Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram
Tax Updates - TMI e-Newsletters

Home e-Newsletters Index Year 2024 November Day 7 - Thursday

TMI e-Newsletters FAQ
You need to Subscribe a package.

Newsletter: Where Service Meets Reader Approval.

TMI Tax Updates - e-Newsletter
November 7, 2024

Case Laws in this Newsletter:

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



Highlights / Catch Notes

    GST

  • Negative blocking of ECL not allowed: Court upholds taxpayers' right to utilize ITC against GST liability.

    The High Court held that the issue of 'negative blocking' of Electronic Credit Ledger (ECL) as per the Central Goods and Services Tax Act, 2017 and Rules is no longer an open issue and stands concluded by its previous decision. The Court allowed the petition and set aside the orders disallowing debit from the ECL in excess of the available Input Tax Credit at the time of passing the impugned orders, terming it as 'negative blocking'. The action of the respondents in negatively blocking the ECL cannot be sustained.

  • Tax refunds release ordered within 3 weeks after petitioner's appeals allowed.

    The High Court directed the respondents to release all refunds due and payable to the petitioner within three weeks, pursuant to the appellate authority's order dated July 4, 2024. This order was issued as the petitioner's statutory appeals and refund claims were inordinately delayed, compelling the petitioner to approach the Court. The Court disposed of the writ petition after the pending appeals pertaining to the relevant tax periods were allowed in the petitioner's favor, rendering no further issues to be adjudicated.

  • Rule 96(10) of CGST Rules struck down as ultra vires and arbitrary, IGST refunds secured for petitioners.

    The High Court ruled on the constitutional validity of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017, which was challenged as being ultra vires Section 16 of the Integrated Goods and Services Tax (IGST) Act, 2017, and violating Articles 14, 19(1)(g), and 265 of the Constitution. The court held that Rule 96(10), as inserted by a notification dated 09-10-2018 with effect from 23-10-2017, is ultra vires Section 16 of the IGST Act and manifestly arbitrary, producing absurd results unintended by the legislature. Consequently, the court declared Rule 96(10) unenforceable and quashed any actions or orders against the petitioners based on it. The court directed that no proceedings shall be taken to recover IGST refunded to the petitioners by applying Rule 96(10) for the period between 23-10-2017 and 08-10-2024.

  • Movie theaters hiked ticket prices to offset GST cut - profiteering charges upheld.

    Profiteering in GST rates for admission to cinema exhibitions. Despite a reduction in GST rates from 28% to 18%, the benefit was not passed on to consumers, and instead, the base price was increased to maintain a uniform "cum-tax" selling price. The High Court held that once the GST rate was reduced, it became mandatory for the petitioner to pass on the benefit of that reduction. There was no justification to interfere with the Competition Commission of India's (CCI) view, and the petition challenging the CCI's order was dismissed.

  • Taxpayer wins right to claim input tax credit after 2024 retrospective amendments.

    The Court held that due to amendments brought in by the Finance (No. 2) Act, 2024, the registered person is entitled to avail input tax credit for the relevant period subject to conditions prescribed under newly inserted Sections 16(5) and 16(6) of the CGST Act, 2017. The amendments, given retrospective effect from 01.07.2017, rendered the proceedings initiated against the petitioner through the show-cause notice redundant. Consequently, the impugned order was set aside, and the matter was remanded to the jurisdictional officer to pass an appropriate order. The petition was disposed of by way of remand.

  • COVID extension for tax credit orders challenged; law amended retroactively for FYs 2017-21.

    The High Court addressed the challenge to notifications extending the time limit for issuance of orders u/s 73 of the CGST/AGST Act, 2017, due to the "force majeure" condition of Covid-19. The Court noted that amendments introduced by the Finance (No. 2) Act, 2024, retrospectively effective from 01.07.2017, allowed registered persons to claim input tax credit for financial years 2017-18 to 2020-21, subject to conditions prescribed in the newly inserted Sections 16(5) and 16(6) of the CGST Act, 2017. Consequently, the show-cause notice issued against the petitioners became redundant. The Court set aside the impugned order and remanded the matter to the competent jurisdictional officer for passing an appropriate order, disposing of the petition.

  • Extension of time limits for input tax credit due to Covid-19 upheld by court.

    The High Court addressed the extension of due dates u/s 73 of the CGST/AGST Act, 2017 due to the Covid-19 pandemic. It examined the provisions related to the time limit prescribed u/s 73 and the invocation of Section 168A, considering the "force majeure" condition. The Court observed that, notwithstanding Section 16(4), for financial years 2017-18 to 2020-21, the registered person shall be entitled to take input tax credit in any return filed u/s 39 up to November 30, 2021. The amendments brought by the Finance (No. 2) Act, 2024, rendered the challenge in the writ petition redundant. The petitioner is entitled to avail the input tax credit benefit for the relevant period, subject to the conditions prescribed in the newly inserted Sections 16(5) and 16(6). Consequently, the impugned order was set aside, and the matter was remanded to the competent jurisdictional officer for appropriate orders.

  • Court lifts freezing of account; gives chance to reply to tax notice.

    Interim order by High Court lifting attachment on petitioner's bank account pending final disposal, allowing petitioner opportunity to respond to demand notice issued under CGST Act. Court refrains from opining on merits, directs petitioner to appear before respondent authority on specified date for further proceedings in accordance with law. Petition disposed of.

  • Income Tax

  • Taxpayer's plea for delay in filing tax returns rejected due to insufficient justification.

    The court rejected the petitioner's application for condonation of a 216-day delay in filing their Income Tax Returns (ITRs). The reasons cited by the petitioner, delay in receiving the audit report and the COVID-19 outbreak, were not accepted. The audit report was issued on 02.07.2019, and the statements were made available then, so the delay in receiving the report was not a valid reason. The COVID-19 outbreak occurred in March 2020, seven months after the audit report, so it could not justify the delay. The court held that condoning such a delay without genuine hardship would encourage misdeeds and cannot be allowed, especially in revenue matters. The respondent rightly rejected the application as the petitioner failed to justify the delay.

  • Transfer pricing rules limited - domestic transactions excluded, adjustments only for associated enterprises.

    Regarding the scope of Section 92BA(i) as omitted, the Tribunal held that the reference made to the Transfer Pricing Officer (TPO) for the specified domestic transaction mentioned in clause (i) of Section 92BA of the Act is invalid. This is because the said provision has been omitted, and any addition made concerning the same needs to be deleted. As per the Karnataka High Court's decision in M/s. Texport Overseas Pvt. Ltd., when clause (i) of Section 92BA was omitted by the Finance Act, 2017, with effect from 01.07.2017, it is considered as if it never existed. Consequently, the Assessing Officer's decision u/s 92BA and the reference made to the TPO order u/s 92CA are invalid and unlawful. Regarding Transfer Pricing (TP) adjustment, it was held that it should be restricted only to transactions between Associated Enterprises (AEs). As per the Bombay High Court's decision in Phoenix Mecvano (India)(P.) Ltd., under Chapter X of the Act, re-determination of consideration is to be done only concerning income arising from international transactions on determination of Arm's Length Price (ALP). The adjustment is mandated only for international transactions and not transactions with independent unrelated third parties, as there is no tax avoidance issue requiring adjustment.

  • High Court condones 80-day delay in filing tax returns for COVID warrior doctor due to pandemic hardships.

    The High Court held that the delay of 80 days in filing the Return of Income should be condoned as the petitioner faced genuine hardship due to valid reasons arising from the COVID-19 pandemic. The petitioner, a doctor on COVID-19 duty, lost her father to COVID-19, and her family members were also affected. The valuation of land for computing capital gains could not be completed timely as the valuer, a senior citizen, could not conduct physical verification until mid-February 2021 due to the pandemic situation. The court observed that technicalities should not override genuine human problems preventing timely compliance. The reasons provided by the tax authority for rejecting the condonation plea, such as the petitioner being an educated person with access to tax practitioners, were found unacceptable. Consequently, the High Court quashed the tax authority's order and condoned the 80-day delay in filing the Return of Income for the relevant assessment year.

  • Tax assessees can approach Settlement Commission if search happened before 31/03/2021 & application filed by 30/09/2021.

    Assessees subjected to search u/s 132 prior to March 31, 2021, retained the right to file applications for settlement before the Interim Settlement Board, provided such applications were filed on or before September 30, 2021. The Explanation Clauses accompanying the deleted provisos in Section 245A(b) cannot restrict the definition of 'case' after the deletion of provisos. Accepting the Revenue's interpretation would defeat the legislative intent behind deleting the provisos. The right to approach the Settlement Commission vested in eligible assessees until the Finance Act, 2021 amendments remained enforceable. The High Court concurred with the Bombay High Court's view in Senapati Santaji Ghorpade Sugar Factory Ltd. and Vishwakarma Developers cases. Consequently, orders by the Interim Settlement Board finding applications for settlement filed by petitioners as not maintainable stand set aside if the search u/s 132 was prior to March 31, 2021, and applications were filed by September 30, 2021.

  • Tax authorities mandating FIFO/Average Cost for inventory valuation, excluding LIFO method.

    Constitutionality and legality of Income Computation and Disclosure Standards (ICDS) II and Notification 87/2016, which mandate the use of the First In First Out (FIFO) or Weighted Average Cost method for inventory valuation, excluding the Last In First Out (LIFO) method, while computing income under the head of Profits and Gains of Business or Profession under the Income Tax Act. The court held that FIFO, LIFO, and Weighted Average Cost are recognized methods for inventory valuation, and the adoption of any particular method aims to reflect the fairest approximation of the cost incurred. The valuation of unsold stock is a necessary process for determining trading results, not the source of profits. The amendment to Section 145A and ICDS II were not manifestly arbitrary, as they aimed to provide a uniform method of inventory valuation for assessees computing income under the specified head. The court found no unreasonable classification or violation of the equal protection rule, as the prescription applies to all assessees in the specified category. The appellants cannot claim a fundamental right to follow a particular inventory valuation method that would prevail over statutory prescription. The decision to amend Section 145A and implement ICDS II was based on recommendations from expert financial bodies.

  • Company seeks compound charges based on 2014 guidelines, not 2019 norms cited by authorities.

    The High Court held that the compounding application should be treated as filed on the original date of February 15, 2018, rather than September 24, 2020, as erroneously considered by the respondents. Consequently, the erstwhile 2014 compounding guidelines would apply instead of the 2019 guidelines. The Court directed the respondents to recompute the compounding charges payable by the petitioner based on the 2014 guidelines, considering the application date as February 15, 2018. Upon payment of the recomputed charges, the application shall be processed further in accordance with law.

  • Payments to non-residents sans PE for services abroad & reimbursements sans TDS.

    TDS disallowance u/s 40(a)(i) for non-deduction on overseas payments towards patent fees, reimbursement of official fees and professional fees, treating such payments as royalty taxable in India. Assessee not liable to deduct TDS as payments were reimbursements for expenses incurred by non-resident attorneys for renewal of patents abroad and to registration authorities. Professional fees paid to foreign attorneys without PE in India, not taxable. Payments not income chargeable to tax in India u/s 195, no TDS obligation. Coordinate bench held such reimbursements and official purpose payments not professional/technical services, not taxable income. Payments to non-residents without PE for overseas services and reimbursements not subject to TDS u/s 195. Disallowance deleted, assessee's appeal allowed.

  • Firm transfers land to partners via book entries, no capital gains tax says ITAT.

    The appellant firm had purchased lands for business purposes but did not carry out any business activities on those lands. The firm transferred the amounts pertaining to the immovable properties in its balance sheet to the capital accounts of its partners through book entries, without executing any written instruments. The Assessing Officer treated this as a transfer of immovable property, resulting in capital gains. However, the ITAT held that since the lands were transferred to the partners at book value without any revaluation, no capital gains arose. The ITAT relied on the Bombay High Court's decision in CIT vs. M.J. Mehta and Bros., which held that the transfer of immovable property belonging to a firm to its partners by means of book entry is not valid. The ITAT also noted that the Assessing Officer had partly accepted and partly rejected the transaction, which was not justified. Consequently, the ITAT allowed the assessee's grounds and held that no capital gains arose.

  • Royalty income taxed at concessional 10% rate for timely Form 3CFA filing.

    The Income Tax Appellate Tribunal (ITAT) held that the assessee is entitled to the concessional tax rate of 10% on royalty income u/s 115BBF, as the assessee had uploaded Form No. 3CFA before the completion of proceedings u/s 143(1) of the Income Tax Act. The ITAT set aside the order of the Additional/Joint Commissioner of Income Tax (Appeals), Panchkula, which had rejected the assessee's appeal and directed the Assessing Officer to tax the royalty income at the normal rate. The ITAT directed the Assessing Officer to tax the royalty income at the special rate of 10% against the normal rate adopted by the Centralized Processing Center (CPC). The grounds raised by the assessee were allowed.

  • Construction Revenue Recognition: Assessee wins when AS-9 & Section 43CB deemed inapplicable for ongoing pre-2016 project.

    Income recognition rules and accounting standards for revenue from construction contracts were at issue. The assessee argued that AS-9 was not applicable as it specifically excludes revenue from construction contracts. Section 43CB, introduced with effect from 01.04.2017, mandates revenue recognition based on ICDS-3 for construction contracts. ICDS-3 allows recognizing revenue using the regular method for contracts commenced before 31.03.2016 and not completed by that date. As the assessee's residential project commenced before 31.03.2016 and was ongoing, neither AS-9 nor Section 43CB applied. Consequently, the CIT(A)'s deletion of the addition was upheld, and the Revenue's appeal was dismissed by the Appellate Tribunal.

  • Educational institution's excessive depreciation disallowed but no tax payable due to spending over 85%. Wrongful 200% penalty levied on notional tax.

    Penalty levied u/s 274 read with Section 270A - assessee computed tax on disallowed depreciation amount at maximum marginal rate and levied 200% penalty on payable tax - held, Assessing Officer (AO) contradicted himself by levying penalty while framing assessment with Nil income despite depreciation disallowance. AO resorted to compute notional tax on disallowance where no tax payable by assessee. Assessee did not under-report income as per Section 270A(2). Section 270A(7) refers to penalty on under-reported income tax. No tax payable as assessee spent over 85% of revenue. Commissioner of Income Tax (Appeals) rightly deleted penalty. Revision u/s 263 - Commissioner of Income Tax (CIT) claimed AO did not disallow depreciation claim, amounting to double deduction - held, AO disallowed depreciation u/s 11(6) and assessed income at Nil as assessee applied over 85% of income u/s 11. Argument accepted that since AO disallowed depreciation, CIT(E)'s order u/s 263 has no merits. Order u/s 263 quashed - decided in favor of assessee.

  • Lack of approval for scrutiny renders assessment void.

    The validity of the scrutiny process was challenged due to the lack of approval obtained by the Assessing Officer from the Jurisdictional Principal Commissioner of Income Tax, as mandated by CBDT Instruction No. 5/2017 dated 7.7.2017. It was held that non-compliance with CBDT instructions would render the entire assessment proceedings void ab initio. Reliance was placed on the decision in CIT vs Best Plastics P Ltd, wherein it was ruled that the revenue is bound to follow CBDT instructions, and failure to do so would be fatal to the assessment proceedings. The jurisdictional defect cannot be cured by the provisions of Section 292BB of the Income Tax Act, as held in the case of LAXMAN DAS KHANDELWAL. Consequently, the entire assessment framed for the Assessment Year 2016-17 was quashed, and the assessee's cross-objections were allowed.

  • Bank's tax battle: Expense disallowances, exempt income, broken period interest, stock revaluation, pension cap, bad debt recovery.

    This case discusses various issues related to the income tax assessment of a bank. The key points are: Disallowance of expenditure incurred for reservation of seats in schools for employees' children was upheld based on a favorable High Court decision. Disallowance u/s 14A for exempt income was restricted to 1% of exempt income in line with earlier years. Broken period interest paid on securities constituting stock-in-trade was allowed as deduction following a High Court ruling. Interest on securities was taxable only on due basis, not accrual basis, adhering to the accounting method. Loss on revaluation of investments held as stock-in-trade was allowed based on RBI guidelines and favorable High Court decisions. Contribution to pension fund exceeding statutory limits was disallowed u/s 40A(9) following a High Court judgment. The eligibility of the bank to claim deduction u/s 36(1)(viii) for special reserve was remitted back for examination. Deferred payment guarantee commission was held taxable when guarantee was issued and commission received, following precedents. Disallowance of depreciation on leased assets was confirmed. Recovery of bad debts, where no deduction was claimed earlier, was remitted for fresh examination u/s 41(4). Exclusion of foreign branch income was disallowed for the relevant years, allowing only tax credit under tax.

  • Hospital pharmacy income exempted; 15% deduction allowed on gross receipts for charitable trust.

    Exemption u/s 11 for surplus arising from a pharmacy store run by a hospital, and the deduction of 15% on gross receipts u/s 11(1)(a). Regarding the pharmacy store, it was held that running a pharmacy is incidental to the main objects of running a hospital and research center, and hence not hit by Section 11(4A). The pharmacy store serves only admitted patients, not outsiders, and is an integral part of the assessee's activities. This issue was already decided in the assessee's favor by the ITAT and the jurisdictional High Court. Concerning the deduction u/s 11(1)(a), it was held that the assessee is entitled to claim a deduction of 15% on gross receipts, as per the Supreme Court's decision in Programme for Community Organisation. The deduction is to be calculated on gross receipts and not on surplus or deficit, without any condition imposed by Section 11(1)(a).

  • Lands acquired by assessee: Agricultural or urban for TDS u/s 194L - Matter remanded for thorough inquiry.

    The case pertains to the determination of the nature of lands acquired by the assessee, whether agricultural or urban, for the purpose of deducting Tax Deducted at Source (TDS) u/s 194L. The Assessing Officer (AO) held the lands to be urban, requiring TDS deduction, while the CIT(A), relying on reports from other District Authorities, concluded the lands were agricultural, exempting the assessee from TDS liability. The ITAT observed that the CIT(A) failed to examine all relevant authorities and their contentions, as required u/s 250(4). Consequently, the matter was remanded to the CIT(A) for a thorough inquiry and adjudication, considering the claims and evidence from all concerned authorities to determine the actual nature of the lands. The Revenue's appeal was allowed for statistical purposes to ensure a compliant and judicious adjudication process.

  • Kaccha Aaratiya's TDS credit eligibility on commission & interest income upheld for agricultural produce sales.

    Allowance of Tax Deducted at Source (TDS) claimed by a "Kaccha Aaratiya" (commission agent) engaged in selling agricultural produce on behalf of farmers. The key points are: The assessee, a Kaccha Aaratiya, is entitled to claim TDS credit u/ss 194A (interest income) and 194H (commission income) as the entire income on which TDS was deducted is duly offered for taxation. The disallowance of TDS amounting to Rs. 179,551 is unjustified. Regarding TDS u/s 194Q (purchase of goods), the assessee is eligible to claim credit as they merely facilitate the sale between farmers and principal buyers, earning only commission. The invoices and sale documents establish that the assessee has no control or margin in the sale and earns only commission. As per CBDT Circular 452 (1986), for Kaccha Arahitias, turnover excludes sales on behalf of principals, and only commission income is considered for tax purposes u/s 44AB. TDS deducted u/s 194Q by principal buyers cannot be denied by invoking Rule 37BA read with Section 199, as the sales facilitated are not the assessee's turnover, and the commission income is.

  • Charitable trust's exemption wrongly denied due to non-filing of returns; Tribunal restores exemption.

    The assessee, a charitable trust enjoying exemption u/s 11 since 1954, was denied exemption by the Assessing Officer during reassessment proceedings on the grounds that the assessee had not filed the return of income as mandated u/s 139(1). However, the Commissioner of Income Tax (CIT) revised the order u/s 263, deeming it bad in law. The Tribunal held that the revision was unjustified as the assessee had been granted exemption in scrutiny assessments and by the Tribunal for various assessment years. The assessee's inability to file returns electronically from 2013-14 to 2015-16 due to unavailability of registration details was a circumstance not considered properly. Despite efforts to file physical returns, they were not accepted due to lack of information. The CIT(Appeals) doubted the postal acknowledgments without verifying the assessee's submissions. Consequently, the Tribunal allowed the assessee's appeal, ruling that the revision order could not be upheld in law.

  • Charitable trust's exemption claim denied for late filing of prescribed form due to technical issues.

    Denial of exemption u/s 11(2) was contested due to the trust's failure to file Form No. 10 within the due date specified u/s 139(1) owing to technical issues. The provisions of section 11(2) mandate charitable trusts to apply a specified percentage of income for charitable purposes, with an option to accumulate or set apart the prescribed percentage for application in India, subject to conditions. The issue centered on whether furnishing the statement in the prescribed Form No. 10 on or before the due date of filing the return is mandatory or directory in nature for availing exemption u/s 11(2). Relying on the Supreme Court's decision in PCIT vs. Wipro Ltd., which held furnishing the prescribed form within the due date as mandatory for claiming benefits u/s 10B(8), the Tribunal concluded that filing Form No. 10 is mandatory for claiming exemption u/s 11(2). However, considering the assessee's grievance petition citing technical glitches on the Income-tax portal and the delay being within 365 days, the Tribunal set aside the CIT(A)'s order and remanded the matter to the AO with directions to allow the assessee to apply for condonation of delay to the CIT(Exemption). Upon condonation, the AO shall decide the exemption claim u/s 11.

  • Customs

  • Customs broker's license revocation wrongly upheld due to lack of evidence.

    Revocation of a customs broker's license and imposition of penalty under the Customs Brokers Licensing Regulations, 2018. The key points are: The finding that the customs broker failed to obtain authorization from each client was held as not proved. The requirement of being in contact with a specific person was confused with obtaining authorization from the client company. The charge of failing to advise the client to comply with statutory provisions was incorrectly invoked, as there was no evidence that the broker did not advise the client properly. The charge of furnishing incorrect information to the client was also not proved. The allegation of attempting to influence the examination report by customs officers was not substantiated, as there was no evidence of threats, inducements, or favors offered by the broker. The charge of failing to verify the correctness of particulars was erroneously upheld based on flimsy presumptions. Consequently, the revocation of the license, forfeiture of the security deposit, and imposition of penalty were set aside by the appellate tribunal (CESTAT) due to lack of evidence and erroneous findings.

  • Customs duty liability determination: Authority's power & limitation period invoked.

    The High Court examined the validity of a show cause notice issued u/s 28 of the Customs Act, invoking the extended period of limitation. The court held that the proper officer has the power to determine the amount payable as customs duty, including interest liability, u/s 28. This power is not subject to or conditional upon the assessment being reopened or set aside. Consequently, the respondent has jurisdiction to invoke Section 28, irrespective of not verifying the self-assessment u/s 17 or not appealing against such self-assessment. Regarding the invocation of the enlarged period of limitation under sub-section (4) of Section 28, the court found that the allegations of wilful misstatement and suppression of facts were made in the show cause notice. Without closely considering disputed facts and documents, the veracity of these allegations cannot be determined at this preliminary stage. Therefore, the court cannot conclude that the respondent invoked sub-section (4) without jurisdiction, especially since the notice appears to be issued within the specified five-year period. The petitioner was granted time to respond to the show cause notice, and the respondent was permitted to proceed with the matter in accordance with the law upon receiving the reply.

  • Importers face duty demands, penalties for forged duty credit scrips.

    The appeals relate to confiscation of Duty Entitlement Pass Book (DEPB) licenses and Telegraphic Release Advices (TRAs), and demands of customs duty u/s 28(1) of the Customs Act, 1962, along with penalties u/ss 112(a) and 114(A). The CESTAT dismissed appeals by importers and traders, holding that the TRAs and DEPBs were forged and fabricated instruments. The High Court affirmed that there can be no credit derived from forged scrips, and the liability for duty, interest, and statutory consequences is unavoidable. The factual findings by authorities were upheld as no perversity was found. Penalties on importers were restored to 50% in line with traders/brokers. The Settlement Commission's orders for co-noticees who approached it cannot be extended to other co-noticees who did not approach it, as the 'case' u/s 127-B relates only to the declarant and not all co-noticees in common proceedings.

  • Asbestos manufacturer inadvertently failed to claim export rewards; High Court allows claim based on intent.

    The Petitioner, a manufacturer of Asbestos Free brake-lining and Brake pads & brake shoes, exported these items under 28 shipping bills. However, due to a technical difficulty, the Petitioner inadvertently marked 'N' instead of 'Y' in the "reward item box" for claiming rewards under the Merchandise Exports from India Scheme (MEIS). Consequently, these shipping bills were not transmitted for granting rewards. The Policy Relaxation Committee rejected the Petitioner's claim for release of the admissible reward amounts under MEIS. The High Court, relying on the Supreme Court's decision in N.C. John case and Mangalath Cashews, ANU Cashew cases, held that where there is an inadvertent mistake of mentioning 'N' instead of 'Y' and the claimant had shown the intent to claim MEIS benefit, the reward should be granted. Since the Petitioner had declared their intention to claim rewards under MEIS while filling the shipping bills, applying the N.C. John case, the Petitioner is entitled to the rewards.

  • License Suspension of Customs Broker Overturned Due to Lack of Evidence.

    The Customs Broker's license suspension under Regulation 16(1) of CBLR, 2018 and its continuation were challenged. The Tribunal examined the Bill of Entry details and found no evidence of illegal activities by the Customs Broker in removing the container or taking it back to the examination area. The duties of examining goods and allowing movement from the Container Freight Station were part of Customs officers' responsibilities, not the Broker's. The impugned order lacked clear findings and reasons for immediate suspension as per CBIC instructions. The Tribunal held that no sufficient grounds were made out against the Broker, and the continuation of license suspension could not be sustained. Following precedent, the Tribunal modified the order by setting aside the Broker's license suspension while allowing proceedings under Regulation 17 of CBLR, 2018 to continue as per law.

  • PVC Resin Anti-dumping Duty Dispute: Importer Wins Based on Documentary Evidence Over Packing Discrepancy.

    The case pertains to the demand of anti-dumping duty on PVC Resin SG 5 imported from China. The appellant claimed to have imported the goods from "CNSG Jilantai Salt Chlori-Alkali Chemical Co. Ltd," while the bags bore the name "CNSG Jilantai Chlori-Alkali Chemical Co. Ltd," with the word "salt" missing. The CESTAT held that the documentary evidence, including the invoice, packing list, and certificate of origin, takes precedence over assumptions/suspicions arising from the packing. Relying on a previous case involving a similar issue, the CESTAT accepted the documentary evidence as adequate proof that "Alkali Company" was the producer and allowed the benefit of the concessional rate to the appellant.

  • Customs duty dispute: Revenue's single appeal against 93 Bills of Entry deemed non-maintainable.

    The central issue revolves around the maintainability of a single appeal filed by the Revenue against multiple Bills of Entry. As per Rule 6(A) of the CESTAT Procedure Rules, 1982, when separate orders-in-original are passed for each Bill of Entry, the appellant is required to file separate appeals corresponding to each order. However, in this case, the Commissioner (Appeals) disposed of appeals concerning 93 Bills of Entry through a common order-in-appeal. Consequently, the Revenue is obligated to file 93 separate appeals challenging each Bill of Entry, as each assessment order constitutes a distinct cause of action. This interpretation aligns with the National Litigation Policy's stance that monetary thresholds apply to individual appeals rather than the aggregate amount. The Tribunal, concurring with prior judicial precedents, held the single appeal filed by the Revenue as non-maintainable and directed the filing of 93 separate appeals if advised.

  • DGFT

  • Import Relief for Exporters: Duty-Free Inputs Exempt from Quality Control Orders.

    This public notice amends Appendix 2Y of the Foreign Trade Policy 2023 to exempt goods imported under Advance Authorisation, EOU, and SEZ schemes from mandatory Quality Control Orders (QCOs) issued by certain ministries/departments, when such goods are utilized/consumed in the manufacture of export products. The Ministry of Heavy Industries has been added to the list of exempted ministries/departments under Appendix 2Y, enabling imports of inputs subjected to QCOs issued by this ministry for use in export production. This amendment provides relief to exporters by allowing duty-free import of inputs required for manufacturing export goods, even if those inputs are covered under domestic quality control regulations.

  • Revised norms for precious metal wastage in jewelry exports.

    This public notice amends paragraph 4.59 of the Handbook of Procedures, 2023, and modifies the Standard Input Output Norms (SION) M-1 to M-8 for the export of jewellery. It revises the maximum permissible wastage or manufacturing loss percentages for various categories of gold, platinum, and silver jewellery and articles, distinguishing between handcrafted and mechanized production processes. The SION tables specify the quantities of gold, platinum, and silver required as inputs to produce one kilogram of different types of exported jewellery items. The revisions aim to align the norms with current industry practices and ensure efficient utilization of precious metals in jewellery exports.

  • Extension of relaxation on gold/platinum/silver wastage norms for exporters until 31.12.2024.

    This public notice from the Directorate General of Foreign Trade (DGFT) further extends the abeyance of Public Notice No. 05/2024 dated 27.05.2024 regarding modification of wastage permissible and Standard Input Output Norms (SIONs) for Gold/Platinum/Silver content in export items until 31.12.2024. The previous extensions were granted until 31.07.2024, 31.08.2024, 15.09.2024, and 31.10.2024 based on representations from the Gem & Jewellery Export Promotion Council. During this interim period, the wastage norms under Para 4.59 of Handbook of Procedures 2023 and SIONs M1 to M7 as existed prior to Public Notice No. 05/2024 stand restored. The revision of new SIONs is under process. This notice is issued by the DGFT under powers conferred by Paragraphs 1.03 and 2.04 of the Foreign Trade Policy 2023.

  • IBC

  • Disciplinary panel's 2-year suspension of insolvency professional upheld for e-auction irregularities.

    The High Court upheld the Disciplinary Committee's order suspending the petitioner's registration as an Insolvency Professional for two years due to procedural irregularities in conducting an e-auction as a Liquidator. The key points are: Principles of natural justice were duly followed by issuing a show cause notice, granting an opportunity to reply and oral hearing. The order was based on NCLT and NCLAT orders finding irregularities in the short notice period for the e-auction. The two-year suspension was not disproportionate considering the adjudicated misconduct. The petitioner can continue ongoing assignments at the discretion of creditors/stakeholders. The High Court found no perversity, irrationality or disproportionality in the suspension order and dismissed the writ petition challenging it.

  • Bank loan default before Covid triggers insolvency despite recall notice delays.

    The CD defaulted on loan repayment from January 2020, failing to pay the monthly installment due on 20th January 2020. Though partial payment was made in February 2020, the entire amount including penal interest was not paid, constituting default. The FC issued a recall notice on 06.11.2020, giving 15 days to pay the defaulted amount. The CD cannot claim the recall notice date of 21.11.2020 as the default date to bring it within Section 10A of the IBC, as the default occurred much earlier in January/February 2020, prior to the cut-off period of 25.03.2020 to 25.03.2021. Issuance of the recall notice was a procedural consequence of the pre-existing default. Section 10A is inapplicable as the default predated the cut-off period. The appeal challenging the order admitting the insolvency petition u/s 7 is dismissed.

  • Indian Laws

  • Power company's right to recover unpaid charges lapses if unreasonable delay in issuing notice.

    Statutory liability under the Indian Electricity Act, 1910 survives after the Electricity Act, 2003's enforcement. The limitation period u/s 56 of the 2003 Act applies to liabilities arising under that Act, not prior. Section 24 of the 1910 Act allows disconnection for non-payment without prescribing a limitation period. However, the licensee's right to claim unpaid charges lapses if notice u/s 24(1) is unreasonably delayed beyond the period for filing a recovery suit. The High Court's judgment allowing the appeal was unsustainable, and the Supreme Court set it aside, allowing the civil appeal.

  • Defendants' spurious defence rejected; admitting liability but claiming payment at own discretion deemed "moonshine".

    The Court dismissed the defendants' applications seeking leave to defend the suit, as their defence was found to be frivolous, vexatious, and without any merit. The defendants admitted their liability to repay the amount claimed by the plaintiff but contended that the repayment was contingent upon an uncertain future event, solely at their discretion. The Court held that admitting liability while claiming non-repayment based on their inability to pay at their sole discretion is a moonshine defence. As the defendants failed to disclose any substantial or genuine defence, leave to defend was rightly refused under Order XXXVII Rule 3(5) of the CPC. The denial of leave is an exception when the defendant has practically no defence or raises only frivolous and vexatious issues without any semblance of triable issues.

  • Company director can't escape cheque dishonor liability by claiming ignorance of affairs.

    A director of a company cannot evade vicarious liability for the offence of dishonor of cheque u/s 138 of the Negotiable Instruments Act by merely claiming to be a housewife and not involved in the company's affairs. The High Court held that while exercising jurisdiction u/s 482 CrPC to quash a complaint, it must be extremely cautious and do so only in rarest of rare cases where allegations are patently absurd and inherently improbable. The Supreme Court in S.P. Mani & Mohan Dairy v. Snehalatha Elangovan clarified that Section 141 extends criminal liability to every person in charge and responsible for the company's conduct at the time of the offence. The director, being one of only three directors, cannot claim to be unaware or uninvolved in the day-to-day affairs. Such contentions are matters for trial, and in the absence of unimpeachable evidence, the summoning order cannot be quashed at this stage. The petition was dismissed.

  • VAT

  • Excess tax refund claims rejected on time limit, High Court allows explanation for delay.

    The High Court set aside the orders rejecting the petitioner's refund claims for excess tax paid in different assessment years on the ground of time limitation. The Court observed that Rule 29 prescribes the time limit for filing refund claims, but the proviso empowers the authority to admit delayed claims if sufficient cause is shown. The impugned orders did not reflect if the petitioner was given an opportunity to explain the delay. The respondents did not dispute the petitioner's entitlement to refund or the assessment proceedings referred to. The Court remanded the matter to the concerned authority, permitting the petitioner to explain the causes of delay in filing the refund applications.

  • Bank's charge takes precedence over VAT dept's charge on property under SARFAESI Act.

    The court held that the charge created by the bank u/s 26E of the SARFAESI Act would take precedence over the charge created by the respondent u/s 48 of the VAT Act. Relying on a previous judgment, the court ruled that the charge for VAT dues has no legal efficacy in view of the SARFAESI Act and the RDB Act. As the bank had created the charge prior in time, the subsequent charge created by the respondent in 2019 cannot be sustained. Consequently, the respondent was directed to remove the charge over the property, and the mutation entry in the Revenue Record was ordered to be deleted. The petition was disposed of accordingly.

  • Central Excise

  • Hidden cigarette manufacturing: Excise duty evasion alleged, but petitioner's reply ignored in assessment order.

    Clandestine manufacture and recovery of Central Excise Duty along with interest and penalty - suppression of facts and misrepresentation alleged against petitioner - adjudicating authority failed to consider petitioner's reply while passing impugned order - assessment period covered by earlier orders of coordinate authorities - principles of natural justice violated - doctrine of res judicata applicable. Careful perusal of first appellate authority's order revealed core issue was production capacity of machine, concluded based on evidence as 301-750 pouches per minute, contrary to adjudicating authority's subsequent finding of above 751 pouches. First appellate authority interfered with adjudicating authority's order, holding it unsupported by evidence/records. Clear finding of no suppression or misrepresentation by petitioner. First appellate authority's factual findings binding on adjudicating authority unless overturned by higher authority/court, which is not the case. Mere submissions by respondents without supporting facts cannot establish petitioner's reply was considered. Impugned order passed in violation of natural justice. Principle of res judicata rightly applied by Tribunal. First appellate authority found no willful suppression or mala fide intention by petitioner, rendering invocation of jurisdiction u/s 11A untenable. Alternative remedy under statute not efficacious in present circumstances. Petition allowed.

  • Partial GST refund allowed; remaining claim remanded for fresh adjudication on unjust enrichment.

    Refund claim u/s 142(3) of CGST Act, 2017 read with Section 11B of Central Excise Act, 1994 was partially allowed. Refund of Rs. 20,52,143/- and Rs. 2,19,004/- granted, appellant can approach GST authority for credit in electronic ledger. Refund of Rs. 41,244/- and Rs. 4,87,533/- initially rejected as paid after 01.07.2007, when no CENVAT credit provision existed. However, CESTAT relied on its previous decision in Shree Ganesh Remedies case, holding that Section 142(3) covers amounts accrued pre-GST regime, even if paid post 01.07.2017. Matter remanded to adjudicating authority to pass fresh order considering unjust enrichment, after processing refund claim for Rs. 41,244/- and Rs. 4,87,533/-.


Notifications


Circulars / Instructions / Orders


News


Case Laws:

  • GST

  • 2024 (11) TMI 193
  • 2024 (11) TMI 191
  • 2024 (11) TMI 190
  • 2024 (11) TMI 189
  • 2024 (11) TMI 188
  • 2024 (11) TMI 187
  • 2024 (11) TMI 186
  • 2024 (11) TMI 185
  • 2024 (11) TMI 184
  • 2024 (11) TMI 183
  • 2024 (11) TMI 182
  • 2024 (11) TMI 181
  • 2024 (11) TMI 180
  • Income Tax

  • 2024 (11) TMI 192
  • 2024 (11) TMI 179
  • 2024 (11) TMI 178
  • 2024 (11) TMI 177
  • 2024 (11) TMI 176
  • 2024 (11) TMI 175
  • 2024 (11) TMI 174
  • 2024 (11) TMI 173
  • 2024 (11) TMI 172
  • 2024 (11) TMI 171
  • 2024 (11) TMI 170
  • 2024 (11) TMI 169
  • 2024 (11) TMI 168
  • 2024 (11) TMI 167
  • 2024 (11) TMI 166
  • 2024 (11) TMI 165
  • 2024 (11) TMI 164
  • 2024 (11) TMI 163
  • 2024 (11) TMI 162
  • 2024 (11) TMI 161
  • 2024 (11) TMI 160
  • 2024 (11) TMI 159
  • 2024 (11) TMI 158
  • 2024 (11) TMI 157
  • 2024 (11) TMI 156
  • 2024 (11) TMI 155
  • 2024 (11) TMI 154
  • 2024 (11) TMI 153
  • 2024 (11) TMI 152
  • 2024 (11) TMI 151
  • 2024 (11) TMI 150
  • 2024 (11) TMI 149
  • 2024 (11) TMI 148
  • 2024 (11) TMI 147
  • 2024 (11) TMI 146
  • 2024 (11) TMI 145
  • 2024 (11) TMI 144
  • 2024 (11) TMI 143
  • Customs

  • 2024 (11) TMI 142
  • 2024 (11) TMI 141
  • 2024 (11) TMI 140
  • 2024 (11) TMI 139
  • 2024 (11) TMI 138
  • 2024 (11) TMI 137
  • 2024 (11) TMI 136
  • 2024 (11) TMI 135
  • 2024 (11) TMI 134
  • Insolvency & Bankruptcy

  • 2024 (11) TMI 133
  • 2024 (11) TMI 132
  • PMLA

  • 2024 (11) TMI 131
  • 2024 (11) TMI 130
  • Service Tax

  • 2024 (11) TMI 129
  • 2024 (11) TMI 128
  • 2024 (11) TMI 127
  • Central Excise

  • 2024 (11) TMI 126
  • 2024 (11) TMI 125
  • 2024 (11) TMI 124
  • 2024 (11) TMI 123
  • 2024 (11) TMI 122
  • 2024 (11) TMI 121
  • 2024 (11) TMI 120
  • 2024 (11) TMI 119
  • CST, VAT & Sales Tax

  • 2024 (11) TMI 118
  • 2024 (11) TMI 117
  • 2024 (11) TMI 116
  • 2024 (11) TMI 115
  • 2024 (11) TMI 114
  • Indian Laws

  • 2024 (11) TMI 113
  • 2024 (11) TMI 112
  • 2024 (11) TMI 111
  • 2024 (11) TMI 110
 

Quick Updates:Latest Updates