TMI Tax Updates - e-Newsletter
March 25, 2020

Case Laws in this Newsletter:

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

Articles

1. THE PROVISIONS OF INSOLOVENCY AND BANKRUPTCY CODE, 2016 OVERRIDE THE GST ACTS

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Notice of Amendments FINANCE BILL, 2020 [As introduced in Lok Sabha]

2. Export prohibited of all ventilators, including any artificial respiratory apparatus or oxygen therapy apparatus or any other breathing appliance/device; No Export of Sanitizers also

3. Finance Minister announces several relief measures relating to Statutory and Regulatory compliance matters across Sectors in view of COVID-19 outbreak

4. Invest India Business Immunity Platform launched to helping businesses withstand COVID-19

Notifications

Customs

1. 16/2020 - dated 24-3-2020 - Cus

Amendment to Notification No.52/2003-Customs dated 31.03.2003 for extending exemption from IGST and compensation cess to EOUs on imports till 31.03.2021

2. 30/2020 - dated 24-3-2020 - Cus (NT)

Exchange Rates Notification No.30/2020-Custom (NT) dated 24.03.2020

DGFT

3. 53/2015-2020 - dated 24-3-2020 - FTP

Amendment in Export Policy of Ventilators including any artificial respiratory apparatus or oxygen therapy apparatus or any other breathing appliance/device and Sanitizers

GST

4. 29/2020 - dated 23-3-2020 - CGST

Seeks to prescribe return in FORM GSTR-3B of CGST Rules, 2017 along with due dates of furnishing the said form for April, 2020 to September, 2020

5. 28/2020 - dated 23-3-2020 - CGST

Seeks to prescribe the due date for furnishing FORM GSTR-1 by such class of registered persons having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year, for each of the months from April,2020 to September, 2020.

6. 27/2020 - dated 23-3-2020 - CGST

Seeks to prescribe the due date for furnishing FORM GSTR-1 for the quarters April, 2020 to June, 2020 and July, 2020 to September, 2020 for registered persons having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year.

7. 26/2020 - dated 23-3-2020 - CGST

Seeks to extend due date for furnishing FORM GSTR-3B of the said rules for the months of July,2019 to September, 2019 for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir, shall be furnished electronically through the common portal, on or before the 24th March, 2020

8. 25/2020 - dated 23-3-2020 - CGST

Seeks to extend due date for furnishing FORM GSTR-3B for the months of October, 2019 , November, 2019 to February, 2020 for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir on or before the 24th March, 2020.

9. 24/2020 - dated 23-3-2020 - CGST

Seeks to extend due date for furnishing FORM GSTR-1 for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir, for the quarter July-September, 2019 till 24th March,2020.

10. 23/2020 - dated 23-3-2020 - CGST

Seeks to extend due date for furnishing FORM GSTR-1 for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir, by such class of registered persons having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or current financial year, for each of the months from July, 2019 to September, 2019 till 24th March, 2020.

11. 22/2020 - dated 23-3-2020 - CGST

Seeks to extend due date for furnishing FORM GSTR-1 for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir, and having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or current financial year, for the month of October, 2019 and November, 2019 to February till 24th March, 2020.

12. 21/2020 - dated 23-3-2020 - CGST

Seeks to extend due date for furnishing FORM GSTR-1 for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir or the Union territory of Jammu and Kashmir or the Union territory of Ladakh for the quarter October-December, 2019 till 24th March, 2020

13. 20/2020 - dated 23-3-2020 - CGST

Seeks to extend due date for furnishing FORM GSTR-7 for those taxpayers whose principal place of business is in the erstwhile State of Jammu and Kashmir for the July, 2019 to October,2019 and November, 2019 to February, 2020

14. 19/2020 - dated 23-3-2020 - CGST

Seeks to specify class of persons, other than individuals who shall undergo authentication, of Aadhaar number in order to be eligible for registration.

15. 18/2020 - dated 23-3-2020 - CGST

Seeks to notify the date from which an individual shall undergo authentication, of Aadhaar number in order to be eligible for registration.

16. 17/2020 - dated 23-3-2020 - CGST

Seeks to specify the class of persons who shall be exempted from aadhar authentication.

17. 16/2020 - dated 23-3-2020 - CGST

Central Goods and Services Tax (Third Amendment) Rules, 2020

18. 15/2020 - dated 23-3-2020 - CGST

Seeks to extend the time limit for furnishing of the annual return specified under section 44 of CGST Act, 2017 for the financial year 2018-2019 till 30.06.2020.

Circulars / Instructions / Orders

GST

1. 133 03/2020 - dated 23-3-2020

Clarification in respect of apportionment of input tax credit (ITC) in cases of business reorganization under section 18 (3) of CGST Act read with rule 41(1) of CGST Rules

2. 134/04/2020 - dated 23-3-2020

Clarification in respect of issues under GST law for companies under Insolvency and Bankruptcy Code, 2016

DGFT

3. TRADE NOTICE NO. 58/2019-2020 - dated 23-3-2020

Modalities for import of 4 Lakh MT of Urad for the fiscal year 2020-2021

Customs

4. PUBLIC NOTICE No. 10/2020 - dated 13-2-2020

Implementation of PGA eSANCHIT - Paperless Processing under SWIFT- Uploading of Licenses/Permits/Certificates/Other Authorizations (LPCOs) by PGAs

5. PUBLIC NOTICE. 09/2020 - dated 7-2-2020

Standard Operating Procedure (SOP) to be followed by exporters

6. PUBLIC NOTICE No.02/ 2020 - Customs - dated 29-1-2020

Levy and Collection of Social Welfare Surcharge (SWS) on imports under various schemes such as Merchandise Exports from India Scheme (MEIS), Services Exports from India Scheme (SEIS) etc

7. PUBLIC NOTICE NO. 01/2020 - dated 16-1-2020

ICES Advisory 01/2020 (SCMTR) dated 13.01.2020-Registration and Application process for all the stakeholders

Highlights / Catch Notes

GST

• Tax Invoice with IGST Allowed for Interstate Transactions Under IGST Act Sec 20 & CGST Act Sec 31. No Port State Registration Needed.

  Case-Laws - AAR : Input Tax Credit (ITC) of IGST - import of goods through the port situated in different state - The applicant can issue tax invoice with IGST to the customer as per section 20 of the IGST Act 2017 read with section 31 of the CGST Act 2017 for the interstate transaction as provided under section 7(1) of the IGST Act 2017, when the goods are directly dispatched from the port of import with invoicing done from the registered place of business. - The applicant need not obtain registration in the state where the port of clearance is located, if he is not making any supply from the State in which the port is located. - AAR
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• Purified water supply, sealed or unsealed, not GST-exempt per Sl. No. 99, notification 2/2017-Central Tax (Rate).

  Case-Laws - AAR : Exemption from GST - supply of purified water to public in empty unsealed cans - supply of purified water whether in sealed container or unsealed container not entitled for GST exemption as the purified water excluded from the Sl. No. 99 of notification No. 2/2017-Central Tax (Rate) - AAR
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• GST Applies to Sub-Leasing Land; LAD Fund Part of Taxable Rental Value Under Forward Charge Mechanism.

  Case-Laws - AAR : Supply or not - levy of GST - sub-leasing of land - collection of LAD Fund alongwith rent - amount collected towards Local Area Development Fund (LAD Fund ), which is kept separately and used for development of the affected area as per the guidelines of MNRE - utilization of the LAD fund amount under the direction of Committee, for the intended purposes does not involve in supply of any service by the Committee - The amount collected by the applicant towards LAD fund forms part of value of supply of rental/leasing service and hence is taxable under forward charge mechanism. - Liable to GST - AAR
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• Contract Classified as Composite Supply: Monthly Payments Based on Energy Savings, 12% GST Applied.

  Case-Laws - AAR : Classification of supply - pure supply of goods or pure supply of services? - The impugned contract, in the instant case, is a composite supply where the principal supply is supply of goods. It is an accepted fact that the consideration is received on monthly basis; invoice is raised on energy savings; value of such invoice is equal to 90% of the energy savings. - The time of supply is the date of invoice and the consideration is equal to the value of the invoice, the GST rate being 12%. - AAR
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• Jurisdictional Officer Ordered to Verify Petitioner's CENVAT and Service Tax Credit for GST TRAN-1 Submission on Portal.

  Case-Laws - HC : Filing of Form GST TRAN-1 - transitional credit - Respondent No.4, who is the jurisdictional officer, is directed to verify the claim of credit of CENVAT and service tax of the petitioner so as to enable the petitioner to carry forward by filing / uploading form GST TRAN­-1 on GST portal- HC
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• Court Grants Extra Time for GST TRAN-1 Submission Due to Technical Issues, Allows Transitional Credit Claim.

  Case-Laws - HC : Filing of form GST TRAN-1 - transitional credit - The petitioner is entitled to get one more chance to submit the declaration in Form GST TRAN-1 as the petitioner could not submit the revised Form GST TRAN-1 as the petitioner could not upload the same before the due date of 27.12.2017 on account of technical difficulties on the common portal - HC
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Income Tax

• Court Reverses Deletion of Income Addition Due to Withheld Agreement in Assessee's Case.

  Case-Laws - HC : Unaccounted income - Nature of advance money received - The assessee successfully by with-holding the information which was in his possession, avoided the scrutiny. The agreement of authorisation was not produced during the assessment proceedings or in the appellate proceedings thereby avoiding further investigation, the same has now been produced before this Court. - Deletion of addition cannot be sustained. - HC
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• Court Rules on Accumulated Income Use Under Income Tax Act Section 11; Payments Must Align with Statute Provisions.

  Case-Laws - HC : Exemption u/s 11 - Use of accumulated income for different purpose - Treating the amount given to PSWHMMS as the income of the appellant-society in terms of section 11(3)(d) - The argument raised that since there is a restriction only for payment or credit of accumulated amount to a registered Trust or institution recognized under the Act and it would mean that payment can be made to un-registered Trust, institution or to institutions or Trusts not even recognized by the Act as charitable is far-fetched. This would lead to adding words to the provisions of the Statute which is not permissible. - HC
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• Court Rules Tax Filing Delay Not Criminal; Payment Made Before Proceedings. Offense u/s 276(c)(2) Dismissed.

  Case-Laws - HC : Offences u/s 276 (c) (2) - belated filing of return - willful failure on the part of the petitioner for non payment of huge tax liability or not - Petitioner had paid the entire tax amount on 18.03.2018 and the respondent had also acknowledged the same by the acknowledgment dated 24.03.2018. Therefore, the offence under Section 276 (c ) (2) of the Income Tax Act is not at all attracted as against the petitioner herein, and the entire criminal proceedings pending against the petitioner is nothing but clear abuse of process of law. - HC
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• Court Examines Deductibility of Interest on Borrowed Capital for Share Purchases Under Income Tax Act Sections 36(1)(iii), 57(iii.

  Case-Laws - HC : Deduction u/s 36(1)(iii) or 57(iii) - interest paid by the assessee on borrowed capital to the extent it was utilised for purchasing shares - The Tribunal was not justified in holding that the purpose of the assessee for purchase of shares of IHFC was not for the purpose of business of the assessee as the business of the assessee was only sale and purchase of land. - HC
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• Court Reviews CCIT's Revocation of Registration u/s 12AA(3) Due to Lack of Material Evidence and Assumptions.

  Case-Laws - AT : Exemption u/s 11 - cancellation of registration u/s 12AA(3) on various grounds - There is no material placed before us to establish that the assessee is not carrying on the activities in accordance with the objects or the activities of the assessee are not genuine. CCIT has cancelled the registration on presumptions and assumptions without having proper material. - AT
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• Income Tax Act Section 68 addition invalidated due to lack of evidence; joint venture funds not proven as own funds.

  Case-Laws - AT : Addition u/s 68 - Addition on account of joint venture agreement - the addition made u/s. 68 of the Act only on the basis of two statements which could not stand the scrutiny of law, was warranted and therefore, the addition cannot be sustained as per law - There is no evidence that, assessee had infused its own fund through accommodation entry provider - additions deleted - AT
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Customs

• High Court Rules TED Refunds Valid for Suppliers Despite DGFT Circular, Aligns with Foreign Trade Policy Provisions.

  Case-Laws - HC : Refund of Terminal Excise Duty (TED) - supplies against ICB are ab initio exempted from payment of excise duty - during the relevant period, no such condition was existing - It appears that DGFT in view of policy circular No. 11/2015-20, has now identified the issue viz-a-viz the non-refund of excise duty paid by the suppliers. This circular in our view now recognizes the provisions of the FTP in the right perspective, that exemption from TED was not available for certain supplies even though the same were under ICB. There is thus no impediment in granting the refund to the Petitioner - HC
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• Individuals Must Prove Retraction Validity; Needs Evidence of Lawful Procurement to Avoid Legal Consequences.

  Case-Laws - AT : Retraction of statements - onus to prove - the persons concerned have accepted the modus operandi to the knowledge of which, they alone are privy of. Retraction is an understandable after thought employed by the persons to wiggle them out of the legal tangle. - We find that retraction, if any, would have had some face value if they could establish licit procurement of the impugned goods. In the absence of the same retraction has no meaning. - AT
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• Appeal's Validity Challenged Due to Non-Compliance with Pre-Deposit Rule u/s 129E of Customs Act, 1962.

  Case-Laws - AT : Maintainability of appeal - compliance of pre-deposit - The first appellate authority erred in taking up the appeal preferred before it despite non-compliance of Section 129E of Customs Act, 1962 - To hear the appeal arising from an order issued without jurisdiction would be to compound the illegality of the proceedings. - AT
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Indian Laws

• Director Cannot Be Prosecuted for Cheque Dishonor Without Specific Allegations in Complaint, per Section 141 of Negotiable Instruments Act.

  Case-Laws - HC : Dishonor of Cheque - The provisions of Section 141 of the Negotiable Instruments Act are pari materia with the provisions of Insecticide Act. In the absence of specific averments in the complaint, no Director can be proceeded against. No Director is required to prove his innocence by leading evidence in the trial, once the averments to this effect are not incorporated in the complaint. - HC
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• Accused Issued Torn Cheque Knowing Insufficient Funds, Complainant's Testimony Deemed Credible in Dishonor Case.

  Case-Laws - HC : Dishonor of cheque - insufficiency of funds - There is a ring of truth in the testimony of the complainant (P.W.1) inasmuch as he has clearly stated that, he was anxious to get back his money from the accused and that the accused gave him a torn cheque saying that he (accused) will ensure that it is cleared if it is presented two moths later and that is why he accepted it and presented it two months later. - HC
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• High Court Rules Against Accused in Cheque Dishonor Case, Citing Failure to Rebut Section 139 Presumption.

  Case-Laws - HC : Dishonor of Cheque - The defence theory, that the eight post dated cheques for ₹ 20,000/- each were given in anticipation of a loan that was promised by the complainant, defies credibility. - Though the accused can discharge the burden under Section 139 of the Negotiable Instruments Act by preponderance of probability even that has not been done in this case - HC
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Central Excise

• Appellant Entitled to 12% Interest on Delayed Refund u/s 11BB of Central Excise Act; Order Lacked Justification.

  Case-Laws - AT : Rate of Interest on delayed refund - whether the appellant is entitled for interest on the delayed payment of refund either at the rate of 6% or at the rate of 12% of the amount of refund? - Section 11BB of CEA - the order under challenge is silent about any reason for reducing the rate from 12% to 6% except relying upon the Notification No. 67/2003 it is held that the appellant is entitled for the interest at the rate of 12% - AT
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VAT

• High Court Upholds Additional Commissioner's Use of Suo-Moto Power Under AGST Section 36(1) and AVAT Section 82(1.

  Case-Laws - HC : Levy of Luxury Tax - concealment of sales - suo-moto power of revision - The two circumstances required to exist for the purpose of invoking the suo-moto revisional power under Sections 36 (1) of the AGST Act and 82 (1) of the AVAT Act are present in the instant case and therefore we do not find any infirmity in the exercise of any suo-moto power by the Addl. Commissioner of Taxes in the order 28.10.2015. - HC
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• Court Orders Refund for Excess GST on LNG; Tax Collected at 15% Instead of 6% per 2017 Order.

  Case-Laws - HC : Refund of differential tax - Input tax credit - rate of tax on LNG - situation post GST regime - The petitioners are entitled to get refund of amount of tax paid by it at the rate of 9% when the respondent No.3 (IOCL) has collected the tax at the rate of 15% instead of 6% as per remission order dated 05.09.2017 from the respondent-State. - HC
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• Court Rules No Interest for Petitioner in CST Delay; Liability on HEC Ltd. if C-Form Not Issued by State Govt.

  Case-Laws - HC : Requirement of extra amount of Central Sales Tax - non-issuance of C-Form - since the petitioner Company is not at fault in making the delay in deposit of the CST, no interest shall be levied from the petitioner and ultimately, if it is found that Form-C could not be given to the HEC Ltd., by the State Government for any valid reason, the liability to pay the interest, if any, shall be of the respondent HEC Ltd., only. - HC
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Case Laws:

• GST

• 2020 (3) TMI 1044
  CENVAT Credit of IGST - import of goods through the port situated in different state - Place of supply - issuance of tax invoice with IGST to the customer - need to obtain registration in the state where the port of clearance is located. Whether the applicant can take credit of IGST paid on import of goods? - HELD THAT:- The applicant being the importer of storage solutions and vertical storage solutions (machines) from Germany is liable to pay the integrated tax on goods imported into India in accordance with the provisions of section 3 of the Customs Tariff Act, 1975, on the value as determined under the aforesaid Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962, in terms of proviso to the subsection (1) of section 5 of the IGST Act, 2017 - In view of the said provisions applicant is liable to pay IGST on the value of the goods imported into India on reverse charge basis. Whether applicant can issue tax invoice with IGST to the customer? - HELD THAT:- The place of supply in case of import of goods, is the location of the importer in terms of section 11(a) of the IGST Act 2017 and in the case of applicant the location of the importer is the state of Karnataka where the applicant has obtain the GST registration. Therefore, the applicant though import the goods to the port nearest to the location of the recipient, said imported goods are deemed to have been supplied to the location of the importer i.e., Karnataka and then further supplied to customer. Hence imported goods supplied directly from the port of import to the customer located in other states or Union territories other than state of Karnataka, such transaction shall be treated as a supply of goods in the course of inter-State trade or commerce in terms of section 7(1) of the IGST Act, 2017 and is liable to issue IGST tax invoice in terms of section 20 of the IGST Act 2017 read with section 31 of the CGST Act 2017. Whether applicant needs to obtain registration in the state where the port of clearance is located? - HELD THAT:- Since the applicant already registered under GST Act, no provisions under the CGST or SGST or IGST Act 2017 mandates any person to obtain the registration again in the place of port where applicant obtain the custom clearance for further supply of goods. Hence, there is no need for the applicant to obtain the separate registration in the state where port of clearance located, if he does not have an establishment in that State and effecting supplies from that location.

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• 2020 (3) TMI 1043
  Exemption from GST - supply of purified water to public in empty unsealed cans - Entry No.99 of the Notification No. 2/2017 - Central Tax (Rate) dated 28th June, 2017 - HELD THAT:- On perusal of the aforesaid Circular No. 52/ 26/2018 dated 09th August 2018, and entry No. 99 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 and the nature of the activity carried out by the applicant, it was observed that applicant supplying purified drinking water to the general public at reasonable price after removing all the physical, chemical and biological impurities in unsealed containers which are brought by the public themselves. In the above said circular it is clearly mentioned that other than those excluded from the SI. No. 99 of notification No. 2/2017-Central Tax (Rate) dated 28.06-2017, would attract GST at NIL rate. In the instant case, applicant supplying purified drinking water to urban under-served people across various metro cities by installing the community water system. In the process applicant removes suspended solids, organic matter, chlorine, obnoxious taste and smell from raw water and then sent to Reverse Osmosis membranes to remove total dissolved solids, bacteria and pathogens. During this process raw water converted into purified drinking water and this purified drinking water is supplied to the public - the word and used before the water sold in sealed container in the Sl. No. 99 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 is disjunctive nature and lays down that Water sold in a sealed container is the another type of water excluded from the said entry along with the aerated water, mineral water, purified water, distilled water, medicinal water, ionic water, battery water, de-mineralized water. Therefore, supply of purified water whether in sealed container or unsealed container not entitled for GST exemption as the purified water excluded from the Sl. No. 99 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2017. Thus, supplying of purified drinking water to the general public in an unsealed container is not entitled for exempt from GST.

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• 2020 (3) TMI 1042
  Supply or not - levy of GST - sub-leasing of land - collection of LAD Fund alongwith rent - amount collected towards Local Area Development Fund, which is kept separately and used for development of the affected area as per the guidelines of MNRE - Classification of supply - rate of tax - benefit of exemption as per SI.No.3 or 3A of Notfn.12/2017-CT (R). HELD THAT:- It is clearly evident from section 15(2)(a) of the CGST Act 2017 that any amount of any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than the GST related Acts are includible in the value of supply. In the instant case the amount is collected by the applicant from the SPDs under guidelines, issued by Ministry of New Renewable Energy , Government of India. Further, there is no doubt that the amounts payable, by the SPDs, towards LAD fund are on account of supply made by the applicant are directly linked to the rent/lease payable and thus are includable in the value of the rental/lease service, being provided by the applicant - t is an admitted fact that in case of non-payment of amount towards LAD fund, under clause 8 of the agreement, the applicant has right of termination of lease agreement. The amounts towards the LAD fund are paid by the SPDs to the applicant, though the usage of the same is decided by the Committee formed by the Government of Karnataka for local area development. The service of lease/rent, being provided by the applicant, is a single service and the consideration is payable under two different heads and if any one of these payments is not made, the applicant has the right of termination of the said lease agreement. Hence the amount collected by the applicant, from the SPDs, towards LAD fund forms the value of supply under Section 15 of the CGST Act 2017 and the usage of the said amount would only amount to application of the said amount and still would form the value of taxable services. Therefore, the said amount, so collected, is taxable along with rental income, under forward charge mechanism. Classification of the service under which the collection of amounts towards LAD funds would fall, if said activity is treated as supply - HELD THAT:- The amounts collected by the applicant towards LAD fund form part of value of the rent/lease service, as discussed in the foregoing paras. The classification of the said activity is nothing but the classification of rent/lease service having SAC 997212. Eligibility of the activity of collection of amounts towards LAD funds, if treated as supply of service, for exemption under SI.No.3 or 3A of Notification 12/2017-Central Tax (Rate) - HELD THAT:- It is pertinent to mention here that the collection of amount towards LAD fund by the applicant is not a separate transaction but linked to the supply of rental/lease service, as discussed in the foregoing paras. Further the exemption under Sl.No.3 or 3A of the notification supra are applicable to only pure services provided to the Central Government, State Government or Union Territory or Local Authority or a Government Entity by way of any activity in relation to any function under article 243 G or 243 W of the Constitution of India - In the instant case the impugned amounts are part of the value of rental/ leasing service and are not provided to any Central Government, State Government or Union Territory or Local Authority or a Government Entity, but by the applicant to the SPDs. Therefore the exemption supra is not applicable to the instant case. Whether the payments made at the direction of the Committee, formed for Local Area Development, be considered as service rendered by Government to Applicant and subject to payment of GST, under Reverse Charge Mechanism (RCM), under Entry No.5 of Notification No. 13/2017-CentraI Tax (Rate) dated 28.06.2017, if the activity of collection of amounts towards LAD fund, by the applicant, is treated as supply or otherwise? - HELD THAT:- In the instant case, the applicant, collects and accounts the amounts collected towards Local Area Development, which form part of value of lease/rental services provided by the applicant to the SPDs. The said Committee merely decides the usage of said fund for the specific intended purpose and the applicant makes the payments accordingly - It is observed in the instant case that the Committee merely gives direction to the applicant which is not a transaction involving a supply of goods or services or both, such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made. Further the committee is not in receipt of any consideration for the said directions and is not in the course or furtherance of business. Therefore the activity of giving direction by the Committee does not amount to in terms of Section 7 (I)(a) of the CGST Act 2017. Therefore utilization of the LAD fund amount under the direction of Committee, for the intended purposes does not involve in supply of any service by the Committee. Further, the Committee is formed under the orders of Government of Karnataka, only for utilization of the LAD fund for local area development. The Committee is not involved in any activity but only decides the utilization of the said fund and hence there is no service involved. Therefore the entry number 5 of the notification is not applicable to the instant case.

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• 2020 (3) TMI 1041
  Classification of supply - pure supply of goods or pure supply of services? - street lighting activity under the Energy Performance Contract dated 05.12.2016 - works contract - Composite Supply of goods and services or not - rate of tax - benefit of exemption under entry 3 or 3A of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 - time of supply. Whether the activity of the applicant herein amounts to supply of goods or supply of services and then the time of supply of the said supply? HELD THAT:- The terms of the contract that the contract involve more than two taxable supplies such as supply of LED lights, fixtures other equipment, their installation, commissioning, operation maintenance etc., We also find that the impugned supplies of goods and services are in conjunction with each other in the ordinary course of business and hence the impugned transaction satisfies the ingredient of composite supply, as defined under Section 2(30) of the CGST Act 2017. In the instant case, the tender is for Implementation of ESCO project which includes Supply, Installation, Operation and Maintenance of LED Street Lights . Hence the predominant and principal factor is to supply and install LED street lights, on the existing street light poles and then to perform the activity of day to day management of the said LED street lights by operating maintaining such equipment to achieve energy savings. Thus the day to day operation maintenance of the LED Street lights can only take effect after the supply and installation of the said LED street lights. Without installation, there can be no day to day management in the form of operation maintenance of LED street lights. In view of the above, the principal supply in the impugned transaction is that of supply of goods i.e. LED street lights. The impugned transaction consists of supply of goods and services, made in conjunction with each other in the ordinary course of business; supply of goods / services are naturally bundled; the contract becomes a composite supply where the principal supply is that of goods and the supply of service is incidental / ancillary to such supply of goods. It is an undisputed fact that the Notification No. 12/2017-CentraI Tax (Rate) dated 28.06.2017 is related to the exemptions of the intra-state supply of services. The Notification is applicable to the composite supplies of goods services, where the principal supply is that of services. In the instant case, it is already concluded, in the preceding paras, that the impugned supply is a composite supply, principal supply being that of the goods. The consideration, in the instant case, is being received by the Applicant on monthly basis, in terms of energy savings fee, as agreed upon by both the parties. The said consideration is for the composite contract comprising supply of LED street lights, installation commissioning of the same and also maintenance of the said installed LED Street Lights, the principal supply being the supply of LED street lights i.e. goods. The impugned contract, in the instant case, is a composite supply where the principal supply is supply of goods. It is an accepted fact that the consideration is received on monthly basis; invoice is raised on energy savings; value of such invoice is equal to 90% of the energy savings. It is pertinent to mention here that the energy savings are directly related to the functioning and quality of the LED Street lights etc., i.e. the goods supplied by the applicant - Therefore, the applicant receives the consideration, through the contract period i.e. 7 years, on a monthly basis, on the energy savings. Applicable rate of tax - HELD THAT:- The rate of tax applicable on this transaction is 12% (CGST-6% SGST-6%), in terms of Sl. No. 226 of Schedule II to the Notification No. 1/2017-CentraI Tax (Rate) dated 28.06.2017, as amended. Further, the applicant is not entitled to the benefit of exemption under entry 3 or 3A of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, as amended, as the impugned supply is not that of pure services. The instant transaction amounts to a composite supply, with supply of goods being principal supply and hence the impugned question is redundant - The time of supply is the date of invoice and the consideration is equal to the value of the invoice, the GST rate being 12%.

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• 2020 (3) TMI 1040
  Filing of Form GST TRAN -1 - carry forward of CENVAT Credit - Section 140(1) of the Act, 2017 read with Rule 117 of the Rules 2017 - HELD THAT:- It appears that if the petitioner could not upload the form GST TRAN -1 due to technical glitches and in spite of various representations made by the petitioner, he was not allowed to upload the form GST TRAN -1. The petitioner is entitled to claim credit of CENVAT as well as service tax as on 30th June 2017 as per the provisions under Section 140(1) of the Act, 2017 read with Rule 117 of the Rules 2017 - respondent No.4, who is the jurisdictional officer, is directed to verify the claim of credit of CENVAT and service tax of the petitioner so as to enable the petitioner to carry forward by filing / uploading form GST TRAN -1 on GST portal. The respondent No.4 shall complete the exercise of verification and permit the petitioner to upload the form GST TRAN -1 within a period of two seeks from the date of receipt of the writ of this order so that the petitioner can upload the form GST TRAN -1 on or before 31st March 2020 - petition disposed off.

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• 2020 (3) TMI 1039
  Filing of Form GST TRAN-1 - transitional credit - HELD THAT:- The petitioner is entitled to claim credit of CENVAT as well as service tax as on 30th June 2017 as per the provisions under Section 140(1) of the Act, 2017 read with Rule 117 of the Rules 2017. Respondent No.4, who is the jurisdictional officer, is directed to verify the claim of credit of CENVAT and service tax of the petitioner so as to enable the petitioner to carry forward by filing / uploading form GST TRAN -1 on GST portal - respondent No.4 shall complete the exercise of verification and permit the petitioner to upload the form GST TRAN -1 within a period of two seeks from the date of receipt of the writ of this order so that the petitioner can upload the form GST TRAN -1 on or before 31st March 2020. Petition disposed off.

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• 2020 (3) TMI 1038
  Filing of form GST TRAN-1 - transitional credit - It is the case of the petitioner that the Redressal Grievance Committee did not consider the problem faced by the petitioner to upload the revised Form GST TRAN-1 - HELD THAT:- It is not in dispute that the petitioner is entitled to carry forward CENVAT/Input Tax Credit to the tune of Rs. 14,55,770/- as per Form E.R.-1 under the provisions of the Act, 1944 as well as the Act, 2017. It is also not in dispute that the petitioner uploaded Form GST TRAN-1 erroneously showing ZERO balance for CENVAT Credit admissible as Input Tax Credit - Therefore, as per the provisions of Section 140 of the Act, 2017 read with rule 117 of Rules, 2017, the petitioner is entitled to carry forward the CENVAT Credit. In the opinion of this Court, the respondents have failed to consider the aspect of the technical glitch to reject the claim of the petitioner on the ground that there was no technical error when the petitioner uploaded the Form GST TRAN-1 without considering the fact that the petitioner could not upload revised Form GST TRAN-1 within the prescribed date of 27.12.2017. The petitioner is also entitled to get one more chance to submit the declaration in Form GST TRAN-1 as the petitioner could not submit the revised Form GST TRAN-1 as the petitioner could not upload the same before the due date of 27.12.2017 on account of technical difficulties on the common portal - the respondents are hereby directed to consider the claim of the petitioner for carry forward of Input Tax Credit of Rs. 14,55,770/- so as to enable the petitioner to take advantage of the order dated 07.02.2020 to upload the revised Form GST TRAN-1 on or before 31.03.2020. Petition disposed off.

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• 2020 (3) TMI 1037
  Reopening of portal for Carry forward in-transit credit - Section 140(3) of the Central Goods and Services Tax Act, 2017 read with Rule 117 of CGST Rules, 2017 - HELD THAT:- Pursuant to the decision of this Court rendered in the case of FILCO TRADE CENTRE PVT. LTD. VERSUS UNION OF INDIA [ 2018 (9) TMI 885 - GUJARAT HIGH COURT] , the writ applicant was entitled to the credit pertaining to the stock held beyond 12 months from the effective date of 01.07.2017. The respondents are hereby directed to consider the representation of the writ applicants at the earliest keeping in mind the ratio laid down by this Court in the case of Filco Trade Center Pvt. Ltd. - Such exercise shall be completed within a period of four weeks from the date of the receipt of the writ of this order. Application disposed off.

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• 2020 (3) TMI 1036
  Filing of Form GST TRAN-1 - transitional credit - HELD THAT:- In view of the Order No.01/2020 of the GST, the grievance of the petitioner can be redressed, if the respondents are directed to allow the petitioner to upload the Form GST TRAN-1 on or before 31st March, 2020. The petitioner is entitled to claim credit of Cenvat as per the decision of the Coordinate Bench of this Court in the case of M/S SIDDHARTH ENTERPRISES THROUGH PARTNER MAHESH LILADHAR TIBDEWAL VERSUS THE NODAL OFFICER [2019 (9) TMI 319 - GUJARAT HIGH COURT] wherein, it is held that the petitioner is entitled to avail the benefit of Cenvat Credit under Section 140(3) of the Act irrespective of time limit prescribed under Rule 117 of the Rules. The respondents are directed to permit the petitioner to upload the Form GST TRAN-1, which is saved by the petitioner as per the Order No.1/2020-GST, dated 7th February, 2020 passed by the Central Board of Indirect Taxes and Customs. Such exercise shall be completed within a period of two weeks from the date of the receipt of the order.

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• 2020 (3) TMI 1035
  Service rendered by the applicant, a registered housing society/resident welfare association to its members - exemption under SI.No.77(c) of Notification No.12/2017-C.T.(Rate) dated 28.06.2017 as amended for CGST and SI.No.77(c) of Notification No.II(2)/CTR/532(d-15)/2017 vide G.O.(Ms)No.73 dated 29.06.2017 as amended for SGST. The question is whether the petitioner is liable to pay GST if the amount collected exceeds Rs. 7,500/-, for the whole amount or only towards the exceeded amount. The term upto employed in the Notification is heavily relied on by the learned counsel for the petitioner to contend that only exceeded amount is liable for the tax and not the whole amount collected. The issue raised needs detailed consideration of this Court. Hence, the respondents are directed to file counter - Post the matter after four weeks.

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• Income Tax

• 2020 (3) TMI 1034
  Unaccounted income - Deemed income - Advance money received or determining income earned from transaction - assessee had failed to bring on record any agreement/contract essential to ascertain the genuineness of transaction or adduce evidence in support that no surplus was generated - HELD THAT:- From the table reproduced, it is evident that unsecured loan was given to Sh. Sudhir Chadha and investment of Rs. 1,00,00,000/- was made in the project of M/s Gulmohar Landcon Pvt. Ltd. It was claimed that Rs. 79,00,000/- was invested with Sh. Darshan Singh who declined the said investment. There was one entry of advance made to Smt. Sumti Devi for purchase of land, it is worth noting that Rs. 55,00,000/- was paid in cash. The appellate authority while deleting the addition has taken a tubular vision of the issue involved. The only basis was that advance received cannot be treated as income, the aspects mentioned in the above para were not considered. It was not merely that the advance received was treated as income, the addition was made as the said money was used for purpose other than procuring the land for TATA Housing Development Company s project and no document/ evidence was produced to support the claim that there was no surplus being generated from the said advance. The aspect that the assessee was getting the sale deeds executed as G.P.A. of the land owners was totally ignored. The assessee successfully by with-holding the information which was in his possession, avoided the scrutiny. The agreement of authorisation was not produced during the assessment proceedings or in the appellate proceedings thereby avoiding further investigation, the same has now been produced before this Court. Deletion of addition cannot be sustained. However, as now the agreement has been produced, the matter is remitted back to the assessing officer to decide the issue afresh after providing opportunity to the assessee. It is clarified that anything recorded hereinabove shall not be construed by the assessing officer as expression on merits of the issue while deciding the remand.

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• 2020 (3) TMI 1033
  Exemption u/s 11 - Use of accumulated income for different purpose - Treating the amount given to PSWHMMS as the income of the appellant-society in terms of section 11(3)(d) - appellant is a Society working under the Government of Punjab, same being principal donor also - HELD THAT:- In the present case, it was not the claim of the appellant that the amount was being accumulated for the payment to PSWHMMS. At this stage, we are not dilating as to whether for such purpose there could be accumulation or not. In such circumstances, there is a clear violation of the conditions referred in sub-section (2) and sub-section (3) of section 11. The amount has been spent for the purpose other than for what it was accumulated, it comes within the mischief of section 11(3)(c). The second limb of the argument raised is that by adding explanation to sub- section (2) and adding clause (d) to sub-section (3) of section 11 it is rather clarified that the assessees like appellant can pay or credit the accumulated sum to an unregistered or funds or Trust or institution not specified therein. The argument is not well founded. From the changes made by Finance Act, 2002 in section 11, it is clear that restrictions have been imposed on transfer of accumulated or set apart amount but the utilization of income received during the year has not been touched. It is settled that income received during the year can be transferred to other Trust or institution for charitable or religious purpose and same shall be held to be application for such purpose. The argument raised that since there is a restriction only for payment or credit of accumulated amount to a registered Trust or institution recognized under the Act and it would mean that payment can be made to un-registered Trust, institution or to institutions or Trusts not even recognized by the Act as charitable is far-fetched. This would lead to adding words to the provisions of the Statute which is not permissible. There is another aspect of the matter, it has not been even the case of the appellant that the donee is indulged in charitable or religious purpose what has been stated is that the aims and objects of the donor and donee are similar. Circular No.8 of 2002 ar nowhere supports the argument raised by the appellant rather clause 21.1 clarifies that payment to other Trust or institution out of the receipt of the year will continue to be treated as application, however no payment can be made from the accumulated income and the same shall be taxed; clause 21.2 reproduces Section 11(3)(d) stating that transfer shall be deemed to be income or person making such payment or credit. The addition of amount transferred to PSWHMMS is upheld. The question is answered against the appellant. The appeal is dismissed.

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• 2020 (3) TMI 1032
  Stay petition - Recovery proceedings - Grievance of the petitioner is that without taking any decision on the stay application of the petitioner, respondent No.1 has attached the above three bank accounts of the petitioner by issuing garnishee notices under Section 226(3) - HELD THAT:- We feel that it would meet the ends of justice if respondent No.1 takes a decision on the stay application of the petitioner in accordance with law within a period of 10 days from the date of receipt of an authenticated copy of this order. Ordered accordingly. Till the stay application is decided, there shall be no further withdrawal of money from the above three bank accounts of the petitioner and whatever withdrawals have been made, the same shall be subject to such order that may be passed by respondent No.1 in terms of the present order. Attachment of the bank accounts would also be subject to outcome of such order that may be passed by respondent No.1. Petitioner would also be at liberty to move respondent No.4 for early hearing of the appeal as well as for stay of the outstanding demand and if such prayer is made, the same shall be considered in accordance with law by respondent No. 4.

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• 2020 (3) TMI 1031
  Additions rate of Depreciation on wind mill - claiming depreciation in the ITR can be treated as exercising of option before the due date as prescribed in the second proviso to Rule 5(1A) of the Income Tax Rules - HELD THAT:- CIT (A) had rightly decided the issue because in the case of the assessee the claim was made in the return of income as well as reflected in the audit report filed along with the return of income, therefore it would amount to exercise of the option as required under Second proviso to Rule-5(1A) and accordingly depreciation @ 80% on the windmill of the assessee has to be allowed. Further the Hon ble Jurisdictional High Court in the case of CIT Vs. ABT Ltd. [ 2014 (10) TMI 788 - MADRAS HIGH COURT] has held as under:- If the assessee exercised the option in terms of the second proviso to rule 5(1A) of the Income-tax Rules, 1962, at the time of furnishing of return of income, it will suffice and no separate letter or request or intimation with regard to exercise of option is required. Since the returns were filed in accordance with section 139(1) of the Income-tax Act, 1961, and the form prescribed therein makes a provision for exercising an option in respect of the claim of depreciation, no separate procedure is required. In these circumstances we do not find any reason to interfere with the order of the Ld. CIT (A) Since the returns are filed in accordance with Section 139(1) of the Income Tax Act and the form prescribed therein make a provision for exercising an option in respect of the claim of depreciation, no separate procedure is required, as contended by the Department. See M/S. KIKANI EXPORTS P. LTD. [ 2015 (2) TMI 680 - MADRAS HIGH COURT] - Decided in favour of the assessee and against the Revenue.

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• 2020 (3) TMI 1030
  Stay petition - recovery proceedings - grievance expressed by the petitioner is that no opportunity of hearing has been granted prior to passing of the impugned order and the same is cryptic that has not taken into account the prima facie case or the submission of financial stringency that has been made in the detailed stay application filed - HELD THAT:- It is incumbent upon the authority who has jurisdiction to consider the application for stay in proper perspective. Be it an Administrative or Appellate Authority, it is necessary that while considering the stay application, the tri-fold aspects of prima facie case, financial stringency and balance of convenience are taken into account, both to protect the interests of the Department as well as to take into account the submissions of the assessee in proper perspective. It is of the considered view that has not been done in the present case. Hence, the impugned order is set aside. The petitioner will appear before the Principal Commissioner of Income Tax/R1 on Tuesday, the 24th of March, 2020 at 10.30 a.m. without expecting any further notice in this regard along with relevant materials in support of his submission. After taking into account the submissions made by the petitioner, a speaking order shall be passed within a period of four (4) weeks from 24.03.2020, i..e, on or before 21.04.2020. Till such time, no recovery proceedings shall be initiated.

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• 2020 (3) TMI 1029
  Offences u/s 276 (c) (2) - belated filing of return - willful failure on the part of the petitioner for non payment of huge tax liability - respondent issued show cause notice even then, the accused has not paid the huge tax liability at the time of filing the return of income - HELD THAT:- On perusal of the documents, it is seen that the last date for filing the returns for the financial year 2012-2013 was on or before 05.08.2013. The respondent did not hand over the book of accounts seized from the petitioner ill 05.08.2013. Therefore, there is delay in payment of income tax and the petitioner filed return of income on 31.01.2014. Thereafter, it was returned on 31.03.2015 directing the petitioner to pay a sum of Rs. 4,30,20,260/-. Thereafter, the petitioner paid tax as demanded by the respondent on 18.03.2018, for which the respondent also issued a letter on 24.03.2018 acknowledging the receipt of tax. Referring to provision to punish the accused, there must be wilful attempt to evade payment of tax, he must be in possession of the book with false entries, the person should have made false entries in the book of accounts and omitting any entry in the statement of accounts. The petitioner voluntarily disclosed the undisclosed income to the respondent on the inspection conducted under Section 132 of the Income tax Act, 1961 on 18.12.2012. Therefore, there is no intention from the petitioner for willful evading of payment of tax. Admittedly, the respondent on the inspection dated 18.12.2012, had seized the relevant book of accounts and as such the petitioner could not able to file the return of income on or before 05.08.2013. Therefore, the petitioner had no wilful intention to evade tax as alleged by the respondent. Petitioner had paid the entire tax amount on 13.03.2018 and the respondent had also acknowledged the same by the acknowledgment dated 14.03.2018. Therefore, the offence under Section 276 (c ) (2) of the Income Tax Act is not at all attracted as against the petitioner herein, and the entire criminal proceedings pending against the petitioner is nothing but clear abuse of process of law. As such it cannot be sustained as against the petitioner and it is liable to be quashed.

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• 2020 (3) TMI 1028
  Offences u/s 276 (c) (2) - belated filing of return - willful failure on the part of the petitioner for non payment of huge tax liability or not - surrender during survey / search proceedings - respondent issued show cause notice on 16.08.2015 even then, the accused has not paid the huge tax liability at the time of filing the return of income - HELD THAT:- On perusal of the documents, it is seen that the last date for filing the returns for the financial year 2012-2013 was on or before 05.08.2013. The respondent did not hand over the book of accounts seized from the petitioner ill 05.08.2013. Therefore, there is delay in payment of income tax and the petitioner filed return of income on 31.01.2014. Thereafter, it was returned on 31.03.2015 directing the petitioner to pay a sum of Rs. 4,30,20,260/-. Thereafter, the petitioner paid tax as demanded by the respondent on 18.03.2018, for which the respondent also issued a letter on 24.03.2018 acknowledging the receipt of tax. Referring to provision to punish the accused, there must be wilful attempt to evade payment of tax, he must be in possession of the book with false entries, the person should have made false entries in the book of accounts and omitting any entry in the statement of accounts. The petitioner voluntarily disclosed the undisclosed income to the respondent on the inspection conducted under Section 132 of the Income tax Act, 1961 on 18.12.2012. Therefore, there is no intention from the petitioner for willful evading of payment of tax. Admittedly, the respondent on the inspection dated 18.12.2012, had seized the relevant book of accounts and as such the petitioner could not able to file the return of income on or before 05.08.2013. Therefore, the petitioner had no wilful intention to evade tax as alleged by the respondent. Petitioner had paid the entire tax amount on 18.03.2018 and the respondent had also acknowledged the same by the acknowledgment dated 24.03.2018. Therefore, the offence under Section 276 (c ) (2) of the Income Tax Act is not at all attracted as against the petitioner herein, and the entire criminal proceedings pending against the petitioner is nothing but clear abuse of process of law. As such it cannot be sustained as against the petitioner and it is liable to be quashed. This criminal original petition is allowed.

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• 2020 (3) TMI 1027
  Reopening of assessment us 147 - exemption u/s. 11 denied - receipt of corpus donations - HELD THAT:- During the course of regular assessment, the petitioner-assessee has furnished requisite details sought for by the Assessing Officer in the form of details of the donation received by the petitioner as corpus credited to the Earmarked Funds being part of the balance-sheet. It is also not in dispute that during the course of the scrutiny assessment, the Assessing Officer has inquired about the donation received by the petitioner, which was forming part of the corpus and thereafter, the assessment order under Section 143(3) of the Act, 1961 was passed. In such circumstances, it cannot be said that there is any failure on the part of the petitioner to disclose truly and fully all material facts during the course of assessment. In view of above dictum of law the issue of reopening in the facts of the present case is no more res-integra. Therefore, the impugned notice is required to be quashed and set aside, as none of the reasons assigned by the Assessing Officer for re- opening the assessment was tenable in the eye of law, the conditions precedent to invoke the powers for re-opening assessment as provided in Section 147 of the Act is absent, therefore we find that the Assessing Officer acted illegally and issued Notice of re-assessment on the self same material forming second opinion without having any tangible material to exercise jurisdiction. - Decided in favour of assessee.

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• 2020 (3) TMI 1026
  Undisclosed income - inclusion of certain income at the hands of assessee s husband - search proceedings - HELD THAT:- Admittedly, search and seizure operations were carried out under Section 132 of the IT Act in the residential premises of the husband of the appellant viz., Mr.G.Narambulingam on 18.01.2000 and notice under Section 158BD of the IT Act were issued to the appellant and her husband on 31.05.2000 and 31.01.2020 respectively. No doubt, in the appeal filed before the Commissioner of Income Tax(Appeals), challenging the order of assessment dated 29.05.2002 passed by the Assessing Officer, the appellant did not appear and based on the materials available, the Commissioner of Income Tax (Appeals) had dismissed the appeal, vide order dated 08.12.2016. In the appeal filed before the Income Tax Appellate Tribunal, a specific ground as to the inclusion of certain income at the hands of her husband and remanding of the matter had been raised and in fact the Income Tax Appellate Tribunal in the impugned order dated 31.08.2017 in paragraph no.9 though referred to the order of remission passed by the Income Tax Appellate Tribunal, as regard her husband, proceeded to dispose of the appeal. As brought to the knowledge of this Court that after the order of remission passed by the Income Tax Appellate Tribunal, vide order dated 30.04.2008, as to the husband of the appellant / assessee, the proceedings are not yet completed. Once certain portion of the undisclosed income are added to the husband and that in respect of certain issues, the Income Tax Appellate Tribunal in the order dated 30.04.2008, filed by her husband, has remanded the matter to the Commissioner of Income Tax(Appeals), Madurai and during the course of arguments, it was also brought to the knowledge of Income Tax Appellate Tribunal, it should have been remanded to the Commissioner of Income Tax(Appeals) for adjudication. Substantial Questions of Law raised by the appellant / assessee, answered in her favour.

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• 2020 (3) TMI 1025
  Addition of speculation loss - Payment of damages made - monetary loss for the breach of contract and the settlement of the contract - whether it would not fall within the purview of Section 43(5)? - Whether the nature of compensation for breach of contract, whether speculation or otherwise can be determined irrespective of the nature of contract breached? - HELD THAT:- The dictum as laid down in Shantilal [1983 (7) TMI 1 - SUPREME COURT] is that the award of damages for the breach of a contract is not the same thing as a party to the contract except the satisfaction of the contract otherwise than in accordance with the original terms thereof. In view of the aforesaid, it is difficult to accept the submission of the learned standing counsel appearing for the Revenue that the case is one of a speculative transaction within the meaning of Section 43(5) of the Act. No substantial questions of law

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• 2020 (3) TMI 1024
  Disallowance u/s 14A r.w. Rule 8D - Non recording of satisfaction - HELD THAT:- To determine the amount of expenditure incurred by the assessee in relation to the income which does not form part of the total income under the Act 1961, the Assessing Officer can apply the method to calculate such expenditure as provided under Rule 8D of the Rules 1962 only if the Assessing Officer having regard to accounts of the assessee is not satisfied with the correctness of the claim made by the assessee in respect of such expenditure in relation to the exempted income under the Act 1961. Thus, precondition for applying Rule 8D of the Rules 1962, the Assessing Officer is required to be satisfied as provided in subsection 2 of Section 14A of the Act 1961. We may refer recent pronouncement of this Court in the case of Principal Commissioner of Income Tax Vs. Gujarat State Fertilizer and Chemical Ltd [ 2018 (10) TMI 1041 - GUJARAT HIGH COURT] finding of fact that as the Assessing Officer did not record any satisfaction under Section 14A(2) OF the Act 1961 prior to invoking Rule 8D, he could not have made any disallowance by applying Rule 8D of the Rules 1962. - Decided against revenue. Disallowance u/s 14A to the book profit under Section 115JB - HELD THAT:- As Question No.2(A) is answered in favour of the assessee to the effect that the Tribunal has not erred in deleting the disallowance under Section 14A of the Act 1961 read with 8D of the Rules 1962, question of making addition of disallowance made under Section 14A by the Assessing Officer to the book profit under Section 115JB of the Act 1961 would not arise. Therefore, the Question No.2(B) is also rejected.

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• 2020 (3) TMI 1023
  Disallowance u/s 14A r.w.r. 8D - assessee was having sufficient own interest free funds available, which exceeded tax free investments - HELD THAT:- CIT (A) as well as the Tribunal to the effect that no disallowance towards the proportionate interest expenditure can be made under Rule 8D(2)(ii) as there was sufficient fund available with the assessee as its own fund, i.e, Rs. 30.35 Crore in excess of corresponding investment of Rs. 12.54 Crore giving rise to the exempt income, no addition can be made by applying Rule 8D(2)(ii) of the Income Tax Rules, 1962. To reach at the aforesaid finding, the Tribunal has relied upon the decision of this Court in the case of Pr. CIT vs. Sintex Industries Ltd., ( 2017 (5) TMI 1160 - GUJARAT HIGH COURT ) and the decision of the Bombay High Court in the case of CIT vs. HDFC Bank Ltd. [ 2014 (8) TMI 119 - BOMBAY HIGH COURT ] In view of the concurrent finding of fact arrived at by the CIT (A) as well as the Tribunal, the question of law, as proposed by the Revenue, cannot be termed as the substantial question of law arising out of the impugned order of the Tribunal.

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• 2020 (3) TMI 1022
  Deduction u/s 36(1)(iii) or 57(iii) - interest paid by the assessee on borrowed capital to the extent it was utilised for purchasing shares - ITAT disallowed interest under both i.e. Section 36(1)(iii) and Section 57(iii) - HELD THAT:- In order to grant deduction of interest paid by the assessee, it would be necessary to determine the dominant purpose for which the expenditure was incurred, meaning thereby that if the expenditure incurred is not to earn the income, then such expenditure would not be allowable as deduction under Section 57(iii) of the Act. In the facts of the case, the JCIT in the remand report as well as the CIT(A) found that the interest borrowed for the purchase of shares was allowable expenditure under Section 57(iii) of the Act without taking into consideration as to whether the capital borrowed for the purchase of shares by the assessee was for the purpose of business or for the purpose of earning income. Where the borrowings are made for the purchase of shares, a question that would often arise is whether the interest paid should be allowed as deduction under Section 36(1)(iii) or under Section 57(iii). At this stage, it is worthwhile to mention that the income by way of dividends on shares, whether held on investment portfolio or as stock-in-trade, is specifically assessable, under Section 56(2)(i), as the Income from other sources . Although the shares are held, on the investment portfolio, as an integral part of the business, yet the interest on such borrowings is allowable under Section 36(1)(iii). Thus, the qualifying factor in this case is to ascertain whether the borrowings for purchasing shares is an integral part of the business of the assessee. The appellant assessee had borrowed the capital to purchase the shares of the IHFC Ltd so as to have effective control of the IHFC Ltd in order to expand its real estate business. Thus, the investment in share was nothing but the expansion of business of the assessee. Therefore, all the conditions necessary for deduction under Section 36(1)(iii) were prima facie satisfied by the appellant assessee. The CIT(A) was, therefore, not justified to allow deduction under Section 57(iii) of the Act as the appellant assessee did not borrow the capital for earning dividend or for making profit and gains. The dominant purpose of the appellant assessee to borrow the capital was to acquire the shares to have effective control over the IHFC Ltd so as to expand the business of the assessee. In that view of the matter, the CIT(A) was not justified in granting deduction of interest paid by the assessee under Section 57(iii) of the Act. But the assessee is entitled to deduction of interest paid on capital borrowed for investment in the shares of IHFC for the purpose of expansion for its business under Section 36(1)(iii) of the Act. The Tribunal was, therefore, not justified in holding that the purpose of the assessee for purchase of shares of IHFC was not for the purpose of business of the assessee as the business of the assessee was only sale and purchase of land. Question of law as framed is answered in favour of the assessee and against the Revenue. The assessee is entitled to deduction of interest paid on borrowed capital to the extent it was utilized for purchasing shares of IHFC Ltd under Section 36(1)(iii)

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• 2020 (3) TMI 1021
  TP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- Assessee rendered Information Technology Enabled Services [ITES] to its AE, thus companies functionally dissimilar with that of assessee need to be deselected from final list. We uphold the exclusion of Genesys International Corporation Ltd., and Mold-tek Technologies Ltd., by the CIT(A) and dismiss the relevant grounds of appeal of the revenue. We also direct exclusion of the following six companies sought by the Assessee in its appeal, viz., Accentia Technologies Ltd., Acropetal Technologies Ltd., Crossdomain Solutions Pvt. Ltd., Eclerx Services Ltd., Infosys BPO Ltd., and WIPRO Ltd. We also direct the TPO while giving effect to this order to verify the correctness of the claim of the Assessee with regard to incorrect profit margin of comparable companies considered by the CIT(A) in the impugned order as stated in the application filed u/s.154 of the Act and if found correct, adopt the correct profit margins as reflected in the TPO s order. The TPO shall recomputed the ALP in the light of the directions given above after affording opportunity of being heard to the Assessee.

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• 2020 (3) TMI 1020
  Revision u/s 263 - referring the case back to the A.O. for fresh examination of estimating the NP at 1% on the turnover declared by the appellant - whether the actions of the AO can be termed as prejudicial to the interest of Revenue? - HELD THAT:- From perusal of the records of A.Y. 2011-12, wherein the book of accounts of the assessee company was rejected and the profit was computed @1% of total sales engaged in the same line of business, observed that during the relevant year also the assessee has failed to produce copy of bills of purchase and sale of goods to examine the actual purchases and sales. AO further held that no labour payment was made for loading and unloading of goods and no transportation cost was claimed by assessee for inward and outward movement of goods. Finally, the AO arrived at the conclusion that in absence of bills evidencing the purchase and sale of goods, the entire trading of goods could not be examined, which under such circumstances were to be treated as paper transactions, implying that there was neither any sale nor purchase. AO had rightly assessed the business income at Nil since no income can arise out of non existent sales and purchases. Therefore, order passed by the AO should not be erroneous. Another stand of the PCIT was that that sufficient/proper enquiries were not conducted by the Ld. AO during the assessee s assessment u/s 143(3) for the relevant Assessment Year. We are of the view that the assessee cannot be held to be at fault and subjected to revision proceedings u/s 263(1) for inadequate enquiry being conducted by the Ld. AO.In other words, fresh enquiry cannot be conducted on completed assessments on the premise that the enquiries and investigations conducted during assessment were not proper/incomplete/inadequate. AO has considered the documents and submissions made by assessee and AO has also considered the assessment order for A.Y. 2011-12 passed in assessee`s case and taking into account all the facts and circumstances the AO has adopted one of the courses permissible in law and even if it has resulted in loss to the revenue, the said decision of the AO cannot be treated as erroneous and prejudicial to the interest of the revenue as held in Malabar Industries Ltd. vs. CIT [ 2000 (2) TMI 10 - SUPREME COURT] Since the order of the Assessing Officer cannot be held to be erroneous as well as prejudicial to the interest of the revenue, usurpation of jurisdiction exercising revisional jurisdiction by the Principal CIT is null in the eyes of law and, therefore, we are inclined to quash the very assumption of jurisdiction to invoke revisional jurisdiction u/s 263 by the Principal CIT. - Decided in favour of assessee.

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• 2020 (3) TMI 1019
  Exemption u/s 10(46) - CIT(A) dismissed the appeal of the assessee since various grounds was not pressed by the assessee - Assessee is a Government Organisation with the main objective of performing activities of controlling pollution - HELD THAT:- Appellant has contended that the said grounds were not only pressed by the assessee but even a detailed submission in support of the issues raised therein was made by the assessee which was extracted by the Ld. CIT(A) in his impugned orders. Keeping in view all the facts of the case as borne out from the record, we are inclined to accept this contention of the learned counsel for the assessee. Even the ld. DR has not raised any objection for sending the matter back to the AO for adjudication of these vital issues relating to the assessment of the assessee for both the years under consideration after proper and necessary verification. We accordingly set aside the impugned orders of the ld. CIT(A) on these issues and restore the matter to the file of the AO for deciding the same on merit in accordance with law after giving the assessee proper and sufficient opportunity of being heard.

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• 2020 (3) TMI 1018
  Exemption u/s 11 - cancellation of registration u/s 12AA(3) - assessee is engaged in the commercial activity and selling the vacant lands to the highest bidders and entering into joint venture for construction of buildings for commercial purposes which is not the object of the assessee - HELD THAT:- In the instant case, the Ld.CCIT viewed that the assessee has lost sight of the objects from the assessment year 2008 onwards and carrying on commercial activity. In this regard, the Ld.Counsel has elaborately discussed the activities carried out by the assessee for furtherance of the objects and argued that the assessee is continuously engaged in the activities for development of the area in its jurisdiction and carried on various activities which are discussed in detail in para No.3 of this order, such as construction of houses for low income groups, widening of roads, development of various areas as per the master plan, sports complex, maintenance of schools, parks, bridges etc. and given a note on the projects which were undertaken and the projects in progress vide note dated 04.10.2019 and argued that the assessee is continuously taking all possible steps for overall development of the areas entrusted to it for orderly growth of the area as per the objects. During the appeal hearing, the Ld.Standing Counsel did not controvert the developmental activities undertaken by the assessee, therefore, we hold that the observation of the Ld.CCIT that the assessee has lost sight of its objects is not based on proper appreciation of facts, hence, we are unable to accept the same. Selling of vacant lands to the highest bidders in auction and entering into joint ventures for construction of buildings - As provided in section 19 of APUDA Act the assessee is permitted to dispose off the lands after development or without carrying out any development in such manner as per the terms and conditions mentioned therein. Sub sec.3 of sec.19 allows the assessee to dispose the lands by sale. Therefore, the assessee is permitted to sell the lands in public auction which is one of the most popular and transparent methods approved by courts also. The Department did not explain how the sale of lands earmarked for high income groups and for commercial ventures in public auction violate the objects of the assessee. As long as the sale proceeds are utilized for advancement of the objects without diversion, it does not violate the objects of the assessee. The department did not place any material to show that the funds of the assessee other than the sale proceeds of land in GO No.1401 are diverted for other purposes. Therefore, we, are of the opinion that the same is not against the objects of the Society and do not violate the objects mentioned in APUDA Act. It is necessary for VUDA to come forward for developing the malls and commercial complexes for the benefit of the public. Therefore, we are of the view that entering into joint venture for construction of buildings cannot be held to be against the object of the assessee society. CCIT has not brought on record how the construction of commercial buildings are against the objects of VUDA. Therefore, we hold that construction of commercial complexes, Malls etc., and entering into joint ventures for construction of the houses does not violate the objects of APUDA Act. Assessee is the owner of the lands alienated to VUDA, thus the assessee becomes the absolute owner of the lands, hence the assessee ought to have utilized the funds instead of remitting the funds back to Government - Sale proceeds of lands mentioned by the Ld.Standing Counsel which were stated to be belonged to the assessee were neither proved to be remitted to the government nor the parts of the lands in GO No.1401, thus there is no impact on Registration u/s 12AA of the Act. Therefore, we are unable to accept the contention of the Ld.Standing Counsel that the assessee has sold the lands belonging to it and remitted the sale proceeds to Government account. Contention of the Department is that the assessee acted as an agent for sale of lands and the agent is disentitled for grant of registration u/s 12AA(3) - VUDA has also collected the service charges and utilized the same for it s objects. Revenue also did not place any evidence or material to show that the VUDA is barred from acting as an agent or in assisting the sale of Government s lands. When Government is giving the loans, funds, grants, loans and advances and giving all the support for advancement of it s objects, we do not find any reason to hold that VUDA is prohibited from helping the Government in selling the Government s vacant lands as per the specific directions of the Government and there is no case law brought on record by either parties to support or to prohibit the assessee to sell the lands of the Government. Therefore, we are of the considered opinion that assisting the Government, in sale of lands, after collecting the expenses does not make the assessee disentitle for registration u/s 12AA(3) of the Act. Assessee has carried on commercial activity, hence, the assessee is hit by the amendment to section 2(15) - In the instant case, whatever surplus generated was used for the activities of the assessee society, therefore, the same cannot be held to be the commercial activities. Even otherwise, through Circular No.21 of CBDT dated 27.11.2016, it has directed the field authorities not to cancel the registration of charitable institution already granted u/s 12AA of the Act just because the provision to section 2(15) comes into play. The process for cancellation of registration to be initiated strictly in accordance with the provisions of section 12AA(3) and 12AA(4) of the Act after carefully examining the provisions. There is no material placed before us to establish that the assessee is not carrying on the activities in accordance with the objects or the activities of the assessee are not genuine. CCIT has cancelled the registration on presumptions and assumptions without having proper material. Therefore, we cancel the order of the Ld.CCIT passed u/s 12AA(3) of the Act and restore the registration granted to the assessee. Accordingly, appeal of the assessee is allowed.

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• 2020 (3) TMI 1017
  Addition u/s 68 - Addition on account of joint venture agreement - allegation of infusion of its own fund through accommodation entry provider - HELD THAT:- From a perusal of the balance sheet of M/s. NCPL, we note that as on 31-3-2013 M/s. NCPL had share capital of Rs. 19,27,000/- and Reserve Surplus of Rs. 18,07,40,956, thus total of Rs. 18.26 crs. We also take note of the copy of the accounts of the assessee for the year ending on 31-03-2013. We cannot subscribe to the allegation of the AO that assessee in order to wriggle out of the search conducted on 2.7.2013 at the premises of Mr. Anand Sharma and Mr. Janardhan Chokhani and their statements before the Investigation Wing that M/s. NCPL is a bogus company is engaged in giving/providing accommodation entry, the assessee had come out with a story of JV and is an afterthought. A perusal of the JV agreement dt. 31-7-2012, that it was executed on Non Judicial Stamp Paper of Rs. 50/- and in case if the AO had any doubts about the veracity of the JV agreement, then the AO had powers to investigate and find out the truth which could have come to light whether the Stamp Paper was purchased on 31.7.2013 or was procured later and JV agreement was executed ante-dated by summoning the stamp vendor itself. AO could have summoned the Notary Public and got the statutory books maintained by him and inspected/verified to see whether the date on which the JV agreement executed was on 31.07.2012 is correct or not, which exercise the AO has not carried out and he based his adverse finding on the basis of conjectures surmises. And it is a matter of fact, that the assessee company was declared as a sick industry by BIFR. Assessee had furnished the copy of the JV, copy of the cancellation of JV, and in addition the assessee produced documents to prove the identity, creditworthiness and genuineness of the transaction with M/s. NCPL, M/s. NCPL s PAN is AACCN5258J and that M/s. NCPL is a regular income tax assessee the ITR intimation is of AYs 2015-16, 2016-17, 2017-18 and 2018-19 - the director of M/s. NCPL has filed an affidavit sworn before the Judicial 1st class Magistrate wherein he has admitted that M/s. NCPL provided Rs. 17.46 cr. to set up manufacturing unit at Silvasa along with the assessee and that the JV has been terminated and that the assessee had refunded the full amount of Rs. 17.46 cr. back to M/s. NCPL. These documents were filed before the authorities below and the documents could not be controverted or its veracity was assailed before us as not genuine documents, therefore, the addition made u/s. 68 of the Act only on the basis of two statements which could not stand the scrutiny of law, was warranted and therefore, the addition cannot be sustained as per law. Audit report of the assessee does not mention the existence of any J.V with assessee. We note that the auditor has not reported the event because the M/s. NCPL had terminated the JV agreement in Feb., 2013 itself and that the assessee company had issued 5 cheques of Rs. 17.46 crs on 31/3/2013 itself in the name of M/s. NCPL. Therefore, the auditor has not reflected the same in his audit report prepared as on 31/3/2013. Thus, we do not subscribe to the views taken by the AO/ld. CIT(A) that the assessee had infused its own fund through accommodation entry provider, M/s. NCPL for the reasons discussed supra. Therefore, we delete the addition as confirmed by the ld. CIT(A) made u/s. 68 - Decided in favour of assessee.

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• 2020 (3) TMI 1016
  Addition u/s 68 - unexplained cash credit - cash payment made towards stamp duty - HELD THAT:- Assessing Officer has made addition on account of cash payment made towards stamp duty - Commissioner (Appeals) accepting assessee s explanation with regard to the unsecured loan has restricted the addition. For explaining the source of Rs. 16,93,770, the learned Authorised Representative has submitted before us that an amount of Rs. 5 lakh was withdrawn from bank account on 3rd May 2013, and paid towards stamp duty on 6th May 2013. On a perusal of cash book extract submitted in the paper book, we find the aforesaid contention of the assessee to be correct. Therefore, we are of the view that a further amount of Rs. 5 lakh out of the addition sustained of Rs. 16,93,770, stood explained. Accordingly, the addition to the extent of Rs. 5 lakh deserves to be deleted. Balance amount of Rs. 11,93,770 - to explain the source of the aforesaid cash payment, the assessee has submitted that from the assessment stage itself it has been explained that the amount has come from agricultural income - As before us, except the 7/12 extract and some documents filed before the Assessing Officer, the assessee has not furnished any other evidence to prove actual carrying on of any agricultural activity or earning of agricultural income. Even, no material has been placed before us to show that the assessee had offered any agricultural income in the earlier or subsequent assessment years. If the assessee claims that it has earned agricultural income and part of the cash payment was made out of that, the burden is entirely on the assessee to prove such fact through proper documentary evidences. In view of the aforesaid, we are inclined to restore the issue relating to the balance cash payment of Rs. 11,93,770, to the file of the Assessing Officer for fresh adjudication, thereby, providing an opportunity to the assessee to furnish corroborative evidence to prove its claim of availability of agricultural income. AO must afford reasonable opportunity of being heard to the assessee before deciding the issue. Appeal is partly allowed.

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• 2020 (3) TMI 1015
  Unaccounted income - Advances received - deemed income of the assessee - HELD THAT:- In the present case, the source of the credit is Shri N. Elamaran and Shri Elamaran has confirmed the advance. Therefore, the question of the said advance or the credit being treated as a deemed income of the assessee no more survives. It is also an admitted fact that Shri N. Elamaran has himself offered the amount of Rs. 1.00 crore as his undisclosed income relating to the assessment years 2012-13 and 2013-14. The fact that Shri Elamaran has offered the amount has never been intimated to the assessee and consequently the assessee would under normal circumstances accept the said amount to be his income. That does not make it the income of the assessee. Assessee is very well entitled to prove that it is not his income. In the present case, much more than the assessee proving that it is not his income, it is the Revenue which has produced evidences to show that it is not the income of the assessee. It is the Assessing Officer who has accepted the claim that the amount of Rs. 1.00 crore in respect of which the promissory notes have been issued and found in the course of search is in fact the advance given to the assessee by Shri N. Elamaran. The purpose for which Shri N. Elamaran has given the advance, is also brought out by AO being for the supply of uniform and materials for M/s. Sree Balaji Medical College and Hospital, Chennai. It is the AO who has brought out the fact that Shri N. Elamaran has also offered the said amount of Rs. 1.00 crore as his undisclosed income for the assessment years 2012-13 and 2013-14. When so much of evidences has been produced by the Revenue which is in favour of the assessee, the same cannot be wished away by saying that the amount of Rs. 1.00 crore has been offered by the assessee in his statement and that the said amount should be assessed as the undisclosed income of the assessee also. Further, even the claim of Shri Elamaran that the advances was for the supply of materials for M/s. Sree Balaji Medical College and Hospital, Chennai has not been considered by the Assessing Officer or the learned CIT(A). Thus addition as unaccounted income of the assessee is unsustainable - Decided in favour of assessee.

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• 2020 (3) TMI 1014
  Rejection of books of accounts - adoption of 10% GP on the ground that the assessee was unable to provide the manufacturing account as it cannot be made - submission of the assessee that the accounts are audited and no defects were pointed out by the auditors; that due to dispute in the family, the turnover has come down and the GP has also fallen and in subsequent years the business has been closed and, therefore, adoption of such high rate of GP is uncalled - HELD THAT:- No force in the argument of the ld. Counsel for the assessee, especially in absence of non-production of manufacturing account and non-furnishing of details to arrive at the actual value of items consumed and the value of closing stock. However, going by the past results and considering the totality of the facts of the case, we are of the considered opinion that adoption of 4% GP in the instant case will meet the ends of justice. We, therefore, direct the AO to adopt the GP rate of 4% and recompute the disallowance. Addition on account of disallowance of interest - Held that:- neither any specific ground has been taken before the Tribunal nor anything was argued by the assessee on this issue although the assessee in the general grounds of appeal has challenged the entire addition made by the AO. We, therefore, refrain from adjudicating the issue of disallowance of interest made by the AO in the original order. The grounds raised by the assessee are accordingly partly allowed.

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• Customs

• 2020 (3) TMI 1013
  Imposition of penalty u/s 144(iii) and Section 112 of the Customs Act, 1962 - grievance on the part of the petitioner is that no readjudication has taken place and after 8 years of such order by CESTAT, the Commissioner of Customs, Navrangpura, Ahmedabad has issued letter and once again has issued show cause notice for readjudication of the matter, which was scheduled to be heard on 18.02.2020 - HELD THAT:- Noticing the fact that these petitions are preferred against the show cause notice relying on the ratio rendered in case of SIDDHI VINAYAK SYNTEX PVT LTD. VERSUS VERSUS UNION OF INDIA 2 [ 2017 (3) TMI 1534 - GUJARAT HIGH COURT] , petitioner may always place the very authority into service before the concerned authority. The petitioner has directly approached this Court against the show cause notice raising all contentions in these petitions. When efficacious remedy in alternative is available, this Court had not enter into the merits of the matters. Petition disposed off.

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• 2020 (3) TMI 1012
  Refund of Terminal Excise Duty (TED) - Rejection of refund contending that as supplies against ICB are ab initio exempted from payment of excise duty, the same are ineligible for refund - applicability of relevant FTP 2009-14. HELD THAT:- By virtue of the notification No. 4 dated 18th April, 2013, a condition was incorporated stipulating that categories of supplies which are exempt ab initio would not be eligible to receive refund of TED. In the present case, the supplies were made during the period from 15th December, 2009 to 10th February, 2011 and thus during the relevant period, there was no such condition in the FTP. It may also be noted that the aforenoted notification is substantive and not clarificatory and therefore cannot be applied retrospectively. Thus, even in this situation, in our view, the petitioner is entitled to refund of TED under para 8.3 (c) of the FTP as the exemption was not availed by the petitioner and it opted to pay the excise duty. It appears that DGFT in view of policy circular No. 11/2015-20 dated 23rd July, 2018, has now identified the issue viz-a-viz the non-refund of excise duty paid by the suppliers. This circular in our view now recognizes the provisions of the FTP in the right perspective, that exemption from TED was not available for certain supplies even though the same were under ICB. There is thus no impediment in granting the refund to the Petitioner - In view of the above discussion, the impugned circular has no application to the case of the petitioner and it is lawfully entitled to refund of TED in terms of para 8.3 (c) read with para 8.4.4. (iv) of the FTP. The impugned orders/letters denying refund of TED are hereby quashed. The respondents are directed to process petitioner s claim for TED refund in respect of the applications enumerated in paragraph 3 of this order and release the amounts which they are entitled to in respect of the supplies made hereunder within a period of eight weeks from today - Petition allowed.

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• 2020 (3) TMI 1011
  Valuation - assessable value of imported goods - Aluminium scrap - rejection of declared value - HELD THAT:- Reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, NOIDA VERSUS M/S. SANJIVANI NON-FERROUS TRADING PVT. LTD. [ 2018 (12) TMI 738 - SUPREME COURT] where it was held that The Tribunal has clearly mentioned that this declared price could be rejected only with cogent reasons by undertaking the exercise as to on what basis the Assessing Authority could hold that the paid price was not the sole consideration of the transaction value. Since there is no such exercise done by the Assessing Authority to reject the price declared in the Bills of Entry, Order-in-Original was, therefore, clearly erroneous. Inasmuch as, the Appellate Authority has relied upon the Hon ble Supreme Court s decision in the case of M/s Sanjivini Non-Ferrous Trading Pvt. Ltd. and the revenue in their memo of appeal have not given any valid reason to deviable from the said decision, we find no justifiable reasons to interfere in the impugned order - appeal dismissed - decided against Revenue.

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• 2020 (3) TMI 1010
  Smuggling - Pharmaceutical Bulk Drugs (PBD) - Miglitol - Mifepristone - Ethynal Estradiol - prohibited goods or not - demand based on various statements - retraction of statements - onus to prove - Circular No. 95/2003-Cus dated 06.11.2003 - Confiscation of sale proceeds of smuggled goods - penalty - principles of natural justice - HELD THAT:- The standard of proof in a case like this would obviously different from other cases. When Shri Bavishi himself has agreed about the smuggling activity in general and was corroborated by others and when they could not produce any evidence of legal procurement, it has to be construed that the department has discharged its burden and thus, we have no hesitation in concluding that the goods are smuggled in nature and accordingly the provisions of Section 11(d) and (l) of Customs Act, 1962 are attracted. Therefore, we find that the confiscation of goods is justified. One more submission made by the appellants is that they have retracted statements and thus, the same lose evidentiary value. We find that the persons concerned have accepted the modus operandi to the knowledge of which, they alone are privy of. Retraction is an understandable after thought employed by the persons to wiggle them out of the legal tangle. We find that the activity of smuggling has not only been accepted by Shri Manish Bavishi but by others involved in the completion of the acts of commission and omission in this regard. We find that retraction, if any, would have had some face value if they could establish licit procurement of the impugned goods. In the absence of the same retraction has no meaning. Another argument taken by the appellants is that the principles of natural justice have been violated and that the adjudicating authority has not given opportunity for being heard and request for cross examination was not granted - Understandably, the appellant has a vested interest in prolonging the proceedings. In such a case, the departmental officers cannot play in to their hands of the appellants in procrastination of the proceedings. We find that legal remedies under the act cannot be allowed to be misused by the people who have indulged in smuggling activities by which they have not only put the public health and Revenue at peril. That would be travesty of justice. We find that sufficient opportunities of hearing have been given by the adjudicating authority - the principles of natural justice are not violated. Seizure of goods - HELD THAT:- The appellants could not prove the legal acquisition of the goods. Therefore, in the circumstances of the case, the same are treated as smuggled goods and hence, liable for confiscation under Section 111(d) (l) Customs Act, 1962. Confiscation of sale proceeds - HELD THAT:- These good too are to be treated as smuggled and hence liable for confiscation under Section 111(d) (l) of the Customs Act, 1962.As the goods are not available for confiscation, confiscation of sale proceeds is required to be upheld in terms of Section 121 of the Customs, Act, 1962. Appellants have also raised the issue that no duty has been demanded on the seized goods. We find that this is not a case of legal import of goods. The question of duty does not arise when goods are confiscated absolutely. Only when the goods are allowed to be redeemed, such goods shall be cleared on payment of duty in addition to the fine in lieu of confiscation. Penalties - HELD THAT:- For all the acts of commission and omission as discussed, he has rendered himself liable for penalty. Showing any lenience to perpetrators of evasion of duty while playing with the lives of people, would be against the interests of justice - Looking in to the long litigation; fact that the sale proceeds have been confiscated and other circumstances of the case we are inclined to reduce the penalty in respect of Appeal No C/594/ 2010 from 30 lakhs to 10 lakhs and penalty in respect of Appeal No C/633/ 2010 from one Crore to 30 lakhs. Levy of penalty on others in respect of other appeals - HELD THAT:- The allegation of abetting, if any, is in relation to the sale and purchase of bulk drugs in the course of trade within India. The whole allegation is that they have issued invoices without receiving or sending goods physically. In that case, they cannot be alleged to have dealt with goods within the meaning of Section 112(b) of the Customs, Act 1962, more so when the knowledge of the goods being smuggled is absent. If the appellants have committed any offence under Drugs and Cosmetics, Act, 1940 the concerned agencies would take necessary action. Therefore, we hold that penalty is not imposable either on Shri Parag Bhavasar or on M/s Palam Pharma either under Section 112 (a) or under Section 112(b) of the Customs, Act, 1962. Application disposed off.

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• 2020 (3) TMI 1009
  Maintainability of appeal - compliance of pre-deposit - section 129E of CA - Valuation - inclusion of royalty in the assessable value of imports - HELD THAT:- There can be no order for recovery of duties of Customs on past imports that were finally assessed without recourse to Section 28 of Customs Act, 1962. Should that eventuality occur, the proper officer would, doubtlessly, issue an order quantifying the demand after following the procedure laid down in law. That could be a cause of grievance and any appeal therefrom, in compliance with Section 129E of Customs Act, 1962, could be entertained by the first, or subsequent, appellate authorities. The appellant is not aware of any action initiated on the prospective ruling on assessments of future imports, whether provisional or final. In Customs (Finalisation of Provisional Assessment) Regulations, 2018, we find that Regulations 4(8), 6(3) and 6(4) provide for consent or justification, as the case may be, on each bill of entry - to entertain and dispose of the appeal would tantamount to presenting the proper officer from applying its mind to finalization of an assessment and, indeed, to interfere in an assessment that is yet to fructify. The order of the Joint Commissioner of Customs is also not of such detriment to the appellant as to warrant circumventing of the requirement of mandatory pre-deposit for entertaining appeals under Section 128, or Section 129 of Customs Act, 1962. The proceedings initiated, and concluded, by the Joint Commissioner of Customs poses no detriment, as noted in the impugned order, till an import is effected or a notice for recovery of duties on past imports has been issued. Admittedly, these events have not taken place and the appellate authority has acted in haste to take up the appeal for disposal prematurely. An order emanating from the authority invested in Special Valuation Branch of Custom houses under administrative instructions of Central Board of Excise Customs are not orders which are capable of complying with the pre-requisites for filing of an appeal in Chapter XV of Customs Act, 1962. The first appellate authority erred in taking up the appeal preferred before it despite non-compliance of Section 129E of Customs Act, 1962 - To hear the appeal arising from an order issued without jurisdiction would be to compound the illegality of the proceedings. Matter remanded back to the first appellate authority to consider the appeal only to the extent of statutory jurisdiction conferred upon it.

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• Corporate Laws

• 2020 (3) TMI 1008
  Oppression and mismanagement - sum and substance of the allegations in the Petition is that the Company has allotted shares at different premiums on different points of time; without proper notices, company meetings were convened; in the Auditor Report Financial irregularities were found and material information has not been supplied to Respondent Nos. 1, 2 3 (Petitioners) - HELD THAT:- From bare reading of this order it seems that the National Company Law Tribunal has appointed an Independent Chairman for interim arrangement till the investigation is completed by the Registrar of Companies and Principal Director of Income Tax (Investigation). However, the scope of enquiry time, for completing the enquiry and to whom the statutory authorities will submit the report, is not mentioned in the impugned order - The impugned order is passed on 22.03.2019, till date about 11 months has lapsed, but Learned Counsel for the parties are unable to apprise the present stage of investigation before the statutory authorities. Thus, in absence of clear directions, the statutory authority will not be able to complete the investigation. Matter remitted to National Company Law Tribunal with a request that after hearing the parties to pass fresh order without being influenced by this order.

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• Insolvency & Bankruptcy

• 2020 (3) TMI 1007
  Calling of CoC meeting - consideration of proposal of the resolution applicant dated July 25, 2019 - section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The e-mail which it sent dated July 25, 2019 by the resolution applicant is merely the revised commercial offer on the rejected plan submitted on July 18, 2019 which was rejected by the CoC and not a resolution plan in accordance with the provisions of the Code read with the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ( CIRP Regulations ) and per the judgment of hon ble apex court in ArcelorMittal India P. Ltd. v. Satish Kumar Gupta [ 2018 (10) TMI 312 - SUPREME COURT ] the Adjudicating Authority has no jurisdiction to challenge the commercial wisdom of CoC to approve or reject the resolution plan . Further, the e-mail sent by the resolution applicant states that the necessary changes shall be made to the resolution plan and the revised resolution plan shall be submitted shortly which has not taken place and it is admitted by the resolution applicant that merely a revised offer and not a resolution plan to be considered. It is also to be considered that by allowing one resolution applicant to submit resolution plan even after its plan has got rejected will be in con travention of the law laid down by the hon ble Supreme Court in Arce lorMittal India P. Ltd. v. Satish Kumar Gupta as the resolution plan was submitted in April, 2019 and there were other resolution applicants also who showed interest in the resolution pro cess. After the rejection of the resolution plan submitted by SREI, it would only be equitable that the resolution process is open for all resolution applicant in order to maximize the recovery for the creditors of the cor porate debtor. Application dismissed.

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• PMLA

• 2020 (3) TMI 1006
  Restoration of possession of property - legal question raised by Respondent that this Tribunal is not empowered to restore the possession is not agreed to on the ground that the power of this Tribunal to issue stay order as well as order consequential thereto is inherent - HELD THAT:- The section 35(2)(h) of the PMLA, 2002 has empowered this Tribunal to set aside any order of dismissal of any representation for default or any order passed ex-parte. The restoration of possession in the present case is consequential to the order of restoration of appeal which was dismissed for default. The restoration of possession is an order during the pendency of the appeal and the status of the order of restoration of possession is same as in the case of passing of stay order. The main allegation against the appellant with respect to this property is that the appellant has liquidated the loan out of proceeds of crime. But the fact is that the appellant was staying with his family which consists of aged parents and that after being evicted they are staying with the family of sister of the appellant in a difficult condition. There is nothing on record that the appellant or their family members have any other accommodation to stay. The appellant has a prima facie case for restoration of possession of the property mentioned above and there will be injustice and irreparable injury would be caused if the possession of the house is not restored - the Respondent is directed to restore the possession of the property in question to the appellant within two weeks from today, subject to conditions imposed.

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• Service Tax

• 2020 (3) TMI 1005
  Levy of service tax - pilotage charges - whether the appellant is liable to pay service tax on Port Service as per Section 65(105)(zzl) in respect of the services rendered by them in Ravva Port with permission of the Port Authority? - it was held that the appellant was fully liable to pay service tax on the pilotage charges which they received from their customers under the head Port Services , under section 65(105)(zzl) of Finance Act, 1994. HELD THAT:- There is no need to interfere with the impugned order passed by the Tribunal - appeal dismissed.

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• 2020 (3) TMI 1004
  Maintainability of appeal - appropriate forum - Recovery of service tax - classification of services - Construction of Complex Services or Commercial or Industrial Construction Service - period from April, 2005 to March, 2010 - HELD THAT:- Indeed, whether the services provided by the Respondent were classifiable directly as Construction of residential Complexes and Commercial or Industrial Construction Service or as Works Contract Service was a neat question of law. The case involves the issue of classification and, therefore, in such instance an appeal against the order of the CESTAT would lie in the Supreme Court under Section 35L of the Central Excise Act, 1944, even if there are other questions involved. The present appeal before this Court is not maintainable.

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• 2020 (3) TMI 1003
  Clubs or association service - doctrine of mutuality - scope and exclusions from the definition of club or association or not - HELD THAT:- The issue decided in the case of 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] where it was held that from 2005 onwards, the Finance Act of 1994 does not purport to levy service tax on members clubs in the incorporated form. It is evident that the proposed demand in the impugned show cause notice can no longer be sustained - petition allowed - decided in favor of petitioner.

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• 2020 (3) TMI 1002
  Maintainability of appeal - time limitation - it is submitted that the order passed by the adjudicating authority dated 27.1.2011 was not served on the appellant - Business Auxiliary services - non-payment of service tax - HELD THAT:- The Commissioner (Appeals) has dismissed the appeal observing that it is time-barred and also noting that the Order-in-Original was received and acknowledged by the appellant on 10.2.2011. However, on perusal of records, we do not find any document to show that the appellant has been served with the copy of the Order-in-Original dated 10.2.2011. Though the Bench directed the department to produce documents to prove that the Order-in-Original has been served to the appellant, they have not been able to do so. The appellant has to be given a chance to contest the case on merits - The impugned order is set aside and the appeal is allowed by way of remand to the Commissioner (Appeals).

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• Central Excise

• 2020 (3) TMI 1001
  Extension of time for completion of arbitration proceedings and rendering of the arbitral award - Section 29A(4) of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Issue notice. Keeping in view the fact that much time and labour has already been invested in the proceedings, the time for completion of arbitration proceedings and rendering of award is extended till 30.09.2020 reckoned from 18.08.2019 - petition disposed off.

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• 2020 (3) TMI 1000
  Service of order - principal argument of the learned counsel appearing for the appellant is that at no point of time, he received the Order- in- Original passed by the Deputy Commissioner - HELD THAT:- The Tribunal has held that it is fact on record that the adjudication order was sent to the appellant through registered post on 19.05.2015 and the same was delivered at the premises of the appellant on 25.05.2015. In that circumstance, the date of received of adjudication order is 25.05.2015. Admittedly, the appeal filed by the appellant is with a delay of almost 15 months therefore, the Ld. Commissioner (Appeals) has rightly dismissed the appeal as time -barred. In view of the aforesaid findings of fact arrived at by the Tribunal, it is difficult for us to take the view that the questions as proposed are substantial questions of law falling for the consideration of this Court. Appeal dismissed.

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• 2020 (3) TMI 999
  Refund of Excise duty - principles of unjust enrichment - HELD THAT:- Mr. Walve and Mr. Ochani, appearing for the respondents, very fairly state on instructions of Mr. Bhanu Jain, Assistant Commissioner, Central GST and Central Excise, that the petitioner s grievance in the present facts is justified. This as the impugned order is contrary to and in defiance of the orders of the Tribunal which have attained finality. The impugned order dated 30th April, 2019 passed by the Assistant Commissioner of Central GST and Central Excise, is quashed and set aside.

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• 2020 (3) TMI 998
  Interest on delayed refund - whether the appellant is entitled for interest on the delayed payment of refund either at the rate of 6% or at the rate of 12% of the amount of refund? - Section 11BB of CEA - HELD THAT:- Perusal of the section leaves no doubt that the assessee is entitled to interest if the payment had not been paid to him within 3 months of finalization of the claim at such rate as is prescribed under the law. The Section itself records that the interest be given at such rate, which should not be below 5%, nor should be exceeding the rate at 30% per annum - Similar is the intention of Legislature apparent from Section 35FF of Central Excise Act, 1944. Therefore, as per statute itself, the interest rate may vary within the range of rate at 5% to 30%. The notification as relied upon cannot supersede the statute. Keeping in view that the order under challenge is silent about any reason for reducing the rate from 12% to 6% except relying upon the Notification No. 67/2003 it is held that the appellant is entitled for the interest at the rate of 12% - Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2020 (3) TMI 997
  Levy of Luxury Tax - concealment of sales - suo-moto power of revision - Sections 36 (1) of the AGST Act and 82 (1) of the AVAT Act - HELD THAT:- Considering the view taken by the appellate authority as regards the acceptance of the seized documents for the purpose of the assessments made and the view taken by the revisional authority and the learned Assam Board of Revenue that the petitioner assessee failed to provide the required evidence to arrive at a conclusion that the information contained in the seized documents were related to some other hotel and were procured for the purpose of making a sale projection, we are required to examine whether the view taken by the appellate authority in the order dated 29.01.2015 can be termed to be erroneous order and prejudicial to the interests of the revenue . From the point of view whether there was any incorrect assumption of facts or incorrect application of law by the appellate authority in respect of the seized documents, we take note of that the appellate authority had rejected the seized documents by accepting the statement of the Manager (F A) of the petitioner assessee that the information contained therein relates to some other hotel and were obtained for the purpose of making a sales projection of the hotel before a financial institution. No further evidence had been brought in by the petitioner assessee that the information contained in the seized documents were of some other hotel and if yes, as to of which hotel, nor any evidence had been brought in that it was used for the purpose for making a sales projection before any financial institution for obtaining a loan - Merely because a stand was taken by the assessee, the burden of proof would not shift to the department. In such view, it would have to be construed that there was an incorrect assumption of facts by the appellate authority. The two circumstances required to exist for the purpose of invoking the suo-moto revisional power under Sections 36 (1) of the AGST Act and 82 (1) of the AVAT Act are present in the instant case and therefore we do not find any infirmity in the exercise of any suo-moto power by the Addl. Commissioner of Taxes in the order 28.10.2015. The contention of the petitioner assessee that in view of the provisions of Section 33(2)(b), providing for an appeal by the Commissioner against the appellate order, the suo-moto power of revision against such appellate order would not be maintainable, is liable to be rejected. Revision dismissed.

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• 2020 (3) TMI 996
  Refund of differential tax - Input tax credit - rate of tax on LNG - situation post GST regime - It is the case of the petitioners that prior to coming into force of Goods and Service Tax regime in India, LNG was taxable under the Act 2003 at the rate of 15%, the IOCL-respondent No.3 charged tax at the rate of 15% on sales of LNG to the petitioners. The petitioners under the VAT Act were entitled to claim input tax credit of the tax so charged by the IOCL after reduction at the rate of 4% under Section 11(3) (b)(iii) of the Act 2003. HELD THAT:- The petitioners are entitled to get refund of amount of tax paid by it at the rate of 9% when the respondent No.3 has collected the tax at the rate of 15% instead of 6% as per remission order dated 05.09.2017 from the respondent-State. The petitions succeeds and are accordingly allowed - the respondents are directed to process refund claim of the petitioners for refund of the 9% tax amount collected from the petitioners and deposited by the respondent No.3 IOCL within a period of three months from the date of receipt of copy of the writ of this judgment.

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• 2020 (3) TMI 995
  Requirement of extra amount of Central Sales Tax - non-issuance of C-Form - Form-C was not issued by the HEC Ltd., to the petitioner Company, for the reason that the same was not supplied to HEC Ltd., by the State Government - HELD THAT:- Since the amount of Rs. 30,00,000/-(thirty lacs) has already been deposited, which is kept in the custody of this Court, we direct the Registrar General of this Court to make the payment of Rs. 28,61,893/- in favour of the petitioner Company, who in turn, shall deposit the said amount being the assessed differential amount of CST in the Government Treasury, within the period of ten days after receiving the cheque / draft. The remaining amount shall be refunded back by the Registrar General of this Court to the respondent HEC Ltd. Further it is made clear that since the petitioner Company is not at fault in making the delay in deposit of the CST, no interest shall be levied from the petitioner and ultimately, if it is found that Form-C could not be given to the HEC Ltd., by the State Government for any valid reason, the liability to pay the interest, if any, shall be of the respondent HEC Ltd., only. In case, Form-C is issued by the State Government to the respondent HEC Ltd., this respondent shall be entitled to the refund of the aforesaid amount of Rs. 28,61,893/- from the State Government itself. Application allowed.

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• 2020 (3) TMI 994
  Rejection C-Form - sale and purchase of building material i.e. Rori, Bajri, Sand etc. - C-Form rejected on the ground that single form was submitted for transaction of whole year 2008-09 - HELD THAT:- The Tribunal has correctly interpreted scheme of the Act and denied benefit of single C Form for the entire year. Tribunal has considered judgment of Calcutta High Court in the case of Cipla Ltd. [ 2013 (1) TMI 702 - CALCUTTA HIGH COURT ] which is basis of present appeal - Calcutta High Court has dealt with question of form F whereas present matter relates to form C and provisions relating to both forms are not identical. Appeal dismissed.

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• Indian Laws

• 2020 (3) TMI 993
  Dishonor of Cheque - Proceedings against the Director of the company - No averments against the director in the complaint - offence under Section 141(2) of the Negotiable Instruments Act - HELD THAT:- The complaint in question is wanting on material particulars. The requirement of law in respect of creating vicarious liability must be strictly construed. Since it is a penal provision, creating vicarious liability, therefore, it is not sufficient to make bald and cursory statement in the complaint that Director is incharge and responsible to the company for the conduct of the business of the company without anything more. Rather in the instant case, no such averments have been made in respect of the petitioner being Director is also incharge and responsible to the company for the conduct of the business. The complaint must contain as to how and in what manner, the Director was incharge or was responsible to the company in conduct of its business. This should be in consonance with strict interpretation of penal statutes, especially, where such statute creates vicarious liability. In NATIONAL SMALL INDUSTRIES CORPN. LTD. VERSUS HARMEET SINGH PAINTAL [ 2010 (2) TMI 590 - SUPREME COURT] the Hon ble Apex Court has interpreted on the aforesaid lines that requirement in terms of pleading has to be construed not only to the extent of mentioning the Director to be incharge of and responsible to the company for doing its business, but strictly spell out as to how and in what manner, he was incharge and responsible for the conduct of its business. The provisions of Section 141 of the Negotiable Instruments Act are pari materia with the provisions of Insecticide Act. In the absence of specific averments in the complaint, no Director can be proceeded against. No Director is required to prove his innocence by leading evidence in the trial, once the averments to this effect are not incorporated in the complaint. The averments made in the present complaint are fell short of statutory requirement. The prosecution against Director cannot be held sustainable in the absence of mandatory requirement in the pleadings. Petition allowed.

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• 2020 (3) TMI 992
  Compliance with the pre-deposit for maintenance of appeal - imposition of the condition on the petitioner to deposit 20% of the compensation amount within 60 days in view of Section 148(1) of the Negotiable Instruments Act, 1881 - HELD THAT:- In the present case, learned Additional Sessions Judge, Yamuna Nagar at Jagadhri had granted 60 days time to the petitioner for deposit of 20% of the compensation amount which will expire on 19.03.2020. The petitioner is stated to be unable to deposit the amount by that date due to his difficult financial conditions. Under Section 148 of the N.I. Act the period for deposit of the amount can be extended by another period of 30 days so as not to exceed 90 days. In the facts and circumstances of the case, ends of justice require that the petitioner be allowed 30 days time to deposit 20% of the compensation amount as no prejudice will be caused to the respondent if the petitioner is given 30 days time to comply with order dated 20.01.2020 to deposit 20% of the compensation amount. The petition is hereby disposed of with the direction to the learned Additional Sessions Judge, Yamuna Nagar at Jagadhri to extend the time for deposit of 20% of the compensation amount awarded by learned Judicial Magistrate Ist Class, Bilaspur by further period of 30 days.

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• 2020 (3) TMI 991
  Dishonor of cheque - insufficiency of funds - Section 138 of the Negotiable Instruments Act, 1881 - Compounding of offences - HELD THAT:- Under Section 320 Cr.P.C., the High Court may allow compounding of offences at the stage of revision also. Therefore, allowing the compounding of offences in view of the compromise between the parties, the revision petition is accepted and the judgments passed by the Courts below are set aside, resultantly, the revisionist accused is acquitted of the notice of accusation served upon him for offence under Section 138 of the Negotiable Instruments Act, 1881. It is clarified that the compromise arrived at in the revision petition shall not have any effect upon RSA-3195-2015, said to have been filed by the complainant against the present revisionist, which is pending before this court. The revisionist is directed to deposit 15% of the cheque amount with the High Court Legal Service Committee, within two weeks from today.

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• 2020 (3) TMI 990
  Dishonor of cheque - summon of Accused - insufficiency of material - HELD THAT:- It is directed that the accused may appear before the court below within a period of one month from today through the representing counsel and move an application seeking compounding of offence through compromise. On such application being moved the concerned court may take adequate steps in accordance with law in this regard and shall provide further opportunity to the accused which shall not exceed a maximum period of four months from today to make an endeavour in this direction. If the decision of the Court given in the light of the application does not conclude the proceedings against the accused and he is further required to appear and face the trial, the court shall be at liberty to proceed in accordance with law against the accused and take all necessary steps and measures to procure his attendance as the law permits. Application disposed off.

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• 2020 (3) TMI 989
  Dishonor of Cheque - summon order - Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT:- The issue decided in the case of NATIONAL SMALL INDUSTRIES CORPN. LTD. VERSUS HARMEET SINGH PAINTAL [ 2010 (2) TMI 590 - SUPREME COURT] where it was held that In agreement with the conclusion arrived at by the High Court and in the absence of specific averment as to the role of the respondents and particularly in view of the acceptable materials that at the relevant time they were in no way connected with the affairs of the company, we reject all the contentions raised by learned counsel for the appellants, appeals dismissed. Petition allowed.

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• 2020 (3) TMI 988
  Dishonor of Cheque - section 138 of NI Act - petitioner has submitted that the Courts below passed the judgements only on surmises and not on settled proposition of law - HELD THAT:- In the case on hand, it is admitted by the petitioner that Cheques were issued by him. It is quite natural that the person, who issued or was responsible to issue the cheques, has to rebut the presumption placing necessary evidence, because when cheques are issued towards payment of certain amount, it is presumed that there was existence of a legally enforceable debt. When the issuance of the cheques are admitted by the petitioner, the respondent is entitled to invoke presumption under Sections 118 and 139 of the Negotiable Instruments Act for discharging the subsisting liability and in this case, rightly the respondent has invoked such presumption. The presumption will live, exist and survive and shall end only when the contrary is proved by the petitioner, i.e., the cheque was not issued for consideration and in discharge of any debt or liability. Further more, there is no iota of evidence or document on the side of the petitioner by way of reply to prove that there is no legally enforceable debt or liability due to the complainant. Hence, the petitioner has not rebutted the presumption as contemplated under Section 139 of the Negotiable Instruments Act. This Court is of the opinion that cogent and convincing reasons have been recorded by the Courts below for convicting and sentencing the petitioner / accused and hence they are confirmed as such - This Criminal Revision Case is devoid of merits and hence the same is dismissed.

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• 2020 (3) TMI 987
  Dishonor of cheque - insufficiency of funds - cheque is torn and cellophane tape has been used to hold it firm - section 138 of NI Act - HELD THAT:- It was not dishonoured on the ground that the signature varies or the instrument is mutilated, but on the ground of insufficiency of funds. It is trite that while exercising revisional jurisdiction in a case involving concurrent findings of fact arrived at by two Courts below, the High Court cannot act as a second appellate Court. Both the Courts have disbelieved the defence taken by the accused that his small daughter had torn some cheque leaves and one of such torn cheque leaves had gone into the hands of the complainant through a relative and the present prosecution has been filed. The accused has not stated the date on which his daughter tore the cheque leaves. The reply notice in this case (Ex.P5) was issued by the accused on 18.07.2006. Since the accused knew that he had given a torn but glued cheque leaf to the complainant towards the loan availed by him, he took a specious defence in the reply notice (Ex.P5) that his child had torn the cheque leaves and such a torn cheque leaf had gone into the hands of the complainant. There is a ring of truth in the testimony of the complainant (P.W.1) inasmuch as he has clearly stated that, he was anxious to get back his money from the accused and that the accused gave him a torn cheque saying that he (accused) will ensure that it is cleared if it is presented two moths later and that is why he accepted it and presented it two months later. Though the accused can discharge the burden under Section 139 of the Negotiable Instruments Act by preponderance of probability, the false defence taken by the accused perforce strengthens the case of the complainant. In fine, this Court does not find any infirmity in the findings of fact arrived at by the two Courts below, warranting interference. Revision dismissed.

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• 2020 (3) TMI 986
  Dishonor of Cheque - preponderance of probability - discharge the burden under Section 139 of the Negotiable Instruments Act - HELD THAT:- In the cross-examination of the complainant (P.W.1), it was suggested to him that the eight cheques were given only as security on the promise that the complainant will arrange an educational loan for the daughter of the accused, but he did not arrange the loan and instead, misused the cheques. The complainant denied this suggestion. The defence was not able to make any serious dent in the testimony of the complainant (P.W.1) in the cross-examination - If the complainant had failed to arrange the promised loan, the accused would have issued directions to his Bank to stop payment, but that was not done. The accused also did not issue any reply notice to the statutory demand notice sent by the complainant. Of course, that by itself, cannot be a reason to hold against the accused. But, that circumstance, if viewed cumulatively with other circumstances, does make this Court to reject the defence theory. The defence theory, that the eight post dated cheques for Rs. 20,000/- each were given in anticipation of a loan that was promised by the complainant, defies credibility. Though the accused can discharge the burden under Section 139 of the Negotiable Instruments Act by preponderance of probability even that has not been done in this case - this Criminal Revision Case is devoid of merits and stands dismissed.

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• 2020 (3) TMI 985
  Dishonor of Cheque - insufficiency of funds - Challenging the concurrent findings of the two Courts below, the accused has filed the present Criminal Revision Case, before this Court, under Section 397 (1) r/w. 401 Cr.P.C. - HELD THAT:- It is trite that while exercising revisional jurisdiction in a case involving concurrent findings of fact arrived at by two Courts below, the High Court cannot act as a second appellate Court. This Criminal Revision Case is devoid of merits and stands dismissed and the judgments of the two Courts below are confirmed. The trial Court is directed to secure the accused and commit him to prison to undergo the remaining sentence.

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• 2020 (3) TMI 984
  Dishonor of Cheque - contention that the disputed cheques were not dishonoured for insufficiency of fund rather the payment of above cheques were got stopped as per the instructions of the applicant and in cases of stop payment, the provisions of 138 of the Negotiable Instruments Act do not apply - applicability of section 138 of NI Act - HELD THAT:- The contentions raised by applicant are required to be decided upon evidence to be led by parties before the trial court and at this stage merely for the reason that the applicant got the payment stopped it will not be just and appropriate to discharge the applicant. There is no illegality, irregularity, incorrectness or impropriety in the impugned order or any sufficient ground for quashing it and learned counsel for the applicant has failed to show that there is any abuse of process of court or likelihood of miscarriage of justice for prevention of which the exercise of inherent powers by this Court is required. The application is devoid of merits and is liable to be dismissed. Application dismissed.

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• 2020 (3) TMI 983
  Bail application - allegation that the accused had taken away money form her in the context of chit fund - HELD THAT:- Petitioners remained proclaimed offenders from 2016 to 2019. Now they are in custody since 28.06.2019. The case is triable by the Magistrate. Only one prosecution witness has been examined so far and the cross-examination of PW 1 was deferred as the prosecution wanted to file an application under Section 319 Cr.P.C. The filing of application under Section 319 Cr.P.C and decision thereof, would give rise to some more time for commencement of the trial in accordance with law. In such situation, bail can be granted to the petitioners on stringent condition in order to ward off any apprehension of the prosecution that the petitioners may flee from justice. The petitioners are directed to be released on regular bail on their furnishing adequate bail/surety bonds to the satisfaction of the trial Court.

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