Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 27, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Highlights / Catch Notes
GST
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Detained goods alongwith vehicle have already released - Section 129 and 130 of the GST Acts - The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law.- HC
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Demand of GST, penalty and confiscation of goods - detention of vehicles / trailers - Purchase and movement of Cranes from another state - default related to E-way Bill - The petitioner is directed to submit a bank guarantee in terms of the provisions of Section 129 of the CGST Act for release of the vehicle. - HC
Income Tax
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Penalty u/s 271(1)(c) - defective notice - At the highest, the case of the revenue was that even though the material was disclosed by the assessee but he had claimed certain inadmissible expenses. Claiming of an expense which is not sustainable in itself cannot be a ground for invoking Section 271(1)(c) of the Act - HC
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Accrual of income - Interest accrual as liable to tax - exemption u/s 10 (23BBA) - The argument that there is no such stipulation in the letter releasing the grant does not lead to the automatic conclusion that the interest is income of the Assessee. It is not the case of the appellant that the books of the Assessee ever revealed the diversion of any interest income. - HC
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Addition u/s 68 - allegation that assessee has introduced cash in the form of share capital thorough the racket of entry provider - the documentary evidence produced by the assessee cannot be ignored or rejected - no additions - AT
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MAT computation - exclusion of profit on sale of agricultural land while computing book profit u/s 115JB - This land was used for agricultural purpose and considering the location of this land, in near future it cannot be used for non-agricultural purposes. The AO himself has accepted that the land is an agricultural land out of definition of capital assets - No additions - AT
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Addition u/s 68 - none of the lenders is alleged to be an entry provider. A perusal of their bank statements reveals that they have given loan to the assessee out of their available balances and it is not the case of the Revenue that prior to issuing cheques, there is a deposit of cash in the lender’s bank account. Therefore, it can be safely concluded that the assessee has not purchased cheque by paying cash. - CIT(A) rightly deleted the additions - AT
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Addition u/s 69 - amount received as advance / earnest money for sale of land which was deposited in the bank - The documents appeared to have been prepared by the assessee for self-serving purposes. Since the aforesaid cancellation deed does not bear signatures of the any of the purchasers, hence, no reliance can be placed on it. - additions confirmed. - AT
Customs
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Jurisdiction - power of DRI to issue SCN - when it is only a show cause notice, which could be answered properly and the adjudication if permitted would not prejudice the petitioner in any manner. In that view of the matter, the SCN without rendering final opinion upon the aspect of the jurisdiction when prima facie appears to be not without any authority of law are required to be permitted to be proceeded with. - HC
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Validity of Circular issued by the Central Board of Excise and Customs on May 9, 2013 - disposable sterilised dialysers - classification of goods - The approach of the Single Bench and the final conclusion rendered in the impugned order that the writ petitioner’s product had to be classified in Chapter 90, do not call for any interference. - HC
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Jurisdiction - seizure of goods - extension of time u/s 110(2) for issuing Show Cause Notice (SCN) - no notice for personal hearing has been issued before extension of time u/s 11(2) - the authority has to record reasons in writing, but no notice is required to be issued. - AT
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Valuation of imported goods - purchase of urea by the Appellant from the Government of India on High Sea Sale - neither the amount of ₹ 17/- per MT paid by the Government of India to the STE could have been added to the assessable value on which the Appellant was required to pay duty, nor 2% Notional High Seal Sale could have been added in the assessable value. - AT
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Classification of imported goods - ‘Segway’ product in CKD condition - These were got assembled with the help simple hand tools like spanner, screw driver etc. and it also emerges from the investigations that sometimes the product were got assembled at the buyer’s premises itself. - The correct classification for the product imported in the CKD condition as is the case in this particular appeal, same need to be classified under Chapter sub-Heading 87119091 - AT
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Confiscation of import - personal effects/household articles - cosmetic items - Baggage Rules - she was shifting from Dubai where she was running a shop which was closed and all the items brought in her baggage were cosmetic items and she was not aware of the requirement of law that Mangalore Port is not authorized port for import of impugned goods into India through sea - penalty reduced. - AT
Service Tax
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Imposition of penalty and interest - Failure to discharge Service Tax - proper records of the receipt of sales commission by cheque were maitained, duly disclosed in the Income Tax record. Thus, there is no case of deliberate defiance of law or contumacious conduct as mis-statement of facts, and penalty set aside - AT
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Club or Association service - principles of mutuality - As there is no distinction between the identity of the members and the identity of the club, there is no service provider – service recipient relationship in such transactions. Therefore, no service tax can be levied upon the appellant.- AT
Central Excise
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Process amounting to manufacture - Packing of duty paid machine dipped match splints purchased from mechanized match units - the appellants are not eligible for the benefit of exemption notification - AT
VAT
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Levy of VAT - whether the branches of same corporate body acquire independent “legal personality” on being separately registered as dealers for the purpose of the Act? - whether supply of goods from one unit/branch to another of the very same company amounts to sale for the purpose of levy of tax under the Act? - Held No - HC
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For payment of tax, no assessment order is required and only in case of short payment of tax assessment is required after due notice - but for the deferral in payment of the tax under Section 17A of the Act, the petitioner would have been liable to pay tax irrespective of the assessment of tax liability as per Section 13 of the Act. Liability to pay tax is not dependent on the assessment order. - HC
Case Laws:
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GST
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2020 (2) TMI 1159
Release of detained goods alongwith vehicle - Section 129 and 130 of the GST Acts - it was argued by the learned counsel appearing for the writ applicants that the integrated goods and services tax has already been paid on the goods in question at the time of import thereof - HELD THAT:- While passing the said order, this Court, by way of interim relief, directed the respondents to release the vehicle as well as the goods forthwith - The writ applicants availed the benefit of the interim order passed by this Court and got the vehicle, along with the goods released. The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law. It shall be open for the writ applicants to point out the recent pronouncement of this Court in the case of SYNERGY FERTICHEM PVT. LTD VERSUS STATE OF GUJARAT [ 2019 (12) TMI 1213 - GUJARAT HIGH COURT] . It is now for the applicants to make good their case that the show cause notice, issued in GST-MOV-10, deserves to be discharged - this writ application stands disposed of.
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2020 (2) TMI 1158
Demand of GST, penalty and confiscation of goods - detention of vehicles / trailers - Purchase and movement of Cranes from another state - default related to E-way Bill - Validity of proceedings initiated under Section 129(3) of the Central Goods Service Tax Act, 2017 - allegation of violation of Section 129 (3) and (6) for the consequential initiation of confiscation proceedings after expiry of fourteen days - HELD THAT:- The controversy involved in the present case assailing the impugned notices cannot be adjudicated at this stage of the matter, particularly when the petitioner has already submitted reply. The aforementioned reply is not a routine reply but backed by relevant provisions and circulars as mentioned above, which is required to be considered dispassionately and in a pragmatic manner - on the merits of the matter, it is not commented, as it may have a far reaching effect in respect of any adjudication. It is being clarified that in the kind of a transaction referred to therein and involved in the present case, there is no question of any supply and thus applicability of the GST would, in such circumstances, be not as already observed without being examined by the authorities who issued the notices and the appellate authorities if any. The petitioner is directed to submit a bank guarantee in terms of the provisions of Section 129 of the CGST Act for release of the vehicle. However, that would be without prejudice and subject to the outcome of the decision to be taken by the adjudicating authority - petition disposed off.
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2020 (2) TMI 1156
Maintainability of petition - alternative remedy of appeal u/s 107 of the Karnataka Goods and Services Act, 2017 - HELD THAT:- Petitioners submits that an appeal is provided under Section 107 of the Karnataka Goods and Services Act, 2017 and they would avail the same provided some interim protection is afforded by this Court, lest otherwise the purpose of filing of the appeal should be defeated. There is force in this submission apart from fairness. These writ petitions are disposed off reserving liberty to the petitioners to file a statutory appeal within a period of four weeks keeping open all contentions of the parties.
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Income Tax
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2020 (2) TMI 1155
Taxability of profits on sale of investments and securities - premium paid by the assessee on purchase of Govt. Securities as allowable as revenue expenditure on amortization - Relief to the assessee u/s 10 - profits on sale of investment and securities - whether no such benefit is allowable to the assessee due to the non-obstante nature of Section 44? disallowance of expenses under Section 14A - MAT provision u/s 115JB applicability - HELD THAT:- Delay condoned. Leave granted.
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2020 (2) TMI 1154
Deemed dividend addition u/s 2(22)(e) - nature of the transaction for refund of the advance amounts received by the assessee from the vendee company of which, he was a director - CIT(A) was satisfied with the explanation and held that the amounts could not be brought to tax under Section 2(22)(e) - ITAT agreed with the view of the AO and set aside the CIT(A) orders - HELD THAT:- SLP dismissed.
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2020 (2) TMI 1153
Eligibility to Interest u/s. 244A - self assessment tax refunded to the assessee - Self assessment tax as voluntarily paid by the assessee and not pursuant to a notice of demand issued u/s. 156 - HELD THAT:- Leave granted.
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2020 (2) TMI 1152
Deduction u/s 80IC - substantial expansion - exemption at the same rate of 100% beyond the period of five years on the ground that the assessee has now carried out substantial expansion in its manufacturing unit - HELD THAT:- In the light of the judgment of this court in the case of Pr. CIT v. Aarham Softronic [ 2019 (2) TMI 1285 - SUPREME COURT] and connected matters, the special leave petition is dismissed.
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2020 (2) TMI 1151
Deduction u/s 80 HHC(4B) - HELD THAT:- It is not in dispute that the stated issue in reference to Assessment Year 1998-1999 has been answered by the High Court on 05.09.2008. That decision having become final will apply proprio vigore to the subject assessment year i.e. 1996-1997, in terms of the aforementioned order of the Tribunal. We order accordingly. Deduction u/s 80M - non-allocating personal and administrative and financial expenses proportionately for computing net dividend income referred to in Section 80AA - HELD THAT:- It is not in dispute that thereafter the Assessing Officer completed the assessment in terms of the remand order and challenge thereto before the Tribunal has also become final. Be it noted that as regards the said claim, the High Court had observed that the issue has been answered in favour of the Revenue in Distributors (Baroda) Pvt. Ltd. vs. Union of India and Others [ 1985 (7) TMI 1 - SUPREME COURT] . It is for the Department to consider whether the assessment done after remand and culminated with the order of the Tribunal is in conformity with the said decision of the Supreme Court or otherwise. Nothing more is required to be said as the appellant is content with the order passed by the Tribunal, which as of now has been allowed to become final by the Revenue-respondent.
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2020 (2) TMI 1150
Deduction u/s 80P - exemption claimed on interest income received by the petitioner from deposits/investments of funds in Banks - Such income, according to the Officer, was ineligible for deduction under Section 80P, since it did not form part of the operational income of the petitioner/assessee and was liable to be taxed in terms of Section 56 - HELD THAT:- W.P. set aside to this extent and the matter are remanded to the file of the Assessing Officer for denovo consideration. For this purpose, the petitioner shall appear before the Assessing Officer on 26.02.2020 at 10.30. a.m. without expecting any further notice. The petitioner will be heard specifically on the question of classification of interest generated by investments made for the purpose of statutory reserve and the judgments of the Supreme Court in Nawanshahar [ 2005 (8) TMI 28 - SC ORDER] and Totgars' [ 2010 (2) TMI 3 - SUPREME COURT] as well as other relevant case law shall be taken into account by the Assessing Officer in framing assessment by way of a speaking and detailed order. This exercise shall be completed within a period of six (6) weeks from date of conclusion of personal hearing.
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2020 (2) TMI 1149
Exemption u/s 11 - benefit of registration u/s 12AA denied - Object Clause 3.3(e) of the Trust Deed provides for development of new drugs or medicines, Object Clause 3.6(g) speaks about printing, publishing and selling journals, periodicals, books etc., Object Clause 3.8(f) mentions about establishing financial institutions etc., and therefore the learned Commissioner felt that the Assessee Trust might itself engage in business activities and therefore not entitled to registration under Section 12AA - HELD THAT:- Mere apprehension on the part of the Revenue authorities that the Object Clause of the Trust Deed provided for development of new drugs / publication of journals etc., cannot per se amount to any business or trading activity on the part of the respondent Trust. These activities are prima facie incidental to the charitable activity of providing good health and medical relief to the affected persons. The learned Tribunal however has made it clear in its order that it is even otherwise open to the Revenue authorities under the provisions of the Act to consider the factual aspects of the matter as to whether the Trust is engaged in any business activity or not upon granting annual renewal of such registration under Section 12AA of the Act and therefore unless the Charitable Trust is found to be engaged in the business or trading activity apart from the charitable purposes for which the Trust is incorporated, the benefit of registration under Section 12AA of the Act cannot be denied to the Trust. Therefore Tribunal was perfectly justified in allowing the appeal filed by the Assessee and directing the Revenue authorities to grant registration under Section 12AA of the act to the applicant / Assessee. - Decided against revenue.
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2020 (2) TMI 1148
Income from other sources - interest derived by the assessee from the borrowed funds which were invested in fixed deposits with banks - HELD THAT:- We admit the appeal. The following substantial questions of law are framed (i) Whether in the facts and circumstances of the case and in law the ITAT has erred in not appreciating that, during the stage of pre-commencement of business, interest derived by the assessee from the borrowed funds which were invested in fixed deposits with banks would be chargeable to tax under the head 'Income From Other Sources' and would not go to reduce the capital work in progress? (ii) Whether in the facts and circumstances of the case and in law, the Hon'ble ITAT has erred in placing reliance on the Judgement of Delhi High Court i.e. Oil Panipat Power Consortium Ltd vs. ITO [ 2009 (2) TMI 32 - DELHI HIGH COURT] ? (iii) Whether in the facts and circumstances of the case and in law, the Hon'ble ITAT has erred by not applying the case of Tuticorin Alkali Chemicals Fertilisers Ltd. Vs. CIT [ 1997 (7) TMI 4 - SUPREME COURT] ?
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2020 (2) TMI 1147
Penalty u/s 271(1)(c) - defective notice - non specifying what was wrong with Assessing Officer's order as of why penalty was not leviable in this case - HELD THAT:- There is no dispute on the fact that during the relevant assessment year, the assessee changed the accounting method from project completion to percentage method. It was the result of change of method that certain indirect expenses claimed could not be allowed. The account books of the assessee were found to be duly audited and prepared in accordance with accepted accounting standard. The change of accounting method was also duly disclosed by the auditor. It was not the case of the revenue even before the Appellate Authority that the assessee had suppressed any material fact. At the highest, the case of the revenue was that even though the material was disclosed by the assessee but he had claimed certain inadmissible expenses. Claiming of an expense which is not sustainable in itself cannot be a ground for invoking Section 271(1)(c) of the Act. In order to impose penalty under the said section, either there has to be concealed particulars of the income or furnishing of inaccurate particulars of the income. Rejection of a claim that too where in the facts of the present case it was result of change of accounting method is not sufficient for penalising the assessee. See RELIANCE PETROPRODUCTS PVT. LTD. [ 2010 (3) TMI 80 - SUPREME COURT] - No interference is warranted in deletion of penalty. - Decided against revenue
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2020 (2) TMI 1146
Accrual of income - Interest accrual as liable to tax - exemption u/s 10 (23BBA) - Instead of saying that the interest income has been utilized by the Assessee on its own free will, the Assessing Officer has inverted the law and has held that merely because the Assessee has never refunded any amount of interest to the Government it means it is its income - HELD THAT:- The argument that there is no such stipulation in the letter releasing the grant does not lead to the automatic conclusion that the interest is income of the Assessee. It is not the case of the appellant that the books of the Assessee ever revealed the diversion of any interest income. Had that been so something could have been said. The other argument raised by the counsel for the appellant is that the Tribunal wrongly invoked Section 10 (23BBA) of the Act and the invocation of that Section completely blind-sided the Tribunal into taking a wrong decision. Assessee never claimed any exemption u/s 10 (23BBA) and in the circumstances, the only thing which can be held is that reference to Section 10 (23BBA) by the Tribunal was surplusage and was not required in view of the basic finding of fact that the income which accrued to the Assessee from the funds of the Government which were released to it were not diverted by it and could not be diverted by to any other purpose and had to be used only for the purposes which the Government directed and in case the funds were not used the Government had the right to recall them.
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2020 (2) TMI 1145
Rectification u/s 254 - Maintainability of appeal on low tax effect - non-consideration of Circular and the special order so passed by the CBDT - HELD THAT:- CBDT low tax effect circulars issued from time to time wherein the tax effect have been progressively increased by the Revenue with a view to minimize the litigation has been read by the Courts and the Tribunal, and even the CBDT has also clarified latter, that these CBDT Circulars shall apply not just to future appeals but also to pending appeals and therefore, where the appeal has already been filed by the Revenue and is pending, such appeal has been held to be covered by a subsequent low tax effect circular and dismissed on account of low tax effect. In the instant case, the issue is regarding carving out an exception from such low tax effect limits and that too, not just by a general order but by way of a special order where such appeals can be filed, therefore, unless the special order has been passed by the CBDT and an appeal is filed pursuant to such a special order, the exception cannot be read and understood to apply to existing appeals which have already been filed prior to issuance of the special order. CBDT Circular no. 23 of 2019 should be read along with special order of the CBDT dated 16.09.2019 in respect of appeals filed pursuant to such special order and shall thus apply to all appeals filed on or after 16.09.2019 by the Revenue where the tax effect may be low but the appeal can still be filed by the Revenue on merits. In the instant case, the appeal of the Revenue was filed on 16.04.2019 and therefore, the present appeal was not filed pursuant to such a special order of the CBDT dated 16.09.2019 and thus, the matter doesn t fall in any exception as so prescribed by the CBDT in its earlier circular dated 8.8.2019 and the special order doesn t apply in the instant case and the appeal has thus rightly been dismissed by the Bench on account of low tax effect in light of CBDT s circular dated 8.8.2019. In any case, both CBDT Circular no. 23 of 2019 and special order dated 16.09.2019 were not in existence and thus not part of the record at the time when the matter was heard on 23.08.2019 or at the time of passing of order by the Tribunal on 2.09.2019 and therefore, non-consideration of such Circular and the special order so passed by the CBDT is not a mistake apparent from record which can be rectified within the narrow compass of section 254(2) of the Act.
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2020 (2) TMI 1144
Reopening of assessment u/s 147- suppression of export sale of iron ore - HELD THAT:- Factum as well as quantum of suppression of production of iron ore was noticed by the AO from the information received by him in the form of report of Justice M.B. Shah Commission on illegal mining and keeping in view that the production of iron ore to that extent had remained undisclosed by the assessee in its books of account, a belief was found by the Assessing Officer that income of the assessee had escaped assessment and the assessment was reopened by him after recording the reasons. The failure on the part of the assessee to disclose fully and truly the actual quantity of production of iron ore, which was a material fact necessary for its assessment for the year under consideration thus was clearly pointed out by the Assessing Officer in the reasons recorded and since the escapement of income chargeable to tax for the year under consideration was by reason of such failure on the part of the assessee, we are of the view that the reopening of assessment by the AO after the expiry of four years from the end of the assessment year under consideration was in accordance with the relevant provisions of the Act including the 1st Proviso to Section 147. We, therefore, find no infirmity in the reopening of assessment as made by the Assessing Officer on the basis of reasons recorded by him and upholding the validity of the same, we dismiss the Cross Objection filed by the assessee. Suppression of export sales - matter of appreciated by the ld. CIT(Appeals) in the right perspective and he deleted the addition made by the Assessing Officer on this issue by placing the onus wrongly on the Assessing Officer by observing that the Assessing Officer should have obtained the details of figures reported by Paradeep Port Trust and furnished the same to the assessee so as to enable the assessee to reconcile the difference. In our opinion, the said details ought to have been obtained by the assessee so as to support and substantiate its explanation that the export of iron ore to the extent of 8,000 Metric Ton actually pertaining to the immediately succeeding year was included by Paradeep Port Trust in the export figure of the year under consideration as reported to the Assessing Officer. Having regard to all these facts and circumstances of the case, we set aside the impugned order passed by the ld. CIT(Appeals) giving relief to the assessee on this issue and restore the matter to the file of the Assessing Officer for giving the assessee one more opportunity to support and substantiate its explanation regarding the difference of 8,000 Metric Ton in the export of iron ore by bringing on record the relevant details of export as reported by Paradeep Port Trust to the Assessing Officer. The appeal of the Revenue is accordingly treated as allowed for statistical purposes.
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2020 (2) TMI 1143
Addition u/s 68 - allegation that assessee has introduced cash in the form of share capital thorough the racket of entry provider operating in Kolkata - information of which was provided by the Investigation Wing, Kolkata - CIT-A deleted addition - HELD THAT:- When the assessee has produced all the relevant documents as narrated by the ld. CIT(A) in para 5.11 above then onus casted u/s 68 of the Act has been duly discharged by the assessee. Once the assessee has discharged his primary onus then burden is shifted on the AO to bring on record the contrary material or facts to disprove evidence produced by the assessee. The AO except narrating the modus operandi as disclosed by Shri Anand Sharma, has not referred to any documentary evidence or other material to support his view and findings. Therefore, the findings of the AO are merely an assumption and based on conjecture and surmises and not on any tangible material. The existence of the company is not in dispute as it is established from the record. In the case in hand, the AO has not brought any material on record as a result of any enquiry. The commission issued to the DIT (Inv), Kolkata has not yielded any result. Thus except on the reliance of the statement of Shri Anand Sharma, the AO was not having either any document in his possession or any other facts detected as an outcome of enquiry. The said statement of Shri Anand Sharma has not made any allegation regarding transaction of investment made by M/s. Abhishek Advisory Pvt. Ltd. Therefore, the documentary evidence produced by the assessee cannot be ignored or rejected. Hence, in view of the above facts and circumstances of the case, we do not find any error or illegality in the order of the ld. CIT(A). Thus the appeal of the Revenue is dismissed.
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2020 (2) TMI 1142
Reopening of assessment u/s 147 - validity of reasons to belief - applicability of mind before according sanction - assessment u/s 153C - HELD THAT:- AO has referred to the issues which were considered in the assessment order dated 23.12.2011 framed u/s 143(3) r.w.s. 153C of the Act. As mentioned elsewhere, the said assessment order was declared null and void and thus became non-est. This means that everything has gone back to the stage of the return of income and, therefore, the AO should have proceeded from the stage of the return of income. A careful reading of the aforesaid notice and the reasons for the belief that the income has escaped assessment clearly show that the AO wanted to proceed in the light of the provisions of section 151(1) The reasons for belief if read with the provision of section 151(1) of the Act clearly show that there is no application of mind by the AO nor there is any application of mind by the sanctioning authority. Neither the Addl. Commissioner nor the Commissioner applied his mind before according sanction. None of the authorities realized that there is no assessment framed u/s 143(3) of the Act on the date of the assumption of jurisdiction. The erstwhile assessment has been declared as null and void as mentioned as well. In our considered opinion assumption of jurisdiction without any application of mind is bad in law. Same reasons have been given for reopening the assessment which were used for framing the assessment u/s 143(3) r.w.s 153C of the Act. The Hon ble High Court of Punjab and Haryana in the case of Smt. Anchi Devi [ 2008 (3) TMI 39 - HIGH COURT PUNJAB AND HARYANA] has held that AO cannot be allowed to initiate fresh reassessment proceedings on identical facts where the first reassessment proceedings were quashed being barred by limitation. We are of the considered view that the AO has wrongly assumed jurisdiction in framing the assessment order dated 02.03.2015 u/s 143(3) r.w.s 147 of the Act and such order deserves to be set aside. - Decided in favour of assessee.
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2020 (2) TMI 1141
MAT computation - exclusion of profit on sale of agricultural land while computing book profit u/s 115JB - . CIT(A)held that profit from sale of agriculture land which is not a Capital Asset cannot be included for the purpose of computing book profit u/s 115JB - HELD THAT:- The assessee held the agricultural land for more than 9 years as investment and this land was situated in rural area more than 17 Km away from Municipal Limit. This land was used for agricultural purpose and considering the location of this land, in near future it cannot be used for non-agricultural purposes. The AO himself has accepted that the land is an agricultural land out of definition of capital assets. No infirmity in the order of the ld. CIT(A) for holding that the gain arising from sale of agricultural land cannot be taxed U/s 115JB of the Act. The detailed finding so recorded by the ld. CIT(A) after applying judicial pronouncements are as per the material on record which do not require any interference on our part. Hence, we uphold the same.
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2020 (2) TMI 1140
Undisclosed cash u/s 69 - survey operation u/s 133A - ₹ 1 crore found and seized was never disclosed in the books of account - HELD THAT:- There is no dispute that the assessee is an authorised money changer. In our considered opinion, this line of business required availability of cash in huge amount as the persons give dollars to be exchanged in Indian currency. Considering the exchange rate, the assessee has to carry heavy cash. To this extent, we do not find any quarrel between the assessee and the revenue. The main reason which we find is that the cash bundles carry the tag of PNB, Hissar. Again, in our considered view, this should not be given weightage in as much as it is a very common practice amongst all banks to issue currency bundles as received by them. Moreover, once a bundle of currency carried tag of another bank, the issuing bank need not have to count again and again. Another reason given by the Assessing Officer is that the cash books were not available at the time of survey. It is common practice that though the cash books are written on day to day basis, but in practice, there is always a time gap between the book entries. Books were lying with the CA, which have also been verified by the Assessing Officer and when during the course of assessment proceedings books were produced, not even a single defect has been pointed out by the Assessing Officer in the books of account of the assessee. We are of the considered view that the entire addition has been made on the basis of suspicions and surmises and such additions cannot be sustained. We, accordingly, set aside the findings of the ld. CIT(A) and direct the Assessing Officer to delete the addition of ₹ 1 crore. The ground raised by the assessee is allowed. Addition u/s 68 - assessee was asked to produce all the creditors personally but could produce only one person, namely, Shri Neetu Nayyar - HELD THAT:- There is no dispute that all the lenders are either directors or relatives of the directors. It is also true that the assessee has furnished PAN details, bank statements, confirmations and copies of Income tax returns of the lenders. It is equally true that none of the lenders is alleged to be an entry provider. A perusal of their bank statements reveals that they have given loan to the assessee out of their available balances and it is not the case of the Revenue that prior to issuing cheques, there is a deposit of cash in the lender s bank account. Therefore, it can be safely concluded that the assessee has not purchased cheque by paying cash. Considering the evidences which are before us in the form of paper book and considering the fact that the ld. CIT(A) has deleted the addition after carefully perusing the documents, we find no reason to interfere with the findings of the ld. CIT(A). Accordingly, the ground raised by the revenue is dismissed.
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2020 (2) TMI 1139
Exemption u/s 11 - claim for exemption u/s 10(23C) (iiiad) denied - assessee is a society running three different schools at Ravipadu village - HELD THAT:- We observe that receipts of each educational institution did not exceed ₹ 1.00 crore as specified in section 10(23C)(iiiad) of the Act. In Section 10(23C)(iiiad) of the Act, the word used is any university or educational institution existing solely for educational purpose, but not the person. The assessee filed the return of income admitting Nil income claiming exemption u/s 11, however, before the AO, the assessee made a claim for 10(23C)(iiiad) vide letter dated nil filed before the AO in response to the notice u/s 142(1) which was placed in page No.14 to 21 of the paper book. In Children s Education Society [ 2013 (7) TMI 519 - KARNATAKA HIGH COURT ] considered the similar issue and held that if the receipt of each educational institution does not exceed ₹ 1 crore, the same required to be not to be included in computing the total income of the assessee. In the instant case, there is no dispute that the assessee is running different educational institutions and the receipts of each educational institution does not exceed more than ₹ 1.00 crore as per the details given above. Therefore, we hold that the assessee is entitled for exemption u/s 10(23C)(iiiad) - Decided in favour of assessee.
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2020 (2) TMI 1138
Addition u/s 69 - amount received as advance / earnest money for sale of land which was deposited in the bank - additional evidence in the shape of bank statement of HDFC bank and copy of Cancellation agreement dated 21.02.2011 were furnished under rule 46A of the I.T. Rules - HELD THAT:- As per the copy of the agreement placed on record at page 53, the sellers i.e. assessee and other co-sharers of land and the purchasers namely Zora Singh, Darvesh, Lakshan Mirdha and Barinder belong to the same city i.e. Narwana. As per the said agreement the amount of ₹ 50 lacs was received by the assessee and other co-sharers on 18.12.2010 and an amount of ₹ 50 lacs was agreed to be received on 15.1.2011 and further an amount of ₹ 50 lacs on 15.2.2011. The sale deed was to be executed on 20.2.2012 on which date the remaining sale consideration was to be paid. A perusal of the cancellation deed dated 21.2.2011 reveals that the said agreement was cancelled and that the purchasers had received back the entire amount which was paid by them as earnest money to the assessee and others. However, surprisingly, the said cancellation deed does not bear signatures of the alleged purchasers. A bare perusal of the same shows that the same is a fictitious document, whereupon, the signatures have been put on of certain persons which do not match at all with the signatures on the agreement to sell. Even in the alleged Pancayati Rajinama there is no signature of the alleged / concerned purchasers. These documents appeared to have been prepared by the assessee for self-serving purposes. Since the aforesaid cancellation deed does not bear signatures of the any of the purchasers, hence, no reliance can be placed on it. Further, despite the fact that the alleged purchasers belonged to the same city i.e Narwana, the assessee failed to furnish any confirmation from the buyers about the alleged transactions of sale of land and cancellation deed etc. The Ld. CIT(A) has held that the facts of this case are different from the case laws relied upon by the assessee in following ways (i) No confirmations from the buyers were submitted; ii) Identity proofs of buyers were not provided; iii) Nobody attended in response to the summons issued by the Assessing Officer; iv) The documents of ikrarnama and cancellation deed do not bear the same signatures of buyers; and vi) Bank statements of buyers have not been produced to justify the source of deposits. Under the circumstances, the assessee has miserably failed to prove his case. - Decided against assessee.
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Customs
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2020 (2) TMI 1137
Jurisdiction - power of DRI to issue SCN - Validity of N/N. 44/2011Cus (N.T.) dated 6th July 2011 - territorial limits of jurisdiction of the persons designated therein as proper officers for the purposes of Sections 17, 28 and 28AAA of the Act - HELD THAT:- The question arises as to whether this Court would embark upon the examining of this aspect only when the show cause notice is under challenge. The show cause notice as per say if found without jurisdiction then, it goes without saying that this Court has power to or rather duty to embark upon the examination and pass appropriate direction as this would go to the root of the matter. In the instant case, the averments made on oath have remained to be controverted and when it is only a show cause notice, which could be answered properly and the adjudication if permitted would not prejudice the petitioner in any manner. In that view of the matter, the SCN without rendering final opinion upon the aspect of the jurisdiction when prima facie appears to be not without any authority of law are required to be permitted to be proceeded with. The petitioners could be said to be having not made-out a case for interference and the petition is required to be dismissed and accordingly the same is dismissed. It goes without saying that the observations made hereinabove are only for the purpose of examining the controversy in question and the same have no bearing upon the right of the petitioners to takeout all the submissions available under law while replying to the show cause notices and during the adjudication thereof - Petition dismissed.
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2020 (2) TMI 1136
Validity of Circular issued by the Central Board of Excise and Customs on May 9, 2013 - disposable sterilised dialysers - classification of goods - levy of duty - HELD THAT:- Paragraph 5 of the impugned circular of May 9, 2013 purported to club the dialyser or the equipment pertaining to dialysers that purify the blood along with generic equipment for purification of water or liquids or the like. Ordinarily, it appears that the writ petitioner s product would have more nexus with Chapter 90 and the goods covered by the heading Renal Dialysis Equipment rather than filtering or purifying machinery and apparatus for liquids. It is true that the particular equipment which is the subject-matter of the present case undertakes the work of purifying blood. It is, in a sense, a purifier. The input and output to and from such equipment is a liquid; it is blood in the toxic form which goes in and in a cleaner form that comes out. Considering the other products pertaining to the group of 8421 in Chapter 84 and the other products in the group of 9018 in Chapter 90, it is obvious that the writ petitioner s product has overwhelming nexus with medical equipment and renal dialysis equipment and only an incidental connection by reason of its use as a purifier of blood with other classes of purifiers used in the industry. The approach of the Single Bench and the final conclusion rendered in the impugned order that the writ petitioner s product had to be classified in Chapter 90, do not call for any interference. There does not appear to be any error in the judgment and order impugned arriving at the conclusion that by the impugned instructions issued under Section 151A of the Act of 1962, the very nature and efficacy of the writ petitioner s product could not be altered from that which is used in connection with renal dialysis to being a mere purifier of liquids - Appeal dismissed.
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2020 (2) TMI 1135
Jurisdiction - seizure of goods - extension of time u/s 110(2) for issuing Show Cause Notice (SCN) - no notice for personal hearing has been issued before extension of time u/s 11(2) - Principle of natural justice - import of Crystallized Glass Panel B Grade - mis-declaration / undervaluation of goods. HELD THAT:- Seen in the context of these facts, it is apparent that a textual reading of Section 110(2) would lead one to conclude that no separate notice is necessary, before extending the period of limitation by a further six months (for issuance of show cause notice); the authority has to record reasons in writing, which of course, should be based on materials and inform the concerned party about the extension before the expiry of the first period of six months. The decision of Ahmedabad Bench in the case of M/S GASTRADE INTERNATIONAL VERSUS C.C. -KANDLA [ 2019 (6) TMI 170 - CESTAT AHMEDABAD] relied upon where it was held that there is no legal authority with the department for dispensing with the issuance of SCN to the appellant, therefore, the impugned order passed without issuance of any SCN will not sustain. The decision was essentially based on the Delhi Bench of Tribunal decision in the case of M/S SWEES GEMS JEWELLERY, M/S AARADHYA IMPEX VERSUS CGST CE, JAIPUR-I [ 2019 (2) TMI 1375 - CESTAT NEW DELHI] which has been upset by the Hon ble Rajasthan High Court in COMMISSIONER OF CUSTOMS (PREVENTIVE) , JODHPUR VERSUS SWEES GEMS AND JEWELLERY, AARADHYA IMPEX [ 2019 (7) TMI 1433 - RAJASTHAN HIGH COURT] - Rajasthan High Court has held that the CESTAT fell into error in holding that goods had to be released in the circumstances of the case since no notice preceded extension of detention under Proviso to Section 110(2) of the Customs Act, 1962 Thus, the decision of the Tribunal in the case of Gastrade International is no longer a valid precedence on this issue. Appeal dismissed - decided against appellant.
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2020 (2) TMI 1134
Valuation of imported goods - rejection of declared value - purchase of urea by the Appellant from the Government of India on High Sea Sale - inclusion of miscellaneous charges of ₹ 17/- per MT paid by the Government of India to STE, in assessable value - inclusion of notional 2% High Sea Sale Commission in assessable value - invocation of extended period of limitation - confiscation - penalty. Whether for the purchase of urea by the Appellant from the Government of India on High Sea Sale, miscellaneous charges of ₹ 17/- per MT paid by the Government of India to STE is required to be included in the assessable value and consequently duty payable on it? - HELD THAT:- The STE buys urea on behalf of the Government of India. The STE in fact represents the Government of India abroad and the foreign sellers know that the urea will be ultimately purchased by the Government of India. It is the Government of India that ultimately sells urea to the Appellant and the Appellant sells urea to the farmers - The Principal Commissioner has also placed reliance upon Rule 10(1) (e) to contend that ₹ 17/- per MT paid by the Government of India to STE should be included in the transaction value. This rule provides that in determining the transaction value, there shall be added to the price actually paid or payable for the imported goods all other payments actually made or to be made as a condition of sale of the imported goods, by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the seller to the extent that such payments are not included in the price actually paid or payable. This rule speaks of payment made or to be made by the buyer to the seller, or by the buyer to a third party. The seller in the instant case is the Government of India and the buyer is the Appellant. This amount of ₹ 17/- per MT has neither been paid by the Appellant to the Government of India nor the Appellant paid this amount to a third party. This amount of ₹ 17/- per MT, therefore, could not have been included in the transaction value under rule 10(1) (e) of the 2007 Valuation Rules. Also, since the aforesaid payment of ₹ 17/- per MT has not been made as a condition of sale of urea by the Government of India to the Appellant to satisfy an obligation of the Government of India, this amount cannot be added to the transaction value under rule 10 (1) (e) of the 2007 Rules. Whether in regard to the aforesaid purchase of urea by the Appellant from the Government of India on High Sea Sale, notional 2% High Sea Sale Commission is required to be included in the assessable value of goods and consequential duty is payable? - HELD THAT:- What has to be seen under section 14(1) of the Customs Act as amended in 2007 is the transaction value of the goods imported or exported for the purpose of customs duty and transaction value is stated to be the price actually paid or payable for the goods when sold for export to India for delivery at that time and place of importation. Sub-section (1) of section 14 also makes it clear that the price actually paid or payable for the goods will not be treated as transactional value where the buyer and the seller are related to each other. As per the first proviso to the amended section 14 (1), certain charges are to be added in the transaction value of the imported goods - It needs to be noted that the Circular dated 11 May 2004 was issued during the period the unamended section 14 of the Customs Act was in force. Thus, while there was scope for addition of notional charges in the assessable value under the unamended section 14 of the Customs Act, but after the actual sale price concept was introduced in the year 2007 on the basis of GATT guidelines and section 14 of the Customs Act was amended in 2007, any inclusion of notional charges seems to have lost its relevance and only actual cost incurred by the buyer is required to be considered. Thus, 2% Notional High Sea Sale Commission could not have been added to the assessable value - neither the amount of ₹ 17/- per MT paid by the Government of India to the STE could have been added to the assessable value on which the Appellant was required to pay duty, nor 2% Notional High Seal Sale could have been added in the assessable value. The confirmation of demand under these two heads, therefore, cannot be sustained. The order passed for confiscation of urea under section 111(m) of the Customs Act and the imposition of penalty are also liable to be set aside and is set aside. It is, therefore, not necessary to examine the contention raised by the learned counsel for the Appellant that the extended period of limitation could not have been invoked in the fact and circumstances of the case. Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 1133
Classification of imported goods - Segway product in CKD condition - whether classified under Customs Tariff Heading 87149990/87144011 etc? - benefit of N/N. 21/2002- Cus. dated 01/02/2002 (Sl. No. 345) and N/N. 12/2012-Cus. dated 17/03/2012 (Sl. No. 443 and 444). HELD THAT:- It categorically emerges from the entire discussions, which have also been not rebutted by the appellant, that under the various bills of entries the appellant have imported all parts including screw, nuts and user manual etc. for assembling Segway in India. The parts and assemblies imported were not subjected to any modification or addition of the local parts or hardware. The imported assemblies, such as, transmission assembly, power base assembly, wheel assembly with tyre, info key assembly and batteries were just put together by following the instructions with the screw driver technology and complete Segway unit came into existence. It also emerges from the entire investigation that gear box mentioned as the transmission assembly were imported in the form of the pre-assembled unit and same were used, as such, while assembling the Segway the final product - It also emerges that no plant, machinery was required for assembling Segway imported by the appellant and the Segway were imported in the CKD condition, which were got assembled with the help simple hand tools like spanner, screw driver etc. and it also emerges from the investigations that sometimes the product were got assembled at the buyer s premises itself. Thus, it emerges that the Segway product was being imported in a CKD condition under various bills of entries and same was got assembled in India for further sale with the simple screw driver technology. It is also matter of fact that the parts such as Power Base, Gear Box were imported in assembled forms and not in CKD condition and thus these crucial parts were assembled/ready to use components for further assembly of Segway product. The correct classification for the product imported in the CKD condition as is the case in this particular appeal, same need to be classified under Chapter sub-Heading 87119091. We have also analyzed the declaration which have been made by the appellant while making import of various complete assemblies of various components of Segway and find that the classification adopted by the appellant was under CTH 87149990, which primarily pertains to parts and accessories of the vehicles of heading classifiable under 8711 to 8713. Since it has already been established with the help of an expert that the components imported by the appellant while put together will form a complete operative Segway product. We, therefore, feel that classification claim by the appellant while getting clearance of the consignment appears to be not correct. Since the technical person has given his categorical finding that what has been imported by the appellant were the Segway product in the CKD condition and the appellant did not have any evidence to contradict the finding of the technical expert, we are inclined to accept the opinion expressed by the technical expert. Benefit of the Notification No. 12/2012-Cus. dated 17/03/2012 - HELD THAT:- It can be seen from the entry 443 of the above-mentioned Notification No. 12/2012-Cus. dated 17/03/2012 that the concessional rate of Customs duty @ 10% available under category 1 (a) for engine, gear box and transmission mechanism not in a pre-assembled condition. The benefit under this category has wrongly been claimed and availed by the appellant as from the expert opinion as well as from the facts of the matter it has come out specifically that what has been imported by them were not CKD condition components or parts, such as, engine, gear box, transmission mechanism etc. rather they were in the form of completely assembled components in the form of transmission assembly, power base assembly, wheel assembly with tyre etc. and, therefore, the benefit of the concessional rate of the duty were certainly not available to them. The appellant have mis-declared their import consignment and what they have imported were Segway product classifiable under Customs Tariff Heading 87119091 in completely knocked down condition. The findings of the impugned order-in-original classifying the import consignments under 87119091 is upheld - there is no reason to interfere with the order-in-original with regard to demand of Customs duty under Section 28 (4) of the Customs Act, 1962 by invoking the extended time proviso as the appellant have been fully aware as to what is being imported by them and they have consciously mis-declared their product as CKD parts of electrically operated two wheelers of captive use classifying the same under chapter sub-Heading 87149990. The Adjudicating Authority is right in imposing penalty upon them under provision of Section 114A and Section 114AA of the Customs Act, 1962 and we refrain from interfering the finding and imposition of the penalty upon these two appellants also. Appeal dismissed - decided against appellant.
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2020 (2) TMI 1132
Confiscation of import - personal effects/household articles - cosmetic items - Baggage Rules - allegation that the said import was in violation of Rule 133 and Rule 43A of the Drugs and Cosmetic Rules, 1945 - further allegation that as per the Board s Circular No. 8/2010-Cus., dated 26-3-2010, Mangalore Port is not listed for import of the impugned goods into India by sea - HELD THAT:- The appellant is an Indian Passport holder and she shifted her household articles into India from Dubai and filed unaccompanied baggage under Section 77 of the Customs Act, 1962. When the goods reached at Mangalore Port, it was examined and it was found that out of 139 packages, 54 packages are personal effect/household articles and remaining 85 packages were cosmetic items which are not permitted to be brought to India through Mangalore Port. Further, the appellant has violated the provisions of Baggage Rules as well as Drugs and Cosmetics Rules and also the Board s Circular which prohibits the import of these goods through Mangalore Port and both the authorities have rightly upheld the absolute confiscation of the said goods. Imposition of penalty u/s 112(a) and 114AA of the Customs Act - HELD THAT:- It is on higher side because the appellant has not suppressed any material facts from the Department and she has filed the declaration before the Customs as required under law. Moreover, she was not knowing the Customs Regulations and she was shifting from Dubai where she was running a shop which was closed and all the items brought in her baggage were cosmetic items and she was not aware of the requirement of law that Mangalore Port is not authorized port for import of impugned goods into India through sea - penalty reduced. Appeal allowed in part.
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Corporate Laws
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2020 (2) TMI 1131
Winding up process - Dissolution of PRJ Enterprisers Ltd (in liquidation) - discharge of Official Liquidator as its Liquidator - It is submitted that the Official Liquidator is not seized of any other moveable/immoveable property of the company (in Liqn) and there are no recoverable assets in the hands of the Official Liquidator and that no fruitful purpose will be served in continuing the present liquidation proceedings. - HELD THAT:- Reliance placed in the decision of Supreme Court in the case of MEGHAL HOMES (P.) LTD. VERSUS SHREE NIWAS GIRNI KK. SAMITI [2007 (8) TMI 447 - SUPREME COURT] where it was held that When the affairs of the Company had been completely wound up or the court finds that the Official Liquidator cannot proceed with the winding up of the Company for want of funds or for any other reason, the court can make an order dissolving the Company from the date of that order. This puts an end to the winding up process. The liquidation proceedings deserve to be brought to an end - Application allowed.
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2020 (2) TMI 1130
Steps for Financial Scheme of Compromise and Arrangement between Applicant, Arun Kumar Jagatramka (Promoter) and the Company (Corporate Debtor) - Whether in a liquidation proceeding under Insolvency and Bankruptcy Code, 2016 the Scheme for Compromise and Arrangement can be made in terms of Sections 230 to 232 of the Companies Act? - If so permissible, whether the Promoter is eligible to file application for Compromise and Arrangement, while he is ineligible under Section 29A of the I B Code to submit a 'Resolution Plan'? HELD THAT:- Even during the period of Liquidation, for the purpose of Sections 230 to 232 of the Companies Act, the 'Corporate Debtor' is to be saved from its own management, meaning thereby the Promoters, who are ineligible under section 29A, are not entitled to file application for Compromise and Arrangement in their favour under section 230 to 232 of the Companies Act. Proviso to section 35(f) prohibits the Liquidator to sell the immovable and movable property or actionable claims of the 'Corporate Debtor' in Liquidation to any person who is not eligible to be a Resolution Applicant. From section 35, it is clear that the Promoter, if ineligible under Section 29A cannot make an application for Compromise and Arrangement for taking back the immovable and movable property or actionable claims of the 'Corporate Debtor'. The National Company Law Tribunal by impugned order dated 15th May, 2018, though ordered to proceed under sections 230 to 232 of the Companies Act, failed to notice that such application was not maintainable at the instance of 1st Respondent-Arun Kumar Jagatramka (Promoter), who was ineligible under section 29A to be a 'Resolution Applicant' - case remitted to 'Liquidator'/ Adjudicating Authority for taking fresh decision - appeal allowed by way of remand.
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Insolvency & Bankruptcy
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2020 (2) TMI 1129
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of dues - existence of debt and default or not - HELD THAT:- The Corporate Debtor's foremost contention, that the debt is not Financial Debt as per section 5(8), as per section 5(8)(a) money borrowed against the payment of interest . However, from the Loan acceptance letter itself is evident that the money has been borrowed with an interest of 18% per annum by the Corporate Debtor. Also Bank statements placed on record shows that money was transferred form Bank account of Financial Creditor. Same has also been Certified by the Bank of Financial Creditor. Hence, no further proof is required in this regard. Also, as per section 5(7) of IBC, Financial Creditor means any person to whom a financial debt is owed and includes a person to whom such a debt is legally assigned or transferred. Hence this contention of the Corporate Debtor is unsustainable. e Financial Creditor has established beyond doubt that the loan was duly accepted and duly received by the Corporate Debtor and that there has been default in payment of the Debt by the Corporate Debtor. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared.
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2020 (2) TMI 1128
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - time limitation - HELD THAT:- Learned counsel for the Appellant submits that the 'State Bank of India' has 91% voting share and therefore, any settlement with them will amount to settlement under section 12A. Instead of granting further time, we allow the Appellant to file an application under section 12A before the 'Committee of Creditors' - Appeal disposed off.
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2020 (2) TMI 1127
Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in repayment of its debt - debt arose due to non-payment of consideration amount for providing services - existence of dispute or not - HELD THAT:- The present petition deserves to be dismissed due to the following reasons: a. It is evident that the operational creditor has surrendered the contract on 21.01.2013 and the same is not denied by it. b. It is also evident that as per the work order, all bills for the work undertaken under subcontract, dated 24.12.2010, by operational creditor are to be raised immediately and to be verified by 3rd party i.e., Project Management Consultant. This is not done in support of the present claim. c. The operational creditor has already taken back the bank guarantee for the amount of ₹ 4,66,25,000 for cancellation from the corporate debtor on 21.01.2013. This indicated the matter has come to an end between the parties on the said date. d. All the above facts also indicated no existence of debt. Further, prior dispute between the parties before filing of the present petition under Section 9 of I B Code, is also raised by corporate debtor in its letter, dated 23.05.2017, sent to the operational creditor in response to demand notice, dated 20.04.2017. e. The claim of petitioner is also barred by Limitation since application is filed under section 9 of I B Code, beyond three years from the date of alleged claim. f. Accordingly the present petition filed under Section 9 of I B Code, is hereby dismissed.
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2020 (2) TMI 1126
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - application rejected on the ground that there is the existence of dispute regarding the outstanding amount claimed by the Applicant - HELD THAT:- The Appellant/the operational creditor has not filed any document about the letter of engagement, assignment to the operational creditor to act for and on their behalf in liaisoning with Bank for raising loan. There is no document on record to substantiate the claim of operational creditor/Appellant to pay service charge, as claimed by the Appellant, i.e. 1% service charge on the total sanctioned term loan amount - The document submitted by the Appellants requires further investigation to prove its claim, which can't be done in summary proceedings. The Documents relied on are not sufficient to show engagement for service charge fixed, and the rate of service charge. There is nothing on record to show that the amount is due and payable. Thus, the Adjudicating Authority has rightly rejected the application filed u/s 9 of the 'I B' Code - Appeal dismissed.
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2020 (2) TMI 1125
Maintainability of application - initiation of CIRP - default committed by the Corporate Debtor in making repayment of the amount as availed to the Corporate Debtor Company - Existence of debt and default - HELD THAT:- Since, the Corporate Debtor did not file any objection nor any adverse material is available on record that it did not receive the payment of loan amount through the RTGS in its account, which is rupees fifteen lakhs and the same is not refunded/returned by the Corporate Debtor as per the entered MOU, it is established that the Corporate Debtor availed unsecured loan of ₹ 15 Lakhs from the Petitioner/Financial-Creditor and has failed in making repayment of the same. Hence, the default is occurred. Hence, filing of this IB. Petition is found in order and is found complete. Therefore, the present I.B. Petition deserves for an admission with the following directions/observations. The date of admission of this petition is 04.12.2019. Petition admitted - moratorium declared.
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2020 (2) TMI 1124
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - debt due and payable or not - main contention of the respondent is that there is a pre-existing dispute between the parties and the work remained incomplete by the operational creditor - HELD THAT:- It is seen that there is pre-existing dispute and also there is no certainty of the actual amount of default. Though the invoices pertain to the year 2015, there was no effective pursuance for a long period from 2015 till end of 2018. The various correspondences placed on record show that dispute was not raised for the first time to evade liability but certainly pre-existed much prior to the issuance of notice under section 8 of the Code. The e-mail dated 03.09.2015 reveals that the respondent requested for the accounts of the petitioner to confirm the balance which was never issued. There are allegations of non-conciliation of accounts despite request. Existence of an undisputed operational debt is sine qua non for initiating CIRP under section 9 of the Code. The Code is not intended to be substitute to a recovery forum. The moment there is existence of a dispute, the corporate debtor gets out of the clutches of the Code. In the factual background of this case 'existence of real dispute' cannot be totally overruled - The provisions of section 9 (5) (ii) (d) of the Code clearly mandates that Adjudicating Authority shall reject the application when notice of dispute has been received by the applicant operational creditor. In the present case notice under section 8 was duly replied within the period prescribed by bringing to the notice of the operational creditor the existence of dispute. Materials placed before us show that dispute was raised prior to the issuance of notice under section 8 of the Code. The claim of operational debt in question is not free from dispute. There is substance and plausible contention in the pleadings of both sides, which necessitates investigation - Respondent has raised dispute with enough particulars to qualify as a dispute as defined under sub-section (6) of section 5 of the Code. Application dismissed.
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2020 (2) TMI 1123
Liquidation of the Corporate Debtor Company - HELD THAT:- It is now settled position in law, as per the decision of the Hon'ble Supreme Court of India in the matter of K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK OTHERS [ 2019 (2) TMI 1043 - SUPREME COURT] and in ESSAR STEEL LTD. VERSUS UNION OF INDIA ORS. [ 2016 (4) TMI 1366 - SUPREME COURT] that, the commercial wisdom applied by Member of the CoC to be treated as conclusive and this Adjudicating Authority is not expected to sit in appeal and to substitute its own view to the CoC. Because its jurisdiction is supervisory in nature and nor as of an Appellant Authority. The present application can be allowed in view of the resolution of the CoC for passing an appropriate order for liquidation of the company - Application deserves to be allowed and an order for liquidation of the company is required to be passed. It is ordered that the Corporate Debtor Company, M/s. Shri Padmavati Sortex Pvt. Ltd. shall go under liquidation with certain directions.
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2020 (2) TMI 1122
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of dispute or not - HELD THAT:- Records show that the respondent had made last payment on 30.06.2016 i.e. after the last invoice dated 06.04.2016 was raised by the applicant and the said fact is also admitted by the corporate debtor. Moreover, no document like debit note or any complaint in writing regarding inferior quality of the material eve raised and/or produced on record to support the contention. On one hand the respondent claims that the goods supplied were of inferior quality, on the other hand record shows that the respondent had made last payment on 30.06.2016. Had there been any serious complaint about the quality of goods supplied by the applicant, the respondent should have returned the goods and/or would have retained the payment. On perusal of the records it is also found that only after filing the instant application by the operational creditor the respondent has raised the dispute regarding the quality of goods. It is also a matter on record that the respondent never raised any dispute on receipt of demand notice issued under Section 8 of the I B Code and has also admitted in reply that the corporate debtor has not replied to the demand notice by way of raising any dispute. This adjudicating authority is of the considered view that operational debt is due to the Applicant and it fulfilled the requirement of IB Code as enshrined in the Code. Moreover, the corporate debtor admitted in his reply that he has already made part payment towards the total dues so claimed by the applicant. That, service is complete and no dispute has been raised by the respondent at any point of time. That, Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default and the amount claimed by operational creditor is payable in law by the corporate debtor as the same is not barred by any law of limitation and/or any other law for the time being in force. The Application filed by the Applicant is complete in all respects and is in accordance with the I B Code and the Rules made thereunder - it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - Petition admitted - moratorium declared.
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2020 (2) TMI 1121
Application for withdrawal of application under Section 9 - CIRP process - constitution of Committee of Creditors - settlement agreement entered - HELD THAT:- The parties having settled the matter on 30th October, 2019 i.e. before the constitution of Committee of Creditors and application having filed by 'M/s Syndicate Interglobe' (Operational Creditor) for withdrawal of application under section 9, the Adjudicating Authority instead of adjourning the matter should have passed appropriate order in exercise of power conferred under Rule 11 of the NCLT Rules, 2016. The Adjudicating Authority having failed to do so, we exercise inherent power conferred under Rule 11 of NCLAT Rules, 2016 and set aside the Corporate Insolvency Resolution Process initiated against 'M/s Global Fragrances (P.) Ltd.' (Corporate Debtor) by order dated 25th September, 2019 and allow the application filed by the Respondent - 'M/s Syndicate Interglobe' (Operational Creditor)for withdrawal of application under section 9. The Company Petition stands disposed of as withdrawn.
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2020 (2) TMI 1120
Dissolution of company - Section 59(7) of the Insolvency and Bankruptcy Code - HELD THAT:- The Liquidator has placed on record the Final Report showing realization and payment to the stakeholders, containing details as required under Regulation 38 of IBBI (Voluntary Liquidation Process) Regulations 2017. Besides that, copy of the Final Report, dated 28.03.2019, was submitted to the RoC in Form GNL - 2 and sent to IBBI through e-mail and by registered post. Subsequent to the payment to creditors and members of the Applicant, the balance in the liquidation account is NIL and an application w.r.t. closure of the bank account has been made by the Liquidator. In view of the necessary compliances made by the Company and the Liquidator, this Authority in exercise of the powers conferred under Sub-section (8) of Section 59 of I B Code, 2016, do hereby order the dissolution of the Corporate Person viz., Yosun India Private Limited, from the date of this Order i.e.04.11.2019 - the Corporate Person stands dissolved and the Liquidator stands relieved. Application disposed off.
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2020 (2) TMI 1119
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - dishonor of cheque - financial debt - debt due and payable or not - HELD THAT:- The Financial Creditor has succeeded to make out a case for triggering the Corporate Insolvency Resolution Process. The material on record clearly goes to show that the Corporate Debtor had availed the loan facility and has committed default in the payment of the said debt amount. The applicant 'financial creditor' has placed on record evidence in support of the claim as well as to prove the default. The Corporate Debtor by its own admission in reply acknowledges the existence of financial debt. Merely because respondent has stated that it is willing to settle the debt and in spite of being given various opportunities for repayment, the respondent failed to make payment. There is no bar for Financial Creditor from proceedings under the provisions of Code. It is evident from the record that the application has been filed on the proforma prescribed under Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of the Code - We are satisfied that a default has occurred and debt has remained unpaid. Thus, the application warrants admission as it is complete in all respects and is admitted initiating CIRP as prescribed under the Code. Petition admitted - moratorium declared.
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2020 (2) TMI 1118
Recall of Order - initiation of CIRP - primary ground for the recall it is evident from the averments contained in the application as well as the grounds is that the applicant company, namely, the CD is Non-Banking Financial Company (NBFC) registered on 1.1.2003 bearing registration No. B. 14.00908 evident from the registration certificate issued by the Reserve Bank of India (RBI) - HELD THAT:- It is evident that the CD is required to establish that it is rendering financial service as defined under Section 3(16) of IBC,2016 and that it is a 'Financial Service Provider' as defined under section 3(17) of IBC,2016 all of which requires appreciation of evidence, which this Tribunal is afraid cannot be ventured into after a final order has been passed after contest with the available materials on hand, including the pleadings of the respective parties. Inherent powers as provided under Rule 11 of NCLT Rules, 2016 cannot also be indiscriminately exercised by this Tribunal with a view to subvert the appellate provisions as provided under IBC,2016 in case if the parties are aggrieved by final order passed by this Tribunal more so when specific time limits are provided in IBC,2016 in filing appeals before the Appellate Tribunal. Application do not deserves to be admitted - application dismissed.
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Service Tax
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2020 (2) TMI 1117
Imposition of penalty and interest - Failure to discharge Service Tax - Business Auxiliary Service - demand pertains to 2009-10 and 2010-11 - HELD THAT:- Similar issue decided in the case of SMT. KUSUM LATA DAMANI VERSUS CCE CGST, DELHI [ 2019 (3) TMI 1723 - CESTAT NEW DELHI] where it was held that the appellant is a lady and not much conversant with the service tax laws. However, she has maintained proper records of the receipt of sales commission by cheque, duly disclosed in the Income Tax record. Thus, there is no case of deliberate defiance of law or contumacious conduct as mis-statement of facts, and penalty set aside - the case at hand is identically same, and therefore, there is no justification in imposition of penalty on the appellant. Demand of interest - HELD THAT:- The same is required to be recomputed under Proviso to Section 75 of the Act by the original adjudicating authority. Accordingly, the matter remanded to the lower adjudicating authority for the limited purpose of calculating the interest as applicable in this case. Appeal allowed in part and part matter on remand.
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2020 (2) TMI 1116
Levy of service tax - Club or Association service - principles of mutuality - appellant were providing services, facilities and advantages to their members and collected amounts under various heads - distinct legal status of club from its members or not - case of appellant is that since they have been providing services to members as well as non-members they do not qualify to be called as a club - HELD THAT:- It is not in dispute that the amounts have been collected by the appellant from their own members as can be seen from the impugned order itself. They might be rendering same services to non-members as well and may also be generating a surplus. However, these factors do not change the character of the appellant as that of a club or association. As decided by the STATE OF WEST BENGAL ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE ORS. VERSUS M/S. RANCHI CLUB LTD. [ 2019 (10) TMI 160 - SUPREME COURT] and several previous judgments, no service tax can be levied on a club or association on the amounts collected by them from their own members either towards subscription or towards some other services because the club is held to be not a different legal entity but the same as that of the members. As there is no distinction between the identity of the members and the identity of the club, there is no service provider service recipient relationship in such transactions. Therefore, no service tax can be levied upon the appellant. Appeal allowed - decided in favor of appellant.
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Central Excise
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2020 (2) TMI 1115
Principles of natural justice - SCN in call book for more than 13 years and without informing the petitioner, the SCN has been recalled - petitioner submitted that the SCN impugned in this petition is dated 19.03.2004 and thereafter no adjudication proceedings were conducted or concluded by the respondent no.2 authority within reasonable period and after a long delay of more than 13 years, the case was taken up for its adjudication by respondent no.2. HELD THAT:- It would be appropriate to refer to the show- cause notice dated 19.03.2004 impugned in this petition. It is an admitted position that the impugned notice is not adjudicated till date. The show- cause notice itself shows that the petitioner Company was registered as 100% EOU with Development Commissioner, KFTZ Gandhidham and the same relates to predominantly the goods cleared by the petitioner in DTA between July 1999 to March 2000. The show- cause notice also indicates that 30 days time was given to the petitioner Company and the petitioner Company had replied to the same, however the respondent authorities did not adjudicate the show- cause notice. The record clearly indicates that the authorities kept the show- cause notice in call book for more than 13 years and without informing the petitioner and as averred by the petitioner, which is not controverted by the respondent authorities and on the contrary on inquiry made by the petitioner, the petitioner was informed that the impugned show- cause notice has been recalled from the call book and was kept again for its adjudication which is against the principles of natural justice and beyond reasonable period. The impugned notice dated 19.03.2004 deserves to be quashed and set aside and is hereby quashed and set aside - Petition allowed - decided in favor of petitioner.
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2020 (2) TMI 1114
Process amounting to manufacture - Packing of duty paid machine dipped match splints purchased from mechanized match units - Benefit of N/N. 4/2006-CE dated 1.3.2006 (Sl. No. 72 of the Table) denied - Department was of the view that the appellants are not eligible for the benefit of Notification since the match splints purchased by them have been manufactured using the aid of power - Board Circular No. 1/93-CX-4 dated 2.121993 - difference of opinion - matter referred to Third member. HELD THAT:- The scope and cause of reference to the Third Member is limited to the difference of opinion between the Members and therefore, as a Third Member, I cannot go beyond the reference to entertain the above application. However, I deem it proper to place the above application before the regular Bench for any order on the application. The Member (Judicial) has held that the appellants are eligible for the benefit of the Notification (supra) and has set aside the demand whereas, the Member (Technical) has held that the benefit of the exemption Notification (supra) is not available to the assessees and has accordingly confirmed the demand. The only question formulated by the Members on the Difference of Opinion is whether the appellants are eligible for the exemption Notification No. 04/2006-C.E, dated 01,03.2006 as held by Member (Judicial) or they are not eligible for the exemption as held by Member (Technical). In Union of India Vs. Elphinstone Spinning Weaving Co. Ltd., [ 2001 (1) TMI 966 - SUPREME COURT ], the Hon'ble Apex Court formulated what it termed the cardinal principle of construction in the following words: a statute is a command of the Legislature. The interpreter must, therefore, in interpreting and construing the statute, identify the intention of the Legislature; that in identifying the intention of the Legislature by the process of constructing, the Court will have to adopt both literal and purposive approaches. This would mean that the true or legal meaning of an enactment is derived by construing the meanings of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief of its remedy to which the enactment is directed. In State of Uttar Pradesh Vs. Vijay Anand [ 1962 (3) TMI 7 - SUPREME COURT ], the Hon'ble Apex Court inter alia when the language is plain and unambiguous and admits of only one meaning, no question of construction of a statute arises, for the Act. When the meaning is plain and unambiguous, no process of construing or interpreting a statute can proceed beyond the literal or textual interpretation except if absurdity results as a consequence. In my considered opinion, the same principles apply to construing - Although courts have historically taken the assistance of common law principles in interpreting statutory law, there is very little common about the tax laws. There are a sui generis set of principles that apply to the interpretation of taxing statutes. It is the we]/ settled proposition that the subject is not to be taxed without clear words for that purpose; and every Act of Parliament must be read according to the natural construction of its words. Member (Judicial) rightly points out that the notification does not require that the processes listed therein are required to be carried out by a single/same manufacturer. However, for the reasons I have given above, the converse too is not true. That is, the absence of such a requirement does not automatically entitle the assessee to the exemption - The very heading of the Notification, i.e., GENERAL EXEMPTION NO,47 reads thus: Exemption and effective rate of duty for SPECIFIED GOODS of chapters 25 to 49 and it applies. to exempt excisable goods of the description specified in column (3) of the table. So, the conditions upon which the exemption depends is relatable not to the assessee, not the manufacture and not even the manufacturer, but only to the goods specified. It is the case of the appellants that they have procured dipped match splints from other manufacturers who have removed such goods on payment of that this would not make any difference since the entitlement to exemption is to be determined separately in each assessee's case. The fact that duty has been paid on some intermediate/ semi-finished goods not themselves entitled to exemption is in no manner relevant to whether exemption is to be granted at a subsequent stage to the finished goods. In any event, the cascading effect is effectively mitigated by CENVAT credit. The exemption notification must be applied only to the goods .it seeks to cover. The appellants are not eligible for the benefit of exemption notification No.4 ibid and accordingly, I concur with the conclusions drawn by the Member (Technical) - Registry is directed to place the matter before the Division Bench for recording majority/Final Orders accordingly. Majority order recorded - Appeals dismissed.
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2020 (2) TMI 1113
Restoration of appeal - non-compliance of the requirement of Section 35F of the Central Excise Act, 1944 - HELD THAT:- It is an admitted fact on record that the applicants did not comply with the stay orders dated 22-4-2013 and 24-6-2013 passed by this Tribunal and for that purpose, the appeals of the applicants were dismissed by the Tribunal for such non-compliance. We find from the available records that the above referred stay orders were compiled by the applicants on 8-3-2018 and 23-4-2018, which are more than four and a half years from the date of passing of the said stay orders. We also find that in the stay applications filed before the Tribunal, the applicants had not pleaded for the financial difficulties faced by them. Thus, for non-compliance of the stay orders, the Tribunal has rightly dismissed the appeals filed by the appellants. The applicants are directed to deposit the entire adjudged dues confirmed in the original orders within a period of 4 weeks from the date of receipt of this order and to report compliance on 10-7-2019. The appeal shall be restored back to file subject to receipt of the compliance report by the next date of hearing. Registry is directed to list the matter on 12-7-2019 for further orders.
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CST, VAT & Sales Tax
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2020 (2) TMI 1157
Validity of Assessment/Reassessment order - levy of VAT - Challenge on the ground that their branches or units cannot be treated as separate legal persons and therefore supply of goods from one branch to another in the State does not amount to sale so as to attract the statutory levy - whether the branches of same corporate body acquire independent legal personality on being separately registered as dealers for the purpose of the Act? - whether supply of goods from one unit/branch to another of the very same company amounts to sale for the purpose of levy of tax under the Act? HELD THAT:- Both the above questions need to be answered in the negative. In the above circumstances, these writ petitions succeed; a Writ of Certiorari issues quashing the impugned orders; all the monies deposited by the petitioners pursuant to interim orders shall be immediately refunded to them; the securities/bank guarantees furnished by the petitioners pursuant to interim orders shall stand rescinded/dissolved.
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2020 (2) TMI 1112
Waiver of interest on the Interest Free Sales Tax Deferral Amount - petitioner became a sick industrial unit within the meaning of the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 by the time when it was required to discharge the tax liability under the agreement - Section 17-A (2) of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- Interest Free Sale TCA Deferral Scheme is a special scheme prescribed under Section 17-A of the Tamil Nadu General Sales Tax Act, 1959 - Under the said provision, the Government may, by a notification defer the payment of the whole or any part of the tax payable in respect of any period of any new industrial unit or sick unit or sick textile mill. Interest Free Deferral of Sales Tax may be given prospectively or retrospectively. It is however to subject to such conditions as may prescribed which are incorporated in the Deferral Agreement. As per sub-section 2 to Section 17-A of the Tamil Nadu General Sales Tax Act, 1959, no interest is attracted under Section 24(3) of the Act during the deferral period, provided the condition laid down for payment of tax deferred are satisfied. A plain reading of Section 17A(2) of Tamil Nadu General Sales Tax Act, 1959 would indicate that petitioner is not entitled to waiver of interest even for the period during the deferral period as the petitioner breached the condition of the deferral agreement by not paying the tax in time as agreed - In this case, admittedly, the petitioner has not satisfied the condition for payment for deferred payment of tax and therefore interest is payable by the petitioner after the specified date. There is no basis on which the interest liability can be waived. The interest liability which could be waived by the respondent would have been be only in terms of 17-A (2) of the Tamil Nadu General Sales Tax Act, 1959 read with the Agreement. Thus at best the tax liability can be deferred. There is no power vested with the respondent to waive interest payable under Section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 - Only when the assessing officer comes to a conclusion that the tax determined and payable by a dealer was less or the return was incomplete or where no returns were filed, a notice under section 13(2) of the Tamil Nadu Gen Sales Tax Act, 1959 is required to be issued to a registered dealer. Thus liability to pay is tax mandatory as long as same is reflected in the returns. For payment of tax, no assessment order is required and only in case of short payment of tax assessment is required after due notice - but for the deferral in payment of the tax under Section 17A of the Act, the petitioner would have been liable to pay tax irrespective of the assessment of tax liability as per Section 13 of the Act. Liability to pay tax is not dependent on the assessment order. Only in case of short payment such notice and assessment is required. Further, an assessment order merely completes the assessment and nothing more. If there is a deficit in payment of tax, a dealer can be asked to pay tax . If not assessment order will accept the tax paid and shown the sales tax return. The fact that the petitioner was within the purview of Board for Industrial and Financial Reconstruction and was declared as sick unit by the on 31.5.2006 and was de-registered on 05.12.2013 is of no avail - Petition disposed off.
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2020 (2) TMI 1111
Rate of tax on turnover - Sale of Music/Film Audio Compact Disc, video compact disc, digital video etc. - whether taxable at the rate of 14.5% or not - petitioner had claimed that the music/film audio compact disc/video disc/digital video disc et were liable to tax as Information Technology Product under Serial No.68 of Part B of the 1st schedule to the Tamil Nadu VAT Act, 2006 - HELD THAT:- A notice dated 31.10.2016 was issued to the petitioner. Since the clarification of the Authority for Clarification and Advanced Ruling dated 25.7.2012 was against the petitioner, the respondent was justified in confirming the demand to that extent at the time of passing the impugned order - However, post facto, the above clarification of the Authority for Clarification and Advanced Ruling under section 48A of the T.N. VAT Act, 2006 given earlier on 25.7.2012 to the petitioner clarifying that music/film audio compact disc/video disc/digital video disc etc were liable to tax at 14.5% under Entry 13-A (e) of Part C of the 1st Schedule to the Tamil Nadu VAT Act, 2006 was reviewed and a review order has been passed on 19.11.2018 - the demand confirmed by the impugned order insofar as dispute relating to rate of tax on the sale of these items are concerned are answered in favour of the petitioner and accordingly to that extent the impugned order is quashed. Reversal of the Input tax credit under Section 19(5)(c) of the Act - HELD THAT:- The period in dispute is 2013-14. The Amendment to Section 19(5) was in the year 2015. It deleted sub-clause (c) to Section 19(5). It was not intended to be retrospective in nature. If it was so, the state legislature would have expressly stated at the time of amendment in 2015 - the amendment cannot be said to be retrospective - That apart the amounts involved are too meagre - impugned order upheld. Petition disposed off.
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Indian Laws
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2020 (2) TMI 1110
Dishonor of Cheque - Section 138 of the Negotiable Instruments Act, 1881 - legally enforceable debt or not - whether Ext.P6 could be regarded a valid document under law as being sufficient to authorise PW1 to prosecute the complaint on behalf of the complainant? HELD THAT:- It is proved that Ext.P1 cheque arose out of a hire purchase transaction between the complainant and the accused. The accused does not dispute the transaction nor that he purchased a vehicle availing the loan sanctioned by the company. It has come out in evidence that, after repayment of part of the loan for sometime, there was default and consequently the vehicle was seized and sold by the company. According to the company, the entire loan arrears could not be still realised and this led to the accused issuing Ext.P1 cheque in discharge of partial liability. The veracity of prosecution case could not be successfully assailed by the accused. No rebuttal evidence was also brought in by him. It was sought to be tendered in evidence through PW1, whose authority itself was under challenge. The conduct of the signatory to Ext.P6 in having addressed the Chief Judicial Magistrate before whom the case has been tried and sought to tender the document in evidence is not in any way appreciable. Having regard to the lack of proper conduct and also the casual manner in which the document was sought to be brought in evidence which the complainant considered to be material, the view taken by the court below in rejecting Ext.P6 as not being valid cannot be faulted. In my view also, Ext.P6 was rightly dismissed as being inadmissible. In the interest of justice, the appellant ought to be given an opportunity to adduce the requisite evidence to prove that the signatory to the complaint has had legal authority to represent the company in the proceeding before the court below - the order of acquittal of the accused dated 31.01.2007 is set aside and the matter is remitted back to the court below to give an opportunity to the complainant to prove that it was properly represented by the signatory to the complaint - Appeal allowed by way of remand.
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