TMI Tax Updates - e-Newsletter
October 6, 2023

Case Laws in this Newsletter:

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

Articles

1. How to apply for GST Registration?

   By: Sparsh wadhwa

2. Quashed Service Tax Demand as Calculation Sheets can’t be assumed to allege collection of Service Tax

   By: Bimal jain

3. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

4. ADDENDUM TO RESOLUTION PLAN

   By: DR.MARIAPPAN GOVINDARAJAN

5. Non-filing of GSTR-3B over an extended period can lead to the cancellation of GST registration

   By: Bimal jain

News

1. 11th Meeting of the India-UAE High Level Joint Task Force on Investments

2. UAE-India MoU to drive investment and collaboration in industry and advanced technologies

3. RuPay Domestic Card Scheme Agreement between India and the UAE

4. Commerce Secretary visits Brazil for 6th Meeting of the India Brazil Trade Monitoring Mechanism

5. Department for Promotion of Industry and Internal Trade and GatiShakti Vishwavidyalaya sign MoU for advancing PM Gati Shakti National Master Plan

6. Repayment of ‘4.48% GOVT. STOCK 2023’

Notifications

Customs

1. 73/2023 - dated 5-10-2023 - Cus (NT)

Rate of exchange of one unit of foreign currency equivalent to Indian rupees - Supersession Notification No. 68/2023-Customs(N.T.), dated 21st September, 2023

GST - States

2. 36/2023-State Tax - dated 18-9-2023 - Himachal Pradesh SGST

Seeks to notify special procedure to be followed by the electronic commerce operators in respect of supplies of goods through them by composition taxpayers

3. 34/2023-State Tax - dated 18-9-2023 - Himachal Pradesh SGST

Persons exempted from obtaining registration under HPGST Act - Persons making supplies of goods through an electronic commerce operator who is required to collect tax at source under section 52 of the HPGST Act specified

4. 32/2023-State Tax - dated 18-9-2023 - Himachal Pradesh SGST

Exemption from filing annual return for the said financial year to registered person whose aggregate turnover in the financial year 2022-23 is up to two crore rupees

5. 30/2023-State Tax - dated 18-9-2023 - Himachal Pradesh SGST

Special procedure to be followed by a registered person engaged in manufacturing of the goods - Additional records to be maintained by the registered persons manufacturing the goods mentioned in the Schedule

6. 29/2023-State Tax - dated 18-9-2023 - Himachal Pradesh SGST

Special procedure to be followed by a registered person or an officer u/s 107(2) of HPGST Act who intends to file an appeal against the order passed by the proper officer

7. (20/2023) FD 20 CSL 2023 - dated 30-9-2023 - Karnataka SGST

Amendment Notification No. (15/2023) FD 20 CSL 2023, dated the 11th August, 2023

IBC

8. S.O. 4321(E) - dated 3-10-2023 - IBC

Insolvency and Bankruptcy Code, 2016 shall not apply to transactions, arrangements or agreements, under the Convention and the Protocol, relating to aircraft, aircraft engines, airframes and helicopters.

Income Tax

9. 86/2023 - dated 4-10-2023 - IT

Exemption from specified income U/s 10(46) – ‘District Mineral Foundation Trust’

Circulars / Instructions / Orders

Customs

1. PUBLIC NOTICE No. 15/CCP/JMR/2023 - dated 15-9-2023

CBIC Advisory regarding processing of requests received from Private Vessel Operators for Customs clearance at non-notified Sea Ports in support of respect import goods/construction materials for Government Projects for which the permission/approval of the Board is required.

Highlights / Catch Notes

GST

• Court Quashes GST Registration Cancellation Due to Lack of Reason; Petitioner to Reply to Show Cause Notice in 3 Weeks.

  Case-Laws - HC : Cancellation of GST registration of petitioner - No reason has been assigned for cancellation of the registration of the petitioner. The order of cancellation is in the teeth of various judgments of this Court - Order of cancellation quashed - Petitioner directed to file reply to the show cause notice within a period of three weeks - HC
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• Court Orders IGST Refund with Interest for Zero-Rated Supplies After Error in Shipping Bill Column Selection.

  Case-Laws - HC : Refund of IGST - Zero Rated Supplies - wrong column selected in the shipping bill - the excess drawback on account of availing of CENVAT credit facility had been repaid with interest - The respondents are directed to sanction the refund of IGST paid in context of shipping bills mentioned with simple interest @ of 6% from the date of the shipping bills till the date of actual refund - HC
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• Parallel GST Proceedings Validity: Section 6(2)(b) Allows Transfer to Prevent Multiple Simultaneous Investigations; DGGI Continues Current Investigation.

  Case-Laws - HC : Validity of Parallel proceedings under GST - the device of transferring investigations or proceedings inter se proper officers to ensure that a taxpayer is not subjected to parallel proceedings, in effect, subserves the object of Section 6(2)(b) of the CGST/SGST/UGST Act - It cannot be accepted that the provisions of Section 6(2)(b) of the Act can be interpreted to proscribe consolidation of investigation or proceedings in a single authority where warranted. - DGGI agreed to continuing the investigation from the stage, as obtaining before it. - HC
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• Significant delay in filing appeal challenges writ petition's maintainability; Article 226 jurisdiction deemed inappropriate due to alternative remedies.

  Case-Laws - HC : Maintainability of writ petition - gross delay in filing appeal - There are no reason to invoke the extraordinary jurisdiction under Article 226, especially since it is not a measure to be employed where there are alternate remedies available and the assessee has not been diligent in availing such alternate remedies within the stipulated time. - HC
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• Court Sets Aside Account Attachment for Third-Party Tax Dues; Non-Compliance with Section 79(1) Cited.

  Case-Laws - HC : Attachment of accounts of the petitioner - recovery of tax dues of the third party - Prescribed procedure u/s 79(1) not followed - order of attachment set aside - However, the operation of the accounts shall kept in abeyance for a period of 10 days from the date of the receipt of a copy of this order. The respondents are at liberty to issue appropriate notice in accordance with the provisions of the TNGST Act, 2017 of the TNGST Rules, 2017 - HC
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Income Tax

• Unabsorbed Depreciation Can Offset Short-Term Capital Gains When Current Depreciation Exceeds Business Profits.

  Case-Laws - HC : Set-off of unabsorbed deprecation against short term capital gains - if current depreciation is deductible in the first place from the income of the business to which it relates and such depreciation amount is larger than the amount of the profit of that business, then such excess comes for absorption from profit and gains from any other business or business, if any, carried on by the Assessee. If a balance is left even thereafter, that becomes deductible from out of income from any source under any of the other heads of income during that year. In case there is still a balance leftover, it is to be treated as unabsorbed depreciation and taken to the next succeeding year. - HC
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• High Court: Reopening Tax Assessment on Same Grounds as Original is Not Allowed u/s 147.

  Case-Laws - HC : Reopening of assessment u/s 147 - Reason to believe - change of opinion - The reason we say that there is a change of opinion is because once a query has been raised during the assessment and query has been answered and accepted by the AO while passing the assessment order, it follows that the query raised was a subject of consideration of the AO while completing the assessment. This would apply even if the assessment order has not specifically dealt with that issue. - HC
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• Trust Misrepresented PAN Status in 2015-2016; Court Finds Potential Fraud in Section 12AA Registration Attempt.

  Case-Laws - HC : Assessment of the assessee trust v/s AOP - The earlier returns filed relatable to the first PAN number issued was as a firm, and not as an AOP. Obviously, in the AY 2015-2016, the assessee filed a fresh application for registering the very same institution as a charitable institution under Section 12AA of the Act, without surrendering the earlier PAN issued in the very same name. This was to avail the benefit of Section 12AA. - the assessee from the above facts is guilty of misrepresentation and even fraud; prima facie, from the above disclosed facts - HC
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• Assessee's Revenue Recognition Method Accepted; TDS Credit Limited to Taxed Amount by Commissioner of Income Tax (Appeals.

  Case-Laws - AT : Revenue recognition - Additions based on TDS statement 26AS - Assessee claimed a part of the amount as received in Advance while claiming the entire TDS credit in the same year - CIT(A) rightly accepted the revenue recogination based on accounting policy being followed by the assessee and restricting the TDS credit corresponding to the amount offered for tax - AT
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• Rejected Tax Claims Don't Always Mean Penalties u/s 271(1)(c) of Income Tax Act.

  Case-Laws - AT : Penalty u/s 271(1)(c) - A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. If the contention of the Revenue is accepted then in case of every Return, where the claim made is not accepted by the AO for any reason, the assessee will invite penalty u/s 271 (1) (C). That is clearly no the intendment of the Legislature. - AT
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• Expenditure Disallowed for AY 2016-17 Due to Earlier Payment; Upheld u/s 43B of Income Tax Act.

  Case-Laws - AT : Allowability of expenditure on service tax liability - since the amount was not paid during the F.Y. 2015-16, but it was actually paid in F.Y.2014-15 and earlier years the AO has rightly disallowed the impugned amount as un-allowable expenditure u/s. 43B of the Act for A.Y.2016-17.Therefore, in these facts and circumstances of the case we agree with the AO and upheld the disallowance. - AT
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• Section 41(1) Review: Assessee Given Chance to Prove Exemption Claim on Liability Write-Back with Evidence.

  Case-Laws - AT : Additions u/s 41(1) towards written back of liabilities - capital or revenue in nature - CIT(A) had also called for the details but assessee did not respond to the same. However, in the interest of justice and fair play, we find it proper to afford an opportunity to the assessee to substantiate its claim of exemption in respect of write back of its liabilities by adducing all the relevant documentary evidence and explanation - AT
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• Assessment Order Challenged for Missing Document Identification Number, Violating Circular Paragraph 3 Requirements.

  Case-Laws - AT : Validity of the assessment order - Absence of Document Identification Number (DIN) - even assuming that the Assessing Officer might have generated the DIN or had obtained approval of the concerned authority, however, since he has not incorporated the reasons of issuing the assessment order manually without DIN and date and number of approval in the body of assessment order, it does not comply with the conditions of paragraph 3 of the extant circular. - AT
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• Income Tax Act: Penalties u/ss 271D and 271E for Cash Loan Transactions Deleted After AO Enquiry.

  Case-Laws - AT : Penalty u/s 271D/271E - nature of transaction with other party - taking or repaying cash-loans contravention of sections 269SS/269T - other party is being assessed by the same AO and enquiry was made by the AO to ascertain the facts - Additions deleted - AT
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Customs

• Duty Demand Upheld for Fake DEPB Scrips; Penalty Removed Due to Lack of Fraud Intent.

  Case-Laws - AT : Recovery of duty by invoking extended period of limitation - fabricated DEPB scrips - The duty demand is sustained on the basis of fake scrips and not vested any right in the appellant. However, since there is no intention to the fraud/ forgery, the penalty imposed is set-aside. - AT
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• Dried Black Currants from Greece Classified as 'Raisins' Under Tariff Heading 0806 20 10, Eligible for Exemption Benefits.

  Case-Laws - AAR : Classification of goods intended to be imported - Dried Black Currants i.e. dehydrated dark and small seedless raisins from Greece and other countries - The goods intended to be imported as ‘raisin’ merit classification under 0806 20 10 - Benefit of exemption available - AAR
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FEMA

• Detention order invalidated due to 30-year delay in execution under COFEPOSA Act, section 7(1)(b). No action taken.

  Case-Laws - HC : Detention order - inordinate delay of thirty years in the execution of the detention order - In the facts of this case, no attempts had been made to contact or arrest the petitioner. There is no explanation forthcoming for not taking any action to trace the whereabouts of the petitioner, and also, after the gazette publication in the year 1995 under section 7(1)(b) of the COFEPOSA Act, there is no action taken to serve the detention order. - Detention order became invalid due to the passage of time. - HC
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Service Tax

• Tax Evasion Confirmed: Extended Assessment Period Applied Due to Nondisclosure in ST-3 Return, Intent to Evade Tax Found.

  Case-Laws - AT : Extended period of limitation - The very fact that the appellant is contesting the issue of invoking larger period of limitation, that the rendering of service under the ‘supply of tangible goods’ is accepted; but for survey, persuasion, etc., by the officials, the tax would have remained unpaid amounting to evasion of duty. The other fact that the rendering of service and the receipt is not shown in the ST-3 return thus clearly amounts to suppression of facts; and hence, it is a clear case of suppression of facts with intent to evade tax payment. - Demand confirmed - AT
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Central Excise

• Court Sets Aside Demand Due to Denial of Cross-Examination; Breach of Section 9D of Central Excise Act, 1944.

  Case-Laws - AT : Clandestine removal - In the light of sanctity of section 9D of Central Excise Act, 1994, the outcome of the notices can rest squarely on statements that comply thereon and any documents, including ‘data repository’, that are, substantially, unchallenged - The plea for cross-examination of witnesses were made before the adjudicating authority. Both were willfully and deliberately denied in breach of statutory mandate of section 9D of Central Excise Act, 1944. - Demand set aside - AT
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• Penalties on Employees for Differential Duty Unjustified Due to Lack of Direct Financial Benefit Evidence.

  Case-Laws - AT : Levy of penalty on employees of company - Recovery of differential duty - There is no evidence of any pecuniary benefit deriving to the two persons directly or indirectly. - As ‘limbs’ of their respective employer organizations, they may have had a role in the price-setting but with penalizing of the corporate entities that derived the benefit, it would be improper to penalize the ‘limbs’ for vicarious responsibility. - AT
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• Appeal Deadline Extended to Monday Due to Sunday Cutoff, Filed Timely on 22.09.2014 Per Section 10 Rules.

  Case-Laws - AT : Computation of period for filing of appeal in stipulated time - the admitted communication date of the Order-in-Original is 23.06.2014, which has to be excluded in terms of Section 9 above. Therefore, the commencement of the period shall be from 24.06.2014 and from that date 90 days completes on 21.09.2014 - 21st September, 2014 being a last date for filing appeal falls on Sunday, therefore in terms of Section 10 the appeal could have been validly filed on 22nd September, 2014, in this case the appeal was filed on 22.09.2014. Thus, the appeal was filed well within the stipulated period of 90 days. - AT
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VAT

• Show Cause Notice from January 4, 2011, Void for Lacking Assessing Authority's Satisfaction and Reasons, Violating Natural Justice.

  Case-Laws - HC : Power of review - error apparent on the face of record or not - the very initiation of the review proceedings pursuant to Show Cause Notice dated 04.01.2011 was void ab initio, as neither any satisfaction was recorded by the Assessing Authority nor any reason was assigned for initiation of review proceedings - It is a settled law that vague show cause notice lacking details amounts to violation of the principles of natural justice - HC
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Case Laws:

• GST

• 2023 (10) TMI 152
  Cancellation of GST registration of petitioner - appeal preferred by the petitioner has been dismissed by the respondent no.2 as barred by limitation as provided under section 107(4) of the UPGST Act - doctrine of merger - HELD THAT:- Admittedly from the perusal of the order dated 3.2.2023 it transpires that no reason has been assigned for cancellation of the registration of the petitioner. The order of cancellation is in the teeth of various judgments of this Court as also referred to above. The reasons are heart and soul of any judicial and administrative order. In absence of the same the order cannot be justified in the eye of law. Further since the appeal of the petitioner was dismissed on the ground of delay, this Court finds that the doctrine of merger will have no application considering the facts and circumstances of the present case. In Om Prakash Mishra [ 2022 (9) TMI 1051 - ALLAHABAD HIGH COURT ] this Court has held It is essential that every administrative authority or a quasi judicial authority should indicate the reasons, howsoever, brief they may be before passing an order of the nature which has been done by the authority. The order passed dated 15.03.2019 has a very harsh consequences and the same being without any reason whatsoever, fails to satisfy the test of a judicial order and suffers from the vice of violation of Article 14 of the Constitution of India, as such, the order dated 15.03.2019 is set aside with direction to the petitioner to file his response to the show cause notice before the respondent no.3 who shall pass fresh order after giving an opportunity of hearing to the petitioner with all expedition. The petitioner would be at liberty to place whatever documents he pleases to rely upon in support of his defense. The order dated 3.2.2023 passed by the Assistant Commissioner, respondent no.3 is hereby quashed - it is directed that the petitioner shall file reply to the show cause notice within a period of three weeks from today - Petition allowed.

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• 2023 (10) TMI 151
  Cancellation of GST registration of petitioner - Taxpayer is non existent - violation of principles of natural justice - HELD THAT:- A physical verification of the principal place of business was conducted on 25.05.2023 and the petitioner was found to be existent - the impugned order cancelling the petitioner s GST registration cannot be sustained as the said order has been passed in violation of the principles of natural justice. The petitioner was not issued any show cause notice proposing to cancel his GST registration number on any other ground other than that he was non-existent at the principal place of business. The Revenue submits that the petitioner has also defaulted in complying with the other provisions of the CGST Act and the rules made thereunder. The petitioner has not filed returns and there is also a substantial demand outstanding against the petitioner - it is not considered apposite to examine any of those issues in this petition. The concerned authorities had issued a demand cum show cause notice dated 10.08.2023 under Section 73 of the CGST Act. The respondents are not precluded from proceeding with the said demand cum show cause notice, however, insofar as the cancellation of the petitioner s GST registration is concerned, the same cannot be sustained. The impugned order is set aside - petition allowed.

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• 2023 (10) TMI 150
  Revocation of cancellation of petitioner s GSTN registration - appeal rejected on the ground that it was beyond the period of limitation - HELD THAT:- There is a consistent view taken in these matters. The revenue has not challenged any of such orders of this Court and hence the orders have attained finality. In view of the fact that this Court has been consistently following the directions issued in the case of TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. [ 2022 (2) TMI 933 - MADRAS HIGH COURT] and the Revenue/Department has also accepted the said view as evident from the fact that no appeal has been filed in any of the matters, this Court intends to follow the above order of this Court. This Court is of the considered opinion that the benefit extended by this Court in the earlier orders referred to above in Suguna Cutpiece Centre s case, may be extended to the Petitioner. The impugned order is quashed and the respondents shall follow the same directions mentioned in Suguna Cutpiece Centre - Petition disposed off.

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• 2023 (10) TMI 149
  Cancellation of GST registration of petitioner - non-filing of returns during the month of October, November and December 2022 - HELD THAT:- The petitioner appears to be a person engaged in Automobile spare parts. The learned counsel for the petitioner submits that the petitioner has filed a return on 17.02.2023. However, there are no records to substantiate the same. Be that as it may, Court is inclined to permit the petitioner to pursue the appellate remedy before the Appellate Commissioner under Section 107 of the TNGST Act, 2017, within a period of 30 days from the date of receipt of a copy of this order - petitioner shall however pre-deposit a sum of Rs.15,000/- along with the appeal over and above any amount that is due from the petitioner which shall be subject to final appropriation/adjustment, after order is passed by the Appellate Commissioner. Petition disposed off.

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• 2023 (10) TMI 148
  Refund of IGST - Zero Rated Supplies - Inaction on the part of the respondents not to sanction the refund claims of IGST on exported goods - Petitioner submitted that, they had inadvertently selected A suffixed with the serial number in the drawback notification which provides for higher drawback rates concerning cases where CENVAT facility has not been availed, instead of B which provides for lower draw back for cases that are otherwise. It was their case that the excess drawback on account of availing of CENVAT credit facility had been repaid with interest and therefore the petitioner is entitled to the refund of IGST in respect of the shipping bills. HELD THAT:- It is not in dispute that the issue is covered by a decision of this Court in the case of Amit Cotton [ 2019 (7) TMI 472 - GUJARAT HIGH COURT] which was subsequently followed in the case of Real Prince Spintex Private Limited [ 2020 (3) TMI 614 - GUJARAT HIGH COURT] . Before the coordinate bench of this Court, it was the case of the petitioner therein that it was eligible to seek refund of IGST in accordance with the provisions of the Act inasmuch as the export supplies were Zero Rated Supplies . The Revenue had disputed the claim relying on the very notification dated 31.10.2016 after having considered the issue at hand especially Sections 16 and 54 of the CGST Act, the Division Bench of this Court held the writ-applicant is entitled to claim the refund of the IGST. Relying on a decision of the Supreme Court in the case of J.K. Laxmi Cement Limited v. Commercial Tax Officer, Pali [ 2016 (9) TMI 721 - SUPREME COURT] , the Division Bench held that the circular cannot run contrary to the statutory rule, more particularly, Rule 96. The Division Bench therefore, held that the circular had nothing to do with IGST refund. The petition was allowed directing the respondents to immediately sanction the refund of IGST. The respondents are directed to sanction the refund of IGST paid in context of shipping bills mentioned with simple interest @ of 6% from the date of the shipping bills till the date of actual refund - petition allowed.

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• 2023 (10) TMI 147
  Principles of natural justice - ex-parte order - failure to file reply to SCN - Seeking one more chance to first reply to the SCN and then appear before the assessing authority - HELD THAT:- A perusal of the impugned order reveals that it was passed ex parte. In fact, the Petitioner was unable to appear and did not even file a reply to the show cause notice (SCN) dated 23rd February, 2023 issued to him preceding the above assessment order - In the petition, the Petitioner has explained how he was suffering from Back Ache disease for which he was receiving treatment. The medical certificate has also been enclosed. The Court is of the view that the Petitioner ought to be given one more chance to first reply to the SCN and then appear before the assessing authority for a fresh assessment order to be passed in accordance with law. The impugned assessment order set aside - petition disposed off.

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• 2023 (10) TMI 146
  Proper communication of notices or not - mismatch between the details in Form GSTR-1 and Form GSTR-3B - HELD THAT:- The discrepancy appears to arises on account of the amount deducted by the deductor and declared in Form GSTR-7 which requires to be explained by the petitioner. The Court is of the view, the petitioner therefore deserves a fair chance as admittedly there appears to be a discrepancy in the turn over pointed out in Form GST ASMT-10 dated 21.03.2022. and in Form GSTR-1 and Form GSTR-3B - Court is not inclined to direct the petitioner to approach the Appellate Authority as the matter would require a proper consideration, so that in case of any other discrepancy, the matter can be later decided in hierarchy of the Appellate Forum prescribed under the TNGST Act, 2017. The impugned order set aside - matter remitted back to the respondent to pass a fresh order on merits and in accordance with law within a period of three months from the date of receipt of a copy of this order - petition disposed off.

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• 2023 (10) TMI 145
  Levy of penalties u/s 74(9) read with Section 122(2)(b), 122(1)(i) and 125 of the Central Goods and Service Tax Act issued by the 1st respondent - return filed by petitioner not accepted by 1st respondent - classification dispute - evasion of tax - HELD THAT:- As per the Judgment of this Court in the case M/S. CHAKKIATH BROTHERS VERSUS THE ASSISTANT COMMISSIONER, COMMERCIAL TAXES SPECIAL CIRCLE-1, ERNAKULAM [ 2014 (6) TMI 974 - KERALA HIGH COURT] on the basis of a mere dispute in classification, no penalty proceedings can be initiated. In the present case also there is a dispute of classification. In the impugned order the authority had not considered the judgment of this Court in the case Chakkiath Brothers v. Assistant Commissioner. The matter needs to be remanded back to the 1st respondent for passing a fresh order in accordance with law, after taking into consideration the Judgment in the case Chakkiath Brothers v. Assistant Commissioner - matter is remanded back to the file of the 1st respondent to decide the penalty proceedings - Petition allowed by way of remand.

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• 2023 (10) TMI 144
  Direction to pay the difference percentage of 10% GST on the original agreed contract value to this petitioner company in respect of contracts signed before the implementation of GST - HELD THAT:- It appears in accordance with G.O.Ms.No.296, Finance [Salaries] Department dated 09.10.2017, the respondents have also directly remitted tax due. Now, the petitioner is facing proceedings under the provisions of the Central Goods and Services Tax (CGST) Act, 2017 on the interest on account of delayed/belated payment of tax. Hence, the petitioner has sent representations dated 09.09.2021 and 13.04.2023 for asking the respondent to bear the incidence of the interest on account of the delayed/belated payment of tax - learned Standing Counsel for the respondent submits that the petitioner representations dated 09.09.2021 and 13.04.2023 will be considered and disposed on merits and in accordance with law within a period of six weeks from the date of receipt of a copy of this order. Petition disposed off.

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• 2023 (10) TMI 143
  Parallel proceedings or not - Multiple investigations being conducted by the different authorities in respect of the supply of goods received and made by the petitioner - diversion of agriculture urea for sale as technical grade urea - wrongful availment of the ITC - HELD THAT:- The focus of the DGGI s investigation is somewhat different from the focus of the investigation being commenced by the Jurisdictional Commissionerate. The Jurisdictional Commissionerate is not investigating the diversion of agricultural grade urea. However, it cannot be disputed that the investigation regarding the availment of the ITC is common to the investigations conducted by both the authorities. There are no multiple proceedings in regard of the central and the state officers being authorized as proper officers, Clause (b) of Section 6(2) of the Act provides that where a proper officer under the SGST Act and the UGST Act has initiated proceedings on a subject matter, the proper officer under the Act would not initiate proceedings on the same subject matter . This provision of CGST is also mirrored by Clause (b) of Section 6(2) of the SGST Act and UGST Act as well. Thus, where a proper officer under the CGST Act had initiated proceedings on a subject matter, no proceedings would be initiated by proper officer authorized under the SGST Act or UGST Act on the same subject matter. In the present case, the focus of investigation by the DGGI was in respect of the diversion of agriculture urea for sale as technical grade urea. The issue regarding wrongful availment of the ITC is also inextricably linked with the subject matter of investigation by respondent no. 3. In terms of Section 6(2)(b) of the Act, where a proper officer has initiated the proceedings in respect of the subject matter, no proceedings in respect of the same subject matter are required to be initiated by a proper officer under the said Act and the SGST Act and vise versa. Confining the proceedings to silos of a subject matter may in certain cases lead to parallel proceedings. Therefore, the device of transferring investigations or proceedings inter se proper officers to ensure that a taxpayer is not subjected to parallel proceedings, in effect, subserves the object of Section 6(2)(b) of the CGST/SGST/UGST Act - It cannot be accepted that the provisions of Section 6(2)(b) of the Act can be interpreted to proscribe consolidation of investigation or proceedings in a single authority where warranted. The petitioner s insistence on the authority which should conduct the investigation is unjustified. As noted, at the outset, the petitioner s grievance was in respect of conduct of parallel proceedings. The said grievance perished with respondent no. 3 agreeing to the DGGI continuing the investigation from the stage, as obtaining before it. Petition disposed off.

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• 2023 (10) TMI 142
  Claim for Complementary refund by the GST authorities to the IRCTC - HELD THAT:- Such complementary refund to the IRCTC shall be considered by the GST authorities in accordance with law. However, there cannot be any doubt that the petitioner is entitled to a refund of the GST component from the IRCTC. Petition is disposed of by directing the IRCTC to refund the GST component to the petitioner, in view of the cancellation of the licence between the parties by mutual agreement, as expeditiously as possible, positively within three weeks from date.

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• 2023 (10) TMI 141
  Maintainability of writ petition - gross delay in filing appeal - jurisdiction under Article 226 of the Constitution of India to interfere with appealable orders - HELD THAT:- It is required to immediately notice that the assessment order is for the assessment year 2019-2020 and there cannot be a contention raised that it was during the transition period that the assessee failed to upload the return. The petitioner also claimed that there is an excess amount of tax paid which is liable to be refunded. The appeal was filed only on 09.12.2022 without annexing a certified copy of the assessment order which was to be filed within seven days from that date. Despite opportunity given to the petitioner by the appellate authority to file certified copy of the assessment order on 24.01.2023, 08.02.2023 and 06.03.2023, he did not file the same and accordingly, the appeal was rejected on the ground that the petitioner is not interested in the matter and that the appeal was also filed after lapse of twenty months. Though twenty months cannot be deemed to be the delay occasioned, it was not within the time provided under section 107(4) of the BGST Act. The Hon ble Supreme Court In Re: Cognizance For Extension of Limitation [ 2022 (1) TMI 385 - SC ORDER ] due to the pandemic situation saved the limitation between 15.03.2020 till 28.02.2022. Therein, due to the pandemic situation limitation was saved between 15.03.2020 till 28.02.2022. It was also directed that an appeal could be filed within ninety days from 01.03.2022. Hence, an appeal could have been filed on or before 29.05.2022, which provision was not availed by the petitioner herein. The Hon ble Supreme Court also declared that if a longer period than 90 days is provided in a Statute, then that longer period will apply. There are no reason to invoke the extraordinary jurisdiction under Article 226, especially since it is not a measure to be employed where there are alternate remedies available and the assessee has not been diligent in availing such alternate remedies within the stipulated time. It is to be noticed that the contours of the jurisdiction under Article 226 of the Constitution of India to interfere with appellable orders laid down by the Hon ble Supreme Court in STATE OF HP. AND OTHERS VERSUS GUJARAT AMBUJA CEMENT LTD. AND ANOTHER (AND OTHER APPEALS) [ 2005 (7) TMI 353 - SUPREME COURT ]. It has been held that if an assessee approaches the High Court without availing the alternate remedy, it should be ensured that the assessee has made out a strong case or that there exists good grounds to invoke the extraordinary jurisdiction. While reiterating that Article 226 of the Constitution confers very wide powers on the High Court, it was clarified that nonetheless the remedy of writ is an absolutely discretionary remedy. The High Court, hence, can always refuse the exercise of discretion if there is an adequate and effective remedy elsewhere - The High Court would also interfere if it comes to a conclusion that there is infringement of fundamental rights or where there is failure of principles of natural justice or where the orders and proceeding are wholly without jurisdiction or when the vires of an Act is challenged. There is no such plea made by the petitioner in the present case against the impugned order. Petition dismissed.

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• 2023 (10) TMI 140
  Attachment of accounts of the petitioner - recovery of tax dues of the third party - alleged dues of Tvl SMIS Industrial Consultancy Services (P) Limited to the Commercial Tax Department - compliance with mandatory procedure prescribed under Section 79(1)(c) of the TNGST Act, 2017 read with Rule 145(1) of TNGST Rules, 2017 or not - HELD THAT:- There is no merits in the impugned order seeking to attach the accounts of the petitioner without proper notice as is contemplated under Section 79(1)(c)(i) of the TNGST Act read with Rule 145(1) of the Act. The impugned order is set aside. However, the operation of the accounts shall kept in abeyance for a period of 10 days from the date of the receipt of a copy of this order. The respondents are at liberty to issue appropriate notice in accordance with the provisions of the TNGST Act, 2017 of the TNGST Rules, 2017 - Petition disposed off.

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• Income Tax

• 2023 (10) TMI 139
  Reopening of assessment - allegations levelled against the petitioners/assessees are that they are beneficiaries of accommodation entry provided by one Mr Ankit Jain, proprietor of Rishabh Trading Company - what s the relevant material available with AO which persuaded him to trigger the reassessment proceedings against the petitioners/assessees? HELD THAT:- As referring to answer furnished by Mr Ankit Jain this was the only part of the statement that Respondent could rely upon in support of his stance that there was material available to establish under-invoicing being carried on. At the highest, what can be stated in favour of the respondents/revenue is that Mr Ankit Jain has accepted the fact that cash transactions were made outside the books of account. Significantly, there is, however, no reference to the petitioners/assessees. Revenue has not been able draw our attention to any part of the statement which refers to the petitioners/assessees - respondent in our view, cannot but accept that the documents evidencing approval, if any, granted for commencement of reassessment proceedings against the petitioners/assessees ought to have been furnished to the petitioners/assessees. Thus we are of the view that best option available to the AO would be to go back to the drawing board and if deemed necessary, reinitiate the proceedings against the petitioners/assessees, albeit, as per law. Accordingly, the impugned notices and order are set aside with liberty to the AO to recommence the proceedings, having regard to what is stated hereinabove

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• 2023 (10) TMI 138
  Set-off of unabsorbed deprecation against short term capital gains - ITAT held that unabsorbed depreciation of the years in question could be set-off only against the profits and gains of subsequent assessment years - HELD THAT:- As decided in M/S GUNNEBO INDIA PVT. LTD. [ 2019 (2) TMI 1872 - BOMBAY HIGH COURT] has quoted the relevant portion of the order of ITAT which had dismissed the revenue s appeal where ITAT has held that as per the provisions of Section 32(2) of the Act read with Sections 70, 71 and 72 of the Act it becomes very clear that the total depreciation comprising of the depreciation of the relevant assessment year along with the unabsorbed depreciation of the earlier years becomes the total current year s depreciation which is allowed to be set-off against income under any head of income including long term capital gain and hence did not find any reason to interfere with the order of CIT(A). The High Court has also quoted relevant paragraph from General Motors [ 2012 (8) TMI 714 - GUJARAT HIGH COURT] where there is reference to a Circular No. 14 of 2001 issued by the CBDT where the Court has held that the unabsorbed depreciation was available for carry forward and set-off in the subsequent assessment year. In the appeal at hand, the ITAT, in the impugned order, after relying on General Motors (supra), has incorrectly come to a conclusion that the Assessee has claimed set-off of the impugned unabsorbed depreciation against the income under the head capital gain which is not permissible. This is totally contrary to the conclusion of the co-ordinate bench of the ITAT in Gunnebo (supra) where, as quoted above, the ITAT has held that the unabsorbed depreciation of earlier years become the total current year depreciation which is allowed to be set-off against income under any head of income including long term capital gain. As stated in General Motors (supra) with which we are in respectful agreement, if current depreciation is deductible in the first place from the income of the business to which it relates and such depreciation amount is larger than the amount of the profit of that business, then such excess comes for absorption from profit and gains from any other business or business, if any, carried on by the Assessee. If a balance is left even thereafter, that becomes deductible from out of income from any source under any of the other heads of income during that year. In case there is still a balance leftover, it is to be treated as unabsorbed depreciation and taken to the next succeeding year. We hold that ITAT was not justified. Assessee should be permitted to set off of the unabsorbed depreciation against short term capital gains.

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• 2023 (10) TMI 137
  Reopening of assessment u/s 147 - Reason to believe - change of opinion - HELD THAT:- The law as held in Siemens Financial Services [ 2023 (9) TMI 552 - BOMBAY HIGH COURT] is clear that reopening of assessment is not permissible based on change of opinions as the AO does not have any power to review his own assessment when during the original assessment Petitioner has provided all the relevant information which was considered by the AO before passing the assessment order u/s 143(3. The reason we say that there is a change of opinion is because once a query has been raised during the assessment and query has been answered and accepted by the AO while passing the assessment order, it follows that the query raised was a subject of consideration of the AO while completing the assessment. This would apply even if the assessment order has not specifically dealt with that issue. It is not necessary that an assessment order should contain reference and/or discussion to disclose his satisfaction in respect of the query raised. As held in Aroni Commercials Ltd [ 2014 (2) TMI 659 - BOMBAY HIGH COURT] if an AO has to record the consideration bestowed by him on all issues raised by him during the assessment proceedings even where he is satisfied, then it would be impossible for the AO to complete all the assessment which are required to be scrutinized by him under Section 143(3) of the Act. Therefore, it would follow that the reopening of the assessment by the impugned notice is merely on the basis of change of opinion from that held earlier during the course of assessment proceedings that led to the passing of the assessment order - In our view, this change of opinion does not constitute justification to believe that income chargeable to tax has escaped assessment.

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• 2023 (10) TMI 136
  Reopening of assessment u/s 147 - Reason to believe - notice beyond period of four years - transactions have resulted in net capital loss on foreign exchange derivatives, being notional and contingent in nature, it is not an allowable expenditure u/s 37(1) - HELD THAT:- A basis for issuance of notice was the fact that the requisite materials as noted in the reasons were embedded in such a manner that material evidence would not be discovered by the Assessing Officer and could have been discovered with due diligence and therefore, the provisions for Explanation-1 of Section 147 would attract. Having considered the submissions made by the learned counsels for the respective parties on reading the reasons recorded it is evident that it was for the Assessment Year 2014-15 and while recording the brief details of the assessment that fact is taken note of. Admittedly therefore, it is a case where the assessment or exercise of re-opening the assessment is beyond the period of four years and therefore, the petitioner would succeed only on this ground. Even otherwise, on the submission of the concept of change of opinion having considered the fact that for the very issue, when a notice under Section 142(1) of the Act, 1961 was given to the petitioner to which the petitioner responded on 13th November, 2017 and that very submission was the basis to have triggered the reassessment exercise, it is clearly an exercise which would tantamount to have undertaken on the basis of change of opinion. In light of the decision in case of Kelvinator of India Limited [ 2010 (1) TMI 11 - SUPREME COURT] the petition succeeds on this ground too.

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• 2023 (10) TMI 135
  Assessment of the assessee trust v/s AOP - Validity of revisional order - petitioner could not upload the returns online as an Association of Persons as petitioner was issued with a wrong PAN No. as a firm and not as an AOP - assessee had earlier registered as a firm and the said firm had subsequently registered as an AOP with a Certification of Exemption obtained u/s 12AA - The attempt in change of the registration was only to get the benefit of a charitable institution - revisional authority in fact found that though the challenge was related to the assessment carried out against the assessee, a firm, who was issued with PAN No. AAGFB5910L but the requisite fee was filed against the new PAN account. The application of the assessee hence was dismissed as not maintainable - HELD THAT:- We are not convinced that there is any valid argument against the assessment of the assessee as a firm with PAN No. AAGFB5910L for the year AY 2017-2018. The assessee admits that an application was filed as an AOP but the registration was issued as a firm; which is hard to believe, especially since the assessee claims that from the time of its registration in 2004, the assessee had been regularly filing returns, an authenticated copy of which has not been produced here. The earlier returns filed relatable to the first PAN number issued was as a firm, and not as an AOP. Obviously, in the AY 2015-2016, the assessee filed a fresh application for registering the very same institution as a charitable institution under Section 12AA of the Act, without surrendering the earlier PAN issued in the very same name. This was to avail the benefit of Section 12AA. We are of the opinion that the assessee from the above facts is guilty of misrepresentation and even fraud; prima facie, from the above disclosed facts. We do not say anything about the measure employed for obtaining the registration under Section 12AA, but however, leave it to the Income Tax Officer to take appropriate proceedings As to the challenge against the assessment made, we are convinced that there is absolutely no reason to interfere with the original order or the revisional order.

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• 2023 (10) TMI 134
  Revenue recognition - Additions based on TDS statement 26AS - Assessee claimed a part of the amount as received in Advance - entire Tax Deducted as Source (TDS) corresponding to the contractual receipts has been claimed by the Assessee - CIT(A) directed the AO to delete the addition and also restrict the TDS claim made by the assessee in the year under consideration only in respect of the income for the assessment year 2008-09 as per accounting policy followed by the assessee. - HELD THAT:- As there is no dispute regarding the preparation of the financial statement by the assessee as per AS-9, wherein the assessee offered to tax the income to the extent of project completed and the balance amount was considered as advance, we are of the considered view that the learned CIT(A) correctly directed the AO to delete the addition which was declared as advance by the assessee in the year under consideration and offered to tax in the subsequent year on the basis of project completion. We also do not find any infirmity in the directions of the learned CIT(A) to restrict the credit of TDS only with respect to the income of Rs. 9,79,79,884 for the assessment year 2008-09 and the balance excess claim for TDS be allowed in the subsequent years in which the income has been offered to tax as per the consistent accounting practice followed by the assessee. Accordingly, the impugned order passed by the learned CIT(A) is upheld and the grounds raised by the Revenue are dismissed.

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• 2023 (10) TMI 133
  Penalty U/s 271(1)(c) - disallowance the claim of deduction u/s. 10(34) namely dividend income received by the assessee - HELD THAT:- As it is clear from assessment and reassessment proceedings in the case of the assessee for earlier assessment years 2008-09 to 2012-13, the Ld. A.O. has not levied Penalty u/s. 271(1)(c) for furnishing inaccurate particulars of income on the very same issue of claim u/s. 10(34) on the dividend income received by the assessee. However only for the present A.Y. 2013-14, A.O. levied penalty, which is inconsistent with that of the earlier assessment years. Hon ble Supreme Court of India in the case of Reliance Petroproducts Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] has held the words inaccurate particulars mean that the details supplied in the Return are not accurate, not exact or correct, not according to truth or erroneous. In the absence of a finding by the AO, that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false, there would be no question of inviting penalty u/s 271(1)(c). Argument of the revenue that submitting an incorrect claim for expenditure would amount to giving inaccurate particulars of such income is not correct. By no stretch of imagination can the making of an incorrect claim in law, tantamount to furnishing inaccurate particulars. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. If the contention of the Revenue is accepted then in case of every Return, where the claim made is not accepted by the AO for any reason, the assessee will invite penalty u/s 271 (1) (C). That is clearly no the intendment of the Legislature. Thus penalty deleted - Decided in favour of assessee.

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• 2023 (10) TMI 132
  Undisclosed cash receipts including cash deposits into the bank account - addition is called for in the hands of the deceased assessee on account of cash deposits to the bank accounts - exempt agricultural income as not been allowed by the AO - HELD THAT:- We are in agreement with the contention of Ld. AR that an amount received by the assessee on sale of crop is never mentioned in the Revenue records and thus, the basis taken by the AO for rejecting factum of cash consideration received against sale of crop is not correct and sustainable. Undisputedly, the assessee has shown exempt agricultural income in his return of income which cannot be disputed merely on the basis of suspicion or doubts. Therefore, we are inclined to agree with the contention of the assessee that assessee earned exempt agricultural income as a result of agricultural activity on the agricultural land and the assessee submitted documentary evidence before the AO in the form of Revenue records issued by Tehsildar Jewar. Cash gift receipt - AO has rejected the same by observing that the assessee has not submitted other cooperative evidence with regard to the identity, creditworthiness of the person giving advance gift - The copy of gift and copy of confirmation in the form of affidavit clearly reveals that Smt. Rajbati at the time of giving cash gift to the assessee and his brother Shri Krishna Kumar Sharma executed gift deed on stamp paper and again confirm the same fact in the affidavit sworn on 04.11.2019, therefore, the identity and capacity of cash gift provider cannot be disputed. AO was not satisfied with the explanation and documentary evidence filed by the assessee then he could have show caused the assessee asking him to produce the donor or he could have called the donor Smt. Rajbati directly by issuing summon/notice u/s 131 or 133(6) of the Act but there was no such exercise by the AO before dismissing the contention of the AO and dismissing the claim of assessee about receipt of cash gift from his sister in law Smt. Rajbati. It is not the case of the AO that the assessee has rooted his own unaccounted income through his sister in law in the garb of gift. Therefore we agree with the contention of assessee that the assessee received cash gift from his sister in law as per last wish of his elder brother Shri Madan Mohan Sharma. Advances receipt against agreement to sale of plot owned by him, from his brother - As noted that from the copy of gift deed and affidavit of gift provider reveals that as per last wish of her husband sister in law of assessee gifted cash to assessee and younger brother and gift deed as well as affidavit sworn on 04.11.2019. In the said gift deed and affidavit, she supported the fact that the gifts in cash were given to assessee as well as to his brother - Therefore, availability of cash of Rs. 2 lakhs which Shri Krishna Kumar Sharma on 28.05.2010 i.e. during FY 2010-11 pertaining assessment year under consideration 2011-12 cannot be doubted or disbelieved. Regarding remaining amount of advance of Rs. 4 lakhs the documentary evidence on record is not sufficient to establish capacity and creditworthiness of Shri Krishna Kumar Sharma hence, explanation of assessee to this extend is partly dismissed. Therefore, in view of foregoing discussion explanation of assessee is partly allowed.

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• 2023 (10) TMI 131
  Penalty levied u/s 271C - irregularities of non-deduction of tax at source on various payment were observed - HELD THAT:- Since the order u/s 201(1)/201(1A) of the Act has already been cancelled by CIT(A) and therefore, the penalty levied u/s 271C of the Act also cannot survive. Decided in favour of assessee.

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• 2023 (10) TMI 130
  TDS u/s 194J - Tax on fees for professional and technical services - Assessee by filing its of income u/s 44AD of the Act shown its income @8% on receipts from the business of consultancy qua stamp duty and registration - AO/CPC added the income @50% u/s 44 ADA of the Act, which resulted into making the addition - HELD THAT:- As both the authorities below applied the provisions of section 44ADA of the Act, which in fact deals with persons carrying on legal, medical, engineering or architectural profession or profession of accountancy, technical consultancy or interior decoration or any other profession as is notified by the Board in the official gazette. Admittedly the Assessee is just a 10th/matriculation passed and do not have any qualification to act as a legal, medical, engineering or architectural professional or professional accountancy or technical consultancy of interior decoration or any other profession as is notified by the Board in the official gazette, as prescribed under section 44AA of the Act. As the Assessee s case does not fall under the provisions of section 44ADA of the Act and therefore the addition sustained by the learned Commissioner to the extent is liable to be deleted. Appeal filed by the Assessee stands allowed.

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• 2023 (10) TMI 129
  Allowability of expenditure on service tax liability - AO held that payment of service tax is covered under section 43B of the Income Tax Act and same is allowable in the year of payment only - HELD THAT:- The impugned service Tax liability was actually paid by the Assessee in FY 2014-15. As per Section 43B and as per the law enunciated by Hon ble SC Maruti Suzuki India Ltd [ 2020 (2) TMI 376 - SUPREME COURT] the amount of deduction is available only when it is actually paid during the year irrespective of the accrual of actual liability as per the relevant statute. The assessee had claimed that the Liability was not crystallized in FY 2014-15 and assessee paid the amount under protest. Assessee claimed that the impugned service Tax Liability was crystallized only in F.Y.2015-16 after the Order of Pr. Commissioner Service Tax Pune dated 30/10/2015. Service Tax Liability arises when the services are performed. The impugned services were actually performed in financial years prior to F.Y.2015-16. There is no dispute about these facts. Superintendent of Central Excise Service Tax had passed the order in F.Y.2014-15 directing the assessee to pay the Service Tax for the Services provided from July, 2012 to March, 2014. Therefore, the liability to pay the service Tax had arisen in earlier financial years and the contention of the assessee is rejected that the demand was not crystallized. Thus, in the case of United Glass Manufacturing CO [ 2012 (9) TMI 914 - SUPREME COURT] allowed deduction u/s 43B, of Sales tax paid on estimate basis. Therefore, no merit in the argument of the assessee that the Liability of Service Tax was not crystallized during F.Y.2014-15 and it was crystallized only in F.Y.2015-16, though the Service Tax amounts were paid in F.Y.2014-15. In this case since the amount was not paid during the F.Y. 2015-16, but it was actually paid in F.Y.2014-15 and earlier years the AO has rightly disallowed the impugned amount as un-allowable expenditure u/s. 43B of the Act for A.Y.2016-17.Therefore, in these facts and circumstances of the case we agree with the AO and upheld the disallowance. Decided against assessee.

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• 2023 (10) TMI 128
  Revision u/s 263 - Unexplained cash deposit to the bank account of assessee - HELD THAT:- AO has made all necessary efforts and inquiry about the source of cash deposit to the bank account of assessee and thereafter accepted the claim of assessee explaining the source of cash deposit as fees received in cash from the students of Mount Litera School, which was run and owned by the trust in which assessee was top office bearer. The resolution reveals that the trustees agreed and resolved that till the bank account of trust is opened the amount of cash received as fees will be deposited to the personal saving account of the assessee. From copy of income and expenditure account for the year ended on 31.03.2016 it is clear that the trust has shown fee receipt during the year and said amount includes the cash deposit to the bank account of assessee with ICICI bank. Therefore when the impugned amount was included and shown in the income and expenditure account of trust then the factual position clearly reveals the source of cash deposited to the bank account of assessee. Therefore we are unable to see any valid reason to allege the assessment order as erroneous and prejudicial to the interest of revenue and hence we are inclined to hold that the ld. PCIT was not validly empowered to invoke revisionary provision of sec 263 - Decided in favour of assessee.

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• 2023 (10) TMI 127
  Reopening of assessment u/s 147 - Reasons to believe - Additions u/s 41(1) towards written back of liabilities - capital or revenue in nature - assessee submitted that there is no whisper in the reasons recorded by the AO about failure on the part of the assessee to disclose truly and fully, all material facts necessary for the assessment rendering reassessment proceedings invalid - HELD THAT:- From the perusal of the records, it is evident that no where assessee has made a request before the Ld. AO for the supply of reasons to believe. We note that the same are recorded on the order sheet of the assessment proceedings and on the same order sheets, the authorised representative of the assessee is a signatory to various entries made therein. AO in the impugned assessment order has recorded the fact of intimation about the reason of reopening to assessee in the course of assessment. Even in the written submission placed before us, what the assessee is challenging that reasons were not provided before the commencement of reopening proceeding though they were furnished in the course of reassessment proceeding because of which assessee was denied the opportunity to raise objection for reopening. We find that claim of the assessee is not in accordance with the procedural mandate given in the case of GKN. Driveshaft [ 2002 (11) TMI 7 - SUPREME COURT] and, therefore, has no legs to stand. It is a fact that original return was processed u/s. 143(1) of the Act. There was no scrutiny assessment u/s. 143(3) of the Act. In respect of claim of the assessee that there is no allegation recorded by the Ld. AO of failure on the part of the assessee about the full and true disclosure of all material facts necessary for assessment, we find that this condition is stipulated in first proviso to section 147 wherein requirement of assessment u/s. 143(3) is a pre-condition to record such an allegation by the Ld. AO, if an action is sought to be taken up under this section after the expiry of four years from the end of the relevant assessment year. Thus, even this contention of the ld. Counsel of the assessee fails. Additions u/s 41(1) towards written back of liabilities - capital or revenue in nature - Keeping the above judgment of MAHINDRA AND MAHINDRA LTD. THRG. M.D. [ 2018 (5) TMI 358 - SUPREME COURT] in the context of facts of the present case before us, it is not discernible from the records and details furnished by the assessee that the liabilities written back were receipts in the nature of cash or money or are towards trading liability for which deduction has been claimed in earlier years as well as status of deduction towards interest thereon. What the assessee has placed on record are the ledger accounts which is not adequate to ascertain their nature so as to bring them within the ambit of the judgment of Hon ble Supreme Court referred above. CIT(A) had also called for the details but assessee did not respond to the same. However, in the interest of justice and fair play, we find it proper to afford an opportunity to the assessee to substantiate its claim of exemption in respect of write back of its liabilities by adducing all the relevant documentary evidence and explanation, for which we remit the matter back to the file of ld. AO in this respect. Ld. AO is directed to verify the evidence and explanation furnished by the assessee, keeping in perspective, the aforesaid judgment of the Hon ble Supreme Court and allow the claim in accordance with the provisions of law. Assessee be given reasonable opportunity of being heard who is also directed to be diligent in complying with the requirements before the ld. AO for its effective disposal. Appeal of the assessee is partly allowed for statistical purposes.

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• 2023 (10) TMI 126
  Validity of the assessment order as it does not contain computer generated Document Identification Number (DIN) - Rejection of assessment order manually without DIN - No reasons were recorded by the AO - HELD THAT:- It is fairly well settled, a circular issued u/s. 119 of the Act has statutory force and is binding on subordinate authorities working under the CBDT. A perusal of the impugned assessment order makes it clear that in the body of the assessment order, the Assessing Officer has neither recorded the reasons for issuing the assessment order manually without DIN nor the date and number of approval of the Chief Commissioner/Director General of Income-tax. Therefore, even assuming that the Assessing Officer might have generated the DIN or had obtained approval of the concerned authority, however, since he has not incorporated the reasons of issuing the assessment order manually without DIN and date and number of approval in the body of assessment order, it does not comply with the conditions of paragraph 3 of the extant circular. Thus, in such a situation, as per paragraph 4 of the said circular, the assessment order has to be treated as invalid and shall be deemed to have never been issued. Thus as relying on BRANDIX MAURITIUS HOLDINGS LTD. [ 2023 (4) TMI 579 - DELHI HIGH COURT] and paragraph 4 of the circular No. 19/2019 dated 14.08.2019 the impugned assessment order is invalid and shall be deemed to have never been issued. Decided in favour of assessee.

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• 2023 (10) TMI 125
  Penalty u/s 271D/271E - nature of transaction with other party - taking or repaying cash-loans contravention of sections 269SS/269T - other party is being assessed by the same AO and enquiry was made by the AO to ascertain the facts - HELD THAT:- Despite a simultaneous search on the assessee as well as Shri Laxmi Narayan and despite centralization of assessments of assessee and Shri Laxmi Narayan in the same AO, the Ld. AO has not made any enquiry whatsoever qua the alleged transactions from Laxmi Narayan Shivhare. We agree with the submission of Ld. AR that when the case of Laxmi Narayan Shivhare was very much assessed by same AO, the AO ought to have examined from Laxmi Narayan Shivhare as to whether he had really made loans to assessee or not and if yes, then whether he had explainable sources or not? Before us, Ld. AR has made a clear assertion that no such exercise was done by AO and that AO has not made any addition u/s 69/69A/69B in the hands of Laxmi Narayan Shivhare. Secondly, on a prima facie perusal of LPS-01-Page 135 , we find that there are transactions of Demand-Draft, Cheques, Plots, lands, etc. noted in the said document and at the end of document, there is a mention of deposit of Rs. 33,13,000/- at the showroom. Apparently, these transactions do not speak of cash-loans having been taken/repaid by assessee from Laxmi Narayan Shivhare. Therefore, the contentions raised by AR are very much meritorious which Ld. DR could not contradict or rebut. In these circumstances, we are unable to sustain the view taken by lower-authorities. Decided in favour of assessee. Penalty u/s 271D qua the alleged loans taken from other persons - AR submitted that although a search u/s 132 was also conducted upon assessee but the assessee never claimed to have taken loans for explaining source of any cash, jewellery, asset, investment found during search or any entry in the books of account in any of the assessment-years involve - HELD THAT:- ssessee being in liquor business, the possibility of bringing cash from shops cannot be ruled out. Secondly, we find merit in AR s submission that if the AO really believed that the assessee had taken loans from different persons, the AO ought to have made enquiries from those persons and examined whether they had explainable sources of giving loans to assessee or not. Needless to mention that the enquiries from those persons would have unearthed the truth. But the AO has not carried out any such exercise. Thirdly, we also find that although a search was also conducted upon assessee but there is no single document, paper, slip, promissory note, agreement, etc. found by authorities to corroborate the indulgence of assessee in taking loans. It is also noteworthy that the AO has not made any addition on account of payment of unaccounted interest by assessee. Thus, we find that the AO s action is based on mere surmises and conjectures without having any valid, positive, cogent or corroborative evidence. AR has also relied upon CBDT Circular No. 387 dated 07.06.1984 to advance an argument that the intention behind introduction of section 269SS/269T as explained by CBDT clearly encapsulates, rather guards, the assessee s case. On perusal of Circular, we find the opening para itself Unaccounted cash found in the course of searches carried out by the Income-tax Department is often explained by taxpayers as representing loans taken from or deposits made by various persons . It conveys that the provisions of section 269SS/269T would trigger where the assessee explains the source of cash or any other asset found during search as representing the cash loans taken from various persons. As a matter of fact, Ld. AR has made a clear assertion standing at the Bar that the assessee has not explained the source of any cash, jewellery, asset, investment, etc. found during search or any entry in the books of account in any of the assessment-years involved pursuant to search as sourced from alleged cash loans taken by assessee. Had the assessee declared the source of any cash, jewellery, asset, investment etc. found during search as acquired by utilizing loans taken in cash, the AO would have been justified to impose penalty u/s 269SS/269T. But the situation is just opposite. In the present case, there is no such declaration by assessee. Therefore, going by Circular also, one can conclude that the sections 269SS/269T and consequently sections 271D/271E can t be applied in present case - Decided in favour of assessee.

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• Customs

• 2023 (10) TMI 124
  Condonation of delay of 331 days in filing special leave petition - Sufficient reasons for delay or not - HELD THAT:- No satisfying explanation offered by the petitioner seeking condonation of delay. The application seeking condonation of delay is dismissed - SLP dismissed.

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• 2023 (10) TMI 123
  Refund of SAD - rejection on the ground that the declaration as stipulated under condition 2(b) of Notification No. 102/2007-Cus. not filed - other ground for rejection is that there is no finding in the Order-in-Original to the effect that the goods imported tally with the goods sold - HELD THAT:- The respondent has not filed cross objections or a written reply against the appeal. The issue involves determining the authority who has to decide on the merits of the refund claims. A question of the power to remand lies at the heart of the appeal. Delay in a decision on this issue does not help even the respondent in settling his claims. The matter can move forward on merits only when placed before the proper authority for consideration. Adjournments will only delay statutory relief. Hence the matter is decided based on the legal position that has evolved and the issues available on record, as applicable. Having original powers in matters related to assessment as per the statute, it was expected of the lower authority to examine and dispose of the matter on merits. The Commissioner (Appeals) was not vested with any powers to remand a matter under consideration with a direction for the issue to be reviewed once again and if necessary to file a fresh appeal under the Customs Act, 1962. The amendment brought out in the sections pertaining to the powers of the Commissioner (Appeals) vide Finance Act, 2001 w.e.f. 11.5.2001, is a part of a beneficial legislation to ensure that matters are disposed of quickly and must be respected. Similarly, the powers of the Commissioner (Appeals) being a statutory one he cannot act in breach of the provisions under which he functions. His powers are circumscribed by the conditions of the Customs Act 1962. The issues stands restored back to the Commissioner (Appeals) for a de novo decision - lower authority shall follow the principles of natural justice and afford a reasonable and time bound opportunity to the appellant-department and the respondent to state their case on merits both orally and in writing - appeal disposed off.

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• 2023 (10) TMI 122
  Seeking stay of disposal of seized gold dore bars - gold in question has requisite purity of less than 95% or not - HELD THAT:- There are contradictory reports about the purity of 27 number of gold dore bars in question. It is pertinent to note here that gold dore bars should have the purity of less than/ upto 95% while being imported. The reports on record are observed to be both ways, i.e. less than 95% as well as more than 95%. In these circumstances, clause 2.4.3 of the guidelines for disposal of seized goods as produced by the department is relied upon. In the present case appellant is claiming it to be licensed importer of the gold dore bars - Learned Authorised Representative has acknowledged that no reply has so far been received from the DRI with respect to the disposal of impugned seized gold. Also it is observed that the period of two months from the date of seizure, as is prescribed under the guidelines produced by the department, stands already expired. It is deemed necessary that the seized gold bar shall not be disposed of till further orders as may be passed. It is also held relevant that the impugned appeal be disposed of expeditiously. Application allowed.

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• 2023 (10) TMI 121
  Recovery of duty by invoking extended period of limitation - fabricated DEPB scrips - dispute pertains to the period Jan 2004 for which the show cause notice was issued on 21.05.2008 - existence of mens rea or not - levy of penalty - HELD THAT:- In view of the definite findings of the Apex Court in M/S. MUNJAL SHOWA LTD. VERSUS COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE (DELHI IV) AND M/S. FRIENDS TRADING CO. VERSUS UNION OF INDIA AND ORS. [ 2022 (9) TMI 1076 - SUPREME COURT] that fraud vitiates everything and it having been considered and decided that for the fake scrips, no right accrues, same holds good for the appellant in the present matter too. However, since in the decision of Division Bench from the same facts cited by the appellant, it has already been decided that there is no allegation of fraud against the importer, penalty cannot be invoked in the absence of mens-rea, therefore regarding penalty party is entitled to relief. The duty demand is sustained on the basis of fake scrips and not vested any right in the appellant. However, since there is no intention to the fraud/ forgery, the penalty imposed is set-aside. The appeal is partly allowed.

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• 2023 (10) TMI 120
  Classification of goods intended to be imported - Dried Black Currants i.e. dehydrated dark and small seedless raisins from Greece and other countries - classifiable under HS Code 0806 20 10 or not - Sr. No. 32 of Notification No. 50/2017-Cus., dated 30-6-2017 - HELD THAT:- Dried Black Currant (subject goods) is classifiable under HS Code 0806 20 10; and the subject goods are eligible to be covered under Sr. No. 32 of Notification No. 50/2017-Cus., dated 30-6-2017. It is noticed that the applicant has stated that Black Dried Currant is a kind of dried grape, of vitis vinifera species commonly known as Zante currant in Greece region made from grapes (Vitis vinifera) which are raisins produced by drying grapes. In light of the foregoing facts and discussions, black dried currant of vitis vinifera species, intended to be imported as raisin merit classification under 0806 20 10 of the First Schedule of the Customs Tariff Act, 1975. As regards, applicability of exemption vide Sr. No. 32 of N/N. 50/2017-Cus, dated 30-6-2017, it is noted that exemption under the said serial number of the notification is admissible to dark seedless raisin classifiable under 0806 20 10. Since the subject goods are dark seedless raisin, exemption under the said notification is admissible to the subject goods.

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• Insolvency & Bankruptcy

• 2023 (10) TMI 119
  Seeking reopening of Accounts with the Order of the Tribunal, was kept pending - erroneous admission of Section 7 application only based on the Financial Statements of the Years 2012-2016, which the Appellant was challenging as fraudulent - HELD THAT:- It is the main case of the Respondents that an amount of Rs. 4 Crores was lent to the Corporate Debtor Company based on a Resolution passed by the Board of Directors on 07/11/2011. Curiously, this document was neither filed before the RoC nor was it a part of the Section 7 Application filed earlier or even part of the present Application, but was only filed along with the Rejoinder . It is clear that there was an interim direction given by the three Member Bench of the Principal Bench, NCLAT dated 17/11/2020 that any action taken during the CIRP would be subject to the outcome of this Appeal. This Order was not challenged and the interim direction stands as of today. Having regard to the chequered history of the case, the Investigative Auditors Report which is dated 01/08/2018 and immediately a week thereafter the second Section 7 Application was filed before the Adjudicating Authority and C.A. 162/130/HDB/2019 seeking reopening of the Books of Accounts under Section 130 of the Companies Act, 2013 was filed by the Appellant on 26/11/2018 and the Order of the Admission under Section 7 of the Code was passed on 13/02/2020, which Impugned Order does not refer to adjudication of C.A. 162/130/HDB/2019, this Tribunal is of the considered view that the issues raised by the Appellant regarding transactions and entries in the Financial Books require Consideration. This Tribunal is of the considered view that the Adjudicating Authority ought to have adjudicated C.A. 162/130/HDB/2019 which was kept pending from 26/11/2018 to 13/02/2020 before deciding the Section 7 Petition. The Impugned Order of the Adjudicating Authority is set aside and the matter is remanded to the Adjudicating Authority to decide application and then adjudicate the Section 7 Application, in accordance with Law - Appeal allowed.

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• FEMA

• 2023 (10) TMI 118
  Detention order - whether the inordinate delay of thirty years in the execution of the detention order is explained by the concerned authorities? - detention order indicates that the detaining authority has relied upon the search and seizure proceedings u/s 34 of the Foreign Exchange Act 1973 ( FERA ) - HELD THAT:- The detention under the COFEPOSA Act is for the purpose of preventing persons from acting in any manner prejudicial to the conservation or augmentation of foreign exchange or preventing from smuggling goods, or abetting smuggling goods, or engaging in transporting or concealing or keeping smuggled goods or dealing with the same or harbouring person engaged in such activities. Hence, there must be conduct relevant to the formation of the satisfaction having reasonable nexus with the petitioner s action, which is prejudicial to make an order for detaining him. The unexplained and inordinate delay of thirty years in the present case does not justify the preventive custody of the petitioner. As held in the case of Shafiq Ahmad [ 1989 (9) TMI 381 - SUPREME COURT] the satisfaction of the authorities based on conduct must precede action for prevention based on subjective satisfaction. In the present case, the action based on satisfaction is not commensurate with the situation after thirty years of the detention order. It is not even the case of the authorities that in the last thirty years, the petitioner was engaged in any prejudicial activity or has indulged in any objectionable activity. Petitioner is right in submitting that there was no material adduced indicating that the petitioner was absconding or that the petitioner was evading arrest. Thus, by relying on the principle of law laid down by the Hon ble Supreme Court in the case of Shafiq Ahmad, we find that the action under Section 7 of the COFEPOSA Act would not be decisive or determinative of the question of whether there was undue delay in serving the order of detention in the present case. In the facts of this case, no attempts had been made to contact or arrest the petitioner. There is no explanation forthcoming for not taking any action to trace the whereabouts of the petitioner, and also, after the gazette publication in the year 1995 under section 7(1)(b) of the COFEPOSA Act, there is no action taken to serve the detention order. Thus, there is no merit in the submissions supporting the detention order. We find substance in the ground of challenge raised on behalf of the petitioner that the detaining authority has not meticulously followed the procedure to serve the detention order, making it invalid due to the passage of time.

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• Service Tax

• 2023 (10) TMI 117
  Non-payment of service tax - works contract service - construction services and construction of residential complex services provided during the period 10.09.2004 to 31.03.2008 without obtaining service tax registration - HELD THAT:- The appellant has provided the above services along with materials and on material part, they have paid the VAT to the State Government. The said fact is not in dispute at all. Therefore, the merit classification of the service rendered by the appellant is works contract service which came into service tax net w.e.f. 01.06.2007 as held by the Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT ], wherein the Hon ble Apex Court has observed Works contract were not chargeable to service tax prior to 1.6.2007. Further, the fact is noted that w.e.f. 01.06.2007 onwards also, no demand has been raised against the appellant under works contract service . In that circumstances, for the period post 01.06.2007 also, the appellant is not liable to pay service tax under the category of construction of commercial and residential services or construction of residential complex services. There are no merit in the impugned order and the same is set aside - appeal allowed.

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• 2023 (10) TMI 116
  Invocation of larger period of limitation under proviso to section 73(1) of FA Act - HELD THAT:- From the perusal of the letters/communication, it is found that the appellant seriously contested the chargeability to tax under supply of tangible goods service, but however, only after much persuasion did the assessee pay the tax along with interest. Hence, such payment of tax and interest is certainly not a voluntary act; it is a different matter altogether that the assessee did not collect the Service Tax from its customer. Also, the fact remains that the assessee was aware of the change in law with the introduction of supply of tangible goods service with effect from 2008, when admittedly, a tangible goods is being leased/rented, or given to use, without thereby transferring the right of possession or effective control over the same. If there was any genuine doubt, the only option perhaps was to pay the tax instantly and upon being pointed out, and then seek clarification from a tax expert or the Department. The very fact that the appellant is contesting the issue of invoking larger period of limitation, that the rendering of service under the supply of tangible goods is accepted; but for survey, persuasion, etc., by the officials, the tax would have remained unpaid amounting to evasion of duty. The other fact that the rendering of service and the receipt is not shown in the ST-3 return thus clearly amounts to suppression of facts; and hence, it is a clear case of suppression of facts with intent to evade tax payment. There are no justifiable reasons to interfere with the invocation of extended period of limitation and hence, the same is held to be in order - appeal dismissed.

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• 2023 (10) TMI 115
  Chargeability to Service Tax - business support service - collection and disposal of fly ash generated at the thermal power stations - Section 73(1) of the Finance Act, 1994 - HELD THAT:- This Bench in METTUR THERMAL POWER STATION VERSUS CCE (ST) , SALEM [ 2013 (10) TMI 436 - CESTAT CHENNAI] has considered the rival contentions, notifications referred to during the course of arguments and the issue as to chargeability to Service Tax on the collection and disposal of fly ash generated at the thermal power stations, has also considered the Notification issued by Ministry of Environment Forests, Government of India, policy decision of the Government of Tamil Nadu, in the context of the scope of levy under business support service, to hold that Activity of collection and removal of Fly ash as per rate of the order of Government of Tamil Nadu would not constitute infrastructural support service under the definition of Support Service of Business or Commerce . In terms of the above ruling of this very Bench and as judicial discipline demands us to follow the order of a co-ordinate Bench, it is held that the proposed tax liability on the assessee was rightly deleted by the Commissioner and hence, the order of the Commissioner does not call for any interference. The appeal filed by Revenue is dismissed.

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• 2023 (10) TMI 114
  Levy of service tax - Management and Repair Service - service of repaid carried out to photocopier machines, projectors, laser printers etc. - invoices did not show the value of the parts separately so as to meet the requirements of N/N. 12/2003-ST - HELD THAT:- The same issue for the period up to September 2008 is covered by BRIGHT MARKETING COMPANY VERSUS COMMISSIONER OF CENTRAL EXCISE, COIMBATORE [ 2018 (9) TMI 1592 - CESTAT CHENNAI ] by a Coordinate bench of this Tribunal, wherein it was held that when the assessee has paid tax under the State statute on the value of component of material used, service tax would be exigible only on the remaining value of services provided and allowed the appeal. The impugned order covers the period October 2008 to March 2009 on identical facts. There are no reason to deviate from the said order - impugned order set aside - appeal allowed.

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• 2023 (10) TMI 113
  Levy of Service tax - mark up ocean freight - HELD THAT:- The dispute in the present case is for the period from 01.01.2011 to 30.06.2012. In the case of Marine Container [ 2019 (3) TMI 1388 - CESTAT CHENNAI] the period of dispute was from 01.04.2005 to 31.12.2010 where it was held that with reference to amount collected from exporters/shippers the original authority clearly recorded that it is not the case that this amount is a commission earned by the respondent while acting on behalf of the exporter and said mark-up value is of freight charges and are not to be considered as commission. The demand in the present appeals cannot sustain and deserves to be set aside - The impugned order accordingly, set aside - Appeal allowed.

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• Central Excise

• 2023 (10) TMI 112
  Clandestine removal - irregular availment of Cenvat Credit - removal of 556.780 MTs of old and used C.I. Moulds (capital goods) without payment/reversal of Cenvat credit, in the guise of captive use during the period from 2006-07 to 2008-09 - HELD THAT:- It is found that the applicant were maintaining the Mould Register, wherein receipt/consumption of the CI Moulds were duly entered. From the Mould register, we find the Appellant has received 434.644 MT of C.I.Mould during the period 2006- 07 to 2008-09 and 122.136 MT remained as opening balance. The Appellant contented that all the moulds purchased during the material period were put into use during the relevant period. There are force in the submission of the Appellant that after receipt of the Moulds, the same were utilized in the manufacture of finished goods namely, MS ingots and in the process of manufacture, the C.I. moulds were exhausted, and ultimately, the same were melted along with other raw materials for manufacture of the finished goods - there is no provision in the Cenvat Credit Rules, 2004 to reverse the credit availed on capital goods after they were put into use in the manufacture of final products, even if they are worn out or damaged due to wear and tear. In absence of physical presence of such moulds in the factory, the department alleged that those were cleared clandestinely and hence demanded the Cenvat credit availed on such Moulds - It is observed that non availability of the moulds in the stock or physical absence of goods, cannot be a reason to allege clandestine clearance. There must be positive evidence available on record to substantiate the allegation of clandestine clearance. In the present case, the department has not brought in any evidence to establish clandestine clearance of the used C.I. Moulds. The Appellant contended that these mould were capital goods on which Cenvat credit has been availed. Admittedly, when the credit in respect of these capital goods was availed, the same was in order. These capital goods have been put to use for a number of years, when the same were ultimately unfit for use, they were scrapped. The Appellant claims that the scrap were used in the furnace for manufacture ingots. However, the department s allegation is that there was no evidence for such consumption - there are no justification for reversal of Cenvat credit availed by the Appellant on the said capital goods, which after being put into use scrapped. Thus, the Appellant has taken Cenvat credit correctly on the capital goods, namely C.I. Moulds and there is also no provision in the Cenvat credit Rules to reverse the Cenvat credit when they are scrapped after put into use. In view of the above, the Appellant is not required to reverse the Cenvat credit availed on the capital goods, M.I. Moulds. Since, the credit is not liable to be reversed, there is no liability of interest or penalty. Accordingly, the penalty imposed in the impugned order is also set aside. Appeal allowed.

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• 2023 (10) TMI 111
  Clandestine removal - mild steel ingots - gully - risers - cross-examination sought was denied - breach of statutory mandate of section 9D of Central Excise Act, 1944 - violation of principles of natural justice - HELD THAT:- It is no secret that establishing clandestine removal is easier said than done and much latitude, in the form of preponderance of probability and deducing from corroborative evidence affirming testimony in statements, is permissible in determining the outcome. However, the proceedings may not be allowed to draw upon that flexibility for discarding even the most fundamental canon of evidence. Reliance upon a statement, to the exclusion of any material facts, in a show cause notice is, in effect, examination-in-chief and credibility of the contents therein for resort to conclusion of detriment rests upon quicksand except by assertion through challenge of cross-examination ; we are unable to appreciate the notion of lack of bias in such denial that, especially in the light of section 9D of Central Excise Act, 1944, should not have occurred save with detailed justification - A case made out on statements and peripheral records must find corroboration in each other; the validity of statements lies in sustaining through cross-examination and, hence, the significance of section 9D of Central Excise Act, 1944. The request of the appellants for determination of its validity as evidence was not only ignored but the adjudicating authority proceeded to dispose off the notice without placing on record the reason for such denial. That is certainly not in consonance with the principles of natural justice or even in conformity with adherence to testing of evidence. A determination, judicial or quasi-judicial, is application of known law to established facts. The facts are not established here and the adjudication proceedings stand vitiated accordingly. In the light of sanctity of section 9D of Central Excise Act, 1994, the outcome of the notices can rest squarely on statements that comply thereon and any documents, including data repository , that are, substantially, unchallenged - The plea for cross-examination of witnesses were made before the adjudicating authority. Both were willfully and deliberately denied in breach of statutory mandate of section 9D of Central Excise Act, 1944. Nothing remains of the facts upon which the detriments in the impugned order had been erected. Consequently, the impugned order lacks authority of law. Appeal allowed.

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• 2023 (10) TMI 110
  Recovery of differential duty - clearance of goods by job-worker - undervalued goods - alleged less charging in the value of supplied inputs, and discharge of 1% on freight and 5% on unloading charges and 15% on profit and overheads - penalty on employees of company - HELD THAT:- Clearance of goods by the job-worker merits valuation in the same manner that captive consumption would and, relying upon cost computation , in the manner determined by the Hon ble Supreme Court in UJAGAR PRINTS, ETC. ETC. VERSUS UNION OF INDIA AND OTHERS [ 1988 (11) TMI 106 - SUPREME COURT] , does not preclude scrutiny of assessing authorities. The charge in the show cause notice is that additional consideration , as received by the job-worker , from the principal having paid the cost of transportation and other charges that, otherwise, would, ordinarily, have not been. No evidence has been placed on record to counter this allegation. Furthermore, no evidence has been adduced to suggest that the allegation of pricing as being below that of procurement cost was incorrect. Consequently, the costs involved in the transaction between the job-worker and principal require addition to the declared value. That the procedure prescribed in rule 57F of Central Excise Rules, 1944 were followed cannot alter the excisability or mode of determination of value such treatment is akin to inputs having reached the job-worker directly as the same would have been included in the price at which an independent manufacturer would have cleared the goods to the principal. The plea for the privilege of excluding these costs is not tenable. Levy of penalty on employees of company - HELD THAT:- Both are employees of the respective corporate entities and there is no evidence of any pecuniary benefit deriving to the two persons directly or indirectly. As limbs of their respective employer organizations, they may have had a role in the price-setting but with penalizing of the corporate entities that derived the benefit, it would be improper to penalize the limbs for vicarious responsibility. Appeal disposed off.

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• 2023 (10) TMI 109
  Valuation of manufactured goods - process amounting to manufacture or not - assessable value arrived by the appellant on re-engraving of duty paid cylinders supplied by the customers free is in accordance with the provisions of Central Excise Valuation (Determination Of Price Of Excisable Goods) Rules, 2000 or not - demand of differential duty - HELD THAT:- This issue has been settled by the Larger Bench of this Tribunal in the case of JSS. PRINTING INDUSTRIES PVT. LTD. VERSUS COMMR. OF C. EX., CALCUTTA [ 2000 (10) TMI 63 - CEGAT, COURT NO. II, NEW DELHI] where it was held that the work carried out to re-engrave the rollers second, third or fourth time, as the case may be, will not amount to process of manufacture. However, this issue has not been brought before the authorities below. The appeals be remanded to the adjudicating authority to consider the judgment of the Larger Bench of this Tribunal directing discharge of service tax on the activity of re-engraving of Rotogravure Printing Cylinders under Business Auxiliary Service . Appeal allowed by way of remand.

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• 2023 (10) TMI 108
  Computation of period for filing of appeal in stipulated time - appeal dismissed being time barred on the ground that the appeal has been filed before him 92 days after the admitted communication date of the Order-in-Original - HELD THAT:- The Learned Commissioner (Appeals) has dismissed the appeal being time bar on the ground that the appeal was filed after 92 days. As per the fact of the present case, we find that the admitted date of communication of the Order-in-Original was considered and accepted by the commissioner (Appeals) i.e. 23.06.2014. But the appeal was dismissed on the ground that since the appeal was filed on 22.09.2014, which is beyond 90 days and beyond 90 days the commissioner (Appeals) has no power to condone the delay. In the fact of the present case, the admitted communication date of the Order-in-Original is 23.06.2014, which has to be excluded in terms of Section 9 above. Therefore, the commencement of the period shall be from 24.06.2014 and from that date 90 days completes on 21.09.2014 - 21st September, 2014 being a last date for filing appeal falls on Sunday, therefore in terms of Section 10 the appeal could have been validly filed on 22nd September, 2014, in this case the appeal was filed on 22.09.2014. Thus, the appeal was filed well within the stipulated period of 90 days. Therefore, the contention of the Learned Commissioner (Appeals) that the appeal was filed after 92 days, without considering the General Clause Act, 1897 is absolutely incorrect and illegal. Applicability of judgment of Supreme Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] - HELD THAT:- Since the appeal itself was filed within stipulated time period of 90 days, the ratio of the judgment of the Hon ble Supreme court in the case of SINGH ENTERPRISES as also in the case of COMMISSIONER OF CUSTOMS CENTRAL EXCISE VERSUS M/S HONGO INDIA (P) LTD. ANR. [ 2009 (3) TMI 31 - SUPREME COURT] not relevant. The impugned order is set aside and appeal is allowed by way of remand to the commissioner (Appeals) to decided matter on merit within a period of two months from the date of this order.

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• CST, VAT & Sales Tax

• 2023 (10) TMI 107
  Power of review - error apparent on the face of record or not - Extraction of coal primarily for captive consumption in its Industrial Unit situated at Jamshedpur - transfer of goods for captive consumption and not for sale - demand of additional tax liability - HELD THAT:- It transpires that Petitioner-Tata Steel Ltd. is having its industrial unit at Jamshedpur wherein it is engaged in manufacturing of Iron and Steel. It has its colliery in the District of Dhanbad known as Jamadova Colliery and from the said colliery, coal is being extracted and stock transferred to its unit at Jamshedpur in the District of East Singhbhum for captive consumption, which is intra-state stock transfer . Original assessment proceedings of the petitioner were completed and its gross turnover was accepted and no dispute was raised with respect to intra-state stock transfer of goods. A bare perusal of Section 21(1A) of the Bihar Finance Act would reveal that if any dealer claims that he is not liable to pay any tax on the part of his turnover by reason of transfer of such goods to any other dealer or agent or principal for sale the burden of proving this claim shall be on the dealer and the dealer would furnish before the prescribed authority a declaration in the form and in the manner prescribed. Under the Rules, the declaration prescribed is Form IX-D - In the instant case, admittedly, the dealer-Tata Steel Ltd. stock transferred its goods to its Jamshedpur Unit for captive consumption and not for sale and, thus, on a bare reading of Section 21(1A), it would be evident that there was no requirement of furnishing of statutory Form IX-D. A perusal of the review order would demonstrate that the review order has been passed not for correcting any mistake or error apparent on the face of record, but review order has been passed to change alleged erroneous decision which is not permissible in the eye of law. Reference in this regard may be made to numerous decisions of Hon ble Apex Court, wherein it has been clearly held that power of review is limited to correcting mistake/error apparent on the face of record and not to change an erroneous decision - reliance can be placed in the case of S. Madhusudan Reddy v. V.Narayan Reddy, reported in (2022) SCC Online SC 1034 [ 2022 (8) TMI 1337 - SUPREME COURT] . Thus, the very initiation of the review proceedings pursuant to Show Cause Notice dated 04.01.2011 was void ab initio, as neither any satisfaction was recorded by the Assessing Authority nor any reason was assigned for initiation of review proceedings - It is a settled law that vague show cause notice lacking details amounts to violation of the principles of natural justice and in that view of the matter, we are inclined to entertain the present writ applications. Petition disposed off.

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• 2023 (10) TMI 106
  Maintainability of petition - availability of alternative remedy - levy of penalty, interest and a direction to deposit a sum of Rs. 86,04,010/- after adjusting a sum of Rs. 5,82,646/- deposited in excess, in the year 2008-09 - delayed payment of tax - HELD THAT:- From the arguments advanced and the materials brought on record it is satisfied that this is not a fit case where the existence of alternative remedy can be bypassed. The petitioner shall have all liberty to raise all such plea/ grounds as raised before us before the Appellate Forum. In such view of the matter the petitioner is relegated to file an appeal before the Appellate Authority under Section 57 of the VAT Act 2008. The writ petition is dismissed on the ground of availability of alternative remedy.

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• 2023 (10) TMI 105
  Violation of principles of natural justice - no opportunity of cross-examination was given to the dealer - rejection of sales which were not proven - non-production of F forms - HELD THAT:- In the present case, opportunity of hearing could only be granted to the appellant had he appeared before the assessing authority. As per order Annexure A-2, dated 28.12.2007, number of opportunities had been given to the appellant, however, he did not put in appearance nor produced any F form and the authority proceeded against ex-parte and had passed the order on the basis of evidence with them and the verification carried out at their own level from Delhi. When it was found that the dealer had accounted for these transactions at Delhi, they extended the benefit of F form to the appellant. The appellant authority has not referred to the provisions of Section 3(a) of the Central Sales Tax Act, Rules 1957 as reflected at Page 43 of the paper book where the assessee apart from producing form F is required to maintain all the conditions to claim the benefit of exemption to claim these sales on consignment basis. The appellant has not assisted in giving complete addresses of the Company namely, Shakti Trading Company and Ghansi Ram Co. and on the basis of F forms they could not get benefit under Section 3(a) of the Central Sales Tax Act Rules 1957. The appeal has been rightly accepted by the tribunal. No substantial question of law arises for consideration in the present appeal as the appellant-assessee never chose to appear before the Excise and Taxation Officer-cum-Designated Officer, Mansa and this finding of fact recorded by the authorities, after giving verification is not a question of law which needs to be examined now. Since the appellant had not appeared and lead any evidence to show that his sales were interstate or within the State, the order passed by the Tribunal does not require any interference as no substantial question of law arises for consideration - Appeal dismissed.

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