TMI Tax Updates - e-Newsletter
March 2, 2013

Case Laws in this Newsletter:

Income Tax Customs Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. Voluntary Compliance Encouragement Scheme, 2013: A Defaulter Friendly Scheme

   By: Pradeep Jain

2. Salient Features of Union Budget 2013-14 and Finance Bill, 2013

   By: Dr. Sanjiv Agarwal

3. Budget 2013: The Tricky tax rebate

   By: DEVKUMAR KOTHARI

4. Quick Review of Budget effects - Direct Taxes

   By: CSSwati Rawat

5. Changes in Indirect Taxes -Union Budget 2013

   By: Bimal jain

News

1. FINANCE BILL, 2013 - PROVISIONS RELATING TO INDIRECT TAXES

2. Concerns on Language of Dtaa To be Addressed When Finance Bill is Taken up for Consideration: Finance Ministry

3. Government Approves Nine Proposals of Foreign Direct Investment Amounting to About Rs.1140.14 Crore

Circulars / Instructions / Orders

Customs

1. Memorandum-2 - dated 28-2-2013

FINANCE BILL, 2013 - PROVISIONS RELATING TO INDIRECT TAXES

Highlights / Catch Notes

Income Tax

• High Court highlights importance of revenue appeals on loss claims, even with minimal tax impact. Tribunal's dismissal considered erroneous.

  Case-Laws - HC : Appeal by revenue - low tax effect - even loss claimed by assessee for a particular year assumes considerable significance in variety of situations - Tribunal committed an error in dismissing the Revenue's appeals- HC
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• Section 104(1) Additional Tax Not Applicable Due to Lack of Accounting Profit, No Dividend Distribution Possible.

  Case-Laws - HC : Levy of additional income tax u/s 104(1) - no actual accounting profit - the assessee could not distribute the dividend to it's shareholders. - there is no question of applicability of Section 104 - HC
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• High Court Rules Sikkim State Lottery Winner Must Pay Income Tax on Prize Money as Indian Resident.

  Case-Laws - HC : Income earned by way of winning of Sikkim State lottery - assessee is liable to pay income tax on the prize money as she is resident of India and received the prize money in India - HC
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• Court Disallows Interest on Director Loan Due to High 20% Rate and Lack of Commercial Expediency Efforts.

  Case-Laws - HC : Interest paid on loan from directors - At the same time, a huge amount has been borrowed @ 20% interest. No attempt was made to reduce the said borrowing. - No Commercial expediency - claim of interest disallowed - HC
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• Court Clarifies: Income Tax Reassessment Notices Must Include Substantive Context u/s 148(2) to Establish Jurisdiction.

  Case-Laws - HC : Reassessment - disclouser of information - A parrot-like repetition of the statutory language without any substance would certainly not amount to satisfying the jurisdictional conditions but if coupled with the context is sufficiently capable of conveying the fact that there was failure on the part of the assessee, that should be sufficient compliance with the requirements of section 148(2) of the Act. - HC
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• Assessees awarded Section 80IB(10) benefits despite no land title transfer under Income Tax Act.

  Case-Laws - HC : Deduction u/s 80IB(10) - the assessees were entitled to the benefit under Section 80IB(10) of the Act even where the title of the lands had not passed on to the assessees - HC
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• Cold Chain Facility Deduction: Section 80-IB(11) Allows Storage or Transportation Alone to Qualify for Tax Benefits.

  Case-Laws - HC : Deduction u/s 80-IB(11) - the words storage and transportation have been separated by using word 'or' as such both the facilities of storage and transportation at the same time was not necessary for falling within the definition of cold chain facility - HC
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• Notice u/s 148: Proceedings Valid Despite Missing Assessment Year Unless Assessee Proves Misleading Impact.

  Case-Laws - HC : Income escaping assessment - non mentioning of AY in the notice u/s 148 - Unless it is shown that assessee was misled by not mentioning the AY, proceedings can not be quashed - HC
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Customs

• Court Rules Department Can't Impose Onerous Conditions for Provisional Release of Seized Goods, Ensures Fair Process.

  Case-Laws - HC : Provisional release of the goods - onerous conditions - department is not empowered to put onerous conditions for provisional release of seized goods. - HC
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• DGFT Exceeds Show-Cause Notice Scope with Orders on Customs Duty Recovery for Advanced Licence and Export Obligation.

  Case-Laws - HC : Export obligation - advanced licence - the Joint DGFT passed, travelled beyond the proposals of the show-cause notice insofar as the orders pertain to recovery of customs duty and interest. - HC
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• Court Orders Importers to Return Hazardous Used Tyres to Origin Countries at Their Own Expense Immediately.

  Case-Laws - HC : Import of used tyres - hazardous waste - importers are directed to send back the imports to the countries of origin at their own cost immediately - HC
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Service Tax

• Real Estate Agent Services Eligible for Input Service Credit, Confirms Decision on Cenvat Credit Applicability.

  Case-Laws - AT : Cenvat Credit - appellants are entitled for input service credit on real estate agent - Credit allowed - AT
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• Court Grants Stay to Examine Eligibility for Service Tax Benefits Under Notification No. 8/2005-S.T. for Job Work Services.

  Case-Laws - AT : Job Work - Ntf No. 8/2005-S.T. - for claiming or denying the benefit of the notification, the assessee should be held to have provided the taxable service - Stay granted - AT
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• Assessees can challenge demands with evidence against employee statements under established legal principles.

  Case-Laws - HC : Demand on the basis of statement of employee - It is well established in law that it is open to the assessee to demonstrate on the basis of the documentary evidence that the statement recorded is erroneous - HC
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Central Excise

• Refund Denied for Service Tax Paid on Reverse Charge, but CENVAT Credit Refund Admissible u/r 5.

  Case-Laws - AT : Refund claim on service tax paid on reverse charge basis denied - the refund of CENVAT Credit on the input service is admissible under Rule 5 of the CENVAT Credit Rules - AT
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• Cenvat Credit Allowed for Service Tax on Royalty Charges for IP Rights in Sharon Plywood Manufacturing.

  Case-Laws - AT : Cenvat credit on royalty charges - it can be inferred that the service tax paid on the royalty, (IPR Services) were used in or in relation to the manufacture of their Sharon branded plywood - AT
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• Original Authority Should Have Transferred Refund Claim to Correct Jurisdiction Before Rejection Decision.

  Case-Laws - AT : Refund claim - claim was filled before wrong jurisdictional office - before rejecting the application, file should have been transferred to correct jurisdiction by the original authority - AT
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Case Laws:

• Income Tax

• 2013 (3) TMI 17
  Appeal by revenue - low tax effect - Consideration of notional tax effect - held that:- even loss claimed by assessee for a particular year assumes considerable significance in variety of situations. Merely because even as per the Assessing Officer's order, ultimately income of the assessee is negative, the Revenue's appeal before the appellate Tribunal would not be barred by the Board's circular under Section 268A of the Act. It is, however, clarified that the notional tax effect would have to be above the limits prescribed by the Board from time to time for presentation of such appeals. In all these cases since it is stated that the notional tax effect would be higher than the limits prescribed by the Board in different circulars, we are of the view that the Tribunal committed an error in dismissing the Revenue's appeals as being not maintainable. - Decided in favor of revenue.

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• 2013 (3) TMI 16
  Additions - Evidence - assessee claim that amount found during search belong to others - held that:- Although three persons were eventually produced who did not confirm the say of the appellant. - With regard to the sum of Rs.5,35,000/-, it was also not revealed that as to why the amount which was said to have belonged to M/s. Ohm Developers continued to lie with the appellant at his residence. Tribunal found no ground to sustain the order of the CIT(Appeals) and by reversing the same, it upheld the order of Assessing Officer and added the entire cash amount of Rs.6,77,450/- to the income of the appellant. - Nothing is pointed out to assail the positive findings of Assessing Officer and that of Tribunal. - Decided against the assessee.

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• 2013 (3) TMI 15
  Levy of additional income tax u/s 104(1) - non distribution of dividend to shareholders - Held that:- There were no actual accounting profit which are to be taken into account for the purposes of declaration of dividend or larger dividend. In this view of the matter, the assessee could not distribute the dividend to it's shareholders. This being so, there is no question of applicability of Section 104 of the Income Tax Act. The view taken by the Tribunal in this regard is perfectly justified - in favour of the assessee.

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• 2013 (3) TMI 14
  Income earned by way of winning of Sikkim State lottery - whether was liable for taxation under the Income Tax Act, 1961? - Held that:- Assessee in the present case is resident of India and has won the lottery prize at Kanpur and accordingly as per provisions of Section 5 of the Income Tax Act, 1961 the total income received by the assessee is liable to be taxed as per the provisions of Income Tax Act, 1961. ITAT has relied upon its own earlier decision while passing the order under appeal and the said decision has been approved in Mahaveer Kumar Jain v. CIT, (2004 (9) TMI 72 - RAJASTHAN HIGH COURT) that the assessee is liable to pay income tax on the prize money as she is resident of India and received the prize money in India - in favour of department and against the assessee.

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• 2013 (3) TMI 13
  Disallowance of equivalent of interest on borrowed capital which was debit balances existing in the names of directors and their family members - ITAT deleted the addition - Held that:- It is established that the borrowed funds on interest will have to be utilized only for the purposes of business. But in the case in hand, it was not done so. Had the Directors or relatives have repaid the loan to the Company, certainly proportionate borrowing liability might have been reduced. It makes no difference that the loan was borrowed in the earlier assessment years. The principle of res judicata is applicable as per the ratio laid down in CIT vs. Brij Lal Lohiya [1971 (7) TMI 13 - SUPREME COURT]. Further, in the case of Radha Swami Satsang vs. CIT [1991 (11) TMI 2 - SUPREME COURT] it was observed that where a fundamental aspect permitting through the different assessment years had been found as a fact, one way or the other and parties have allowed that decision to be sustained by not challenging the order, it would not be at all to appropriate to allow the decision to be changed in the subsequent orders, but in the instant case, it is evident that borrowers i.e. Director and relatives have made no attempt to repay the amount. They utilized the interest free advances for their personal purposes, which has no connection with the business activity of the Company. In other words, the funds were utilized for the purpose of non-business purposes. At the same time, a huge amount has been borrowed @ 20% interest. No attempt was made to reduce the said borrowing. The Commercial expediency would include such purpose as is expected by the assessee to advance its business interest and may include measures taken for preservation, protection or advancement of its business interests. The business interest of the assessee has to be distinguished from the personal interest of its directors or partners, as the case may be. Thus there has to be a nexus between the advancing of funds and business interest of the assessee. The appropriate test in such a case would be as to whether a reasonable person stepping into the shoes of the directors/partners of the assessee and working solely in the interest of the assessee, would have extended such interest free advances. Some business objective should be sought to have been achieved by extending such interest free advance when the assessee itself is borrowing funds for running its business. It may not be relevant as to whether the advances have been extended out of the borrowed funds or out of the mixed funds, which included borrowed funds. The test to be applied in such cases is not the source of the funds but the purpose for which the advances were extended. In the light of above discussion,impugned order passed by the Tribunal is set aside and restored the order passed by the assessing officer in this regard for the assessment years mentioned above - against assessee.

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• 2013 (3) TMI 12
  Jurisdiction u/s 263 used by CIT(A) - true income of paddy husk was not disclosed and the AO has not examined the issue - ITAT set aside the order of CIT(A) - Held that:- No substantial question of law is involved in the appeal as Sri Chopra, learned counsel for the department could not point out as to how the finding recorded by the Tribunal is in any manner perverse or against the law. The Assessing Officer had conducted the proper inquiry and preferred to accept the explanation that paddy husk was utilized in the boiler, the Tribunal has committed no error in setting aside the order passed by the Commissioner of Income Tax.

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• 2013 (3) TMI 11
  Unaccounted share application money - addition u/s 68 - Held that:- As decided in Jaya Securities Ltd. v. Commissioner of Income Tax [2007 (5) TMI 552 - HIGH COURT OF ALLAHABAD] no addition under section 68 could be made in respect of the subscription amount towards the share capital of a company limited by shares whether it is private or public relying on case of CIT v. Steller Investment Ltd. [1991 (4) TMI 100 - DELHI HIGH COURT] upheld by the Apex Court in the case of CIT v. Steller Investment Ltd. [2000 (7) TMI 76 - SUPREME COURT] - in favour of assessee.

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• 2013 (3) TMI 10
  Payment of specified persons u/s 40A(2) - excessive commission -held that:- From the findings recorded by the Tribunal it is absolutely clear that Sri Habib Akhtar was aged about 21 years during the previous year relevant to the assessment year in question and was still studying. The Court came to the conclusion that when a company pay a higher salary to the directors or the managers or to her officers or employees as a matter of commercial expediency, it is not for the Income-tax Officer to say that in his opinion the said salary should not have been paid. A company may decide to pay a higher remuneration to its directors, officers or employees so as to encourage them to work hard, expand the business, or for a host of other commercial considerations and the matter has to be looked at from the view point of the company. Applying the principles laid down in the case of Abbas Wazir(P) Ltd. vs. Commissioner of Income-tax, [2003 (9) TMI 50 - ALLAHABAD HIGH COURT] to the facts of the present case we find that in the case in hand the assessing authority has considered all the relevant factors viz. The agreement, the work done in the new factory as also the quantum of amount paid with relation to the production done in the old as well as the new factory and had acted from the view point of a prudent businessman while introducing the provision of Section 40A(2) of the Act and disallowing a part of the commission on the ground of being excessive in nature. - Decided in favor of revenue.

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• 2013 (3) TMI 9
  Reassessment - disclouser of information - Nature of expenditure - Payment of specified persons u/s 40A(2)(b) - Conversion of legal firm into Company - transfer of goodwill through a gift deed - payment of 25% of amount of the bills raised to as licence fee to the previous owner - held that:- We are unable to appreciate why there cannot be any direct evidence of the licence agreement having been filed before the respondent in the course of the original assessment proceedings. - in the absence of any evidence adduced before us to show that the copy of the licence agreement was filed before the AO on 10.10.2007, we are unable to accept the claim as proved. It remains a mere claim. A parrot-like repetition of the statutory language without any substance would certainly not amount to satisfying the jurisdictional conditions but if the language used coupled with the context is sufficiently capable of conveying the fact that there was failure on the part of the assessee to furnish primary facts fully and truly at the time of original assessment, that should be sufficient compliance with the requirements of section 148(2) of the Act. In this view of the matter we are unable to accept the contention of the petitioner that the failure to refer to the omission of the petitioner specifically to file the licence agreement (in the reasons recorded) is fatal to the validity of the reassessment proceedings. It is difficult to attribute any knowledge to the assessing officer while he is dealing with a return for a particular year under section 143(1), as to what he had done in the case of the same assessee in the earlier assessment years. Therefore, we are not able to accept the argument that the assessing officer consciously allowed the license fee payment as a deduction when he accepted the return under Section 143(1). All we have to see is whether there was “reason to believe” within the meaning of Section 147. The fact that the petitioner did not place the primary facts relating to the claim of the license fee by filing the license agreement dated 05.06.2001 along with the return of income filed for the assessment year 2006-07 would itself constitute reason to believe that primary facts have not been furnished by the petitioner. -Decided against the assessee.

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• 2013 (3) TMI 8
  Deduction u/s 80IB(10) - when the approval by the local authority as well as completion certificate was not granted to the assessee but to the landowner and the rights and the obligations under the said approval were not transferable, and when the transfer of dwelling units in favour of the end-users was made by the landowner and not by the assessee - held that:- Tribunal committed no error in holding that the assessees were entitled to the benefit under Section 80IB(10) of the Act even where the title of the lands had not passed on to the assessees and in some cases, the development permissions may also have been obtained in the name of the original land owners. - Decided in favor of assessee.

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• Customs

• 2013 (3) TMI 7
  Provisional release of the goods - onerous conditions - furnishing 25% bank guarantee and undertaking to the effect that the description of the goods/their quality/age/or other technical specifications/characteristics/ identity, etc., including analyses/test reports as mentioned in the show cause notice dated 4-7-2012 would not be challenged - alternative remedy. Held that:- the goods were seized on 1-9-2011 and the request for provisional release was rejected on 2-1-2012. The period of seizure was extended on 29-2-2012 for a further period of six months. A period of one year has expired since the goods were seized and now the Joint Commissioner has directed provisional release of goods subject to above conditions. At this stage to relegate the petitioner to the remedy of appeal again under the statute would be too harsh as he had imported the film for the purpose of trading. The matter is yet to be adjudicated upon by the authorities in pursuance to show cause notice dated 4-7-2012 and, therefore, alternative remedy would not be efficacious remedy in the facts and circumstances of the instant case particularly when the legal position already stands settled that the respondents are not empowered to put such onerous conditions for provisional release of seized goods. Respondents directed to release the goods - No bank guarantee and no undertaking as required by the department - Decided in favor of assessee.

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• 2013 (3) TMI 6
  Export obligation - advanced licence - order beyond the scope of show cause notice - held that:- in the show-cause notice, there was no proposal that the authority would also proceed to pass an order for recovery of customs duty with interest. Under the circumstances, we are of the opinion that the final orders that the Joint DGFT passed, travelled beyond the proposals of the show-cause notice insofar as the orders pertain to recovery of customs duty and interest. To such extent, the orders are vulnerable and are, therefore, hereby quashed. - Decided in favor of assessee.

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• Service Tax

• 2013 (3) TMI 22
  Refund claim - appellant submitted that various similar refund claims filed by the petitioner for the period from June, 2009 to March, 2010 have been allowed by the A.O. and even the Commissioner (Appeals) has held to the effect that the petitioner is eligible to avail the Cenvat credit and entitled to claim refund of tax paid on the services enlisted therein, the A.O. has failed to record any reasons as to why he differs with the aforesaid decision of the A.O./Commissioner (A) and, therefore, the impugned order is liable to be quashed and set aside. Held that:- The conduct of the A.O. in arriving at a conclusion that the certificate issued by the C.A. is false, without considering the explanation given by the petitioner and without assigning any reasons, clearly shows that the A.O. is biased against the petitioner and bent upon rejecting the claim of the petitioner without even considering the merits of the claim put forth by the petitioner. - matter remanded back for fresh decision on merit.

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• 2013 (3) TMI 21
  Waiver of penalty u/s 80 - discretionary power - held that:- original authority while exercising discretion under Section 80 has held that the assessee was a small time operator and an illiterate and that he was not familiar with the Service Tax Law. He has thus given relief from penalty under Section 76. These findings of the original authority were not challenged by the department before the Commissioner (Appeals). The Commissioner (Appeals), on appeal by the party has held that the reasons given by the original authority for giving relief under Section 76 would equally apply for grant of relief under Section 78. The decisions relied upon by the department are distinguishable on facts from the present case. - order of Commissioner (Appeals) granting full waiver sustained - Decided against revenue.

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• 2013 (3) TMI 20
  Refund of service tax paid on Management, maintenance or repair of roads - period from the 16th day of June, 2005 to the 26 th day of July, 2009 - held that:- activity undertaken by the appellant during the aforesaid period stands accepted to be one of "maintenance or repair of roads" under Section 65(64) of the Finance Act, 1994. If that be so, there is no reason why the appellant cannot claim the benefit of Section 97(1) of the Finance Act, 1994. It will be appropriate for the learned Commissioner to consider this claim of the assessee and render a decision thereon - Decided in favor of assessee by way of remand.

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• 2013 (3) TMI 19
  Cenvat Credit - applicants took the service of real estate agent for preparing office premises from where they are providing outward service. Revenue is of the view that real estate agent is not integral or directly connected with the activity of output service, therefore the input service credit of the same does not qualify under Rule 2(l) of the CENVAT Credit Rules, 2004. - held that:- As the issue has been decided by the Hon'ble High Court of Bombay in Ultra Tech Cement (2010 (10) TMI 13 - BOMBAY HIGH COURT), appellants are entitled for input service credit on real estate agent - Credit allowed - Decided in favor of assessee.

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• Central Excise

• 2013 (3) TMI 5
  CENVAT credit on Tour Operators Service denied - transportation of their employees between the factory and their place of residence - Held that:- This issue is no longer res integra as decided in C.C.E., Bangalore vs. Stanzen Toyotetsu India (P) Ltd [2011 (4) TMI 201 - KARNATAKA HIGH COURT] wherein held that Rent-a-Cab service is provided by the assessee to these workers to reach the factory premises in time which has a direct bearing on the manufacturing activity. In fact the employee is also entitled to conveyance allowance. It also would form part of a condition of service and the amounts spent on the conveyance of the employees is also a factory which will be taken into consideration by the employees in fixing the price of the final product. To ensure that the work force comes on time at the work place, the employers have taken this measure which has a direct bearing on the manufacturing activity. At any rate it is an activity relating to business - in favour of assessee. CENVAT credit on CHA service denied - used by the assessee for export of goods during the period from June 2007 to September 2008 - Held that:- There is only one definition of place of removal under the Central Excise Act or the Rules framed thereunder whether for the purpose of valuation of excisable goods or for the purpose of determination of claim of CENVAT credit or for any other purpose whatsoever. The question whether the port of export could be considered to be place of removal of excisable goods was examined by the division bench in the KUNTAL GRANITES case [2007 (3) TMI 540 - CESTAT, BANGALORE] with reference to the definition of place of removal under Section 4(3) of the Central Excise as also to Section 5 of the Central Sales Tax Act. On a harmonious construction of the provisions, it was held that, in respect of the excisable goods cleared from factory for export and subsequently shipped from the port, the port of export could be held to be the place of removal . In view of this decision, it has to be held that the respondents were entitled to treat CHA service/GTA service as input services under Rule 2(l) of the CENVAT Credit Rules, 2004 as these services were used for clearance of excisable goods from the place of removal - in favour of assessee.

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• 2013 (3) TMI 4
  Cenvat credit of the service tax paid on the commission to the commission agents denied - Held that:- As decided in Cadila Healthcare Ltd. [2013 (1) TMI 304 - GUJARAT HIGH COURT] service tax is ineligible for availment of cenvat credit on this issue, thus appeal to that extent is rejected - against assessee. Equivalent amount of penalties under Rule 15 of the CCR, 2004 read with provisions of Section 11AC of the Central Excise Act, 1944 - Held that:- Finding strong force in the contentions raised by the appellant that during the relevant period, there were decisions which indicated that service tax paid on the commission to the commission agents is eligible for availment of cenvat credit and accordingly appellant availed the cenvat credit. It is also undisputed that the appellant is a manufacturer and was filing regular monthly ARE-1 returns to the authorities and indicating therein availment of such cenvat credit. Thus the action of the appellant in taking the cenvat credit of the service tax to the commission agents could be out of bonafide belief as to eligibility to cenvat credit as it is in relation to the business of manufacturing and selling - the said bonafide belief of the appellant cannot be considered as erroneous and that too, to invoke the extended period of limitation for imposition of equivalent amount of penalty, thus setting aside the penalties imposed by the lower authorities - in favour of assessee.

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• 2013 (3) TMI 3
  Non payment of duty - application for seeking waiver of pre-deposit of duty, interest and penalty - contention of the applicant that with the omission of section and rules under which the duty is demanded without the saving clause, the present proceedings are not sustainable - Held that:- As applicants are engaged in the manufacture of processed textile fabric & during the period in dispute have cleared the processed fabric and have not paid duty as determined under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules by the Commissioner of Central Excise therefore it is not a case for total waiver of duty. Even the Hon'ble Madras High Court in the case of Beauty Dyers (2001 (12) TMI 95 - HIGH COURT OF JUDICATURE AT MADRAS) held that the rules are ultra vires, however, the manufacturer is liable to pay duty under Section 3 of the Central Excise Act. Thus the applicant directed to deposit an amount of Rs. 3,00,000/- within a period of eight weeks. Compliance on 1.3.2013.

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• 2013 (3) TMI 2
  Utilization of basic excise duty for discharge of education cess - period from May 2009 to November 2009 - Held that:- As decided in assessee's own case in [2013 (1) TMI 352 - GUJARAT HIGH COURT] wherein decided that the benefit of utilization of credit of basic excise duty for payment of education cess is to be allowed - in favour of assessee.

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• 2013 (3) TMI 1
  Cenvat credit denied - credit has not been taken immediately on receipt of the inputs in the factory - Held that:- The Tribunal in the case of Pierlite India Pvt. Ltd. vs. CCE, Ahmedabad (2009 (9) TMI 115 - CESTAT, AHMEDABAD) and in the case of Lubi Electronics (2009 (1) TMI 605 - CESTAT, AHMEDABAD) held that no time limit for taking credit is provided in the CENVAT Credit rules. Similarly, the Tribunal in the case of SGS India Pvt. Ltd. (2011 (3) TMI 759 - CESTAT, MUMBAI), after relying upon the Board's Circular dated 29.08.2000, held that if the manufacturer has not taken credit immediately on receipt of the goods, the manufacturer cannot be deprived of taking of the credit. Thus the impugned orders whereby the credit was denied on the ground that the same has not been taken immediately on receipt of the inputs are not sustainable hence set aside and consequential penalties are also set aside - in favour of assessee.

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• CST, VAT & Sales Tax

• 2013 (3) TMI 24
  Revision application disposed of at the admission stage - Held that:- Keeping in view the settled position of law in I. T. C. LTD. Versus COMMISSIONER (APPEALS), CUS. & C. EX., MEERUT-I [2003 (10) TMI 70 - HIGH COURT OF JUDICATURE AT ALLAHABAD] & M/s Pennar Industries Ltd. Versus State of A.P. and Ors. [2009 (2) TMI 457 - SUPREME COURT OF INDIA] and from the perusal of the appellate order passed by the appellate authority the said authorities have not indicated its mind so far as the existence of the prima facie case on merits on appeal as well as the financial condition which are to be considered by them while passing the impugned orders on an application for stay pending in the first appeal. The said mandatory condition is to be taken into consideration while disposing of an application for interim relief moved by the assessee by the appellate authority as well as tribunal during the pendency of appeal. For the foregoing reasons, without entering into the merit of the case, the present revision is disposed of with a direction to the first appellate authority to decide the appeal filed by the assessee expeditiously say within a period of two months from the date of receiving a certified copy of this order with no coercive measure shall be taken against the assessee in the matter in question for a period of two months or till the decision is taken by the appellate authority in first appeal whichever is earlier.

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• 2013 (3) TMI 23
  Reopening of assessment - KVAT Act - on receipt of notice, petitioner submitted Ext.P2, requesting the first respondent to allow time for submitting reply which was received by the first respondent on 30.11.2012 but Ext.P3 orders stating tax due assessed and interest thereon were parsed on the next day i.e. 1.12.2012 - Held that:- As if the request of the petitioner was impermissible, the respondent ought to have communicated its rejection to the petitioner before making assessment. At any rate Ext.P3 order stating tax due assessed has been passed without allowing the petitioner an opportunity to file his reply or affording him an opportunity of hearing, thus it is untenable and be quashed.

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• Indian Laws

• 2013 (3) TMI 18
  Dispute over leased property - Jurisdiction of civil court - held that:- When the tenant knows well that there will be a recovery or taking over of the possession of the mortgaged property or otherwise and enters into a lease agreement with the landlord, it is for him to seek protection before the appropriate forum namely DRT. Such a view of the matter has been dealt with clearly by the Division Bench in Sree Lakshmi Products' case. Therefore, I am of the considered opinion that the remedy available to the petitioner is only before the DRT, having jurisdiction over the issue. Though I am in complete agreement with the ratio laid down by the Division Bench in Indian Bank's case, even as there is inconsistency, repugnancy or overlapping, the mortgaged property is under the seizure of the secured creditor and if any person comes into the picture in between, the remedy for him lies only before the DRT and not the Civil Court.

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