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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter December 10, 2021 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles DESIRABILITY TO ALLOW EXTENSION BY ASSESSING OFFICERS without loss to assessee and revenue both – combing back of old provision is need of hour in view of COVID19 and OMICRON related problems and similar other serious health conditions and other contingencies etc. NON PAYMENT OF TAX BY THE SELLER – INPUT TAX CREDIT AVAILABLE TO BUYER? News North-Eastern Region to emerge as a hub for rubber production: Shri Piyush Goyal Finance Minister Smt. Nirmala Sitharaman participates in G-20 Seminar on “Recover Together, Recover Stronger” Export Turnover Single Window System Special Economic Zones Logistics Cost in NER Foreign Direct Investment (FDI) Regional Trade Agreements Notifications GST - States F A 3-17-2021-1-V-(68) - dated 12-11-2021 - Madhya Pradesh SGST Seeks to bring in force sections 13 and 14 of the Madhya Pradesh Goods and Services Tax (Amendment) Act, 2021 F A-3-42-2017-1-V(75) - dated 10-11-2021 - Madhya Pradesh SGST Amendment in Notification No. F A3-42-2017-1-V(53), dated the 30th June, 2017 F A-3-32-2017-1-V(74) - dated 10-11-2021 - Madhya Pradesh SGST Amendment in Notification No. F A-3-32-2017- 1-V(41) dated the 29th June, 2017 Income Tax 135/2021 - dated 8-12-2021 - IT Agreement between the Government of the Republic of India and the Government of the Kyrgyz Republic for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes Circulars / Instructions / Orders SEBI SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/678 - dated 9-12-2021 Transaction in Corporate Bonds through Request for Quote platform by Portfolio Management Services (PMS) DGFT 42/2015-2020 - dated 8-12-2021 Enlistment of Agencies under Appendix 2E of FTP, 2015-20 authorized to issue Certificate of Origin (Non-Preferential) Customs Instruction No. 28/2021 - dated 9-12-2021 Instruction regarding Testing of coumarin in imported Cinnamon Companies Law 19/2021 - dated 8-12-2021 Clarification of holding of Annual General Meeting (AGM) through Video Conference (VC) or Other Audio Visual Means (OAVM) 20/2021 - dated 8-12-2021 Clarification on passing of Ordinary and Special resolutions by the Companies under the Companies Act, 2013 read with rules made thereunder on account of COVID-19-Extention of timeline Highlights / Catch Notes GST Delay in filing of appeal - Period of limitation - Though the petitioner was in receipt of the impugned assessment order by email on April 20, 2019 itself, the petitioner applied for certified true copy of the order dated April 20, 2019 on November 5, 2019, only after the recovery proceedings were initiated against the petitioner by attaching the bank account on July 1, 2019. The petitioner has by such belated action lost the statutory remedy of appeal - the petitioner’s challenge to the impugned assessment order is not entertained. - HC Visit to Get Source Input Tax Credit - seeking permission to file TRAN-1 Form, either online or offline - This Court directs the respondents to permit the petitioner either submit the TRAN-1 Form online by opening of the portal or permit to submit the TRAN- 1 Form manually and thereafter to process the assessees claim for grant of the input tax credit at the earliest. - HC Visit to Get Source Classification of supply - Coach Work like Switch Board Cabinet for Railway Coaches and Locomotives - Switch Board Cabinet, though to be used in Railway coaches, cannot be called as parts of railway bogies under Chapter Headings 8607 of the Tariff, due to the specific HSN available for Switch Board Cabinet and therefore, the Switch Board Cabinet merit classification under HSN 8537. - AAR Visit to Get Source Seeking grant of Regular Bail - fraudulent transfer of ITC - The offence is triable by learned Magistrial Court. Denial of bail to the applicant, would amount to pretrial conviction. It is not that the applicant would flee from the trial. The apprehension of repetition of offence can be taken care by some stringent conditions. There is no justifiable ground to keep the present applicant in the judicial custody till the completion of investigation / trial. - Bail granted - DSC Visit to Get Source Income Tax Exemption u/s.11 of the Act r.w.s. 13(1)(c) - The purchasing of wood is for the medical college to be established by the assessee/Educational Trust. Each one of the above reasons looked at independently, in the background of material placed on record by the assessee, this Court is of the view that the findings recorded by the Tribunal confirming the findings of facts recorded by the authorities under the Act are available conclusions, and do not warrant interference of this Court. - HC Visit to Get Source TDS u/s 194I - Additional discount given is by way of godown rent - Tribunal is absolutely right in holding that every assessee is required to decide its own business affairs. The manner of conducting the business also gives it a fillip, which shall need to be essentially decided by the assessee and no one can comment and run his business usurping his position. - HC Visit to Get Source Exemption u/s 11 - application for grant of registration u/s 12AA rejected - In the absence of proper compliances etc before the Ld. CIT(Exemption) on the part of the assessee it is made clear that the Ld. CIT(A) (E) shall be at liberty to pass an order on the basis of material available on record. Hence, the opportunity so provided in good faith, it is hoped is not abused and utilized fairly by the assessee. - AT Visit to Get Source Revision u/s 263 by CIT - bogus loss on shares - penny stock transactions - Reliance on audit objection given by the audit party - As safely concluded that the ld. AO had indeed taken a possible view on the matter. PCIT merely because he has got a different view on the same set of facts cannot try to substitute his view in place of the view already taken by the ld. AO by invoking his revision jurisdiction u/s.263. - AT Visit to Get Source Customs Claim of refund - Period of limitation - the refund was filed by the appellant on 27.10.2016 and Notification reducing the rate of ADD was issued on 29.01.2016. Firstly, there is no time limit provided in the section 9A sub section (2) clause (b) for claiming refund, therefore, the appellant have filed the refund claim within reasonable time i.e. one year. - AT Visit to Get Source Revocation of Customs Broker License - It would not be unreasonable to assume that if the shipping bill is filed by Customs Broker X and the person representing the Custom Broker has a G-Card of Customs Broker Y, officers would not entertain or deal through him because he would have no locus standi - it is found that the balancing the evidence available on both sides, it is found in favour of the Customs Broker and hold that it has not been established that the Customs broker has violated Regulation 10(b) of CBLR, 2018. - AT Visit to Get Source Corporate Law Oppression and mis-management - The discretionary power under Section 402 of the Companies Act are residuary in nature and in addition to the powers available to the CLB under Sections 397(2) and Section 398 (2) which permit the CLB to make such order as it thinks fit with a view to give quitus to the matters complainted. In the instant case, the oppressive conduct of the appellants against the Foreign investors namely ORE Holdings and Athappan well found and spoken aloud in the orders passed by CLB, High Court and the Supreme Court. - HC Visit to Get Source Indian Laws Dishonor of Cheque - criminal liability of natural persons - In the case on hand, the insolvency process was initiated by NCLT on 10.07.2017 and moratorium has been declared under the Insolvency & Bankruptcy Code. Therefore, as held by the Hon'ble Supreme Court, the moratorium was only in respect of the corporate debtor and not in respect of the directors / management and therefore, the petitioners 2 and 3 as natural persons, are liable for prosecution. However, in view of declaration of moratorium by NCLT, the prosecution as against the company cannot be allowed to continue. - HC Visit to Get Source Dishonor of Cheque - cheques have been endorsed in favour of the plaintiff - The effect of an endorsement of a Negotiable Instrument with the endorsements as illustrated above has the effect of transferring to the endorsee the property therein with the right to further negotiate. However, the endorsement may expressly restrict or exclude such a right or merely constitute an endorsee right of further negotiation - the plaintiff has not proved the endorsement in the manner known to law and the Judgment of the Trial Court which has elaborately considered this issue does not require any interference. - HC Visit to Get Source Service Tax Classification of services - erection of girders used in the construction of roads and bridges with the help of labour and equipment - supply of tangible goods services or not - The work order issued by M/s L & T Company describes the work as erection services and the payment in both the cases was linked to the number of girders erected. On going through the work contracts, the work performed by the appellants is essentially erection of girders. For this purpose, they may have used/mobilized equipment/labour. It is not coming forth from the work orders that the work orders were for supplies of any cranes or equipments. - AT Visit to Get Source Central Excise Levy of penalty on the company and its Director - If the appellant is permitted to pay reduced penalty i.e. 25% of the duty so determined within 30 days from the date of receipt of server copy of this order, the benefit should enure in favour of the appellant/assessee - HC Visit to Get Source VAT Refund of excess tax - Purchase of High Speed Diesel Oil - inter-state sales - refusal to accept the “C” Forms - It is well settled that if a claim is otherwise admissible on the basis of documents on record, the failure to revise a return would be immaterial as it is the duty of the Assessing Officer to impose tax on the basis of law as not the basis of an alleged concession, acquiescence or mistake or failure on the part of the assessee to make a correct claim - HC Visit to Get Source Case Laws: GST 2021 (12) TMI 376 Delay in filing of appeal - Period of limitation - Validity of action on the part of the respondent no.5 in refusing to accept and entertain the appeal preferred by the petitioner against the impugned assessment order - Section 62 of the Maharashtra Goods and Services Tax Act, 2017 limitation prescribed by sub-section (1) of Section 107 of the Act - HELD THAT:- It is well settled that the Court cannot add or subtract the words to a statute or read something into it which is not there. This is precisely what learned counsel for the petitioner wants us to do. The submission of learned counsel for the petitioner that except for communication of the impugned assessment order on the GSTN portal, all other communications are to be disregarded for the purpose of sub-section (1) of Section 107 of the said Act, is fallacious and too far fetched. Rule 108 which is reproduced herein before. Sub-rule (1) of Rule 108 provides that the appeal under sub-section (1) of Section 107 shall be filed in Form GST APL-01, along with the relevant documents, either electronically or as notified by the Commissioner. Sub-rule (3) provides that a certified copy of the decision or order appealed against shall be submitted within seven days of filing the appeal under sub-rule (1) - proviso to sub-rule (3) of Rule 108 stipulates the consequence of filing the certified copy within seven days and also the consequence of filing the certified copy after seven days from the date of filing of appeal. In the present case, having regard to the express provisions of sub-Section (1) and (4) of Section 107 of the said Act, we have no manner of doubt, that for the purpose of limitation, the date of communication of the impugned assessment order is to be regarded as April 20, 2019 viz the date on which the order was sent by email to the petitioner - the petitioner failed to avail of the remedy provided by the said Act for filing of an appeal within the period prescribed and therefore rightly not accepted and entertained by the appellate authority beyond the extended statutory limitation period of one month in terms of sub-section (4) of Section 107. Though the petitioner was in receipt of the impugned assessment order by email on April 20, 2019 itself, the petitioner applied for certified true copy of the order dated April 20, 2019 on November 5, 2019, only after the recovery proceedings were initiated against the petitioner by attaching the bank account on July 1, 2019. The petitioner has by such belated action lost the statutory remedy of appeal - the petitioner s challenge to the impugned assessment order is not entertained. It was incumbent upon the petitioner to file the appeal within the statutory period of limitation prescribed by sub-section (1) and sub-section (4) of Section 107 of the said Act, to be reckoned taking into consideration the date of communication of impugned assessment order as April 20, 2019, which the petitioner failed to do - Petition dismissed. 2021 (12) TMI 375 Input Tax Credit - seeking permission to file TRAN-1 Form, either online or offline - Inaction on the part of the respondents in permitting the petitioner to submit the TRAN-1 Form under GST Act claiming for the input tax credit - vires of Rule 117 (1A) of CGST Rules - HELD THAT:- Given the authoritative decision rendered by the various High Courts in the country and also taking note of the fact that the husband of the petitioner who was the original proprietor having expired in the midst of introduction of the new GST regime on 20.09.2017 and the then compelling circumstances, and further because of the technical glitches and difficulties which the petitioner faced in the course of submission of TRAN-1 form, this Court also endorses the view taken by the various High Courts. Accordingly, this Court is inclined to allow the writ petition in similar terms as decided by the various High Courts. Reliance can be placed in the case of M/S. SUNNY MOTORS VERSUS CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC) , DEPARTMENT OF REVENUE, GOVT. OF INDIA AND OTHERS [ 2021 (9) TMI 907 - ORISSA HIGH COURT] where it was held that a direction is issued to the Opposite Parties to either open the portal and permit the Petitioner to file TRAN-1 form electronically on or before 1st November, 2021 or accept the TRAN-1 Form from the Petitioner manually before that date. It will be open to the authorities to verify the genuineness of the claim of the Petitioner in accordance with law and pass appropriate orders. This Court directs the respondents to permit the petitioner either submit the TRAN-1 Form online by opening of the portal or permit to submit the TRAN- 1 Form manually and thereafter to process the assessees claim for grant of the input tax credit at the earliest. Let this exercise be completed by the respondents within a period of 60 days from the date of receipt of copy of this order. Petition allowed. 2021 (12) TMI 374 Applicability of GST on petroleum products - HELD THAT:- Even though the matter was taken in the 45th GST Council meeting, three issues seemed to have been considered by the Council, for bringing the petroleum products under the GST regime, i.e., (i) the matter involves high revenue implications, (ii) requires larger deliberations and (iii) during pandemic times, it would be difficult to bring petroleum products under GST regime. We are not satisfied with the reasons. There should be some discussion and genuine reasons, as to why petroleum products cannot be brought under the GST regime. It is well known that even during pandemic period, several decisions were taken involving revenue, after deliberations. Post the matter in the second week of December, 2021. 2021 (12) TMI 373 Classification of goods - poultry meal - classifiable under Chapter Sub Heading No. 2301 10 90 of the first schedule to the Customs Tariff Act, 1975 or under Chapter Subheading No. 1501 90 of the first schedule to the Customs Tariff Act, 1975? - applicability of Sl.No. 103 of the Schedule-I of the Not No.01/2017-CT (R) dated 28.06.2017 or entry No.19 of the Schedule-II of the Not. No. 01/2017-CT (R) dated 28.06.2017? HELD THAT:- For classification under Heading 2309 and the sub-headings/Tariff Items thereunder, the goods must be preparations of a kind used in animal feeding: which is admittedly not fulfilled in respect of the impugned poultry meal. The appellant, though stated in the grounds of appeal that the poultry meal is directly edible by animals, however they have not adduced any material to show or substantiate the said position. In terms of Rule 1 of the Interpretative Rules, the terms of the headings are the primary and the paramount criterion for classification. Heading 2301 covers meals., of meat or meat offal and admittedly the impugned goods are poultry meal made from chicken wastages etc. Thus, we find that the appropriate classification is under Tariff Item 2301 10 10 covering Meat meals and pellets and not under Tariff Item 2301 10 90 -'Other'. Since 'meat meal' finds a specific mention in 2301 10 10 they will merit classification under this heading as opposed to 2301 10 90 which is a generic entry. Therefore, the lower Authority's ruling to this extent, merits to be modified in accordance with Section 101 (1) of the GST Act. 2017 which specifically empowers modification of the ruling appealed against. The classification of the product Poultry Meal is concerned, it is held that the same falls under Heading 2301 of the Customs Tariff (applicable for GST purposes) and in particular, under Tariff Item No. 2301 10 10. Whether the poultry meal is covered by the exemption entry SI.No. 102 of Notification No.2/2017-C.T. (Rate) dated 28.06.2017 as claimed by the appellant or not? - HELD THAT:- The entry refers to both the classification i.e.. Chapter Heading / Subheading / Tariff Item and also specified description, in Col. (2) (3) respectively. The impugned goods viz., 'Poultry meal' have been held to be classifiable under Heading 2301 of the Customs Tariff. The said Heading figures in Column (2) of the entry No. 102. However, the goods 'poultry meal' does not figure in the list of goods specified by description in Column (3) above. Hence, the poultry meal' is not eligible for the above exemption. 2021 (12) TMI 372 Classification of supply - Coach Work like Switch Board Cabinet for Railway Coaches and Locomotives - HELD THAT:- The applicant is registered under the GST Act and intend to supply Switch Board Cabinet for Railway Coaches and Locomotive consisting of all the power/control switchgear for coach lighting, air conditioning, pantry, pump control, sanitary system and public address system of Railways for which capability and capacity assessment of the applicant has been done by the RDSO. However, the applicant has not produced any Purchase Order issued by the Railways for supply of Switch Board Cabinet along with application of advance ruling. Switch Board Cabinet are classified under HSN 8537. The chapter subheading 8537 cover Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, incl. those incorporating instruments or apparatus of chapter 90, and numerical control apparatus (excluding switching apparatus for line telephony or line telegraphy). We find that as per RDSO Specification No. RDSO/PE/SPEC/AC/0814-2015(Rev.0), Switch Board cabinet is equipped with power switchgear, control switchgear, fuses, MPCB, MCB, Relay etc i.e. two or more apparatus of heading 8535 or 8536. As such, the product Switch Board cabinet merits classification under HSN 8537. Switch Board Cabinet, though to be used in Railway coaches, cannot be called as parts of railway bogies under Chapter Headings 8607 of the Tariff, due to the specific HSN available for Switch Board Cabinet and therefore, the Switch Board Cabinet merit classification under HSN 8537. As per Section 9(1) of the CGST Act, 2017, the levy of tax on the supply of goods or services is at such rates as may be notified by the Government on the recommendations of the Council. Accordingly, Notification No. 1/2017-Central Tax (Rate) dated 28-Jun-2017 has been issued to notify the rates. The opening paragraph of the referred notification provides that the stipulated rate in the given Schedules shall apply on the supply of goods which should not only fall in the given tariff item, sub-heading, heading or Chapter but also meet the specified description - The Switch Board Cabinet is covered in the Entry no. 388B of Schedule III of Notification No. 1/2017 C.T. (Rate) dt. 28.06.2017 and attract GST @18%. 2021 (12) TMI 371 Seeking grant of Regular Bail - fraudulent transfer of ITC - fake bills have been obtained without supply and receipt of the goods so as to wrongfully claimed input tax credit - HELD THAT:- The applicant has alleged to have played role in offence. Looking to the fact of the case, evidence on record, it appears that the applicant has fraudulently availed Input Tax Credit (ITC) amounting to ₹ 6.04 crores by using modus operandi of issuing fake invoices and passed on fraudulent ITC to their buyers situated at various places without supply of corresponding goods mentioned in the said invoices. Further huge and voluminous documents related to the transactions of sales and purchases were seized. The punishment prescribed for the alleged commission of offence is with imprisonment for a term which may extend to five years and with fine. Thus, the charge upon the applicant are not of the nature so as to inflict punishment of Death penalty. The whole case is based on the documentary evidence and the Investigating Agency has already seized the related documents. The present applicant is permanent resident of Bhavnagar and have deep root in the Society and therefore, the chances of fleeing away from justice is remote. The offence is triable by learned Magistrial Court. Denial of bail to the applicant, would amount to pretrial conviction. It is not that the applicant would flee from the trial. The apprehension of repetition of offence can be taken care by some stringent conditions. There is no justifiable ground to keep the present applicant in the judicial custody till the completion of investigation / trial. This is a fit case to exercise the discretionary powers of the Court in favour of the applicant by putting some stringent conditions. The discretion vested in this Court can be exercised in favour of applicant-accused - Applicant is hereby released on bail on his furnishing a personal bond and subject to conditions imposed. Application allowed. Income Tax 2021 (12) TMI 370 Deduction u/s 80IA - Revenue s contention is that the assessee is only an advertising firm putting banner for their own purpose and, therefore, the question of claiming of any deduction under section 80IA of the Act would not arise - HELD THAT:- Tribunal has clearly held that the assessee is engaged in infrastructure development which involves construction of foot over bridge as well as the bus shelter and, therefore, the assessee is entitled to deduction under section 80IA - Tribunal followed the decision of this Court in the case of Commissioner of Income Tax, Kolkata-IV, Kolkata vs. Selvel Advertising Pvt. Ltd [ 2010 (4) TMI 1074 - CALCUTTA HIGH COURT ] which was also a similar matter wherein an advertising company engaged in infrastructure development has erected automatic traffic signal and pedestrian foot over bridge and the question was whether this would constitute infrastructure development as contemplated in clause [a] of the Explanation to subsection [4] of section 80IA of the Act. The Division Bench by the said judgement had upheld the decision rendered by the Tribunal and dismissed the Revenue s appeal. This decision has attained finality. Therefore, we are of the view that the decision of the Tribunal in so far as the claim of deduction made by the assessee under section 80IA of the Act requires to be sustained. Accordingly, substantial questions of law nos.1 to 4 are answered against the Revenue. Depreciation on asset put to use less than 180 Days - Whether Tribunal erred in allowing 100% depreciation in hoardings which have been put to use for less than 180 days in place of 50% as per section 32 [1] ? - HELD THAT:- As in assessee s own case for the assessment year 2005-06, the decision was rendered in favour of the assessee and though the Revenue has filed appeal before this Court in [ 2009 (12) TMI 1044 - CALCUTTA HIGH COURT ] but this was not one of the substantial questions of law, which has been admitted for consideration. Thus it goes without saying that the decision in respect of the substantial question of law no.5 has been accepted by the Revenue. Accordingly, the said question is also decided against the Revenue. Depreciation on hoardings - allowing depreciation @ 100% on hoardings treated as temporary structures as against the treatment given by the Assessing Officer as plant and machinery allowing depreciation at 15%? - HELD THAT:- The question is covered by the decision of the assessee s own case in Principal Commissioner of Income Tax, Kolkata-IV vs. Vantage Advertising Pvt. Ltd., [ 2019 (7) TMI 1888 - CALCUTTA HIGH COURT] following the same substantial questions of law was decided against the Revenue. In the result, the appeal fails and dismissed and the substantial questions of law are answered against the Revenue. 2021 (12) TMI 369 Exemption u/s.11 of the Act r.w.s. 13(1)(c) - Claims for exemption/deduction in the Assessment Order - HELD THAT:- A bare look at even the very documents now filed by the assessee discloses that the payment/advance in favour of M/s. VUS Timbers is anterior to any of the steps now relied on by the assessee. This circumstance is sufficient to belie the entire explanation offered by the assessee in this behalf. The admitted circumstances are that advances have been made in favour of the Managing Trustee s wife. The explanation offered is for the purchase of wood for proposed construction of a medical college. The purchasing of wood is for the medical college to be established by the assessee/Educational Trust. Each one of the above reasons looked at independently, in the background of material placed on record by the assessee, this Court is of the view that the findings recorded by the Tribunal confirming the findings of facts recorded by the authorities under the Act are available conclusions, and do not warrant interference of this Court. Nothing more is needed except to record that the findings of fact recorded are tenable from available circumstances and there is no substantial question involved warranting interference of this Court. Hence, the questions are answered in favour of the Revenue and against the assessee. Addition u/s 40(a)(ia) - non-compliance with the requirement of deduction of TDS - HELD THAT:- The statutory obligation of the assessee to conform to the requirement of Section 40(a)(ia) of the Act is not in dispute. The fact that no TDS was effected while making the payment of ₹ 21,27,846/- in favour of one Varghese Innocent towards consideration for contract works is also not in dispute. The explanation, in the understanding of this Court, does not deal with any of the relevant aspects of law or fact for independently examining the question to find out whether the findings recorded by the orders referred to above warrant interference. The assessee failed to demonstrate how the above finding warrants interference of this Court, particularly by referring to the substantial questions framed in this behalf. The questions are not substantial questions of law, and the adjudication is in accordance with the requirements of law and circumstances presented by the very return filed by the assessee. The questions are answered, hence, in favour of the Revenue and against the assessee. Levy of interest u/s 234A and 234B - HELD THAT:- The non-compliance with statutory requirements and inviting one or the other consequence thereof is not disputed. The discretion is rightly exercised by the Assessing Officer for levying interest on the tax determined in this behalf. Since the other questions are answered in favour of the Revenue and against the assessee, these questions follow suit and are answered, accordingly, in favour of the Revenue and against the assessee All the findings of the Tribunal are confirmed. The order of the Tribunal is in accordance with law and no exception could be taken and questions answered accordingly. Income Tax Appeal is dismissed 2021 (12) TMI 368 Revision u/s 263 by CIT - notice u/s 148 issued to the assessee on the ground that the assessee violated the provisions of Section 11(5) of the Act and in substance, the nature of activity undertaken by the assessee is in the nature of business - Tribunal deleted the addition - this Court examines the order of the Tribunal and whether a ground is made out warranting interference under Sec. 260A - HELD THAT:- Tribunal found that the order in Annexure-B is barred by limitation, secondly, the nature of receipt is found as building donation fund/corpus fund received by the assessee for the purpose of building fund. The findings recorded by the Tribunal firstly are findings of fact, the Tribunal being final authority on an issue of fact, a few grounds are available to challenge even the findings of fact recorded by the Tribunal. The question that falls thereafter for our consideration is whether any of the exceptional grounds available in this behalf are put forward to assail the findings of the Tribunal. For convenience, we have excerpted the findings recorded by the Tribunal. This Court since is in agreement with the findings recorded both in law and fact of the Tribunal, is also not pursuaded to restate the same conclusion in a different way. We accept the findings recorded by the Tribunal and further hold that the no substantial question of law arises for consideration. The questions are answered against the Revenue and in favour of the assessee. 2021 (12) TMI 367 Reopening of assessment u/s 147 - validity of reasons to believe - HELD THAT:- AO had applied his mind to the documents and records produced before him by the Assessee. This included the balance sheet, P L Accounts and other relevant documents. It is plain, therefore, that the reopening of the assessment was not based on any new material. The law in relation to the reopening of the assessment, particularly after the original assessment was a scrutiny assessment under Section 143 (3) of the IT Act, has been explained in detail in a number of decisions of the Supreme Court of India. Section 147 of the Act itself has undergone changes over the years. The legal position emerging on an analysis of the decisions and the legislative changes has been summarized succinctly by the Supreme Court of India in CIT, Delhi v. Kelvinator of India Limited [ 2010 (1) TMI 11 - SUPREME COURT] Similar circumstances in M/s. Sri Jagannath Promoters Builders v. Deputy Commissioner of Income Tax [ 2021 (10) TMI 1216 - ORISSA HIGH COURT] quashed the notice issued u/s 148. The facts of the present case being more or less similar, the impugned notice is hereby quashed. The writ petition is allowed. 2021 (12) TMI 366 Entitlement for additional depreciation on hiring buses - assessee is a Trust registered u/s 12A - assessee claimed additional depreciation for the school buses operated by the assessee provided for the above additional service - only argument canvassed is that the receipts received by the assessee in this behalf are included in the business income and, therefore, the assessee is automatically entitled to additional rate of depreciation - HELD THAT:- The judgment of the Supreme Court in Gupta Global Exim P. Ltd [ 2008 (5) TMI 7 - SUPREME COURT ] is a complete answer to the said contention canvassed by the assessee. Gupta Global Exim P. Ltd held that the user of vehicles in the business of the assessee is the test and that the receipt/income is included in the business income would not i.e., qualify for additional depreciation. Except the above, no other point is urged. In our view the point urged is no more res integra and the test laid down by the Supreme Court in Gupta Global Exim P. Ltd is clear on the point. By appreciating the circumstances and also following the judgment in Gupta Global Exim P. Ltd the questions are answered in favour of the Revenue and against the assessee. 2021 (12) TMI 365 TDS u/s 194C - Non deduction of TDS on freight payments made to Essar Steel - addition u/s 40(a)(ia) - as obtaining the PAN Card from the transporters, assessee is needed to furnish the same in the prescribed form to the prescribed authority within prescribed time - ITAT deleted the addition - HELD THAT:- As decided in own case [ 2021 (12) TMI 232 - GUJARAT HIGH COURT] there is no prescribed authority nominated under the provisions of law. Thus, in absence of such prescribed authority, no fault was attributed to the assessee obviously for not filing the details before such authority. The details filed by the respondent assessee along with Form No.26 naturally could be construed as sufficient compliance. No fault can be found with these detailed findings and the settled position of law. - Decided in favour of assessee. TDS u/s 194I - Additional discount given is by way of godown rent - HELD THAT:- Tribunal rightly held that the Assessing Officer had no authority to sit on the arm chair of the assessee and direct the assessee to carry out its business affairs in a particular manner, so far as the first reason was concerned. The second reason, according to the Tribunal, of protection of section 194(i) of the Act on the discount extended was not sustainable. Again, the assessee had claimed the assessment as deduction, which cannot be equated with the rent. The CIT (Appeals) adjudicated the issue raised before it by allowing the appeal of the assessee subject to the directions, which has been discussed above. Hence, it did not interfere. Tribunal is absolutely right in holding that every assessee is required to decide its own business affairs. The manner of conducting the business also gives it a fillip, which shall need to be essentially decided by the assessee and no one can comment and run his business usurping his position. Again, the rational given on the discount and having held it a non-protection of the provisions of section 194(i) of the Act, would not require any interference. Depreciation on car and car expenses - Denial of claim as car purchased in the name of director cannot be said to be assets of the company - dominion ownership of the car - HELD THAT:- ITAT, the material available on record, when looked at, the assessee though was not the legal owner of the vehicle, it has made the payment for acquisition of cars and thus, it is a beneficial owner. It is, therefore, held to be entitled for depreciation on the car. See Electro Ferro Alloys [ 2011 (10) TMI 495 - ITAT, AHMEDABAD] Tribunal has rightly distinguished the concept of dominion ownership of the car. The question raised is answered accordingly. No substantial question of law raised - Decided against revenue. 2021 (12) TMI 364 Exemption u/s 11 - application for grant of registration u/s 12AA rejected - HELD THAT:- We find on a reading of the written submissions in the paper book on record that how that the assessee trust is claimed to be performing Yajnas and running a Goshala . How these activities justify the grant of Registration is to be demonstrated by the assessee. It is also found stated on behalf of the assessee that Registration Application u/s 12AA along with all the supporting documents was filed. Admittedly the assessee could not participate in the proceedings. We also note that the Ld. CIT(E) also did not care to mention any relevant fact. In as much as even the stated Aims and the Objects of the Trust and the supporting documents claimed to have been filed have remained unaddressed. The assessee cannot be allowed to absolve himself of all responsibilities and alternately shift the burden on the tax authorities expecting them to run helter skelter and gather evidences which the assessee seeks to rely upon. The onus placed upon the party seeking Registration cannot be allowed to be struck off on the specious plea that the assessee is unable to assist. In the absence of proper compliances etc before the Ld. CIT(Exemption) on the part of the assessee it is made clear that the Ld. CIT(A) (E) shall be at liberty to pass an order on the basis of material available on record. Hence, the opportunity so provided in good faith, it is hoped is not abused and utilized fairly by the assessee. 2021 (12) TMI 353 Unexplained cash deposits in bank - addition u/s 68 - In survey proceedings u/s. 133A certain loose sheets and registers were impounded - HELD THAT:- Due to the oversight of the Accountant certain entries have not been entered because the managers have deposited the surplus amounts which could not be disbursed to labourers at various working sites/projects. So just because these deposits could not be entered in the cash book cannot be the sole ground for making addition u/s. 68 of the Act, when the bank statement duly reflected the same. Be that as it may be, the Ld. AR alternatively suggested that at the most the income embedded in the said amount of ₹ 15,81,100/- may be taxed. It has been brought to my notice that the AO has accepted the NP @ 0.85% of the assessee s business, therefore, for the interest of both the parties, I direct the AO to restrict the addition to 1% of ₹ 15,81,100/- and balance amount to be deleted. This ground of appeal of assessee is partly allowed. Addition being interest paid to contractees - ascertainment of liability - HELD THAT:- As decided in own case assessee follows mercantile system of accounting wherein the assessee was ascertained his liability of expenses as per terms of agreement and that the said ascertained liability of the assessee should be allowed as expenditure. As per the nature of the business of the assessee, the assessee has ascertained liability on interest expenditure and the Assessing Officer has not pointed out that the same was not ascertained, therefore, no justification on the part of the CIT(A) in confirming the impugned disallowance of interest expenditure. The same is ordered to be deleted. - Decided in favour of assessee. 2021 (12) TMI 352 Revision u/s 263 by CIT - bogus loss on shares - penny stock transactions - Reliance on audit objection given by the audit party - assessee had traded in four more scrips and incurred loss and that these scrips were also part of the 84 penny stock companies investigated by Kolkata Income Tax department - HELD THAT:- No error could be found on the said action and the ld. PCIT as admittedly the audit objection was part of the records of the ld. PCIT at the time of his examination. From the show-cause notice issued by the ld. PCIT and from the perusal of the orders of the ld. PCIT, we find that the ld. PCIT has independently applied his mind for invoking revision jurisdiction u/s.263 of the Act and not merely been driven by the audit objection, Hence, the legal objection raised by the ld. AR in this regard is hereby dismissed. Bogus loss on shares - Entire details of profit earned from sale of shares and loss incurred on sale of shares were indeed submitted by the assessee before the ld. AO in the course of assessment proceedings. Moreover, we find that assessee during the year had dealt with 160 scrips and out of that, it had incurred losses in respect of 45 scrips during the year which had already been tabulated hereinabove. Out of the same, the ld. PCIT had identified four scrips and had decided to treat the said loss as bogus loss in the light of findings of the DIT Investigation Kolkata and not based on his independent analysis and undoubtedly the said details were indeed filed before the ld. AO. The ld. AO in examination of the details of all the scrips had chosen to disallow loss only in respect of three scrips. As safely concluded that the ld. AO had indeed taken a possible view on the matter. PCIT merely because he has got a different view on the same set of facts cannot try to substitute his view in place of the view already taken by the ld. AO by invoking his revision jurisdiction u/s.263. No hesitation in quashing the revision order passed u/s 263 of the Act by the ld. PCIT. Accordingly, the ground raised by the assessee is allowed. Customs 2021 (12) TMI 363 Seeking release of his passport - impounding of a passport entails civil consequences - opportunity of hearing to the persons concerned - Section 10A of the Passport Act, 1967 - HELD THAT:- The petition had been filed challenging the condition imposed by the learned CMM granting permission to that petitioner to travel to Afghanistan subject to terms and conditions as imposed thereby and it was observed to the effect that the Court finds no ground to release the passport of the petitioner and permit the petitioner to leave the country without depositing the penalty of ₹ 13 lacs. The submission made in the instant case on behalf of the petitioner is to the effect that without prejudice to the rights and contention that the petitioner may raise in the appeal under Section 129E of the Customs Act, 1962, the petitioner is willing to deposit the entire penalty amount of ₹ 7 lacs. Taking into account the factum that the Passports Act, 1967 has itself been legislated inter alia to regulate matters incidental or ancillary to the issuance of passports and travel documents and regulation of departure from India of citizens of India and to other persons, the same would also include within its domain the impounding and cancellation of such passports. The petition is disposed of with directions to the effect that the impugned order dated 18.11.2021 of the learned CMM, New Delhi to the extent that it directs that the passport of the petitioner cannot be released is set aside. 2021 (12) TMI 362 Validity of assessment of bills of entry - Levy of ADD - Rubber Chemical Antioxidant (Kumanox 13) - N/N. 04/2016-CUS - adjudicating authority rejected the claim on the ground that the appellant have not challenged the assessment of bill of entry - HELD THAT:- The issue that whether the assessment of bill of entry needs to be challenged in order to claim the refund of differential ADD arising due to the reduction of rate of ADD by Notification. There is no need to challenge the assessment as the Section 9A sub section (2) clause (b) itself has provision for refund in case of ADD. Therefore, the refund is arising as per the provision, therefore, there is no further requirement of challenging the assessment of bill of entry. As regard the ground of rejection made by learned Commissioner (Appeals) of time bar, the refund was filed by the appellant on 27.10.2016 and Notification reducing the rate of ADD was issued on 29.01.2016. Firstly, there is no time limit provided in the section 9A sub section (2) clause (b) for claiming refund, therefore, the appellant have filed the refund claim within reasonable time i.e. one year. The appellant are entitled for the refund. Since the lower authority have not examined the factual aspect of the refund, the refund needs to be processed by verifying the documents - Appeal allowed by way of remand. 2021 (12) TMI 351 Reimbursement of rent/demurrage charges - undervaluation on import of Plain White Paper in Rolls - violation of Regulation 6(1)(1) of the Handing of Cargo in Customs Areas Regulations, 2009 - HELD THAT:- Issue Notice, returnable on 01.12.2021. 2021 (12) TMI 350 Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - clerical, arithmetical or typographical mistake in the original adjudication order or not - rectification of mistake u/s 154 of Customs Act - Has the Customs Broker violated Regulations 10(b), (d), (e) and (n)? - HELD THAT:- There are no reason to doubt the cross-examination and hold that Shri Babul Dey did the export work of the disputed consignment with the Customs because if he was an employee of another Customs Broker, his G-card would say so. In this case, besides the paper work, samples have also been drawn at the time of provisional assessment. If Shri Dey was unauthorisedly representing the exporter in the Shipping Bills filed in the name of the appellant Customs Broker, the Customs officers would not have entertained him. It would not be unreasonable to assume that if the shipping bill is filed by Customs Broker X and the person representing the Custom Broker has a G-Card of Customs Broker Y, officers would not entertain or deal through him because he would have no locus standi - it is found that the balancing the evidence available on both sides, it is found in favour of the Customs Broker and hold that it has not been established that the Customs broker has violated Regulation 10(b) of CBLR, 2018. Regulation 10(d) - HELD THAT:- After the provisional assessment was done which appears to have not been appealed against and hence still valid, DRI intervened and examined the same goods again and came to a different conclusion that the goods were heavily overvalued with a fraudulent intent to claim ineligible drawback. Simply because DRI came to a different conclusion in an export which was already provisionally assessed, it does not mean that the exporter had committed a fraud and that the appellant Customs Broker has colluded with the exporter in such a fraud. At any rate, valuation of the goods is to be done by the exporter (self assessment) or proper officer (re-assessment). there are nothing found remotely in the Customs Act, Rules and Regulations which gives the Customs Broker any power with respect to valuation of imported or export goods - there is no evidence to establish that appellant has violated Regulation 10(d). Regulation 10(e) - HELD THAT:- The learned Principal Commissioner has mis- read the provision of this clause. It only requires the Customs Broker to exercise due diligence to ascertain the correctness of information which he imparts to his client. In this case, the client is the exporter and we do not find anything in the allegation, let alone any evidence that the appellant has provided any incorrect information to the exporter. There is no evidence or even an allegation that the appellant customs broker had provided to the exporter any wrong information regarding any laws, procedures, instructions or anything else. The entire case of the DRI was the exporter has overvalued the goods. It is therefore found that the appellant has not violated Regulation 10(e) of CBLR, 2018. Regulation 10(n) - HELD THAT:- It appears that the appellant Customs Broker has not verified the KYC and export documents and has violated Regulation 10(n). It is found that the identity and functioning of the exporter was not in doubt and in fact, the officers have recorded the statement of the exporter. It has also been alleged in the SCN and the impugned order that the Customs Broker was present at the time of stuffing of the container at the exporter s godown. The only allegation is that there is a discrepancy between the statement of the appellant Customs Broker (who said that the KYC and export documents were given to him by the exporter at his office) and the statement of the exporter (who said that the Customs Broker, i.e., the appellant, was arranged through some other persons) - there are nothing in Regulation 10(n) that mandates how the documents should be handed over by the exporter/importer to the client. All that is required is that the KYC documents must be received and verified to ensure the identity of the client which is not in doubt even according to the SCN itself. Therefore, the charge of violation of Regulation 10(n) against the appellant Customs Broker cannot sustain. The findings in the impugned order that the appellant Customs broker has violated Regulation 10(b), 10(d), 10(e) and 10(n) cannot be sustained and need to be set aside - Appeal allowed - decided in favor of appellant. 2021 (12) TMI 349 Refund of SAD - Failure to submit the additional submissions after the personal hearing as was held on 28 January, 2020 - failure to produce the copy of invoice duly stamped with the remark that no credit of additional duty of customs levied under sub-section (5) of section 3 of Customs Tariff Act, 1975 - N/N. 102/2007 Cus. dated 14.09.2007 - HELD THAT:- It is observed that the additional written submissions were filed by the appellant Annexure P-3 are the said submissions. It bears the receipt of the Department, i.e. Commissioner of Customs (Appeals) dated 12 February, 2020. The perusal of this document is sufficient for me to hold that after the date of personal hearing i.e. 28 January, 2020, the Additional written submissions were filed by the appellant which were received by the adjudicating authority after the aforesaid date o personal hearing i.e. on 12 February, 2020. This perusal is sufficient to hold that Commissioner (Appeals) has committed an error while noting failure on part of the appellant from submitting the additional submissions, rejection of the appeal on this ground is therefore, not sustainable. Want of proper stamping - HELD THAT:- As per the condition 2 (b) of Notification No. 102 dated 14.09.2007, the refund of SAD can be sanctioned when the invoice or sale of goods are produced on record specifically indicating the non-admissibility of credit of additional duty of customs. There is no denial on part of the Department that the invoices have been produced. The only ground of not considering them is the want of proper stamping on the said invoices. The invoices as annexed on record shows that no doubt the requisite stamping specifically indicating the non-admissibility of credit of additional duty of customs is not there, but admittedly the invoices are computer generated duly acceptable in the era of digital transactions - It has also been specifically certified that the refund being claimed herein is being shown in the books of accounts/balance-sheet as amount due as refund of additional duty of Customs and same amount has not been passed on to the buyers of the sale of goods. The said Certificate of the statutory auditor of the appellant is an admissible evidence specially when there is nothing on record by the department to rebut the said documents. All department has not denied the eligibility of impugned refund claim. The otherwise objection of the Department is that instead of the amount of ₹ 2,29,821/- as claimed by the appellant, refund of amount of ₹ 1,58,685/- only is applicable to them. The said factum has also been mentioned in the Chartered Account Certificate in addition, has been acknowledged/ admitted by the appellants that amount of ₹ 2,29,821/- has wrongly been claimed by the appellant and they are entitled for the refund of SAD amounting to ₹ 1,58,685/- only - both the grounds of rejection as taken by Commissioner (Appeals) are not sustainable. Appellant is held entitled for refund claim of SAD but for an amount of ₹ 1,58,685 only - Appeal disposed off. Corporate Laws 2021 (12) TMI 361 Oppression and mis-management - Sections 397, 398, 402 and 403 of the Companies Act, 1956 - HELD THAT:- The exit scheme framed by CLB vide its order dated 13/08/2008 accepted by all the contesting parties and not challenged before the higher forum. What was challenged was the modification of the order dated 13/08/2008 pursuant to the applications filed by CG Holdings and O.R.E.Holdings. However, the error in the modified order dated 03/08/2009 was rectified and cured by the High Court in the appeals vide order dated 05.08.2011. As the result, true test should be is whether the execution order of CLB dated 31/12/2015 is in tune with the order of the High Court order dated 05/08/2011 which modified the CLB order in exercise of its power under Section 10F of the Companies Act. The discretionary power under Section 402 of the Companies Act are residuary in nature and in addition to the powers available to the CLB under Sections 397(2) and Section 398 (2) which permit the CLB to make such order as it thinks fit with a view to give quitus to the matters complainted. In the instant case, the oppressive conduct of the appellants against the Foreign investors namely ORE Holdings and Athappan well found and spoken aloud in the orders passed by CLB, High Court and the Supreme Court. This Court holds that, the functus officio argument of the appellants is baseless - this Court truly not able to find any question which satisfy the test. Most of the questions, does not beg for any answer since already duly answered by the Division Bench and the Supreme Court in the earlier round of litigation. The rest of the questions are not worth to interfere the well considered order of CLB. Appeal dismissed. 2021 (12) TMI 348 Seeking winding up of the respondent - inability to pay the debts under Section 433 (e) and (f) read with Sections 434 and 439 of the Companies Act, 1956 - HELD THAT:- Once a notice is issued under Section 434 of the Companies Act, a deeming fiction is created regarding the inability to pay the debt, therefore it becomes the obligation on the part of the respondent/debtor Company to show that the debt itself is illegal or that there is no debt at all, if it has to escape the consequence of issuance of a winding up notice. On the facts available in the case on hand one could see that the deeming fiction created by Section 434 of the Companies Act, has occurred, therefore, the existence of the debt has been proved. Therefore, it becomes incumbent upon the Court to consider the defences that are projected by the respondent Company as an answer to the claim for winding up. Even ignoring the agreements and the bills of exchange, the certificates of acceptance that had been issued by the respondent would show that there is a categorical admission of liability. Each of the bills of exchange is supported by a certificate of acceptance. The respondent has not denied the execution of the certificates of acceptance - A Division Bench of this Court in MICHAEL HART VERSUS NINESTARS INFORMATION TECHNOLOGIES LTD. REPRESENTED BY ITS MANAGING DIRECTOR, GOPAL KRISHNAN [ 2013 (4) TMI 875 - MADRAS HIGH COURT] , has examined the scope of Section 433 of the Companies Act and held that the Company Court while examining the issuance of notice or admission of a Company Petition need not pronounce upon the validity or enforceability of the debt. Admittedly, the respondent Company had not chosen to terminate the contract. It had continued to avail the services. Therefore, it cannot now turn around and say, there is a violation of the provisions of the Aircraft Act or the C.A.R. Rules made there under and therefore the liability ceased - the respondent Company has miserably failed to satisfy the three pronged test suggested by the Hon ble Supreme Court in MADHUSUDAN GORDHANDAS AND CO. VERSUS MADHU WOOLLEN INDUSTRIES (P.) LTD. [ 1971 (10) TMI 49 - SUPREME COURT] and hence had rendered itself liable to be wound up for its inability to pay its debts under Section 433 (e) of the Companies Act 1956. This Company Petition should be allowed and the respondent Company directed to be wound up. 2021 (12) TMI 347 Disqualification as Directors - Section 164(2) read with Section 167 of the Companies Act, 2013 - Case referred to Larger Bench - HELD THAT:- Following questions are referred for consideration by a larger bench of such strength as is deemed appropriate by Hon'ble the Chief Justice under Chapter V Rule 6 of the Allahabad High Court Rules, 1952:- i) Whether deactivation of Director Identification Number (DIN) under the Act, 2013 is permissible and sustainable in law as a consequence of disqualification of Director of a company under Section 164(2)(a) in the absence of any specific provision in this regard in the Act, 2013? ii) Whether the decision in the case of Jai Shankar Agrahari [ 2020 (4) TMI 354 - ALLAHABAD HIGH COURT ] and Mohd. Tariq Siddiqui [ 2019 (10) TMI 1269 - ALLAHABAD HIGH COURT ] rendered by two Division Benches of this Court relying upon decision of various other High Courts lay down the law correctly in this regard? 2021 (12) TMI 346 Seeking cancellation of specific sale transactions pertaining to the immovable properties of the company in liquidation - Sections 536 and 537 of the Companies Act, 1956 - whether the Dispositions are liable to be validated in terms of Section 536(2) of CA 1956? - HELD THAT:- From a plain reading of Section 536(2), it is evident that any disposition of the property of the company or a transfer of shares in the company or alteration in the status of its members, if done after the commencement of winding up, is void unless the court orders otherwise. In terms of Section 441(2) of CA 1956, as regards companies which are ordered to be wound-up, the winding up of the company is deemed to commence at the time of presentation of the petition for winding up. Consequently, the winding-up of the Company would relate back and commence from the date of presentation of C.P.No.153 of 2002. As a corollary, the winding-up in the present case commenced some time in the year 2002. The Dispositions should be tested by raising the other questions. For such purpose, the question on valuation is salient. The admitted position is that no valuation report pertaining to the relevant assets are on record. The management of the Company, if acting in the best interest of the Company, should have obtained a valuation report from a credible valuer before undertaking the sale of such a large extent of property. A second aspect to be noticed that the agreement of sale was executed on 18.06.1997, and the reference to the BIFR was made on 30.07.1997, which is less than 45 days thereafter - It is also pertinent to point out that many of the endorsements pertain to the period subsequent to the commencement of winding-up and even to the winding-up order. The report dated 06.10.2021 of the Deputy Official Liquidator indicates that only 2% of the admitted claims of about ₹ 23.81 crore could be discharged from the sale proceeds in course of liquidation. Thus, the Dispositions did not enable the discharge of liabilities to creditors such as SIPCOT and TIIC or even to meet workmen's dues. Section 536(2) cannot be construed in isolation, as if it operates in a silo. Once a winding-up order is passed, in terms of Section 456(2) of CA 1956, all the property and effects of the company concerned shall be deemed to be in the custody of the court, and the Official Liquidator is required to take into his custody all the property and actionable claims of the company in terms of Section 456(1) thereof. It is also beyond doubt that the relevant board of directors stands superseded upon a winding up order being issued and, therefore, such directors lose the authority to act on behalf of the company in liquidation. As adverted to earlier, the seven sale deeds were executed on various dates between April 2009 and August 2010. These documents were executed by S.Khaja Mohideen pursuant to a purported power of attorney bearing Document No.1759/2008 dated 26.08.2008. Section 537 (2) of CA 1956 is relevant in this context and provides that any sale, without the leave of the court, of the properties of a company which is being wound-up is void. This Court in INDIAN BANK VERSUS VGP. FINANCE LTD. [ 2008 (9) TMI 550 - HIGH COURT OF MADRAS] formulated a significant test to decide whether a transaction is liable to be validated. The said test is whether the Court would have approved of such transaction had its permission been sought at the time when the transaction was entered into. If the said question were to be posed in relation to the Dispositions, the unequivocal answer would be that such Dispositions would not have been permitted. Therefore, the ex-director has failed to make out a case to validate the Dispositions. On the contrary, the Official Liquidator has established that the Dispositions are liable to be declared void. Application disposed off. 2021 (12) TMI 345 Sanction of Scheme of Amalgamation - Section 230(1) read with Section 232(1) of the Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening and dispensing of various meetings issued - directions with regard to issuance of various notices issued. Application disposed off. Insolvency & Bankruptcy 2021 (12) TMI 360 Presumption of Security Interest - Adjudication of cost, pendente lite and future interest and Penal Interest over the documented rate in respect of its Credit Facility together with interest, further interest, Liquidated Damages and other charges at the contractual rates on the footing of the compound interest till payment and/or realization in full - permission to sale of Agricultural Land - hand over physical possession of the Agricultural Land - permission to sell/realize the above-mentioned Mortgaged Property - contention raised by the Applicant is that as there is no claim received from the workmen and as per the Regulation 21A of the Liquidation Regulations - HELD THAT:- On conjoint reading of Regulation 21A (2) and the Regulation 4 (2) (b) Clarification of the Liquidation Regulations, it is evident that when a secured creditor realizes its security interest, it shall pay the liquidation costs which includes the liquidator's fees. Further, in the case where a liquidator distributes any amount, which is not realised by him, he shall be entitled to a fee corresponding to the amount distributed by him. As to the facts of the present case, it is seen that the Respondent has no objection in allowing the application subject to compliances of Liquidation Regulations. Petition disposed off. 2021 (12) TMI 359 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- Even if specific permission has not been sought to re-file the proceedings on the cause of action having arisen in favour of the operational creditor, once the corporate debtor has failed to comply with the terms and conditions fixed in the settlement agreement, the right of the operational creditor still subsists and he has all the rights to file this petition for enforcing the settlement agreement dated October 11, 2018 having been entered into by the parties and admitted before this Adjudicating Authority. It is no doubt true that the settlement agreement dated October 11, 2018 has indeed been a clever handiwork of a draftsman, especially designed to take the operational creditor in its fold and avoid the imminent court orders against the corporate debtor, without even paying a penny after the settlement - the operational creditor has satisfied this Adjudicating Authority on all the issues raised in opposition by the corporate debtor. The failure of the corporate debtor to comply with the terms settled between the parties is a proved default on its part and its failure to pay the instalments, the right to sue rightly accrued in favour of the operational creditor. The agreed debt forming part of the settlement agreement dated October 11, 2018 is an admitted operational debt which had to be paid off within the stipulated time but since the corporate debtor has failed to perform its obligation under the aforesaid agreement, it is certainly a default which calls for an immediate action by this Adjudicating Authority. The application filed by the operational creditor under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating corporate insolvency resolution process against the corporate debtor, BST Infratech Ltd., is hereby admitted - application admitted - moratorium declared. 2021 (12) TMI 344 Seeking liquidation of the Corporate Debtor - no resolution plan was approved by the Committee of Creditors - section 33 of the Insolvency Bankruptcy Code, 2016 - HELD THAT:- Section 33(2) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where the resolution professional, at any time during the CIRP but before confirmation of the resolution plan, intimates the Adjudicating Authority of the decision of the CoC approved by not less than sixty-six percent of the voting share, to liquidate the Corporate Debtor. In the present case, the CoC has resolved by 97.04% voting share to liquidate the Corporate Debtor. There is no purpose in directing the RP to collate the claim. The claimant can now file the claim with the Liquidator afresh in accordance with the Liquidation Process Regulations. Therefore, the present application becomes infructuous, and is dismissed as such. 2021 (12) TMI 343 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Corporate Applicant - existence of debt and dispute or not - HELD THAT:- On perusal of the averments by Corporate Applicant and reply by its employees, it is clear that Corporate Applicant is in financial distress since January 2019: It has been reflected' in the provisional financial of the Corporate applicant as well. The application is complete and there is an existence of default on the part of Corporate Applicant. Corporate Applicant's business is actually in very downfall condition since inception'. Corporate Applicant is unable to pay off his debts and that's why he came before us to initiate CIRP against it. There is no disciplinary proceedings pending against the RP. Therefore, the application is admitted under Section 10(4)(a) of the IBC, 2016. Application admitted - moratorium declared. 2021 (12) TMI 342 Seeking to replace Respondent and appoint some other person as liquidator in the interest of the creditors - Section 60(5) of the Insolvency and Bankruptcy Code 2016 - HELD THAT:- It is seen that this Tribunal after taking into consideration the piquant situation that the Corporate Debtor is undergoing, after two Scheme proponents have withdrawn their proposal, has passed an order and thereby granted 90 days' time to complete the entire process. It is also seen from the records that the Respondent has filed two applications against the Scheme proponents who have withdrawn the Scheme after submitting the same before the CoC, seeking direction to pay a sum of ₹ 2 Crore into the Liquidation account This Tribunal does not wish to traverse through the allegations made by the Applicant, since any orders passed will adversely affect the timelines set by this Tribunal - Application disposed off. 2021 (12) TMI 341 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Pecuniary Jurisdiction - HELD THAT:- The default, on the part of the Corporate Debtor is proved from the documents filed and the submissions made by the Learned Counsel by the Operational Creditor. Further, it is also pertinent to note that the default arising in the present Application is much prior to the advent of the Covid-19 pandemic and hence the Corporate Debtor also cannot seek shelter under Section 10A of IBC, 2016. Pecuniary Jurisdiction - HELD THAT:- Further in relation to the 'Pecuniary Jurisdiction' even though the Threshold Limit' has been raised to ₹ 1 Crore as and from 24.03.2020 by virtue of a Notification issued under Section 4 of IBC, 2016, as regards the present Application, it is seen that the present Application has been filed on 24.8.2019, which is well before the Notification effected in increasing the threshold limit from ₹ 1 lakh to ₹ 1 Crore as on and from 24.03.2020 and as such this Tribunal has got the 'Pecuniary Jurisdiction' to entertain this Petition, as filed by the Operational Creditor - this Tribunal is left with no other option than to proceed with the present case and initiate the Corporate Insolvency Resolution Process in relation to the Corporate Debtor. The Petition, as filed by the Operational Creditor, is required to be admitted under Section 9(5) of the IBC, 2016. Since the Operational Creditor has not named the Insolvency Resolution Professional, this Tribunal based on the latest list furnished by the Insolvency and Bankruptcy Board of India applicable for the period between July to December 2021 - petition admitted - moratorium declared. 2021 (12) TMI 340 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Operational Creditor issued demand notice dated 13.01.2019 to the Corporate Debtor. But the Corporate Debtor did not issue any reply to the said demand notice. The Corporate Debtor has admitted the debt in its counter - Corporate Debtor does not deny the fact that the amount claimed by the Operational Creditor is due. Counsel for the Operational Creditor submits that though the Corporate Debtor took time on earlier occasions stating that they would settle the matter, only ₹ 3 Lakhs out of ₹ 36 Lakhs was paid. The Counsel appearing for the Corporate Debtor submits that the Corporate Debtor is not in a position to discharge the amount due to the Operational Creditor and agreed for the CIRP to be initiated. This is a fit case to admit and order initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor - petition admitted - moratorium declared. Service Tax 2021 (12) TMI 339 Seeking direction upon the 1st respondent to accept the payments in terms of Sabka Vikas (Legacy Dispute Resolution Scheme), 2019 - non-compliance with the requirement of payment of the taxes within the time stipulated - HELD THAT:- The time limit prescribed under Chapter-V of the Finance Act for completion of certain actions as stipulated under Chapter-V, stood extended till 30th September, 2020, and Section 6 of the Act deals with two situations, namely, period for completion and period of compliance. Therefore, the said provision has to be given a liberal interpretation and if we do so, the time limit for payment of taxes can be construed to be a time limit for completion of particular act, as stipulated under Chapter-V of the Finance Act. In fact, the said Act has also made certain amendments in the Direct Tax Vivad Se Vishwas Act, 2020, in Chapter-IV. Since Chapter-V of the Act, which deals with relaxation of time limit under Indirect Tax Laws, which stipulates four Tax Laws, which includes Finance Act, 1994, we will be well justified in holding that the time limit for completion of the payment of taxes, as quantified in Form-3, also stood extended till 30.09.2020. If that is the date on which the appellants were required to complete the payment, then the appellant's conduct in approaching this Court by filing the writ petitions on 29.09.2020 and 30.09.2020 can very well be reckoned to be a conduct, which will not be hit by delay and laches. The appellant should be permitted to remit the taxes, as quantified in the Form-3 declaration issued to the appellant, subject to of course by also paying interest @ 15% from 01.07.2020 till the date of remittance, which we shall fix as on or before 17.09.2021. If the appellants comply with the said condition, then the appropriate authority under the SVLDR Scheme shall consider the appellant's application and proceed in accordance with the provisions of the said Scheme. Appeal allowed - decided in favor of appellant. 2021 (12) TMI 338 Classification of services - erection of girders used in the construction of roads and bridges with the help of labour and equipment - supply of tangible goods services or not - Board s Circular No. 80/10/2004-ST dated 17.9.2004 and Circular No. B-I/6/2005-TRU dated 27.7.2005 - HELD THAT:- The work order issued by M/s Vijay Nirman Company Private Limited gives the discussion of work as erection of 408 Nos. of PSC girder of 39 M. length at 153 KM interchange of Yamuna Expressway Project, Agra (UP) by providing cranes, manpower, tools and tackles including transportation of the same from casting yard of PCEPL to erection location at site. The work order issued by M/s L T Company describes the work as erection services and the payment in both the cases was linked to the number of girders erected. On going through the work contracts, the work performed by the appellants is essentially erection of girders. For this purpose, they may have used/mobilized equipment/labour. It is not coming forth from the work orders that the work orders were for supplies of any cranes or equipments. The tenor of the contract is certainly for erection of girders. The payment terms also, are not for the lease out or supply of equipment so as to be categorized the service in the supply of tangible goods. The words by providing appearing in the contract should be harmoniously read with the other terms of the contract. Even on a plain reading of the description of item, it is clear that the contract is for erection of girders only and it is also mentioned that the requisite equipment, labour, transportation etc. will be managed by the appellant themselves. Education Guide of Service Tax Department clarifies that however, a sub-contractor providing services by way of works contract to the main contractor, providing works contract services, has been exempted from service tax under the mega exemption if the main contractor is engaged in providing exempt services of work contracts. It is not the case of the Revenue that the clients of appellants have not rendered services in the construction of roads and bridges. On this count also, the Revenue s contention that the appellants provided supply of tangible goods services is not tenable. The impugned order does not survive on merits and is liable to be set aside - Appeal allowed - decided in favor of appellant. 2021 (12) TMI 337 Entitlement to interest on delayed refund - Section 11BB of Customs Act - revenue deposit - principles of mutuality - HELD THAT:- Once the four companies have become one, by merger, under operation of law w.e.f. 01.01.2015, as per order of the competent Court, the transactions between them during the effective date and the date of order of the competent Court, partake the character of mutuality and hence are no longer taxable by operation of law. Whatever tax is deposited by different companies during the intervening period, ipso facto becomes Revenue deposit‟. On such Revenue deposit, interest has to be paid in terms of Section 11BB of the Act, from end of three months from the date of refund claim. There is no error in the impugned order-in-appeal - Appeal dismissed - decided against Revenue. Central Excise 2021 (12) TMI 358 Valuation of goods - M S Rounds/TMT bars - classifiable under Tariff item 72131090 of the erstwhile Central Excise Tariff or not - applicability of Rule 7 or Rule 8 of Valuation Rules - HELD THAT:- Rule 7 of the Valuation Rules, 2000, will apply only where an assessee does not sell any goods to unrelated buyers at the factory gate but transfers all their goods to their consignment agents. In this regard it will be useful to examine the provisions of Rules 7 and 8 of the Valuation Rules, 2000, during the relevant period, as they use the same starting expression. The expression Where the excisable goods are not sold by the assessee came to be examined by the Larger Bench of the Tribunal in the case of ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [ 2007 (2) TMI 5 - CESTAT, MUMBAI] where it was held that the assessee is correct in contending that provisions of Rule 8 would apply only in a case where its entire production of a particular commodity is captively consumed. This decision of the Larger Bench was relied upon by the Tribunal in the case of BHARAT PETROLEUM COPRN. LTD. VERSUS COMMR. OF C. EX., CHENNAI [ 2009 (9) TMI 845 - CESTAT CHENNAI] to hold that Rule 7 of the Valuation Rules, 2000, which uses the same expression where excisable goods are not sold.. , can be invoked only where there are no sales of the goods at the factory gate and all the goods of the assessee are transferred to consignment agents. If the assessee s excisable goods are also sold at the factory gate, Rule 7 will not apply. Appeal allowed - decided in favor of appellant. 2021 (12) TMI 357 CENVAT Credit - manufacture of dutiable goods as well as exempt goods - generation of electricity, which in turn is used in the manufacture of finished goods - Rule 6 of CENVAT Credit Rules, 2004 was amended by Notification No. 27/2005-C.E.(N.T.) dated 16.05.2005 - HELD THAT:- The appellants manufacture the Soda Ash which is a dutiable product and salt of various kinds which is an exempted product. The appellants are using certain common inputs in their electricity generation process on which they are availing Cenvat Credit. The appellant have used these common inputs for generation of steam which in turn is used partly for generation of electricity and partly in the process of manufacture of Soda Ash/salt plant in terms of Rule 6 of Cenvat Credit Rules, 2004. Since, the appellant were availing Cenvat Credit of common inputs which were used for both dutiable and exempted final product. The appellants were required to follow the prescription of Rule 6 of the Cenvat Credit Rules. The Commissioner has denied the benefit of option (II) given under Rule 6 (3) as the appellant has failed to follow the procedure prescribed under Rule 6 (3A). It is found that the appellant has been reversing the credit on a monthly basis and ideally they should have followed the procedure prescribed under Rule 6 (3A) for first ascertaining provisionally the proportional amount of credit required to be reversed and thereafter finalizing it in terms of Rule 6 (3A). However, the substantial benefit available in the law cannot be denied simply because the appellant had failed to follow the procedure prescribed in the law. The appellant have claimed that the reversal made by them is the exact amount that they were required to reverse. The other issue involved in the instant case is if the appellants are required to reverse the credit taken on HDPE bags and Soda Ash captively consumed for manufacture of salt - HELD THAT:- The appellants have categorically stated that they have paid duty on the captively consumed soda ash. They have also reversed entire credit taken on HDPE Bags. These facts needs verification. The matter is remanded to the original authority. The appellant should submit the final data to substantiate the amount of credit required to be reversed in terms of Rule 6 (3A) in terms of the earlier order of tribunal - appeal allowed by way of remand. 2021 (12) TMI 336 Levy of penalty on the company and its Director - initiation of proceeding was not permissible under Section 11A since there was no short-levy or non-levy of short payment of duty was existing on the date of initiation of proceeding - imposition of penalty is likely to be mandatory when penalty under Rule 25 is not mandatory - validity of levy of penalty under Rule 25 without any proposal for confiscation and/or confiscation of the goods and without mentioning any sub-rule is maintainable - Whether separate penalty on the Director is imposable, when penalty has been imposed on the company? HELD THAT:- The assessee was ready to pay interest and the Tribunal has recorded such a concession. Therefore, the only issue whether penalty was rightly imposed or not is the crux of the matter which needs consideration. Considering the facts and circumstances of the case it is found that the penalty was rightly imposed on the assessee. Whether the assessee would be entitled to the benefit of paragraph 2 of the order of adjudication dated 15th December, 2016 by which the adjudicating authority stated that if the duty determined under Section 11A is paid within thirty days from the date of communication of the order of adjudication the amount of penalty liable to be paid by the assessee shall be 25% of the duty so determined provided further if the reduced penalty is also paid within 30 days from the date of receipt of the order of adjudication? - HELD THAT:- Admittedly the duty has been paid much earlier by cheque dated 29th August 2005 i.e. much prior to the issuance of the showcause notice. Therefore, the appellant should be granted the benefit of 25% of the duty so determined by the adjudicating authority. The other condition which has been stipulated in the order of adjudication is that reduced penalty should be paid within 30 days from the date of receipt of the order of adjudication. Though such may be the condition but the same cannot negate the appellant/assessee s right to prefer a statutory appeal provided under the Act. Two tiers of appeal, have been provided for under the Act and, therefore, the proper interpretation to compute the period of thirty days for payment of the reduced penalty is that such period shall start from the date on which the matter attains finality. The present proceeding is an appeal against the order of the Tribunal which is a continuation of the original proceeding though strictly not in the nature of first appeal under the Code of Civil Procedure as in the instant appeal the Court is to be satisfied that substantial question of law is involved. Nevertheless, this appeal has been pending before this Court from 2017. If the appellant is permitted to pay reduced penalty i.e. 25% of the duty so determined within 30 days from the date of receipt of server copy of this order, the benefit should enure in favour of the appellant/assessee - the substantial question of law are answered against the assessee and the only relief granted to the assessee is permitting them to pay 25% of the duty determined by the adjudicating authority in this order of 15th December, 2016 within 30 days from the date of receipt of the server copy of this judgement and order. Appeal dismissed. 2021 (12) TMI 335 Relevant date for counting the period of limitation for filing refund claim - whether it is the date on which the final price was communicated by KSEB to the appellant or the different dates on which duties were paid under provisional prices? - Price variation clause - retention of excess amount of duty when it is not legitimately due - sanction of excess amount of excise duty paid in circumstances beyond the control of the appellant - principles of equity - HELD THAT:- It is not in dispute that, in the case on hand, the claim for refund is made beyond one year from the date of payment of duty by the appellant as stipulated by Explanation (f). As rightly held in the orders under appeal, explanation (eb) is not attracted to the facts and circumstances of this case. The period of limitation since being a mixed question of law and fact, the decisions which have been rendered in different circumstances are not applicable to the issue involved in this case and are clearly distinguishable. The questions are answered against the appellant and in favour of respondent - Appeal dismissed. 2021 (12) TMI 334 Demand of interest and penalty - entire amount of cenvat credit or service tax payable by them paid before issuance of the show cause notice, but interest was not paid - HELD THAT:- It is a fact on record that audit took place during 3rd February to 13 February 2015 for the year 2013-14 if audit could not take place then availment of inadmissible cenvat credit and non payment of service tax on legal services could not be revealed. Further, the show cause notice has been issued within one year from the completion of the audit by the audit party on 11.02.2016. In these circumstances, it is held that the show cause notice has been issued within time. Further, as admitted by Shri Ashok Kumar Sikka appearing on behalf of the appellant that they have not paid the interest for the intervening period which is required to be paid by them, therefore, the demand of interest is confirmed. Penalty - HELD THAT:- In terms of Section 11AC of the Act if the demand of duty, interest are not paid within 30 days from the date of adjudication order, in that circumstances, the penalty is payable by the appellant. Therefore, the appellant is liable to pay penalty also. Appeal dismissed - decided against appellant. 2021 (12) TMI 333 CENVAT Credit - credit denied on the premise as per N/N. 02/14-CE (N.T.) dt.20.1.2014, the appellant was not entitled to credit prior to the N/N. 01/10-CE dt.6.2.2010 - extended period of limitation - HELD THAT:- It is found that similarly placed assessee was allowed the credit although against those orders, the appeals have been filed by the Revenue before the Commissioner (Appeals), in that circumstance, when the Revenue is having divergent views on the issue, the extended period of limitation is not applicable. Admittedly, in this case, the show cause notice has been issued by invoking the extended period of limitation, therefore, the denial of credit is barred by limitation. Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2021 (12) TMI 356 Entitlement to Interest on delayed payment of refund - section 40(2) of the U.P. Value Added Tax Act, 2008 - U.P. Trade Tax Act, 1948 - HELD THAT:- Since, on the date of repeal, the earlier rebate notification dated 27.02.1998 stood withdrawn and only a challenge thereto was pending before this Court (under Article 226 of the Constitution of India), it may never be said that any right or privilege as to rebate had been acquired or had accrued in favour of the petitioner as may have been protected or saved under section 81(2)(b) of the VAT Act. By way of effect caused by the repeal of the Erstwhile Act and by virtue of section 6(e) of the UP General Clauses Act, 1904, any remedy or legal proceeding if it had been commenced before the repeal (with respect to any right, privilege etc.) would remain intact. However, the proceeding here being a constitutional remedy availed by the petitioner, the same may even otherwise have survived the repeal - the principle of unjust enrichment may have disentitled a refund claim irrespective of its absence - as a statutory principle incorporated in that enactment itself. It being a judicially evolved principle, unjust enrichment would find its applicability to all cases of indirect taxation - wherever an assessee/claimant was found to have passed on the disputed tax liability to another, while resisting its imposition qua the State. Present is not a case of amendment of section 29 of the Erstwhile Act but of repeal and replacement of the Erstwhile Act itself by a completely new enactment namely, VAT Act - Since section 40(1) of the VAT Act is found to be wholly inapplicable viz-a-viz the claim for refund of trade tax for the A.Ys. 2004-04 to 2007-08, the language of section 40(2) of the VAT Act is of no help to the petitioner. That provision of law providing for interest on delayed payment of refund would apply to only those cases that fall under the purview of section 40(1) of the VAT Act, and to no other. That is the plain effect of sub-section (2) of section 40 of the VAT Act. In the present case, the order of refund was passed on 29.6.2020 whereas the refund was adjusted against the demand of entry tax on 07.07.2020 i.e. within the statutory period of thirty (30) days - the petitioner is found not entitled to interest on the amount of refund of trade tax ₹ 17,90,61,418/-, up to the date 07.07.2020. Petition dismissed. 2021 (12) TMI 355 Refund of excess tax - Purchase of High Speed Diesel Oil - inter-state sales - refusal to accept the C Forms - concessional rate of tax under Section 8 (1) read with Section 8 (3) and 8 (4) of Central Sales Tax Act, 1956 - HELD THAT:- Under Section 6 of CST Act the liability, in the case of an inter-State sale, liability to pay tax is that of the seller (i.e. IOCL herein). This tax is imposed by the Central Government. However, in view of Section 9(2) of the CST Act the authorities of the selling State (i.e. State Government of West Bengal) have been delegated the powers of assessment, re-assessment, collection and refund of tax under the respective State legislations on behalf of the Union of India. Even though the tax is collected by the State Government on behalf of the Union of India, the proceeds so collected are assigned to the State Government and retained by it in view of Section 9(3) of the CST Act. Section 8 of the CST Act provides for the rate of tax. It is the admitted position as appears from record that the purchasing HSD oil dealer /petitioners as well as IOCL/the selling dealer in West Bengal have registered themselves under the Central Sales Tax Act and the declared goods are certified in the certificate of registration of the petitioner as well as purpose for purchase has also been certified, petitioners are entitled to concessional rate of tax under Section 8 (1) of the CST Act, 1956 since the IOCL/selling dealer has obtained from the petitioner/purchasing dealer the declaration in the prescribed form duly filled and signed by them containing the particulars of the goods that were ordered/purchased/supplied under a certain specific order and all the purpose mentioned and the goods are covered by the registration certificate of the purchaser/petitioner under the CST Act - Since the petitioners have submitted the C Forms to the respondents State Government of West Bengal through the selling dealer/IOCL relating to inter-State sale in question during the course of impugned assessment there cannot be a case of non-compliance of submission of C Forms and neither it is a case of defective C Forms in any manner by the State Government of West Bengal. In the peculiar facts and circumstances of the present case the stand of the State Government of West Bengal to insist upon refund only on the returns being revised now by the IOCL, is a stand which is impossible of compliance under the statute. Furthermore, the buyer/petitioners have absolutely no role to play as this aspect of filing a revised return by IOCL for making claim of refund, is a matter between the State Government of West Bengal and its seller IOCL - Central Sales Tax is a tax leviable at the instance of Government of India, even though assessed and collected by the State Government. The Union of India has also accepted the aforesaid position in law. It is well settled that if a claim is otherwise admissible on the basis of documents on record, the failure to revise a return would be immaterial as it is the duty of the Assessing Officer to impose tax on the basis of law as not the basis of an alleged concession, acquiescence or mistake or failure on the part of the assessee to make a correct claim - even assuming, that IOCL was in default in revising its returns, even in such an eventuality, the Petitioners being buyers of goods, have fulfilled their obligations by producing the C Forms and in such circumstances Petitioners could not be made liable for any alleged default of the seller IOCL being tax collecting agent of the Respondent State Government of West Bengal as the buyers i.e. Petitioners in the present case have no control over the activities of the seller i.e. IOCL in the present case. Impugned order of assessment passed by the Assessing Officer is set aside to the extent of refusal of acceptance of relevant C Forms submitted before him during the impugned assessment proceeding by the HSD oil purchasing dealers/petitioners through the oil selling dealers/IOCL relating to the relevant disputed period which were issued by the purchasing respective State Government, in favour of the petitioners on inter-State sales in question and it shall accept the aforesaid relevant C Forms and allow concessional rate of tax to the petitioners on the basis of the said relevant C Forms subject to formal verification of the same. Petition disposed off. Indian Laws 2021 (12) TMI 354 Dishonor of Cheque - insufficiency of funds - existence of legally enforceable debt or not - rebuttal of presumption - HELD THAT:- It appears that a complaint filed under Section 138 of the N.I.Act by the respondent No.2 was registered as Criminal Case No. 2208 of 2017. That, process was issued under section 204 of the Code of Criminal Procedure by the learned trial Court, as per order passed below Exh. 1 on 15th September, 2017. It is not in dispute that the cheque was issued by the present applicant under his signature in favour of respondent No.2 on 24th April, 2017 for the amount of ₹ 60,000/- which is produced at page 19. It was not in dispute that the cheque was returned back by the bank authority on account of insufficient fund by return memo dated 10th July, 2017. Once, the accused has admitted the issuance of the cheque which bears his signature, there is presumption that there exists a legally enforceable debt or liability under Section 139 of the N.I.Act. However, such a presumption is rebuttable in nature and the accused-applicant is required to lead the evidence to rebut such presumption. The applicant was required to lead evidence that the entire amount due and payable to the complainant was paid. Considering the fact that the applicant-accused has admitted the issuance of the cheque and his signature on the cheque and that cheque in question was issued for security purpose as well as the amount was paid by him. There is a presumption under Section 139 of the N.I.Act that there exists a legally enforceable debt or liability. Of course, such presumption is rebuttable in nature. However, to rebut the presumption the accused was required to lead the evidence that full amount due and payable to the complainant has been paid. In the present case, two receipts are produced by the accused applicant which requires to be proved by him with cogent evidence in trial. The story put forward by the applicant-accused that the cheque was given by way of security is not believable at this juncture to rebut the presumption. This application deserves to be dismissed and dismissed. 2021 (12) TMI 332 Smuggling - narcotic drugs - maintainability of parallel proceedings - whether, the sentences imposed against the appellant accused by two different courts in two different trials but against the same accused/person should run concurrently as submitted on behalf of the appellant accused or consecutively? - HELD THAT:- Under Section 427 (1) of Cr.PC, the Court has the power and discretion to issue a direction that the subsequent sentence to run concurrently with the previous sentence in that case also, the discretion has to be exercised judiciously depending upon the nature of offence or the offences committed. In the present case the appellant accused has been convicted for the offences under the NDPS Act. He has been convicted in one case for recovery of 4 kg heroin and sentenced to undergo 12 years RI and in another case there is a recovery of 750 grams of heroin and considering the Section 31 (ii) of the NDPS Act, he has been sentenced to undergo 15 years RI. No leniency should be shown to an accused who is found to be guilty for the offence under the NDPS Act. Those persons who are dealing in narcotic drugs are instruments in causing death or in inflicting death blow to a number of innocent young victims who are vulnerable. Such accused causes deleterious effects and deadly impact on the society. They are hazard to the society. Such organized activities of clandestine smuggling of narcotic drugs and psychotropic substances into this country and illegal trafficking in such drugs and substances have a deadly impact on the society as a whole. Even while exercising discretion under Section 427 of Cr.PC to run subsequent sentence concurrently with the previous sentence, the discretion is to be exercised judiciously and depending upon the offence/offences committed. Therefore, considering the offences under the NDPS Act which are very serious in nature and against the society at large, no discretion shall be exercised in favour of such accused who is indulging into the offence under the NDPS Act. Appeal dismissed. 2021 (12) TMI 331 Dishonor of Cheque - insufficiency of funds - signatory of the cheque - vicarious liability of NI Act - HELD THAT:- Considering the fact that the petitioners A5, A7, A8 and A9 were not the drawers of the cheques and had not signed the same and no specific averments were made in the complaint against them showing the role played by them as to how they were responsible for the conduct of day to day business of the company, it is considered fit to quash the proceedings against the petitioners. The Criminal petition allowed. 2021 (12) TMI 330 Dishonor of cheque - insufficiency of funds - non-performing assets - Independent Director under Section 149 of the Companies Act - Section 293 of the Companies Act - HELD THAT:- On a perusal of the private complaint filed by the complainant, the role played by the petitioners was nowhere mentioned, except stating that as per Section 293 of the Companies Act, all the accused being the Directors of A1 Company got full knowledge of borrowing of the loan from the complainant bank and as such liable for repayment and also punishment. Considering the judgments of the Hon'ble Apex Court and this Court in a batch of criminal petitions and in Arrakuntal V. Ganeshan case [ 2013 (6) TMI 904 - ANDHRA PRADESH HIGH COURT ] and as the petitioners were neither Managing Directors nor the authorized signatories to sign on the cheques and no specific role was attributed to the petitioners in discharge of the day to day affairs of the Company, continuation of the proceedings against the petitioners is considered as an abuse of process of law. The Criminal Petition is allowed. 2021 (12) TMI 329 Dishonor of Cheque - rebuttal of presumption - burden of proof is on the accused or not - preponderance of probabilities - Section 139 of NI Act - HELD THAT:- Hon ble Apex Court in M/s. Meters and Instruments [ 2017 (10) TMI 218 - SUPREME COURT ] was considering the provisions of Section 143 of the Act and the provisions of Section 258 of Cr.P.C. It requires to mention here that in SUO MOTU Writ Petition (Cri.) No. 2 of 2020 for expeditious trial of cases under Section 138 of N.I.Act, 1881, it has been observed that Section 258 of the Cr.P.C. is not applicable to a summons case instituted on a complaint thus held that Section 258 cannot come into play in respect of the complaints filed under Section 138 of the Act. Further noted that M/s. Meters and Instruments (supra) in so far as it conferred power on the trial court to discharge an accused is not good law. Thus it can be considered that while keeping in view the scheme under provisions of N.I.Act, judgment of M/s. Meters and Instruments (supra) is to encourage the parties to settle the issue amicably and primarily the consent of the parties would be sought for closure of the proceedings under Section 138 of N.I.Act, and while compounding the matter under Section 147 of N.I.Act, the Court is required to assess the amount to be paid to the complainant in accordance with the object. Here in this case the total cheque amount has been paid by the petitioner-company to the respondent No.2-original complainant but the only issue is with regard to payment of interests and cost. Thus, in the fitness of the matter and the facts and circumstances of the case, it would be more appropriate that both the parties are directed to approach the trial court through the learned advocates and assist the court in assessing the interests and cost amount to be paid. It is thus directed that the presence of the parties may not be insisted and the court may take all endeavors to make closure of the case at the earliest. Petition disposed off. 2021 (12) TMI 328 Dishonor of Cheque - legally enforceable debt or not - rebuttal of statutory presumption - relationship between the parties is landlord and tenant or not - Section 138 of the Negotiable Instruments Act - HELD THAT:- Non mentioning of the second transaction in the first legal notice dated 02.09.2011, can be used by the revision petitioner herein/accused to her advantage in the second complaint said to be pending before the learned Judicial Magistrate No.1, Coimbatore, is not relevant for in this complaint and such finding rendered by the Lower Appellate Court appears to be proper and the same does not require any interpretation at this revision stage. It is seen from the grounds of the revision that the respondent herein obtained three alleged pro-note marked as Exs.P1, P2 P3 in the Trial Court charging exorbitant interest on the alleged principal amount, the same is contrary to provisions of the Tamil Nadu Money Lenders Act, 1957, in the oral evidence PW1, PW2, PW3 clearly demonstrated the same before the Court. The evidence of PW2 and the endorsement made therein has been spoken to by PW3. Issuance of cheques from the account of the accused and the signature is not being disputed on the alleged cheques for legally enforcible debt. However, based upon Exs.P1 to P3/promissory notes which has been clearly demonstrated before the Court, the above contention raised at the revision stage does not alter the position. This Court finds that there is no merits in the revision and the order passed by both the Courts below does not suffer from any illegality or irregularity warranting interference - Criminal Revision Case stands dismissed. 2021 (12) TMI 327 Dishonor of Cheque - criminal liability of natural persons - CIRP proceedings are ongoing against the company - natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instrument Act - Section 138 and 141 of the Negotiable Instrument Act, 1881 - HELD THAT:- It is not in dispute that the cheques issued to the complainant's Company were dishonored with an endorsement ''Payment Stopped by the Drawers''. In that regard, the 1st petitioner Company had issued a letter to the respondent through their counsel stating about the initiation of insolvency process by National Company Law Tribunal (NCLT) against the 1st petitioner Company and due to which, the 2nd accused / 2nd petitioner was unable to honor the post dated cheques issued in favour of the respondent Company. Inspite of the communication of the 1st petitioner Company regarding the insolvency process, the complainant has presented the cheques for collection, which was dishonored and thereby filed the complaint against the 1st petitioner Company. In the case on hand, the insolvency process was initiated by NCLT on 10.07.2017 and moratorium has been declared under the Insolvency Bankruptcy Code. Therefore, as held by the Hon'ble Supreme Court, the moratorium was only in respect of the corporate debtor and not in respect of the directors / management and therefore, the petitioners 2 and 3 as natural persons, are liable for prosecution. However, in view of declaration of moratorium by NCLT, the prosecution as against the company cannot be allowed to continue. This Court is of the opinion that the issue is a triable issue and it requires appreciation of evidence and this Court cannot decide the same in exercise of its jurisdiction under Section 482 of Criminal Procedure Code - Petition allowed. 2021 (12) TMI 326 Dishonor of Cheque - applicability of time limitation - cause of action for filing the suit present or not - Whether the person sueing on behalf of the plaintiff's firm has proved that he is the partner of the said firm? - HELD THAT:- The 1st defendant had even at the very outset contended that K. Venkatesh is not a partner of the plaintiff firm, since the plaintiff firm in the Criminal Proceedings before the Judicial Magistrate No. II, Erode, in C.C. No.584 of 2004, is represented by one Mr. Anbalagan who is described as the partner of the plaintiff firm. Though the defendants has taken out a categoric defence that the said Venkatesh is not a partner the plaintiff has not chosen to prove the same by producing a copy of the list of partners as registered with the Registrar of Firms. The non-production of the said document compels this Court to draw an adverse inference against the plaintiff. The finding of the Trial Court in this regard does not require any interference. Whether the cheques have been endorsed in favour of the plaintiff as per the provisions of the Negotiable Instruments Act? - HELD THAT:- As per section 50, the endorsement of a Negotiable Instrument followed by its delivery gives a right to the endorsee for further negotiation. The effect of an endorsement of a Negotiable Instrument with the endorsements as illustrated above has the effect of transferring to the endorsee the property therein with the right to further negotiate. However, the endorsement may expressly restrict or exclude such a right or merely constitute an endorsee right of further negotiation - the plaintiff has not proved the endorsement in the manner known to law and the Judgment of the Trial Court which has elaborately considered this issue does not require any interference. Whether the Judgment and Decree of the Trial Court calls for any interference? - HELD THAT:- The plaintiff has not made out any case to find fault with the findings of the Trial Court and its consequent Judgment. Appeal dismissed. 2021 (12) TMI 325 Dishonor of Cheque - validity of signature of defendant/appellant - presumption under Section 118 of the Negotiable Instruments Act can be raised against the defendant or not - rebuttal of presumption - establishment of due execution or not - HELD THAT:- The defendant had rebutted the presumption raised against her and onus once again fell on the plaintiff. The plaintiff should establish that he had lent a sum of ₹ 10,00,000/- to the defendant as per Ex.A.1. Since it has not been established by the plaintiff, the suit has to necessarily fail. The Court below failed to consider the circumstances projected by the defendant. Since the signature appearing in Ex.A1 is that of the appellant, presumption was rightly raised against her. But then, on a balance of probabilities, the defendant had rebutted the presumption. The plaintiff never had the financial capacity to lend the sum of ₹ 10.00 lakhs to the defendant. The defendant was having psychiatric issues and she had under influence of the plaintiff and making use of the same, the plaintiff had obtained certain signed blank documents from her. Ex.A1 was one such document. Due execution of Ex.A1 has not at all been established - appeal allowed.
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