale at a particular price. Petition allowed.

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• 2024 (10) TMI 1455
  Dishonour of Cheque - Insufficient funds - validity of the complaint u/s 138 of the NI Act, 1881, filed through a Power of Attorney - proceedings initiated on the basis of a compromise deed - HELD THAT:- It is relevant to note that this Court can quash complaints under the NI Act at the pre-trial stage in the exercise of its inherent jurisdiction under Section 482 of the CrPC if such unimpeachable material is brought forth by the accused persons which indicates that they were not concerned with the issuance of the cheques or that no offence is made out from the admitted facts. The Hon ble Apex Court in the case of Rathish Babu Unnikrishnan v. State (NCT of Delhi) [ 2022 (4) TMI 1434 - SUPREME COURT] had discussed the scope of interference by the High Court against the issuance of process under the NI Act and it was held that to non-suit the complainant, at the stage of the summoning order, when the factual controversy is yet to be canvassed and considered by the trial court will not in our opinion be judicious. Based upon a prima facie impression, an element of criminality cannot entirely be ruled out here subject to the determination by the trial Court. Therefore, when the proceedings are at a nascent stage, scuttling of the criminal process is not merited. In line with the dictum of the Hon ble Apex Court in Rathish Babu Unnikrishnan v. State (NCT of Delhi) [ 2022 (4) TMI 1434 - SUPREME COURT] ], thus, while exercising the power under Section 482 of the CrPC to quash a complaint at the pre-trial stage, it is pertinent for this Court to examine whether the factual defence is of such impeachable nature that the entire allegations made in the complaint is disproved. From a perusal of the complaint, it transpires that the complaint mentions that the authorized representative is fully competent to file and sign the complaint and is competent to file evidence by way of affidavit, and do all other acts to pursue the case. The complaint also mentions that attorney possessed personal knowledge of the case. In the present case from a perusal of the complaint and the pre-summoning evidence, it is evident that the same contains an averment that the authorized representative does possess personal knowledge of the alleged transaction. The degree of knowledge or whether the authorized representative even possess any personal knowledge with regard to the alleged transaction as alleged by the petitioner is a subject matter of trial and cannot be looked into at this stage to quash the complaint and framing of notice under Section 251 of the CrPC. Merely because the complaint, or the pre-summoning evidence by way of affidavit does not detail what knowledge or the extent of knowledge possessed by the authorized representative, this Court does not deem it expedient to quash the complaint and notice under Section 251 of the CrPC, especially on the ground of extent of knowledge of the authorized representative - The challenge to the validity of the compromise deed would be decided after the evidence is lead by the parties and cannot be commented upon at this stage and this Court does not deem it apposite to comment or consequently quash the present petition on such ground. In the present case, while the petitioner has raised questions regarding the incapability of the attorney to file the complaint, or lead pre-summoning evidence on the strength of the Power of Attorney, or the maintainability of the complaint on the basis of a fabricated compromise deed, the same is not impeachable in nature and does not disprove the allegations levelled against the petitioner in the complaint. Such questions can well be determined by the learned MM during the course of trial. The learned MM would arrive at a decision after considering the allegations, and counter allegations raised by the parties, and considering the evidence on record. This Court finds that the petitioner has, at best, raised questions of fact mixed with law which cannot be examined by this Court while exercising jurisdiction under Section 482 of the CrPC since it is expedient that the same be left to be adjudicated at the stage of trial when the parties have led their evidence. Petition dismissed.

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